Dow Bear Market Rally
Güncellendi
Looks like the stock market is back in the crazy mode again from before the crash. Things are getting worse each day, which the market then translates that the worst is probably behind us and because the stock market always gets ahead of things, many might think they are missing the boat here.
Now the problem with the stock market is, past 1/1.5 years or so, there is soooo much liquidity in the world, it's extremely difficult to think that logic will win eventually. We have seen it after 2008, where we should have decreased world debt, but to fight the crisis governments doubled down on debt and even more.
Today the IMF gave some numbers, but first i just saw the headline:
" the IMF says the "the Great Lockdown" recession will be the steepest in almost a century". When i read that, i though okay at least one entity is being realistic. Until i saw the article, that they expect only a 3% decline in 2020 and predict an amazing 5.8% growth in 2021. Like OMG, don't think you need to be a genius to know that won't even come close to that.
What i am trying to say with this is, there is soooo much at stake now because of the world debt, governments will do everything they can (especially the US because they have the most to loose), to prevent a depression. So it will be very hard to swing trade these markets, both sides. I think it's inevitable that we see another market crash, but i am NOT prepared to say it will drop here from 24K or whatever price. I am however trying to look for a possible high, which i did last Thursday. But we can already see, where a correction/drop to 22500 was completely normal (even in a bullish setup), we are already back to the 24K.
I posted a few updates in my channel yesterday (i still can't post updates here with my mobile phone), where i showed how bearish the Dow looked, but how very bullish the Nasdaq looked. Making things very difficult to judge about what the short term move would be. Now i gave the 23.400 as an important resistance level. This is what i said:
Short term we have a resistance around 23.400, if that breaks, the movement inside the wedge could be extended.
Now of course i didn't know if it would go to 23500 and dump or see the current price action or even go higher. Now when looking on the right, we can see a potential triangle in the making. Because of the current double top would play out, and price drops, if we would get to see a higher low and move up again to 24.000, it will most likely break and we will see another wave up.
Now the bearish wedge is still in play, as i mentioned yesterday, the movement withing the wedge can be extended, but not indefinitely of course. For the wedge to be real, i think we need to break it withing 48/72 hours. Think otherwise the wedge isn't real. Now for the coming days, there is room up to like 24200 and still be a basic wedge. Getting above it could create a false breakout, but we can't know upfront if and how it will happen. Look back at my Dow Wedge from a few months ago, it looked like a failed wedge, but it wasn't. It was only a fake breakout. Similar to my Bitcoin wedge at 10K few months ago.
At the moment while i am writing this, there is some rejection from the high. down 300 points from the high. So both the triangle from the right and the wedge are in play. Think for the triangle, price has to stay above the 23400ish. Obviously we have a big support for around 23200 (which didn't break yesterday), so that level will prob cause a drop if it breaks. 22.300 is the second big level.
By the way, the levels i mention are from the Dow index, the Dow future on the left chart has a different price (the chart is also delayed 15 min btw).
Please don't forget to like if you appreciate this :)
Previous analysis: (don't forget to keep track of previous Dow analysis)
Now the problem with the stock market is, past 1/1.5 years or so, there is soooo much liquidity in the world, it's extremely difficult to think that logic will win eventually. We have seen it after 2008, where we should have decreased world debt, but to fight the crisis governments doubled down on debt and even more.
Today the IMF gave some numbers, but first i just saw the headline:
" the IMF says the "the Great Lockdown" recession will be the steepest in almost a century". When i read that, i though okay at least one entity is being realistic. Until i saw the article, that they expect only a 3% decline in 2020 and predict an amazing 5.8% growth in 2021. Like OMG, don't think you need to be a genius to know that won't even come close to that.
What i am trying to say with this is, there is soooo much at stake now because of the world debt, governments will do everything they can (especially the US because they have the most to loose), to prevent a depression. So it will be very hard to swing trade these markets, both sides. I think it's inevitable that we see another market crash, but i am NOT prepared to say it will drop here from 24K or whatever price. I am however trying to look for a possible high, which i did last Thursday. But we can already see, where a correction/drop to 22500 was completely normal (even in a bullish setup), we are already back to the 24K.
I posted a few updates in my channel yesterday (i still can't post updates here with my mobile phone), where i showed how bearish the Dow looked, but how very bullish the Nasdaq looked. Making things very difficult to judge about what the short term move would be. Now i gave the 23.400 as an important resistance level. This is what i said:
Short term we have a resistance around 23.400, if that breaks, the movement inside the wedge could be extended.
Now of course i didn't know if it would go to 23500 and dump or see the current price action or even go higher. Now when looking on the right, we can see a potential triangle in the making. Because of the current double top would play out, and price drops, if we would get to see a higher low and move up again to 24.000, it will most likely break and we will see another wave up.
Now the bearish wedge is still in play, as i mentioned yesterday, the movement withing the wedge can be extended, but not indefinitely of course. For the wedge to be real, i think we need to break it withing 48/72 hours. Think otherwise the wedge isn't real. Now for the coming days, there is room up to like 24200 and still be a basic wedge. Getting above it could create a false breakout, but we can't know upfront if and how it will happen. Look back at my Dow Wedge from a few months ago, it looked like a failed wedge, but it wasn't. It was only a fake breakout. Similar to my Bitcoin wedge at 10K few months ago.
At the moment while i am writing this, there is some rejection from the high. down 300 points from the high. So both the triangle from the right and the wedge are in play. Think for the triangle, price has to stay above the 23400ish. Obviously we have a big support for around 23200 (which didn't break yesterday), so that level will prob cause a drop if it breaks. 22.300 is the second big level.
By the way, the levels i mention are from the Dow index, the Dow future on the left chart has a different price (the chart is also delayed 15 min btw).
Please don't forget to like if you appreciate this :)
Previous analysis: (don't forget to keep track of previous Dow analysis)
Not
This move here, is exactly as i have seen a ton of times before the big crash. That half year or so before the crash happened. Such an basic bear flag/wedge with a curving shape, breaking support and short squeeze the market up another level. Let this be a warning sign for bears, it won't be easy!Not
And there is the 23400ish. Dropped a bit too fast to that level, so would say that is not really bullish, but a move up to form a lower high maybe around 23600/800 is still likely. Key zone is still around 23100/200, for the bears to see it break, but 23400ish is a big start i thinkNot
Well, think we can say the suspicion i had was perfect :),with it dropping too fast to the 23400ish, being a sign that is being confirmed now. It did a perfect retest between 23600 and another one to 23800. Now unemployment came out today, 5.2 mil more this week (it was slightly less than expected), market pumped at first but gave it all away since US market opened. Here below a zoom out, as we can see that the SP500 reached that critical resistance level, and making a curved kind of channel there. Where the Dow didnt even come close to that resistance level. Where the Nasdaq even went way above that level (with that triangle i posted in my channel few days ago).
So a lot of indifference between the indexes. For the Dow i can say, big support is around 22300, at the moment, short term, 23200/100 is a big level as well. Has bounced up from it several times past week. So even though it looks like supports broke, it can still turn up if the 23100 holds. But, even if it would break, if we dont see an aggressive dump, i think a small bear trap up to 22800ish is also possible, if it drops in a slow tempo. There is A LOT at stake with the stock market, so they won't let it dump easily
Not
Now have no idea if this is something real or not, but the markets first response at least that it could be something. Don't think it will change a lot, actually mean don't think world economies will be back where they were 3 months ago (we were already headed towards a contraction even before Corona), but stock markets don't always follow logic. Anyway, Dow is up almost 1000 points and still holding. The real answer will be when the US markets open (maybe even when Europe opens). But obviously this could be a game changer on market views and since Bitcoin followed the stock market quite closely, maybe as well for crypto. Just can't say, think would need at least a day to see how both market will respond to this. In the mean time, going to watch it from the sidelines, because no idea if this will give a relief and if so, how big.
Should not forget, this is not the first so called cure, that's why i think having at least a day (since it's Friday tomorrow), maybe the weekend as well to see how markets will react on Monday. Think everyone by now will hope it's something real, because i think even the biggest bears, are prob fed up with the lock downs and the change in life we are experiencing here
cnbc.com/2020/04/16/sp-500-etf-jumps-2percent-after-hours-on-report-gilead-drug-showing-effectiveness-treating-coronavirus.html
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