Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Why Ray Dalio is WRONG About China - Principles for Dealing with the Changing World Order - 24th May 22
Globalists Convene to Plan Central Bank Digital Currencies - 24th May 22
After Recent Highs, What’s Next for the Gold Junior Miners? - 24th May 22
Why APPLE Could CRASH the Stock Market! - 21st May 22
Why Is Crude Oil Ignoring US Inventories? - 21st May 22
Here is Why I’m Still Bullish on Gold Mining Stocks - 21st May 22
THE INFLATION MEGA-TREND QE4EVER! - 20th May 22
US Real Estate Investors – Is There An End In Sight? - 20th May 22
How Technology Affected the Gaming Industry - 20th May 22
How To Set And Achieve Reasonable Goals For Your Company - 20th May 22
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Dow Mini Stock Market Megaphone Top

Stock-Markets / Stock Markets 2014 Dec 17, 2014 - 06:08 PM GMT

By: Austin_Galt

Stock-Markets

The Dow made marginal all time highs in early December before turning back down. Many people are now jumping at shadows with every correction that takes place. This is understandable given the Dow’s precarious position but it is my opinion that the ultimate top is still yet to be seen.

Let’s examine the situation using the daily and weekly charts.


DOW DAILY CHART



There has been a lot of talk about the massive megaphone top in the Dow on the long term chart. I showed this pattern in the recent December newsletter. This pattern has also set up on a much smaller scale on the daily chart which can be seen here.

Just as I am viewing the current price action on the long term chart to be a mega fake out of the megaphone pattern, I believe we are ahead of time in the pattern on the short term daily chart.

I have drawn a green highlighted circle which shows price breaking out above the top trend line of the megaphone pattern. I believe this was a fake out move and price has now dropped back into the megaphone pattern.

I have also drawn a trend line connecting the February 2014 and August 2014 lows. Price has come back to this support line now and turned up. This may well be the start of the next leg up to new all time highs.

I suspect the exact same pattern is playing out right now as that which I laid out in the long term Dow Logarithmic Yearly Chart in the December newsletter.

The Relative Strength Indicator (RSI) shows this low to be extremely oversold while the Moving Average Convergence Divergence (MACD) indicator looks like it may be turning back up after a steep run down.

DOW WEEKLY CHART



We can see once again price making a false break of the upper trend line and price now finding support at the lower trend line.

I have also added Bollinger Bands which show the top candle had already moved away from the upper band with price now finding support around the middle band. A break to new lows now would likely signify price is headed to the lower band and a potential downtrend. And perhaps the expected final surge to new highs will get back up to the upper band for one last kiss goodbye.

I have added the RSI and MACD indicator to show the triple bearish divergences that have formed or are still forming. Now it is possible for the RSI to go back up and make a new high which is still below the second bearish divergence. The MACD has less room to trade and I suspect its triple bearish divergence is now in place.

This correction in December now means I am looking for a top in early January. So let’s leave price to go through the motions and then we can investigate further any likely topping pattern as it takes place.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

My website is www.thevoodooanalyst.com 

© 2014 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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