Charting the Dow ($INDU)
Check out the attached weekly chart of the Dow Industrial ($INDU) for the past year. I look at it every week with the idea that the Dow is still an indictator of the overall market’s direction. We’ll see how my analysis goes with this and I’ll start posting regular charts of the Dow if I seem to be good at it.
Circle A is the beginning of the trend line that was a ceiling at the beginning and turned into support during the entire C circle. For a couple of weeks that A line looked like it might return to being a support line, but then the Dow broke through the line started during the C circle and has been using that in the E circle as support. If that line remains as support the Dow could stay above ~13,300 for a while.
Points B and D show the longer term trend of higher lows. I think/hope in a correction this line will provide support. That means I’m calling ~12,500 the lowest I see the Dow going in the near term.
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Comment by Kadena
I liked your chart since it is different from others i may see. Also, weekly, bi-weekly or monthly charts with identifying points/lines/circles would be great. I am still concerned where the DOW and other stocks can fall back to. I guess we’ll see. Funny thing is we may spend the next 3 years in 10,000 to 14,000 range or go to 16,000 and never look back, i couldn’t tell. I prefer just to buy stocks with low/no debt and at good value, and play options and hope for the best and that my math still works… I want to keep a close eye on interest rates after buying a book by your recommended guru–Jim Cramer, his 2005 book, the Street.com fella. Read about half and he has down to earth viewpoint. My personal philosophy is starting to be no matter how i trade/play the market; i need to find my personal balance that it will take to achieve my goals. Following this blog, reading other books, and researching market headlines and news stories are all info that hopefullly forms my stance and gradually balances me or puts me in the position to get ahead. I would love to be rich! That’s what it’s all about. In a weird way, the more we humans discipline ourselves and learn from and listen to others, i think the greater our chance to acquire wealth and manage it properly. In other words, no matter how much money we have to date, or how strong the latest bull run has been, we can lose it all very quickly with dumb trades and option plays. I never want to go backwards, i want to always get ahead now, i’m addicted to the gains. So keep the charts coming if you are so inclined!