Dow Jones Industrial ..... Top-Bildung !

[Ralph]

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Wenn man sich den Dow Jones Industrial betrachtet, dann stellt man fest, dass er in einer Phase steckt, die m.E. auf niedrigere Kurse schliessen lassen ..... das schon vielfach zitierte "Diamond-Pattern" (weiss) lasse ich jetzt mal aussen vor.

Was auf abbröckenlnde Kurse schliessen lässt, sind die sich bildenden Fächer (rot), die immer niedriger ansetzen und auf nachlassende Dynamik hindeuten.

Darüberhinaus verläuft bei 10.000 der Aufwärtstrend der letzten fünf Jahre, dessen Durchbruch ein unmittelbares Potential von 1.000 Punkten abwärts eröffnen würde .... die psychologische Konsequenz nicht mitgerechnet !!!

Was dies für Indizes wie Nikkei, Dax, Euro-Stoxx etc. bedeuten würde, müsste jedem klar sein.

Selbst ein schneller Anstieg auf über 11.000 Punkte würde ich als Bullenfalle deklarieren, denn ATH's im Bärenmarkt sind oftmals Bullenfallen.

Darüberhinaus scheint sich eine S-K-S-Formation gebildet zu haben, die Potential bis 8.500 eröffnet.

Ralph

[Ralph]

Da die technische Analyse so etwas wie eine Kombination aus Kunst und Wissenschaft ist, gibt es natürlich auch noch andere Methoden (Indikatoren etc.), mit denen man ein "Potential" ermitteln kann.

Egal wie man sie aber nennt und wie man es dreht, der Schlüssel für den DOW Jones Industrial liegt in seinen Marken 11.000 und 10.300

Vor allem die Indikatoren, die "Akkumulierung/Distribution" ermitteln (anhand der täglichen Preise und Volumina) -wie z.B. "Chaikin Money Flow" oder "OBV"- legen nahe, dass beim DOW zur Zeit ziemliche starke "Distribution" vorherrscht, woraus ich im Moment den "Bären" favorisiere .... oder zumindest eine Rally, die geringe Chancen auf Bestand hat !

Sollten die genannten "Level" fallen, dann it mit den o.g. Kurszielen zu rechnen !

Ralph

[TotalStock]

Hi Ralph, ja Ed sieht den DOW auch so oder net viel anders... hatte mal was von 7000 erzählt, sei nicht unmöglich...

DOW Market Analysis

Updated Thursday, 1/4 for Friday's Market

Key DOW Levels for 1/5
UP Current Trend
DN Through 10,830


Consolidated...
Normal market is resuming. Consolidated below the high. Now, want to see a swing or two and the break through 11,250 - OR a failure back through 10,830.

From yesterday's commentary, "...In the Short term, you have to expect a retracement tomorrow back to 10,850. If we get it, go Short until the first reversal, and expect a quick rally back to 10,950 from there. ...."
We did indeed retrace today, almost perfectly off our upper trendline in the 15 Minute Chart, although we did not fall back as much as I thought we might, holding at 10,900. This is a good sign, on the whole. I expected a retracement today after the huge advance yesterday. Markets always have to digest gains after they are made. The question is, will it re-engage?

For tomorrow, we want the market to reverse back to the upside at the Open or after a slide to 10,850 - but no lower. In the short term, it will be fairly easy to pick off trades as the drama unfolds. In the medium term we are Long and ready to exit at 10,830 if the market gets that low.

Short Term Dow

In the short term, we have a case for a move in either direction. On the downside, we have a consolidation right at 10,900. As we have discussed before, consolidations lead to further moves. The target predicted by this one is 10,850. Logical enough. At the same time, we are at a good retracement point, so I could see 10,900 holding. The Open will tell us what to do. In the short term tomorrow, trade up off 10,900 and Short through 10,875 down).

Medium Term Dow

In the medium term, we are expecting this consolidation above 10,850 to result in a new move up. The primary reason for this is the wide consolidation in the Daily Chart (blue lines). This pattern implies a continuation to the 12,500 zone. That is a key target, as it is also the point at which the upper trendline of the diamond crosses price action. We could reverse there, and will probably exit Longs when the target is reached, on the first signs of weakness.

If we drop through 10,830 tomorrow, we want to exit Longs and wait for the next entry point, which would be the next crossing (up) through 10,850. I really don't think the market will fall that low tomorrow, and our Longs should hold. But, if we do, the rally will not be behaving properly and we want to be out, in my opinion.

NASDAQ Composite and
OEX (S&P 100)

As expected, these indexes also gained a dose of reality today, and pulled back from the absolute high of yesterday. Very normal, and nothing to worry about - yet. I am expecting a new wave to hit and drive the NASDAQ through 2,700. Our mental stop is at 2,500 and we should exit if that line is crossed, and be ready to enter Long again at the same level (if it plays out that way tomorrow). **

In Summary:

Today, we had a normal retracement day in the face of the euphoric rally of yesterday. Now, the proof will be in the eating. We want to see the markets consolidate in the range of the recent highs. If that happens, we are almost assured of a new break to the upside, ushering in the new bull. If, on the other hand, the consolidations fail and the markets trade through key support levels down over the next 3 days, we will be in trouble again.

The fed could always come to the market's rescue, and has indicated it will do that again. It's tough to psyche all of this out - easy money vs. economic slowdown, and trying to figure out who will win. I think the chart patterns will remain intact, though, even though they will be affected by this artificial manipulation. Such impact can only last a short while before the inherent psychology sets in.

In a nutshell, we are cautiously Long and expecting a follow through over the next three days. If that does not happen, we will be back in defensive mode. It's important to note that many, many short signals worked out well today, with stocks falling dramatically from highs. We need to keep a close watch on those lower support levels, and not get "sucked into" the euphoria just yet.

Thanks for listening, and good luck in your trading!

Ed Downs

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* Short term vs. medium term. We define short term as 1-4 days, and medium term as 1-4 weeks. This column is designed for both types of trading/ investing.

** We are now publishing charts on the NASDAQ and OEX (SP 100 index) in our Premium SignalWatch section, with short and long term assessments, similar to this page. Click "Subscribe" at www.signalwatch.com (http://www.signalwatch.com) for more details.

*** Our software, OmniTrader, includes market commentary and individual candidates posted each day. To find out more about OmniTrader, visit www.omnitrader.com. (http://www.omnitrader.com.)

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"What to Trade?"

I received a very nice email from Mr. Walsh asking what symbol to trade to mirror the movements we discuss on this page. What I would suggest is, that you look for individual issues which are poised to gain the most from a break of one of our levels. I know this is a bit more work, but you will often get a nice "spring" effect and also reduce your risk.

You can certainly trade the indexes directly (DIA, QQQ, etc.) but I think your results will be better if you focus on the issues which will move the most on any given incentive. Good question - thank you, Mr. Walsh.

[Ralph]

Mit der heutigen Entwicklung ist der Dow Jones Industrial genau auf seiner kurzfristigen Aufwärtstrendlinie (schwarz) innerhalb der Diamond-Formation gelandet. Sollte diese Linie geknackt werden, dann MUSS bei 10.200 die Schosse zum Halten kommen, sonst könnte sich dieser "Diamant" tatsächlich realisieren.

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Mittlerweile ist der Dow, wie auch der Nasdaq ziemlich überVERkauft, was zumindest eine technische Reaktion nach oben wahrscheinlich werden lässt. Aber die Stunde der Entscheidung naht auf jeden Fall, denn die rechte Hälfte des Diamanten verjüngt sich zusehends.

Im Moment ist weiterhin Seitwärtsbewegung im Dow angesagt; so auch die Botschaft der Indikatoren, die auf keine ausgeprägte Trendneigung hindeuten.

Fundamental sind aber ein paar Werte im Dow enthalten, die alles andere als gerechtfertigt gepreist sind !

Ralph

[Ralph]

Hier ist die Einschätzung von Ed Downs für Montag, 26-02-01.

Key DOW Levels for 2/26
UP Through 10,600
DN Through 10,300

Hit 10,300 Today.

Now, we have an even better case for a bottom forming. Still, we need to watch for a definitive higher low to form in the intraday charts...

From yesterday's commentary, "...Tomorrow, I would watch the basic boundaries of the end of day run, which are 10,550 up and 10,490 down. Wait for a break of either of these levels, and go with the flow...."

Well, as hard as it was for all of us to take, we had another down day. For those of us willing to short into the new decline through the lower level, we had some very nice profits - on the short side.

Dow Daily

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Dow 60 min

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Dow 15 min

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First, the good news. We have been talking about the potential for this market to sell off to 10,300. Well, it has. In fact, that was the exact bottom of today's move. I really like the fact that the Dow decided to behave itself and reverse off this important support level. And, it broke an upper line. So, we have reasonably good odds of a rally, IF a higher low can form. We are going to have to see if that happens, but things look pretty good.

You have to be realistic here, of course. We are not going to see a monster rally back through 11,000 quickly. It's going to be stair-stepping, gut-busting all the way up (if it goes up). We have to take it one step at a time. And, the next step is a higher low. But, we have something else looming on the horizon - yep, that pesky diamond is coming into play again, which is the "bad news." Sorry. If you look at the Weekly Chart, you can see we are at the lower boundary as I have drawn it. Anyone can see the clear, diamond shape in this pattern.

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As I have said in the past, diamonds are bearish patterns that imply moves equal to their height, from the lower boundary down. Since that point is 9,800 and the height is 2,000 points, we have an implied drop to 7,800. Again, don't get the idea I am saying the Dow is about to drop to 7,800. What I AM saying is, there is potential for a very bad outcome here. We want to watch that lower boundary carefully. I certainly would not go Long while we are this close - unless a very clear, higher low forms. Then it will at least be less risky.

Short Term Dow

In the short term, we had a great day today - down to 10,300 and then clear rally signs for the afternoon (see our Intraday Alerts page, link on the left). It was a very nice trading day. Now, we want to look for a retracement Monday, from the rally this afternoon. If we pull back through 10,430 I would go with the flow down. If we start up, through 10,450 - go Long but hold your mental stops at 10,430.

Medium Term Dow

Need that higher low! We are expecting a retracement Monday back to something like 10,375. If we get it, and if we see a reversal somewhere in that vicinity, THAT will be the sign ot go Long in the medium term, with stops at the same low point. All we can do at this point is watch and see if it happens. If we fail through 10,300 - yes, you have to go short - again.

[Ralph]

Hier die aktuelle charttechnische Situation des Dow Jones Industrial:

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Ralph