Hunchback head & shoulder pattern developing on Dow

Yen strength or weakness is what is influencing equities for now rather than USD action...

everyone is waiting for the crush..and there is a $1 trillion short interest ...


http://www.bloomberg.com/news/articl...ring-awakening

for me ...is still bullish bias...despite these highs

Watch this week's Dow candle. As I write, it looks like it could end up as a Doji if we now come down a bit from this morning's highs, and if it is a negative Doji similar to the one which closed the week 18th-23rd May 2015, which followed a very similar bullish candle to the one put in by the Dow last week, then this could be a very bearish signal, as so proved in 2015 when the Dow then fell 3000 pips.

you are so right...timing it....

So far....we will see...

Last week's negative candle following the perfect Doji of the week before has been noted, and so far, this potential top is playing out to perfection. If Trump wins in November, watch this thing plummet, if not before.

I'm not expecting any Fed rate hikes before November, and sooner rather than later, I think we'l see QE4, which will most likely reverse this downtrend and send stocks higher. The US though is either in, or going into recession, as is the UK, so this time any ameliorative measures by the central banks is unlikely to do anything except inflate the asset bubble some more.

Biggest one day sell off today since Brexit....and this has been building for a month. So looks like we'll get a big negative candle this week unless the next couple of hours sees a spectacular recovery, paving the way for more selling next week perhaps.

Crazy selloff,Dow at this time down 300, S&P 400.
Quick,sell them high yielding stocks and load up on lovely Dollars.

Dow has already fallen 700 pips from the level I predicted back in April. Hope at least some of you took notice and grabbed some pips, but don't go away, because there are probably more to come to the downside, maybe a lot more.

Anyone following this intermittent thread of mine will know that since April I have been predicting that the Dow would reach the level it reached and would then start coming down, which is exactly what has happened.

Markets have an uncanny way of telegraphing future events which are then judged to have been the cause. I am talking about the forthcoming US elections. I think Trump is going to win, the markets are technically poised for the dump that will inevitable happen if he does, and the Dow I think will fall to around 16,500, maybe further.

Hold on to your hats!!

It would be a good time to buy a put on the S and P and maybe take a chance on the VIX.

BTW, I think Trump will win too. I think the PRESS is manipulating the poll results.

So we're almost here folks, crunch time, because the markets are going to rock when Trump wins next week. Obviously, I think the initial reaction will be down, and as you can see with this weekly Dow chart, we are now accelerating the downward trajectory that has been in place since July. Look at the previous two candles, perfect Dojis, so from a purely technical perspective, and with the trend line conclusively broken, the sell off we have seen so far this week, is exactly what I would have expected.

So where will it fall to next week if Trump wins ( I say if so as not to tempt fate, though I fully expect him to ) I've put the fibs on as you can see. Worse case scenario for me is the 76.4%, which will see the price breaking below the 200ema ( thick rising yellow ) Perhaps more likely though will be the 200sma ( purple dash ) which sits right on top of the 61.8% fib. This level, around 16,700, is a very real possibility.

Should Clinton win, then who knows. The markets for me are set up for a pretty big sell off, and that speaks to me of a Trump victory. But if Clinton steals it, then perhaps not a lot will happen, and there should actually be a brief rally, brief because actually, there's nothing to say that Clinton's economic policies will be any good for the economy at all. If anything, Trump's promised deregulation policies should favour the markets, even see them fly...back to the good old days of the unregulated Wild West!

Hold on to your seats guys, it's going to be one hell of a wild ride!!

Anyone who has looked in on this thread since it began will now know that the drop in the Dow from the level I predicted did happen, but it was stopped in its tracks by the ' Trump hope ' rally we are currently seeing. In the screenshot above, I put the fib levels in for the support levels, and as you can see here, it was the 38.2% that held firm and sent the Dow back up.

I say ' hope ' rally, because this is all this rally is - a hope that under Trump, things are going to be better for the Us economy - a complete joke. The US economy is in terminal decline, and the only thing that is going to save the major US Stock markets from collapsing is another ount of QE, and it is going to have to be massive if any of the economic policies Trump is advocating are going to be possible.

On the technical front, look at the monthly and weekly charts below...the Dow looks super strong doesn't it, as if it's headed for the starts, and it should hit 20,000 soon, but it is also, currently, setting itself up for a very clear looking diversion pattern with MACD. It can go well above 20,000 for this diversion to still be on, and I take this potential diversion as a clear signal that although it is clearly very bullish, there are big headwinds in the US economy, and once this false rally based on hope, a rally which has absolutely nothing to do with the overall health of the broken US economy, then this thing could fall hard, very hard indeed.

So keep an eye on this thread, and I'll post when I think this thing has topped and is about to come down, which may not be yet, as I do not think that the US Federal Reserve are about to begin raising rates beyond the one we may get this month, and instead will keep them low and introduce another round of QE into the system, in fact, they have to as it is the only way forward for Trump and his tax cuts.

As a quick follow up to my last post, fib levels work on MACD as well ( I only use MACD, not RSI, as MACD makes RSI redundant )

If you're interested in how high the Dow can go, watch these levels, because the Dow, and US stocks in general can go a lot higher before the 61.8 or 76.4 is reached. A big monthly diversion pattern really could be a very big indication that a top has been reached. Coming down to smaller time frames - the weekly and Daily will help confirm this if we do get this big diversion pattern, and of course other indicators will come into play as well, depending on what you use.

We've reached the 76.4% fib as referred to in my previous post, and today at least, the Dow is coming off its highs. SO, is this it? We can still go higher for the diversion to be well in place, but boy, this thing is way overextended and as with many tops and bottoms, they catch people completely unawares.

Dennis Gartman went long yesterday so profits on a short position are almost guaranteed.

Quick update on these strong Dow moves to the upside. I'm going to keep things purely technical on this thread, and not get into Fed talk or other fundamentals, except to say that in reality the Dow Jones does not in anyway reflect the health of the US economy, that it is an artificially inflated bubble, and sooner or later, which is the best one can say right now, this gigantic bubble is going to burst. Our jobs as traders is to try and see this coming.

I have the Dow coming down today and over the course of the next week or so from it's current level of 20,552 reached just a couple of hours ago. I have resistance at this level on my Daily chart, so we'll see if it holds. Could this be the top? Well, if you've followed my earlier posts about the Diversion we are seeing on the monthly, then yes, I believe it could be, though we can still move higher for this Diversion to remain in place. and the weekly and monthly charts are certainly showing a very strong looking Bull run in place.

Watch this space.

PS - For those who are a little confused by the title of this thread, the ' Hunchback Head & Shoulders ' I was referring to when I began the thread did actually produce a 1,200 pip fall in the Dow, ended of course when Trump won the Presidency.

From purely a technical viewpoint, today's big push up in the Dow looks suspiciously like the sort of move in a wildly overextended market where you want to be getting ready to take profits and short. We should find out if I'm right this week I think. The diversion I'm been referring to in this thread still stands, but only if it starts to come down now.

192 pips the Dow has fallen since my post yesterday. Was that it, was that the top? I certainly hope so, and the monthly MACD diversion is perfectly in place if we are to come down from here. Check all big market turnarounds in your historical charts...most of then end with a big, final thrust up or down, giving speculators the impression that the end is nowhere in sight. I'm not saying this is it, but if you are short the Dow or S&P now, the risk/reward ratio could not be more favourable.

For EU traders, this would also imply that the euro has just bottomed as well, around 10,500, a level I have also been anticipating, though I thought it could drop to the 76.4% fib at 454 which is my last line of support if it's not to challenge the January low.

the next few days will be very telling indeed.

Take note of the potential monthly doji on the Dow this month, because with two and a half hours left of trading, this is what we've got. Combined with the diversion and the death throe daily candle we saw on the 1st March, and it could be much bigger down time in April and May then we've seen this month.