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Replies to post #43757 on Market Direction and Stock Trends
06/11/22 10:31 AM
Dow Jones Industrials opened below the previous low and closed beneath it as well warning of a bearish posture right now. The market closing today at 3139279 is immediately trading down about 13% for the year from last year's settlement of 3633830. Caution is now required for this market is starting to suggest it will deline further on a monthly level.
At present, this market is currently trading below last month's close and it had been weak for the past 2 months and if the market continues to remain beneath the previous month's close of 3299012, then it will be in a weak position just yet. This price action here in June is reflecting that this is within the scope of a bearish reactionary move on the monthly level thus far.
Up to now, we still have only a 1 month reaction decline from the high established during April. We must exceed the 3 month mark in order to imply 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 Mon. Apr. 10, 2023. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2002. The Last turning point on the ECM cycle high to line up with this market was 2007 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The Dow Jones Industrials has continued to make new historical highs over the course of the rally from 2009 moving into 2022, which has been a run of 13 years warning that timing wise a pause remains possible. Currently, the market has dropped back and is trading beneath the previous year's close warning of a potential correction in play.
This market remains in a positive position on the weekly to yearly levels of our indicating models.
Looking at the indicating ranges on the Daily level in the Dow Jones Industrials, this market remains moderately bearish position at this time with the overhead resistance beginning at 3201486 and support forming below at 3136559. The market is trading closer to the support level at this time. An opening above this level in the next session will imply a decline is unfolding.
On the weekly level, the last important low was established the week of May 16th at 3063576, which was down 4 weeks from the high made back during the week of April 18th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed beneath that low which was 3250943. This was a very bearish technical indicator warning that we have a shift in the immediate trend. We are still trading neutral on the Weekly Momentum Indicators and this is a warning that initial support has been breached. This strongly implies we should pay close attention now to the Weekly Bearish Reversals. If we begin to elect Weekly Bearish Reversals, then we are dealing with a more sustainable near-term correction.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are rising at this time with the previous low made 2018 while the last high formed on 2021. However, this market has rallied in price with the last cyclical high formed on 2021 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.
Some caution is necessary since the last high 3549222 was important given we did obtain two sell signals from that event established during April. That high was still lower than the previous high established at 3695265 back during January. Critical support still underlies this market at 3001480 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.
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