Friday, December 04, 2009

DJIA Monthly EW Analysis

There is a lot of forecasting going on in this monthly chart of the Dow Jones Industrial Average, all courtesy of the internal algorithms of Advanced GET software.





In summary, the EW pattern is of an unfinished 5 waves down from the late 2007 highs.  The blue shaded ellipse is suggesting that current price levels are the likely end of the Wave 4 advance from March, 2009.  The horizontal blue-shaded support levels are suggesting a Wave 5 forecast low at 6000 circa September, 2010.

Below, a close up of the same chart, only this time with the False Bar Stochastic:



As can be seen above, the FBS is nearing a potential Sell signal, possibly coinciding with an ATR SHORT signal.

This may not be the most agile time period with which to base day-to-day trading decisions, but is a good chart to keep in mind when trying to grasp the big picture.


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9 comments:

Silence Dogood said...

Allan, Are you still short on the $SPX?

Sean said...

Allan, it's 2:10pm EST: according to my chart (if I'm reading this correctly) I should be long TZA on both the 15 and 60 minute charts. If I'm wrong, well, it's back to the drawing boards.

TIA!

Sean

Anonymous said...

An analysis of the US dollar would illuminate this analysis greatly because the inverse correlation is so powerful, especially in the gold market.

Sean said...

Allan, interesting piece of the article on the Verwoort ATR. He said that it is not meant for an intreday trade -- that it should be viewed before closing or after the following day open.

I only have Stockcharts. They will not permit me to use a 3.5 period on the ATR; they round it off to 3. Big problem?

Anonymous said...

Sean,

I also use Stockcharts and the ATR is not the same indicator that Allan is using. Verwoort does use this formula plus his own code for his indicator. What I did was download the free version of Ninja Trader and then downloaded the free Verwoort ATR indicator from Stocks and Commodities magazine (link posted here in a prior post by Allan). I hope this helps.
Eric
Milwaukee

Sean said...

Many thanks, Eric. Greatly appreciated!

Sean

Anonymous said...

Hi,

Sorry for the beginner question, but what are the Blue, Green and Red Lines made of crosses?

Thanks!

Allan said...

Re: Colored lines

Trend channel analysis internal to Advanced GET, not relevant for any purposes related to my posted charts.

Anonymous said...

Thanks for the answer and your great job!