Market Direction and Stock Trends

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• • • Dow Jones Industrials Index Cash Analysis
By Martin Armstrong | April 22, 2017

Analysis for the Week of April 24, 2017

We should see a trend change come this month in Dow Jones Industrials so pay attention to events ahead. Last month produced a high at 2116911 and so far we are trading neutral within last month's trading range of 2116911 to 2041280. We need to breakout of this range to confirm the direction. Therefore, a close above will be bullish and a close below will warn of a possible decline. As of the close of Fri. Apr. 21, 2017, the market is immediately in a neutral position for right now with still an underlying bearish tone. Dow Jones Industrials closed today at 2054776 and is trading up about 3.97% for the year from last year's closing of 1976260. So far, we have been trading up for the past 2 days since the low made on Wed. Apr. 19, 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 down for the past 2 weeks from the high of the week of April 3rd, which has been a move of 2.43% percent in a stark panic type decline. Looking at this from a broader perspective, this current rally into the week of April 3rd reaching 2088750 has failed to exceed the previous high of 2116911 made back during the week of February 27th. We have seen only a minor reaction rally from the last low for the past 2 weeks. A break of the last low will warn of a continued decline ahead. Looking at this from a wider perspective, this market has been trading up for the past 2 weeks overall. Interestingly, the Dow Jones Industrials has been in a bullish phase for the past 14 months since the low established back in January 2016.

Critical support still underlies this market at 1739916 and a break of that level on a monthly closing basis would warn of a decline ahead becomes possible.

Broadly, my expanded view forecast recognizes that the current directional movement since the low made back in August 2015 has been a long-term Bullish trend in Dow Jones Industrials which remains in motion as long as we hold above 1545054 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.

Bearing in mind 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. Regarding the various factors, we see a strong potential of a decline moving into 2022 with the opposite trend thereafter into 2024. This pattern becomes a possibility if last year's low of 1545056 is penetrated even intraday. On the subject of 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. Respectfully, 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.

Eyeing the immediate momentum is Bearish on the weekly level yet we did penetrate the week of April 10th's low. Some caution is warranted given the fact that last month closed lower. 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. At this moment, this market is in a downward trend on all our indicators looking at the weekly level. On the subject of the direction of this trend, we have been moving down for the past 2 weeks. The last high on the weekly level was 2088750, which was created during the week of April 3rd. The last weekly level low was 1788356, which formed during the week of October 31st, 2016. However, we still remain below key support and key resistance now stands at 2078631 above the market. 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 19 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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