Dow Jones: Sell opportunity. Potential Double Top.DJI has extended the 1W Channel Up (RSI = 65.157, MACD = 519.030, Highs/Lows = 742.8189) that has previously provided a handful of trading opportunities (see bottom of the analysis).
At the moment a Double Top is being formed on 1D, which since April has been a bearish signal, later initiating a decline towards the Higher Low zone (where the 1D MA200 always supported).
We are expecting a similar behavior especially since the current levels are nearly overbought on 1D (RSI = 69.814). Our Target Zone is 27,000 - 26,800.
See the previous successful signals within this pattern below:
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Stockindex
S&P: Bearish reversal (2,950) with invalidation level.As per our last study, the +100 pip target has been reached:
The index has approached the Higher High zone of the 1W Channel Up (RSI = 64.884, MACD = 62.620, Highs/Lows = 78.1742) and the 1D RSI is close to the 71.30 level which since February 2019 has always caused a pull back.
When on the Higher High trend line of the 1W Channel Up in particular, the 71.00 1D RSI level starts a bearish sequence that drops all the way to the Higher Low trend line, with the 1D MA200 (orange) acting as the Support.
S&P is now on such a spot and if this pattern is repeated then we are looking at a Higher Low contact with the 1D MA200 at least at 2,950.
Attention is needed however. As per our last study (seen on the chart above), it is possible for SPX to start a new 12 month aggressive bullish sequence if 3,150 breaks (similar to what happened in 2016/2017). So be ready to exit this trade in time if you are a long term trader/ investor.
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Nasdaq: Entering new multi-month Bull if the ATH (8,027) breaksDespite Friday's fairly strong pull back, Nasdaq still approached last week the 8,027 All Time High after a very aggressive rebound on the 1D chart (MACD = 50.350, Highs/Lows = 51.7055) since October 2nd near the 1D MA200 (orange line).
Having almost made a Double Bottom then, the annual pattern (2019) resembles that of the 2016/ 2017 period. Not identical 100% but fairly similar on candle action with the variations being due to the volatility caused on geopolitical reasons (China deal etc).
The index is now near the break out phase, which in 2016/ 2017 when the ATH broke paved the way for a very aggressive 12 month Bull Phase until January 2018 on more than +40% gains.
If the current ATH breaks (8,027) we see no reason why this won't initiate a new multi-month Bull Phase as long term investors will accumulate.
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S&P: Targeting 3,100 if the ATH breaks.After hitting our previous Target,
the index is once again approaching the 3,030 1W Resistance and All Time High (ATH). 1D has just turned bullish on its RSI = 56.532 (MACD = 7.990, ADX = 32.823, Highs/Lows = 25.3073) but this is not the clue we are looking at for our next move.
What seems to be more relevant now is how S&P traded on a similar situation in the past. We looked back in 2016/ 2017 when the index last made a rebound on the 1D MA200, within a Channel Up and after a Golden Cross formation. Once the Resistance at the time broke, it strongly moved for a new Higher High within the Channel before aggressively breaking the pattern upwards.
Since we are currently just above the 1D MA50 and just under the 3,030 Resistance, if it breaks, we will target 3,100 - 3,150. A strong earnings season should work as the catalyst the index needs right now.
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CAC 40: Very strong long term upside potential. 6700 on sight.CAC is quite strangely printing on the big 1W/1M time frames a similar trading pattern with the early - mid 90s. The MA50/200 sequence is identical within a Channel Up with two distinct peaks that broke the Channel momentarily before testing again the supporting trend line.
What stands out in particular is the +46.50% rebound from the first Higher Low on both cycles. What follows after is a giant Inverse Head and Shoulders pattern, which gave rise to the second peak outside the Channel Up.
CAC40 is currently on that Inverse Head and Shoulder pattern attempting to price the Right Shoulder.
With such striking similarities it is only natural to assume that the current cycle will follow to a large extent the 90's cycle. Which means that after the Inverse Head and Shoulders is completed a +49.50% rise may follow (second peak outside the Channel) bringing the index close to 6,700. This is our long term target for CAC and the candle action times this by March 2020. After that the final Higher Low takes place which should pave the way for the new hyper aggressive cyclical bull market similar to the late 90s - 2000.
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Dow Jones: Sell Opportunity on 1D.The index is now testing the 1W Resistance (26,280 - 26,300). 1D has been trading on an Ascending Triangle pattern (RSI = 62.583, MACD = 150.200, Highs/Lows = 229.6786) and upon reaching this 1W Resistance zone on overbought stochastics (STOCH = 98.665, STOCHRSI = 90.823, Williams = -0.392) a sell window opportunity emerges. The SL however should be tight primarily because the index is on a long term bullish trend and secondly due to the Nonfarm Payrolls tomorrow which can cause volatility spikes above this level. TP1 = 25,980, TP2 = 25,820 (essentially the 4H Support Zone).
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Dow: 100 MA Crosses under 200 MADow broke out trendlines to the upside yesterday and also closed above its 100 MA and 200 MA for three days but its 100 MA crossed below 200 MA the first time since 2015 with a divergence of RSI on the daily chart.
The Dow's 100 MA/200 MA crossing down could mean a lot from a long term perspective and we might see what would follow soon.
Dow gaps up opening today and now shows lower lows and lower highs on its 15 Min chart. It seems it might be a turning point date today and we will know it for sure after the closing bell.
Have we missed the big picture on stocks?This study focuses on the very long term trading chart of Dow Jones since the Great Depression in an effort to determine if stock holding remains safe following the markets cyclical correction since last September.
So far during each of the post war bull cycles every cyclical correction within the channels was supported on the previous Higher High. The only exception was 1990 but was reasonable due to the 87 flash crash of Black Monday.
The growth and duration of the current bull cycle (following the sub-prime crisis) is calculated on the average values of the previous too, although based on the relative ratios, each bullcycle may tend to be more aggressive and grow more and each consolidation/ bear cycle shorter in duration.
What those metrics show is that the current cyclical correction should not exceed 18500 and if this low is made it should be inside 2019 and start recovering towards the end of the year. Quarterly investors can look to allocate 50% of their portfolio on the current prices and the other 50% close to 18500, in preparation for the second phase of the current bull cycle.
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S&P 500 Rally Could ContinueThe U.S. stock markets have rallied nicely after last quarter's end of year route.
This is encouraging generally speaking for the market and overall economy. The current price structure looks like the trend could continue and even push close to previous all time highs.
With a Super Pivot Stack in place the price action suggests a move higher from here. At the very least the bias has shifted long.
Buy on confirmation of strength, if the price trades above the current session high, at about 2588.50 and place a stop loss at 2483.00. The profit target is 2752.00.
Nasdaq: Buy opportunity on identical fractals.Nasdaq has so far made a +13.55% rise from the December low, the strongest bullish sequence since the October All Time Highs. If this sequence is not a Dead Cat Bounce, then we've spotted a fractal that shows it can make an additional +8.45% rise in the coming weeks.
Illustrated in orange is the December 02 - December 25 candle sequence that led to the recent 5,820 low. Since then, the current bullish candle sequence is identical to that, only inversed of course. Essentially so far it looks like it is the same fractal. Now there are a lot (mostly fundamental) reasons that can break this candle sequence (without necessarily changing the bullish course) but it can be a useful guide for the long entries.
Based on the ATH/ 5,820 low Fibonacci retracement levels, a more modest long TP would be the 0.5000 retracement of 6,777.50 if you want to avoid taking the 100% fractal risk.
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DJI, Daily Chart Analysis 12/22Technical Analysis and Outlook
As shown on Nov 24 chart analysis, DJI inner Index Dip 23210 was completed as of Dec 20 trading session, while Current Index Dip 23365 is open for business. There is two additional Index Dip outcome for mid-long term perspective.
Currently, we have two strategic resistance levels to be aware of. Mean Res registered at 23223 and Key Res 23672 , while there are no significant support levels other than Index Dips outcomes - that however, will change as index price action will develop gradually. See 'Indices Market' tab for full Market Commentary.
SPX (S&P 500), Daily Chart Analysis 12/22Technical Analysis and Outlook
As shown on Dec 20 chart analysis, S&P500 inner Index Dip 2490 was completed as of Dec 19 trading session, while Current Index Dip 2382 is open for business. There is three additional Index Dip outcome for mid-long term perspective.
Currently, we have two strategic resistance levels to be aware of. Mean Res registered at 2547 and Key Res 2651 , while there are no significant support levels other than Index Dips outcomes- that however, will change as index price action will develop gradually. See 'Indices Market' tab for full Market Commentary.
NASDAQ 100, Daily Chart Analysis 12/22Technical Analysis and Outlook
As shown on Nov 21 chart analysis, NASDAQ's inner Index Dip 6273 was completed as of Dec 20 trading session, while current Index Dip lays at 5917 . There is three additional Index Dip outcome for mid-long term perspective.
Currently, we have one strategic Key Res registered at 6485 and no significant support levels other than Index Dips outcomes - that however, will change as index price action will develop gradually. See 'Indices Market' tab for full Market Commentary.
CHINA MARKET COLLAPSED 2019 - MORTGAGE DOOMSDAYYep, you heard it and seen it right.
CHINA50 one of the world most important economy and the stock market is likely to head for DOOMSDAY once again.
It's not just another correction, it is a melt-down a 30% shave off from the current value and 50% to 60% from the all-time high.
Technical we can see a DOUBLE TOP, and ironically CHINA STOCK MARKET RALLIED IN JAN 2015 when the global market was declining during that time.
This was the TECH BUBBLE IN CHINA as well as MORTGAGE LOANS which is bound for DOOMSDAY. HISTORY REPEATS ITSELF!
This is a no-brainer, CHINA was simply over-leveraging during the last 10 years. GHOST TOWN EVERYWHERE AND CONSUMER NO LONGER CAN PAY THEIR MORTGAGE DEBTS in an ENVIRONMENT WHERE
Interest rates are higher, YIELDS are LOWER, and VALUATION no longer keeps up with rising DEBTS. It's just another repeat of LEHMAN CRISIS AND THIS SHOULD GET BIGGER.
The Government is tightening things internally to slow down the imminent meltdown and to cushion this crazy non-existence of money that was borrowed ahead to create artificial assets so every CHINA can be rich selling their LAND AND PROPERTY! With money harder to be transferred out, and clamming down on corruptions and an SKY NET that watches every single cent moving within the country's merchant. More and more developments, as well as projects, are heading for defaults and crashes. Nobody is going to live in a ghost-town anyway.
Here we go again!
#Disclaimer, this is just a forecast. Happy Trading and Good luck folks. - FTD