Yearly Analysis

This is a very long term analysis of the DJIA. The graph starts before 1930.

The lower line.
In June 1932, the DJIA hit a low of 40.3149. The lower line shows a start there. By looking at the next place it touches and all points are above the chart shows that the next point that it touches was in August 1982 at 769.98. Doing the calculation shows that the market has gone up at roughly a 6% increase if we follow that line. What I find interesting is the 50 year cycle. Based upon that, I am anticipating another pull back to that line in 2032. Assuming the DJIA goes up at a 6% rate since 1932, then the DJIA will pull back to 14, 300 at that point in time.

The second line starts at a high in 1937 and also goes up at a 6% rate. What does this show. We have been very overbought since 1997 until this year when it has dropped.

Where should it be and have we hit the low. Doing the calculations shows that the midpoint between those two lines is 8300. The DJIA closed at just slightly over 8000. We are probably getting over sold at this point as we moved back to underneath the center line. Just as it was overbought in 1930 and had to have a correction. So will it be in 2032. In 1982 there was a long period of consolidation.


I will try to post something like this each year.

November 7, 2008 - Weekly Recap

The DJIA for the week shows that it is still oversold considerable from the stochastics. The other thin is that it has not hit another low for 5 weeks. It is presently in a trading range and do not expect it to break out until it crosses its high of 5 weeks ago.
The same is true for the Nasdaq, although its low was only 3 weeks ago. It has been trading in a tight trading range for the last 3 weeks.

November 4, 2008 Daily Recap

The market today did not respond quite like I thought it would. I believed that since it was Election day that the market would have been very low volatility and in a very narrow trading range until the uncertainty of the election was over. Since many people believe that Barack Obama is the one who can lead us to turn the economy around then we should see the market to really start to go up. Reading an article in "Technical Analysis of Stocks and Commodities" about long term trends, It appears that the markets will not really start up until 2012. This may be a good time for Iron Condors on the Russell 2000, or Calendar spreads.

The S&P 500 graph shows that the market is short term overbought, but the short term trend is up. The intermediate trend is still down. Even though the price is above the 21 day MA it still needs to get above the 55 day MA. I believe this could really keep it from moving up. It will probably bounce off of the 55 day MA.
The same thing holds true for the Nasdaq. The 8 day MA still has not crossed the 21 day MA but may tomorrow. This could start this back into a bull market. Although I really believe the next 4 years it will be flat with no growth.

November 3, 2008 Daily Recap

The markets were relatively flat. The volume was very low as well. This is probably waiting for the results of the election. The overall market has not changed since yesterday. The outlook is the same.

October 31, 2008 Daily Recap

The Daily DJIA graph shows that the markets are becoming overbought. The problem is that it is on light volume. The volume has been below the 50 day average. The good news for the bulls is that the daily candle was above both the 8 day MA and the 21 day MA. So for the short term it is up.
The S&P 500 is very similar, although the daily close was above the 21 day MA, but the 8 day MA is starting to turn upward. When the 8 day MA move above the 21 day MA we may be starting to go into a short term bull market.The Nasdaq is very similar to the other two items.
Ditto for the Russell 2000.

The long term has been down. The short term is up. Below is the chart for the way the markets are presently going.

	Monthly	Weekly	Daily
DJIA	Down	Flat	Up
S&P 500	Down	Flat	Up
Nasdaq	Down	Flat	Up
Russell 2000	Down	Flat	Up

October 31, 2008 Weekly Recap

The weekly DJIA graph shows that the markets may be oversold. The MACD is starting to narrow, as well as the stochastic is turning upward from an oversold condition. The other item is that the 20 week low also occurred at the first of October. The markets may be starting into a trading range.
The S&P 500 is very similar to the DJIA.


The Nasdaq shows oversold in the Stochastics, and the narrowing of the MACD shows we may be starting to change direction of the markets. The only problem is the low was only obtained less than two weeks ago.



The Russell 2000 hit its low this week, but by the end of the week it close above the open from last week.

Here is the weekly assessment of the trends.

	Monthly	Weekly
DJIA	Down	Flat
S&P 500	Down	Flat
Nasdaq	Down	Flat
Russell 2000	Down	Flat

October 2008 Monthly Analysis

On all of the markets, it shows that we are in a bear market. The charts below show that over the last 9 months, the market has been below the 10 month moving average. This month was the worst.

The DJIA is shown here.
Below is the S&P 500. Once again there is only one month in the last 10 that even had a brief time above the 10 month moving average. Not anticipating any time soon for it to be above the 10 month MA again.
The Nasdaq also is showing a bear market. It really hit this month for the Nasdaq. It is going to take a lot to bring it back up.

The final is the Russell 2000. Once again it shows something very similar to the Nasdaq. The Small Caps were not being hit as hard as the Large Caps until now.
All of the markets are in a Bear market now. It is farther ahead to trade from a bear perspective.