Saturday, May 10, 2014

INDU Dow Industrials Daily Chart New All-Time Closing High Rising Wedges Versus Ascending Triangles

The Dow prints a new all-time closing high on Friday, 5/9/14, at 16583.34 but not a new all-time high.

Recent Dow Intraday Highs
16631.63 on 4/4/14 (current all-time Dow intraday high)
16622.95 on 5/8/14

Recent Dow Closing Highs
16576.66 on 12/31/14
16573.00 on 4/2/14
16580.84 on 4/30/14
16583.34 on 5/9/14 (current all-time Dow closing high)

So the 16631.63 high continues to rule the roost. The bulls will charge higher if they take out this number. In early April, price came up to threaten a new closing high but could not get the job done falling three points short. The Dow did place the first all-time closing high this year at 16581 on 4/30 and now that is taken out by Friday's new all-time closing high at 16583.

The red lines show the bearish rising wedge patterns. The green lines show the bullish ascending triangle patterns but these are very cheesy. A better ascending triangle pattern would be price staying completely inside the triangles and not printing the low spikes in early February and April. Nonetheless, the triangles will provide an upside target if price breaks out above this 16583 level and starts printing new highs day after day. The upside triangle target would be about eight or nine hundo higher so the 17400 (16.6K +800) to 17500 (16.6K +900) area.

The new all-time closing high comes on weak volume not exactly a ringing endorsement of the upside. Friday's volume is the lowest since the holiday volume to begin the year. The new closing high also comes at weaker volume than the prior closing high on 4/30. The maroon lines show negative divergence for the indicators. The money flow is weak and bleak making lower lows as price prints a new all-time closing high. The Dow benefited this week with a rotation from the riskier small cap speculative, momo and high-flyer stocks into the perceived safety of blue chip dividend stocks (Dow). The Nasdaq and RUT drop this week but the Dow finished higher.

Keep an eye on the levels above. The bears are given a slight edge with the chart above. The collapses from rising wedges can be quite dramatic. The thin blue lines show the sideways overall nature of the indicators squeezing in for a move up or down within days, definitely during the new week of trading, so high drama and theatrics are likely on tap. Usually OpEx Tuesday into Wednesday is bullish and the move through the Wednesday full moon should be bullish so the bulls have seasonality factors in their favor mid-week. Retail Sales and earnings will likely determine if the Dow breaks out to new highs this week, or not. Projection is sideways to sideways lower moving forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 9:51 AM on 5/12/14:  The bulls slice up through the all-time high at 16631.63 like a hot knife through butter. Money is flowing into perceived safety of blue chips. HOD is 16695.18 a new all-time high. TRAN  prints new all-time highs as well so the Dow Theory confirmation is in place. Everything is going the bulls way. Dollar/yen is above 102 so the BOJ weakens the yen to provide bull fuel. Banzai!! Copper is strongly higher leading the parade. Retail sector is recovering with Retail Sales on tap tomorrow morning.

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