DOW JONES for the Next Decade

Some times a chart it´s so clear that you don´t need much explanation.

After 2009 the price have been making Wave C, divided into A-B-C.

In case the 15.300 level it´s broken and also the trendline, the market could see a big down trend in the next decade.

While that happend, enjoy the Bull party, but always be aware for possible declines. Nothing happends from one week to another and will take months to see a big down move, but there are chances and we must follow the trend, up or down.

Time will Tell.

Dow Jones Analysis for the next Months - Weeks - Days

Monthly Chart

In any chart, first we have to look at the bigger picture to know were we are and what can happend in the future.

In this monthly chart, we can see how the price have form 5 impulsive wave from 1982 to 2007 and now its making a 3 wave correction (A-B-C).

The A wave it was sharp and fast, and make a low in 2009 so wave B needs much more time to develope. Since 2009 wave B has retrace all wave A, that means it´s a strong wave B, but also we have to think that once the wave B finish we have to be prepare for a sharp decline for wave C.

Take notice that at 16,810 Wave C equals Wave A, just to see what happend if we arrive.

If we study Benner Cycle Theory, we have to be thinking for a Top for Wave B, around 2016-2017, making a Low around 2022 but that´s all theory and what matters it´s price, and wave formations.

It´s important to know in which part of the cycle we are, and after follow the price really it´s the only thing that matter in the markets.

It´s important to notice that price it´s at the top of the wedge that comes from the top of wave 3 to wave 5. At this moment the wedge it´s acting as a dynamic resistance, so we have to be thinking that price can go higher in the next months but at the moment will need more time to make new all time highs due to that important resistence.

In the next charts we will go to lower time frames in more detail.

Weekly Chart

In this weekly chart we can see how strong the price has move, making a wave (A) and wave (B) has retrace 38,2% of the prior wave.

We are now in a strong wave C, but we have to be cautious because the price it´s very close to the 1,618% of wave (A), so at this point we have to think for a reversal at any time but it prices keeps bullish we have to move with the price at all time.

When we analyse the market we have to be aware of possible reversal points, not to get short positions but not to open new long positions (specially for buy and hold investors).

In the actual wave (c) green, we can see that´s divided in 5 impulse moves, so the brake of the wave (iv) low at 14,719 can make the price go quite lower. That level it´s the trend line from 2008 Lows, and also it´s the red “moving average” that i use to follow the trends. When we see an area with 3 mayor supports near it makes much more important that 14,719 level.

At this moment we have to be thinking of tighting out our stop in long positions, but still have to wait to open shorts. We dont´t know if this wave (c) can still go higher, so it´s important to control our risk and wait for the market to show us the way.

“The trend it´s your friend” and this phrase it´s really true so don´t try to be to smart in the markets, just think in were are the key turning points and wait and see what happends.

Daily Chart

In a daily chart we can see the bullish trend, actually making a wave (v) up, and the target it´s 16,700 (1,618$ extension of Wave A), so it´s an important area to watch. Although we have to know we are in a wave (v) and could truncate in any moment.

The awesome oscillator makes actually divergence between wave (iii orange) and actual wave (v orange) so it´s make a caution signal, but that´s all.

One of the lessons we can learn from the Awesome Oscillator (AO) is that we just have to follow it´s trend. When the AO it´s positive just look for buying at dips, because the AO it´s really a good trend follower.

The important key level it´s 15,338 specially if we don´t see higher highs above the actual mayor top in 16,588.

While the “averages” have positive slope, are below the price and the price doesn´t form a (1-2-3) pattern we have to look at the upside and try to buy at dips specially when we are in such a bullish market.

We are just in the beggining of a wave (v), so let´s wait for a dip, around the 50% retracements of wait for a trigger to get in the bullish market, always with a stop below 15,338. If this Stop is broken we will have to look for bearish set ups because the Wave (v) would have truncated

Contrarian Investment ......

Some times you have to be aware of this Bullish Covers.


The market it´s Bullish specially if there it´s not a closing price under the Key Level of 1540 on the Sp500 or 14.400 in Dow. 


We need both prices under those key levels to use it as confirmation of the trend revearsal.


After the move towards the 1540 in the SP500 the bulls fight back and in a fast move they move forward and try to break the 1600 level.



That´s the next level to consider, above 1600 we can have some more weeks of bull market, under 1540 weeks of bear market.

In between it just a fight of powers between the bulls and bears, and the smart thing to do it´s to sell in resistence and buy in Support zones. The rest of the move it´s just for professionals.

We have to be aware that this Bull Market it´s going end, in the near future, we have just to follow the differente signals and don´t  try to be fool and think we are going to see the 20.000 of the Dow in the next months.

We could see the Dow above 15.000 but i think there it´s quite low chances of see the 16.000 in the next decade.

Just take care and protect your money, that only depends in you, and never follow Bull News specially when the market it´s in All Time High.

Toronto Stock Exchange vs Spain Index

S&P/TSX 60 vs IBEX35

It´s quite clear, that all markets in the world move normally with the same trend. Some times they slow down and sometimes they speed up.

All the markets are organized and pretty much all hedge fund and big companies control all the movements in the world.

With this chart, a normal person, will think there cannot be any possible comparison between Canada and Spain, because they live in different realities.

As you can see there it´s a quite similarity between both charts, with the TOP and BOTTOWN in differente colours so it´s quite clear how normally Spain Index was making higher bit earlier.

(Just Click to Enlarge the chart)

In both cases you just have to follow the Red Trend Line, and wait until it´s broken to enter long in any chart. Buy above the red trend line.

In my study of the past to try to have an answer for the future, i think that the Toronto Stock Exchange will suffer a major correction in the next months.

I have compared the red circle (mayor tops) and in my opinion the TSX60 it´s taking in place a mayor top, had lost the green treen line of short term and in case there it´s a weekly close under 640 level   there will be a high chances to go in the next months to the 500 level.

The Blue Horizontal Line marks the Big Support for each market and will be a big resistence in the future. Sell under the Blue Horizontal Line in case it haven´t benn done.

As you can see in Spain, above that blue line the market it´s bullish and under it´s bearish, so no long positions should be open under that blue line and all longs position should be close.

Just be aware of the past and learn, so you can avoid any possible crash of the markets.

Be smart and always protect your position with a Stop Loss order.

Sp500 - Bears vs Bulls ~ The big battle

The key moment for the SP500 have arrived.

Now it´s time for Bears to take control and make the SP500 go under the 1540-1550 Key Level or the Bulls have still some force to keep taking the price higher.

As previous analysis the price went north of 1570 but just after found the next big resistence in the 1580-1590 level.

After that the bear took control, and now it´s time to decide if the y wil break the support area in 1.540-1.550.

The red support line have hold the price but we need to see a close under the support line to think it´s completely broken.

In case the 1.540-1.550 it´s broken odds are in favour to see the 1.400 in next weeks/months.

Every movement inthe stock market have it´s reaction after a big action. So just this it´s the case, some corrrecction of the big move since December'12.

Maybe we will see some upside move if the 1.540-1550 it´s not broken, and in the next move it´s possible to break above the 1.600.

We always have to follow the market and don´t try to be right or wrong, and in case we are lost use the STOP LOSS.

"Its better to lose than to lose more".

Take care and be smart.

SP500 in the short term

As you can see the SP500 have reach the major Resistence mention the 5th of March. After, it has been moving sideways between higher highs and making some noise in the down side.

The key feature we have to follow in every analysis it´s when it´s the right time to be short or long or when it´s time of selling our long positions.

Now we have to think where the market comes from..... below 670 points in March'09. Now we must be conservative and think that the best portion of the move have well taking place, so it´s not moment no enter any long positions now, and just protect the ones we have. Obviously this it´s quite general, because in any market move there will be stocks that move against the main trend.

As long as the red support line holds the price we can continue with the longs positions, but be aware that price it´s looking that at any time it will close below that level 1545 and will be confirmed with a close below 1540.

In that case price, had try to hold in three differente support (green, brown and red), from minor to major importance.

Absolutely the red zone mark the most important support for the trend that start in October'11 it´s in the lower band of the bullish channel, Around the 1.440 level.

The brown support zone marks the previous low and had held before the new highs.

In case of new highs, plausible option, there is a resistence in the 1580-1590 area. I don´t belive we will reach the 1.600 without a quite significant down move.

I hope you find interesting this post and if you like it don´t forget to share it. Thanks

Take Care, Be Smart and use Stop Loss in every entry.

SP500 - Big Resistence Ahead

In my twitter, i have been posting my impresions of the market, but i have decide now, to post a more clear chart, where i show how it´s my long term view and why i think we are near an important resistence.

As you can see the 1550 - 1570 area it´s quite important due to the extensión of prior swing.

Before in the 1370 there was an important high and after the price decline for several weeks. Now the price its moving up, with small correcction in between, so the indicators are having big divergences and the steep move it´s making me to be aware than this up move cannot last for very long.

Normally the biggest the steep move the bigger it´s the decline afterwards and it´s also telling us than it´s not healthy for the market and normally those moves are made in the last wave of any movement.

Now a close up from Oct'11

In this chart, we can see who in all af the prior moves (1160-1423 and 1270-1472), there were important declines after. This it´s healthy, so shorts also have a chance and to see increase in prices we need buyers,and at one point everyone it´s in the market so there are no new buyers. After a helathy decline,we could see better prices for long positions due to the good prices). In my opinión ít´s moment to close some long positions, not all,until we don´t see a weekly lower low.

Now there has not been much decline from November lows and in the last part of the chart i see a symmetrical broadening bottom. Not very used pattern but it can give us some clue of the future move in case the red trend line it´s broken.

So at you can several patterns are showing us the possible of a decline in the next weeks.

• Extension from prior moves
• Price near the Upper Band of the Bullish Channel
• Steep move
• Negative Divergence with indicators such us a MACD or RSI (not shown in the charts).

So be smart, and don´t let the market and the new highs think that the Bullish move with last for long without some decline in the next weeks or months.

The Lower Band of the Bullish Channel can work as a support for the price in case a normal correction of the market starts.

Always take in mind that lower moves are more spectacular and fast. It´s always important to go to the market with an open mind, remebering than any market have 3 types of moves (upside, downside and neutral) and they all take place in any chart.

I hope you find interesting this post and if you like it don´t forget to share it. Thanks

Take Care, Be Smart and use Stop Loss in every entry.