"Invest With The Insiders, Not The Masses" George Muzea
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Worst DJIA Day! 5 replies
DJIA Chart 1 reply
DislikedThe DOW high was 14,168 a year ago. 50% retracement would bring us to 7,082. Another 1,400 points down and we should find the bottom.
If you are not comfortable waiting then start to buy in small amounts and average down as the DOW falls.
Another indicator of a bottom is to wait for analyst forecast to be surpassed by DOW listed companies.
At the moment not a single company is achieving forecasts.Ignored
Dislikedbablo, Monthly chart shows price bounce at support. Do you still think the dow will continue fall for another 1400+ points?Ignored
DislikedYES, and drop much more.
First, your chart program should be on LOG when dealing with years of data, and second the meaningful low was back in Dec 1982, the trend line you have shown is unknown by the market. Here is a chart showing the trend line, on Log scale.
DislikedWhy does the TL necessarily have to be shown in Log scale? In fact, the argument can be made that most charting programs display charts in linear form by default. And, the market did bounce off of "linear" support, so it does count.Ignored
DislikedLog Charts vs. Linear Charts
Why does The Motley Fool prefer log charts over linear charts? Spend any time looking at charts of stock price movements at Fool.com and you'll be looking at logarithmic charts.
...Why is one kind of chart better than another? Well, imagine a company with a stock price increasing by 15% each year for 20 years. Think about how you'd normally draw a chart of its stock price. You'd probably use a linear chart, as that's what most of us learned to do in school. The graph would show a really curved line, though. It would look like the stock price grew slowly in the first years, and then zoomed up a lot in the last few years.
That's because in the first few years, the change in the stock's price might have been from $10 to $11.50, and later from $25 to $28.75, and later still from $75 to $86.25. So the absolute changes will look small at the beginning, and will look large later on. But it's really just been a steady 15% increase from year to year. (Remember, an investor should be just as happy with a total 50% return from $20 to $30 as from $100 to $150. Investment-wise, percentage-wise, it's the same thing.)
This is why a logarithmic chart is preferable in this situation. If a company is growing at a steady clip, you'll see a fairly straight, upward-sloping line on the graph, not a sharply curving line. If the company's growth is slowing, you'll see the upward slope taper off a bit. If the company keeps growing faster and faster, then you'll see an upward-sloping sharp curve. But this time the dramatic curve will represent dramatic growth.
DislikedAnd, the market did bounce off of "linear" support, so it does count.Ignored
DislikedAllow me to explain why Pros prefer log charts for long term (weekly/monthly) time frames. It is invaluable when determining a trend line over many years to remove the natural curve distortion. And is critical when using Fibonacci values in long time frames, otherwise the values are incredibly distorted using basic linear charting. Let me send you to charting 101:
The example below shows Google shares represented by a log-scale chart. Looking at the Y-axis you can see the values seem to compress as they rise from 0 to 450. The trendline has been clearly drawn and has been broken at the start of the year. This indicates the stock is decelerating because the rate of percentage changes is falling.
The chart below is a normal or arithmetic-scale chart. Note the Y-axis values are equal distance apart. You can also see how the trendline appears much differently from the chart above. It is often necessary to keep re-drawing trendlines (as I have done) on artithmetic charts, which can make the bigger picture difficult to analyse.
If it bounced off, why is this Bloomberg Professional linear chart showing a different result? - it has not touched yet
DislikedThat bloomberg chart is drawn incorrectly. Any child can see that.Ignored
DislikedYou also seem to forget the simply fact, that a TL is only accurate if it drawn on trader's charts. Log vs. Linear makes no difference here.Ignored
Peter B should have used Log scale - not linear. His trend line and Fibos make are distorted and rendered meaningless. I said the same for some of the people posting 20 years of Dow using the wrong scale. You just comfirmed you can see that. No arguement.Ignored
A meaningful diagonal trend line is determined by the market price action, and shows a minimum of 3-4 touches to be considered of importance. The more touches over time, the more the market is saying "this is important". An example over the same 20 years of a trend line touched many times in key reversals is the one here: If you think the market respects a trend line any newbie trader draws on his Metatrade4 charting, you are sadly mistaken. The market could care less what you or I plot on our charts. Ms. Market may care more about how Pros and Institutional traders make decisions based on S&R at trend lines using Institutional charting packages. Go back to Babypips.com, or better yet, check in with charting experts at places like CQG.com of StockCharts.com
If you think an Arithmetic-scale chart and a Log-scale chart are exactly the same, you are willfully ignorant. Making a mistake is one thing - we all do that, but turning a blind eye to argue is just foolish. Go back and read the article posted below, or the link to the source online, and look at those two Google chart examples. Then try to plot a fibo on a chart spanning 20 years, or put a trend line on it, it will be totally inaccurate and an utter waste of time.
You are saying mathematics is wrong, and professional chart traders are all mistaken. Everyone is wrong, except you, Sexglobal?
Tell us more about your "simply fact" - please cite your credible source.
Dislikedany ideas where this market will go today?Ignored
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