Market Direction and Stock Trends

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Dow Jones Industrials Index Cash Analysis
By Marty Armstrong | July 29, 2017

Analysis for the Week of July 31, 2017

Dow Jones Industrials FORECAST UPDATED AS OF THE CLOSE OF Fri. Jul. 28, 2017: We should see a turning point on the monthly level come this month in Dow Jones Industrials at least on a closing basis if not intraday requiring watchfulness. The key week ahead for a turning point is 7/31. Last month produced a high at 2153503 during June. We have now to exceed that level during July implying a continued advance was warranted. Support technically lies now at 2099422 and a breach of that level will warn of a retest of key support down at 2041280 becomes possible. Here we have a long-term bullish trend in play since the historical low took place back in 1896 followed by the historical high in 2017, which constituted a 121 year rally. As of the close of Fri. Jul. 28, 2017, the market is immediately in a bullish posture near-term suggesting it is holding trading above the December 2016 high with a rally for the past 4 days with technical resistance at 2194239. Dow Jones Industrials closed today at 2183031 and is trading up about 10% for the year from last year's closing of 1976260. So far, we have been trading up for the past 4 days since the reaction low made on Mon. Jul. 24, 2017, but the key low was made 8 days ago on Tue. Jul. 18, 2017 at 2147114.

On the weekly level, the last important high was established the week of July 24th at 2184118, which was up 14 weeks from the low made back during the week of April 17th. We have been generally trading up since that low, which has been a move of 3.03% percent in a stark panic type advance. The broader perspective, this current rally into the week of July 24th has exceeded the previous high of 2153503 made back during the week of June 19th. We have seen a rally so far from the last low at 2037955 made the week of April 17th, and only a break of that low would signal a technical reversal of fortune. Otherwise, the market remains strong at this time. Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 10 weeks overall. Interestingly, the Dow Jones Industrials has been in a bullish phase for the past 7 months since the low established back in November 2016.

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.

Methodically, my long-term view outlook 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 1733105 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.

On the subject of 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. Considering all factors, there is a possibility of a rally moving into 2022 with the opposite trend thereafter into 2024. Directing our attention to 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. Focusing on the potential for sharp movement, our Panic Cycle targets for the period ahead to watch are 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.

Directing our attention to the immediate trend remains bullish since June 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. 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 14 weeks. The last weekly level low was 2037955, which formed during the week of April 17th. The last high on the weekly level was 2184118, which was created during the week of July 24th. 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 22 months. The last monthly level low was 1537033, which formed during August 2015. The last high on the monthly level was 2153503, which was created during June.

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