Market Direction and Stock Trends

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:::: Dow Jones Industrials Index (DJIA) Cash Summary Analysis »» Still Bearish
By: Marty Armstrong | January 19, 2019

Analysis for the Week of January 21, 2019

THE ANALYSIS PERSPECTIVE AS OF THE CLOSE OF Fri. Jan. 18, 2019: Dow Jones Industrials closed today at 2470635 and is trading up about 5.91% for the year from last year's closing of 2332746. So far, we have been trading up for the past 4 days since the reaction low made on Mon. Jan. 14, 2019, but the key low was made 17 days ago on Wed. Dec. 26, 2018 at 2171253. The Dow Jones Industrials has been in an uptrend for the past 4 days closing above the previous session's high in a very sharp move up posting a gain on a closing basis of 1.37%. The market remains positive on our system indicators still with some overhead resistance at 2474095 while support lies at 2447328. This market is also trading mostly above the bank of eight moving average indicators suggesting it remains in a mixed posture for now. However, an opening BELOW 2460462 in the next session would warn that the high of this session may stand at least temprorarily.

We did close below the previous session's Intraday Projected Breakout Resistance indicator which was 2445046 settling at 2437010 gesturing that the market is not in a breakout mode at that precise moment. The current Projected Breakout Resistance for this session was 2464431 which we have now closed above suggesting the market is starting to possibly breakout to the upside if it can be maintain in the next trading session. The Projected Breakout Resistance indicator for the next session will be 2494655. Normally, when you open back below this resistance number or closed back below it then the rally is losing momentum. So, watch this number which is dynamic for it changes with each session. (Note: We have included reference to Reversals and Short-Term timing considerations in this Summary Analysis, but please keep in mind this is a preview only - these references will be removed from Summary Analysis and moved to our higher levels of market analysis upon the upcoming launch of our expanded platform service.)

The broader view on a cyclical model, provides us with a map to the future that is rather interesting. This market is currently in a dramatic Phase Transition whereby it has rallied for the past 9 years scoring a 316% gain. To date, we have continue to trade within last year's range of 2695181 to 2695181. While we are still trading more toward the upper resistance, a closing below the previous year's low should imply a continued decline into 2020 remains possible whereas a closing above last year's high would signal a resumption of the uptrend is possible. We also need a higher closing at least above 2332746 to suggest the market is holding for now and likewise a closing below this level will warn of weakness. We do see the next two targets in time forming in 2020 followed by 2021

The historical major high took place here in 2018 and we have so far this year remained trading within last year's range in a consolidating pattern.

Meanwhile, our technical resistance stands at 5517226 and it will require a closing above this level to signal a breakout of the upside is unfolding. Considering our Reversal System, our next Weekly Bullish Reversal to watch stands at 2500320 while the Weekly Bearish Reversal lies at 2221910. This provides a 11% trading range. Turning to the broader Monthly level, the current Bullish Reversal stands at 2661672 while the Bearish Reversal lies at 2241590. This, of course, gives us a broader trading range of a 15%. Immediately, we closed the last session trading at the 2470635, which is below this level on a daily closing basis at this moment. We need to close above this on a weekly basis to signal a rally is unfolding. Right now, the market is trading some 1.18% beneath that level.

A possible change in trend appears due come March in Dow Jones Industrials so be focused. The last cyclical event was a high established back during October 2018. Normally, this implies that the next turning point should be a low. However, the market has been neutral for right now so caution is advisable. Watch the short-term trading levels for a hint of the next directional move into that target time frame. Last month produced a low at 2171253 but closed on the weak side and so far, we are trading neutral within last month's trading range of 2598021 to 2171253. 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.

Our Daily level momentum and trend indicators are both bullish 2409914. Turning to the broader picture, our long-term trend is bullish while the cyclical strength indicator is neutral providing a mixed perspective of the market beyond the short-term.

On the weekly level, the last important low was established the week of December 24th at 2171253, which was down 12 weeks from the high made back during the week of October 1st. We have been generally trading up for the past 3 weeks from the low of the week of December 24th, which has been a move of.1299%. Nevertheless, we have not elected any Weekly buy signal to date.

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 had been moving down for 7 weeks. Subsequently, the market has consolidated for the past 3 sessions. The last high on the weekly level was 2627782, which was created during the week of November 5th. The previous weekly level low was 2171253, which formed during the week of December 24th, and only a break of 2330159 on a closing basis would warn of a technical near-term change in trend. However, we still remain below key support and key resistance now stands at 2523601 above the market.

Some caution is necessary since the last high 2695181 was important given we did obtain two sell signals from that event established during October 2018. Critical support still underlies this market at 2160033 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak. Taking a broader view, this market is in a downward trend on all our indicators looking at the monthly level. Honing in on the direction of this trend, we had been moving down for-820 months. Subsequently, the market has consolidated for the past 822 sessions. The last high on the monthly level was 2695181, which was created during October 2018. The previous monthly level low was 1537033, which formed during August 2015. However, we still remain below key support and key resistance now stands at 2407756 above the market.

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