• 213 days Could Crypto Overtake Traditional Investment?
  • 218 days Americans Still Quitting Jobs At Record Pace
  • 220 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 223 days Is The Dollar Too Strong?
  • 223 days Big Tech Disappoints Investors on Earnings Calls
  • 224 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 226 days China Is Quietly Trying To Distance Itself From Russia
  • 226 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 230 days Crypto Investors Won Big In 2021
  • 230 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 231 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 233 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 234 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 237 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 238 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 238 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 240 days Are NFTs About To Take Over Gaming?
  • 241 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 244 days What’s Causing Inflation In The United States?
  • 245 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Trend-channel Analysis Suggest Stocks Are About to Fall

Prices have risen decisively above key resistance at the top of a Declining Trend-channel from the April 26th, 2010 top in the Industrials. This is a very important trend-channel, as both the top and bottom boundary lines are defined by at least three touch points, and the decisive breakout could mean a significant rally leg has started.

However, there is key resistance from another trend-channel, this one rising from July 1st, shown in red boundary lines. Prices could be setting an upside target of the upper boundary of this channel, 11,100ish in the Industrials. If prices rise next week, this scenario is the most likely one.

However, there is another possibility this weekend, that prices have topped precisely at key resistance at the blue rising trend-line drawn from the tops in June and August. This line has four touch points and Friday's rally took prices precisely to this line and stopped - a fifth touch point. This argues that prices have topped and the start of a decline to at least 10,200ish is imminent.

Should prices fall decisively below the lower rising boundary line from the July 1st, 2010 low, below 10,200ish, that would be very Bearish, and suggest stocks are crashing.

I have drawn out a possible scenario where prices are forming a large Rising Bearish Wedge from July 1st, with the blue line as the upper boundary of this pattern. If this is the case, next we should see a drop to 10,250ish, followed by one more rally to 11,000ish, then a stock market crash, starting in early 2011.

Dow Jones Industrial Average from January 1, 2010

Prices have risen precisely to key resistance at the top of a Declining Trend-channel from the October 2007 top in the Industrials, and stopped. This is in addition to prices rising precisely to the blue trend-line from June 2010 and stopping there Friday. Same place, the intersection of two key upper boundary trend-channels. With prices stopping at two key trend-lines, the odds of an imminent decline are fairly high.

Should prices fail to rise above the upper boundary of the declining trend-channel from October 2007, it would mean the next decline could target the bottom boundary, which would take the Industrials down toward 5,000ish. On the other hand, a decisive rise above the upper boundary line could be quite Bullish.

Dow Jones Industrial Average from January 1, 2007


Check out our SEPTEMBER Specials, including an amazing 8 month offering for only $189, or 2 years for only $459 at www.technicalindicatorindex.com. We also offer a 4 months for $99 budget friendly deal this week.

We cover a host of indicators and patterns, and present charts for most major markets in our International and U.S. Market reports, available to subscribers at www.technicalindicatorindex.com

If you would like to follow us as we analyze precious metals, mining stocks, and major stock market indices around the globe, you can get a Free 30 day trial subscription by going to www.technicalindicatorindex.com and clicking on the Free Trial button at the upper right of the home page. We prepare daily and expanded weekend reports, and also offer mid-day market updates 3 to 4 times a week for our subscribers.

"Jesus said to them, "I am the bread of life; he who comes to Me
shall not hunger, and he who believes in Me shall never thirst.
For I have come down from heaven,
For this is the will of My Father, that everyone who beholds
the Son and believes in Him, may have eternal life;
and I Myself will raise him up on the last day."

John 6: 35, 38, 40


Back to homepage

Leave a comment

Leave a comment