I came across a buy signal on the Dow ($INDU) 10-year monthly candlestick chart. I honestly don't know why I share this for free with this sad excuse of a message board, but here it goes anyway. We have a wide range bar put in last month (June) and then a doji candlestick put in for July. A doji (or any real reversal candlesticks for that matter) doesn't mean all that much other than indecision unless it is at or near support/resistance levels. 11,500(ish) is a major support (former resistance) level from the 2000 highs. If the monthly volume on the July candlestick had been higher, I would say we have reached the bottom in this bear market. However, I'm now expecting the Dow to test 12,000 (T1) and then if it succeeds in breaking that level, 12,500(ish) or more importantly, the declining 20-period SMA on the monthly chart, currently at 12,810.25. My time frame for these targets is by DIA options expiration in September (approximately 50 days). A stop would be placed around the 11,000 level but keeping it a bit tighter may be prudent here. I would then look for a third leg down (with a top somewhere between 11,900 and 12,500) and then possible capitulation to mark the end of the longer-term (6 months to 2 years) downtrend we are currently in. Good luck and good trading to you...
Thanks Wrench ; Well, who knows? You just might be the one to start off a link that will turn this board into something you're looking for. I subscribe to a service also ; Don't have the time to study all the parameters daily and go it alone. The indications I have are a short term buy which started about the middle of July. There appears to be a gap to fill in the S & P 500 up to about the 1320 mark. Now, as to all this happening is another story. Regards,JD
wrench- most technicians use the S&P, not the Dow, which is manipulated (being only 30 stocks)on a 10-year chart, they usually use the 80-week moving average, which CLEARLY gave a bear market sell signal Jan 2001, and a subsequent buy signal in July 2003, when it broke above again, here is the chart. http://tinyurl.com/6bd7to
The $SPX is on some support at 1200, but this downtrend channel is very similar to 2001-2, if we can base at 1200 sideways, maybe it's positive ($SPX), but if 1200 breaks 1150, then 1100 is possible. Value buyers may come in at 1150.
Put in the Dow symbol to compare, use the 80-week, which is the 20 month on this chart.
Here's the Dow, you are right that 12,000 is the 80-week (20-month)resistance to the upside, also it's the neckline of the head and shoulders top that broke. As for support, 11,600? http://tinyurl.com/6dga76