Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

The Dow Just Gave Stock Investors a “Buy” Signal... Did You Miss It?

Stock-Markets / Stock Markets 2015 Jun 04, 2015 - 02:20 PM GMT

By: Investment_U

Stock-Markets

Matthew Carr writes: I’ve been passionate about art my whole life.

In fact, I spent a large chunk of my undergrad years studying the various techniques used in digital design... painting... photography... and animation.

One of the first things you learn in animation is the bouncing ball.


Whether you’re using a computer program like Flash or Maya, or drawing it by hand (which no one really does anymore), you have to understand the physics behind a bouncing ball...

Height, velocity, gravity, acceleration, elasticity, time, etc.

All of this comes into play when making the realistic image of a ball bouncing and losing energy until it rolls or it stops. Something like this:

The shortcut I remember is simply taking the initial height, multiplying it by 0.75 and then multiplying each result by 0.75 to get the peak of each bounce.

Why do I bring this up? Because that’s what the markets - at the least the Dow Jones Industrial Average - remind me of now. A bouncing ball running out of steam.

With each new bounce, there’s less and less energy.

Fear of Heights Dwindling

As most are well aware, year-to-date, the Dow hasn’t done much of anything. The blue chip index is up just over 1% so far.

And the range we’ve been trading in so far in 2015 has been extremely tight. Our low is 17,037.76. And our high is 18,351.40. That’s a spread of 7.71%, or 1,313 points from low to high.

Now, that may seem like a lot. But when we look at the high-low spread during the same stretch over the past several years, we can see it’s a lot tighter.

For example, from January through May 2014, the spread was 9.1% - or 1,395 points. In 2013, during the same stretch, the spread was 18.81% - or 2,438 points. And over the past three months, that spread between high and low has narrowed to 4.39% or 772 points.

That means we have a lot of ups and downs, but not a lot of movement in either direction.

Like a ball bouncing and running out of energy...

Don’t Fight the Trend

The one great thing about this current market is the low point is fairly well defined.

Since breaking above 18,000 in December 2014, however, investors are unsure of what to do with the Dow. Looming questions over the economy... whether the contraction in the first quarter was merely “transitory” or a warning of something larger... and the impact of the stronger dollar...

These are all creating resistance to the upside.

Nonetheless, the Dow set new all-time highs in February, March and May. But the gain from that December 2014 high to its last all-time high in May is just a paltry 1.37%... or 247 points. Which really just represents one good day in the market.

At the same time, the Dow hasn’t fallen below 17,000 during the last seven months. We’ve seen consistent support at the 100-day moving average, which at the moment is 17,915.

This provides us with a very simple plan of attack: Any time the Dow dips below 18,000, we’re looking at a buying opportunity.

Over the last three months, our lowest points have been 17,579.27 in March, 17,585.01 in April and 17,733.12 in May.

The low in May happened after a two-day 2.43% decline from a peak of 18,175.66. The low in March was after a 3.9% decline from a peak to start the month at 18,288.63 (a new all-time high). The low in April was the first day of the month, five sessions after the low in March.

At the moment, the Dow is about 1.37% off its last all-time high set on May 19. Its total move lower was 2.1% to 17,967.74, hit on the final day of trading in May.

So, what I’ve laid out here is something very basic. And very bullish.

This is also important since we’re entering the Summer Lull, when the markets largely trade sideways because of lower volumes. (It’s during these months that traders move from staring at their computer screens to staring at the ocean - or whatever else they choose to ogle on their vacations.)

The Dow hasn’t set a new lower low since February. That lowest low was intraday on February 2. And it has hit higher highs in the months since.

If it dips below 17,915 then there might be something more dramatic on the horizon in the near term. But until the current trend breaks, you should consider any move below 18,000 an opportunity to get in and ride the bounce up.

Good investing,

Matt

Source: http://www.investmentu.com/article/detail/45793/dow-dji-just-gave-investors-a-buy-signal#.VXBdmE3bK0k

http://www.investmentu.com

Copyright © 1999 - 2015 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules