Market Direction and Stock Trends

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:::: Dow Jones Industrials Index (DJIA) Monthly Summary Analysis »» Turning BACK DOWN
By: Marty Armstrong | May 18, 2019

CURRENTLY, OUR ANALYTICAL POSITION AS OF THE CLOSE OF Fri. May 17, 2019: Dow Jones Industrials closed today at 2576400 and is trading up about 10% for the year from last year's closing of 2332746. At the moment, this market has been rising for this market has been rising for 4 months going into May suggesting that this has been a bull market trend on the monthly time level. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 2522251 while it even trading beneath last month's low of 2606259.


Immediately, the market remains bullish on the momentum indicator yet neutral on the short-term trend indicator while the long-term trend and cyclical strength are bearish.

The historical major high took place here in 2018 and we have up to now this year remained trading within last year's range in a consolidating pattern. So far we have seen a trading range of 2669596 for a high and 2263841 for the low.

Meanwhile, our technical resistance stands at 2818645 and it will require a closing above this level to signal a breakout of the upside is unfolding. Nevertheless, our technical support lies at 1881635 which is still holding at this time. At this moment, the market remains between these two projections leaving it neutral on a technical basis.

A possible change in trend appears due come June in Dow Jones Industrials so be focused. The last cyclical event was a low established back during December 2018. Normally, this implies that the next turning point should be a reaction high. However, the market has made a rebound to the upside so we could see a potential reaction high at that time frame. Last month produced a high at 2669596 but closed on the positive side and so far, we have broken beneath last month's low 2606259 closing yesterday at 2576400. We now need to close beneath 2606259 on a monthly basis to imply a technical reversal of trend to the downside for now. Since we are trading below that level, caution is advisable.

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. 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 4 months. The previous low of 2171253 made during December 2018 on the Monthly level has held and only a break of 2520800 on a closing basis would warn of a technical near-term change in trend. The previous high made during October 2018 on the Monthly level at 2695181 remains significant technically and only exceeding that level on a closing basis would suggest a reversal in the immediate trend.

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