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Dow Industrials

 
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arthur
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PostPosted: Fri Dec 24, 2004 7:37 am    Post subject: Dow Industrials Reply with quote

I've included a Dow Jones monthly chart, since 1990 (page two of Chart Room includes long-term SPX and Nasdaq charts). The Dow created a bullish cup-and-handle pattern, over the past few years. Also, the Dow is above its 80 month MA. However, there is strong resistance at the congestion area at roughly 10,500 to 11,500, and a break above resistance is doubtful without a period of consolidation.

There's been talk recently about a four-year cycle (peak to peak or trough to trough). The four arrows reflect corrections in 1990, 1994, 1998, and 2002. Currently, the stock market is in a structural bear market, after an 18 year structural bull market, from 1982-00.

Therefore, I suspect, the stock market is near a peak, there will be some consolidation in 2005, and then a severe correction in 2006. Moreover, volatility will pick-up in 2005, while the Dow trades in a range, creating better trading opportunities.

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