Market Direction and Stock Trends

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Dow Jones Industrials Index Cash Analysis
By Carl Swenlin | May 27, 2017

Analysis for the Week of May 29, 2017

We should see a trend change come this month in Dow Jones Industrials so pay attention to events ahead. Last month produced a low at 2037955 and we need to penetrate that level on a monthly closing basis to suggest perhaps a further decline. As of the close of Fri. May. 26, 2017, the market is immediately in a bullish posture near-term with a distinct bullish undertone suggesting caution on the daily level trading above the December 2016 high. Dow Jones Industrials closed today at 2108028 and is trading up about 6.66% for the year from last year's closing of 1976260. Thus far, we have been trading down for the past day, following the high established Thu. May. 25, 2017.

On the weekly level, the last important high was established the week of February 27th at 2116911, which was up 17 weeks from the low made back during the week of October 31st. We have been generally trading up for the past 5 weeks from the low of the week of April 17th, which has been a move of 3.54% percent.

Critical support still underlies this market at 1913878 and a break of that level on a monthly closing basis would warn of a decline ahead becomes possible.

Logically, my long-term view expectation recognizes that the current directional movement since the low made back in August 2015 has been an extended Bullish trend in Dow Jones Industrials which remains in motion as long as we hold above 1550200 on a monthly closing basis. It is incredibly important to identify the broader trend for that is the underlying tone. It is wise to take position counter-trend only with this understanding of what you are doing.

Consequently, this has been a 8 year rally in motion since 2009. Caution is advisable since this is also 8 years up from the low of given that was the major low 2009. We must pay attention to the closing for this year. If we close lower at year end, beneath 1976260, then we can see a pause in the uptrend into next year. Penetrating intraday last year's low of 1545056 will confirm a serious correction into next year. However, we have rallied to exceed last year's high last month. We need to see a closing above 1998763 at year-end to see a continued rally is possible into next year. Exceeding this year's high next year and holding last year's low intraday will signal the bullish trend is still intact. A breach of last year's low of 1545056 intraday will negate that outcome.

Eyeing the longer term yearly level, we see turning points where highs or lows on an intraday or closing basis should form will be, 2022, 2024 and 2026. Centering on the patterns unfolding, we do see a prospect of a rally moving into 2022 with the opposite trend thereafter into 2024. Eyeballing the volatility models suggest we should see a rise in price movement during January. We look to the turning points to ascertain the direction. Volatility targets reflect only volatility. Nonetheless, our Panic Cycle targets for the period ahead to watch are during 2016 and during 2026. Keep in mind that a Panic Cycle differs from just volatility. This can be either an outside reversal or a sharp move in only one direction. Panic Cycles can be either up or down. Watch the oscillators and the reversals to determine the best indication of the potential direction.

Eyeballing the immediate trend remains bullish since April made new highs and we have exceeded that high so far this month. This is further illustrated given the fact that last month also closed higher. To date, the market has exceeded last year's high of 1998763. In order to maintain an upward advance, we need to close above last year's high at year end. On the weekly level, last month was an outside reversal to the upside which is implying we have a bullish bias currently.

While the market made a new low last month, our energy models turned up. This warns we may be preparing to rally. Currently, this market remains in an uptrend posture on all our indicators looking at the weekly level. We see here the trend has been moving up for the past 29 weeks. The last weekly level low was 1788356, which formed during the week of October 31st, 2016. The last high on the weekly level was 2116911, which was created during the week of February 27th. On a broader perspective, this market remains in an uptrend posture on all our indicators looking at the monthly level. We see here the trend has been moving up for the past 20 months. The last monthly level low was 1537033, which formed during August 2015, 2015. The last high on the monthly level was 2116911, which was created during March.

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