Market Direction and Stock Trends

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:::: Dow Jones Industrials Index (DJIA) »» Weekly Summary Analysis
By: Marty Armstrong | May 20, 2023

This market made a new high today after the past 3 trading days. The market opened quite strong above the previous session's high 3357991 reaching 3365290 intraday. So far the market is still within a reactionary phase being up three trading days. Therefore, this market closed below the opening print while also closing down from the previous closing yet it was weak going into the close.

Clearly, this market is still above the critical support point at this time, which lies at 3340749. Initial support lies at 3326864. This market has exceeded intraday 2 of three projected resistance points and it has closed below 2 others. Our underlying pivot providing some support lies at 3335193 and a close below this level will warn of a shift to retest support. Up to now, the projected extreme resistance stands at 3408404.

Additionally, our central point cyclical study models also ended in a bearish mode for the closing warning that the upward momentum is subsiding. During the last session, we did close above the previous session's Intraday Crash Mode support indicator which was 3290608 settling at 3353591. The current Crash Mode support for this session was 3311876 which we closed above at this time. The Intraday Crash indicator for the next session will be 3327446. Remember, opening below this number in the next session will warn that the market may enter an abrupt panic sell-off to the downside. Now we have been holding above this indicator in the current trading session, and it resides lower for the next session. If the market opens above this number and holds above it intraday, then we are consolidating. Prevailing above this session's low will be important to indicate the market is in fact holding. However, a break of this session's low of 3333666 and a closing below that will warn of a continued decline remains possible. The Secondary Intraday Crash Mode support lies at 3150703 which we are trading above at this time. A breach of this level with a closing below will signal that a sharp decline is possible.

Intraday Projected Crash Mode Points
Today...... 3311876
Previous... 3290608
Tomorrow... 3327446

This market has not closed above the previous cyclical high of 3425783. Obviously, it is pushing against this resistance level.

Up to now, we still have only a 1 month reaction rally from the low established during March. We must exceed the 3 month mark in order to imply that a trend is developing.

ECONOMIC CONFIDENCE MODEL CORRELATION

Here in Dow Jones Industrials, we do find that this particular market has correlated with our Economic Confidence Model in the past. Our next ECM target remains Tue. May 7, 2024. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2009 and 2002. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2007 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The historical perspective in the Dow Jones Industrials included a rally from 2009 moving into a major high for 2022, the market has pulled back for the current year. The last Yearly Reversal to be elected was a Bullish at the close of 2022. However, the market has been unable to exceed that level intraday since then.

This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2021. Pay attention to the Monthly level for any serious change in long-term trend ahead.

From a perspective using the indicating ranges on the Daily level in the Dow Jones Industrials, this market remains neutral with resistance standing at 3343666 and support forming below at 3340640. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply that a bounce is unfolding.

On the weekly level, the last important low was established the week of March 13th at 3142982, which was down 13 weeks from the high made back during the week of December 12th. This was a key week for at least a temporary low. We have been generally trading down for the past 2 weeks, which has been a very dramatic move of 3.653% in a stark panic type decline.

Looking at this from a broader perspective, this last rally into the week of May 1st reaching 3425783 failed to exceed the previous high of 3434232 made back during the week of January 9th. That rally amounted to only seven weeks. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 3323585. Additional support is to be found at 3334343. Looking at this from a wider perspective, this market has been trading up for the past 11 weeks overall.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2022. However, this market has rallied in price with the last cyclical high formed on 2022 and thus we have a divergence warning that this market is starting to run out of strength on the upside.

After closing above last year's low of 2985630.

This market is trading beneath that high of December 2022 which was 3471228 by more than 2 percent. Critical support still underlies this market at 2965310 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible.

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