Dow Industrial Average

An alert Pivoteer reminded me in the chat room that I'd put out a 23665 target for the Dow several weeks ago. I'd nearly forgotten about it because it was contained in a Morning Line rather than in a tout. The up-to-the-minute chart, with a so-far high today at 23638, is shown in the inset. The equivalent target for DIA lies at 236.59 (versus today's so-far high of 236.33). I expect both to get closer to their respective targets, so let's plan on getting short with some DIA 15 Dec 234 puts when the time comes. They should be trading for around 1.00 with DIA at or very near the target today or tomorrow. _______ UPDATE (Nov 28, 9:56 a.m. ET): With DIA opening higher this morning, numerous subscribers have reported getting filled on the DIA puts at prices between 0.91 and 0.99. This is a straight speculation, since we have effectively jumped squarely in the path of a speeding freight train. We'll risk about $100 theoretical and assume four puts bot for 0.96. Stop yourself out of them if they trade down to 0.70, good-till-canceled.

The Indoos surged on Friday to within a millimeter of a 22907 rally target we've been using for more than a month. Although it kept us confidently on the right side of the trend, there are no guarantees that this middling Hidden Pivot resistance will stop a relentless bull market whose trajectory continues to steepen.  If you took a short position at the target as I'd suggested, perhaps using DIA puts, I would suggest tying them to a tight stop-loss. Check the chat room before Monday's opening for real-time guidance, since it may be possible to refine our strategy based on what index futures have done overnight. A slightly weak opening would indicate that DaBoyz are eager to buy 'em before they run stocks up shorts' old wazoo.  A somewhat higher opening could indicate a bull trap, and that would be the scenario best suited to holding onto your puts, even if only for an hour or two, until the mood of the day has become clearer.  If, as seems likely, shares continue to move blithely higher, you should use the 23,226 target shown in the chart (see inset) as a bull-market price objective.  It is quit compelling, especially because of the very precise stall at p=22413.  The breakaway bar on Oct 2, when DJIA launched above the pivot, implies there is a very good chance the blue chip average will in fact get to 23226. _______ UPDATE (Oct 19, 5:07 p.m. EDT): Close but no cigar. The Indoos have gotten as high as 23173 this week, 53 points shy of the target. It remains valid in any event and still looks likely to produce a tradable pullback. Click here for an up-to-the-hour chart.

The Indoos are closing fast on a 22907 target (see inset) we've been using for the last couple of weeks to stay comfortably on the right side of a very steep uptrend. Some subscribers already hold a small short position in DIA that enjoyed a felicitous pullback this morning from within a penny of a 248.44 Hidden Pivot resistance. It is the same pattern that produced the 22907 target for this vehicle, and that's why I'll suggest using the target to re-short DIA (by buying puts), or to take a fresh short position in it, if the opportunity should present itself.

There is much to like in the pattern shown. For starters, the midpoint pivot at 22,563 is located nicely in the middle of nowhere, just the way we like 'em. That means a particularly easy move past it could be confidently expected to hit D=22,907 at least.  The red line is tempting to short, since it looks solid enough to repel an initial barrage, no matter how fierce. But if it instead melts away, that would all but ensure a finishing stroke to 22,907.  That number could be reached in a week if the uptrend accelerates for another day or two. _______ UPDATE (Oct 3, 8:38 p.m. EDT): Buyers chomped through the 22563 pivot identified above in no time, staying well on track to hit 22907. There is just one additional hidden resistance worth noting at this point: 22735, the pattern's 'secondary' Hidden Pivot. It can serve for now as a minimum upside target.  I will signal if this vehicle trips a 'mechanical' buy signal at either x or p in perhaps 4 to 6 days, so be sure to check 'Email Notifications' on your account page if you want to stay apprised in real time._______ UPDATE (Oct 8, 6:30 p.m.): The Dow made no headway on Friday, but because it finished near the top of its range following a shallow pullback, bulls would appear to be well. ________ UPDATE (Oct 9, 5:46 p.m.): A dead day. It suggests there is zero buying power, at least on the surface. I will hazard no prediction for Tuesday, since it looks like a coin-toss at the moment.

It's been a while since I looked at the Dow, but there's no mistaking the 22,500 rally target, an important Hidden Pivot that lies a tad more than 200 points above. It should produce a precisely tradeable top when it's hit, given the bull market's intimate dance on two separate occasions with the 22,050 midpoint resistance (p) shown here as a red line. Moreover, when buyers finally blew past the line with a decisive leap on 9/11, they signaled their ability to push this gas-bag all the way to D=22,500. In the meantime, the best buying opportunity I could foresee would take place at the 'p' midpoint support of the small, still-developing downtrending abc pattern shown at the rightmost edge of the chart._______ UPDATE (Sep 26, 4:53 p.m.): Today's action was bullish but unimpressively so, since all the very fleeting rally accomplished was to notch a new impulse leg on the lesser intraday charts. Wake me on Wednesday if anything happens. _______ UPDATE (Sep 28, 12:04 a.m.): The Indoos have been consolidating above a secondary pivot at 22,275 (click here for chart), suggesting that the 22500 target noted above is all but guaranteed to be hit. I strongly doubt it will be exceeded on the first try, however, so traders should plan on getting short there, perhaps using DIA put options. The Dow is on a mechanical buy signal at the moment, though, and if you are long for the move to 22500 as you should be, you can use some of your profits to cushion the stop when you go short.

The Dow's intraday low on Thursday came within 0.22 points of the crystal-clear, 21750.54 target shown. I hadn't noticed this because I don't track the Industrial Average diligently, but it is surely worthy of our attention. If the Hidden Pivot support were to get trashed on Friday or next week, it would be the first time that an ostensible correction pattern of daily-chart degree had exceeded its 'd' target since May 2016. The bull market survived that one, but the Indoos were not in nosebleed territory at the time.  They've got much farther to fall now, as you can see in this chart. The roll-down from way on high looks ominous, wouldn't you say? ________ UPDATE (Aug 21, 11:45 p.m.): A strong rally wouldn’t undo the damage done by Friday’s decisive downside penetration of the 21750 target flagged above. The Indoos fared even worse on Monday, with a 21600 low on the opening bar (click here for a chart)  that exceeded my bearish threshold by 150 points. The short squeeze that followed doesn’t look like it will get very far, since DaBoyz have failed for two consecutive days to extract much leverage from brazen shakedowns on the respective opening bars.  This is the clearest bear-market action we’ve seen in the Indoos in many years. Generally speaking, corrective abcd patterns are not supposed to achieve, let alone exceed, their d targets in bull markets, but it has finally happened here. As a result. we should start taking technical signs of weakness more seriously than before. _______ UPDATE (Aug 23, 6:16 p.m.): I don't want to read too much into this, but the Indoos have turned lower after failing to achieve an 'easy' Hidden Pivot midpoint at 21942. It's nothing that a thrust past it on Thursday or Friday wouldn't cure, but

The Indoos have recently sailed past a 21763 target derived from a nine-month uptrend on the daily chart, so I've hauled out the weekly chart for a look at a much bigger picture. It projects a possible bull-market top at 23317 while leaving room for yet higher targets. Even so, the ABC rally pattern shown offers enough clarity to suggest that when the Dow hits 23317, the Hidden Pivot is not going to give way easily.  As to the likelihood that this number will indeed be reached, I would say there's about an 85% chance. Mainly, it is a matter of how buyers smoked the midpoint Hidden Pivot resistance at 19343 the first time they encountered it. Moreover, the first pullback that followed failed to come down to the red line, demonstrating that Mr Market was, and still is, in no mood to defer to timid bulls who are hesitant to jump aboard. If he runs true to form, the pitch of the rally is likely to steepen in the weeks ahead, perhaps producing the blowoff top that so many of us have patiently awaited for so long._______ UPDATE (Aug 10, 7:34 p.m.):  Today's selloff did no technical damage whatsoever to the daily chart. In fact, the pullback occurred from a price where we might have expected it -- i.e., at the 22,022 midpoint Hidden Pivot shown (click here). Traders please note: A strong 'mechanical' buy signal would be generated if the retracement continues to the green line at 21,200.

I am featuring the Dow Industrials in today's touts because the rally pattern shown (click on inset) looks so perfectly predictable, or very nearly so. My only concern with respect to the question of whether the Dow will reach a 'D' target at 21763 that lies 350 points above is that the initial move through the 21048 midpoint pivot did not go very far before it needed a correction and a running start to reach the next Hidden Pivot level, a secondary pivot at 21383. I have little doubt that if the Indoos reach the higher number, they will stall there very precisely and pull back in a way that will be tradeable.  However, because of the hesitation following the initial move through p=21048, the ability of the Dow to achieve the target is mildly in doubt. The most bearish thing that could happen next would be for the Indoos to fall in such a way that the two external lows shown, respectively 21197 and 21113, are exceeded to the downside with no intervening upward correction. Alternatively, bulls would hold sway if they can close this vehicle above 21488 for two consecutive days. That is the midpoint pivot of a bullish pattern comprising the last five price bars on the chart. All of this may be making your head spin, but I've sketched it graphically because it's important that you know exactly what's going on, and that you are able to follow price action knowledgeably as things unfold over the course of the week.

The Trump rally is finally starting to show a little fatigue, having pulled back in recent days without achieving the 21265 secondary pivot of the bullish pattern shown. The retracement will need to develop a bit more before we can draw meaningful conclusions, but if it comes down to the red line that sits 220 points below, we might look to do some tightly stopped bottom-fishing there. Any rally that ensues would warrant close scrutiny because of the weakness, possibly fatal, hinted at by the failure of the last upthrust to hit our mark. ______ UPDATE (Mar 7, 5:01 p.m.) Another 189 points and the Dow will hit the red line. If we're going to do any bottom-fishing there it will be by way of a 'camouflage' entry in DIA, so say tuned to the chat room if you're interested. If an optimal entry opportunity materializes, it will be posted to The Scoreboard in timely fashion. Regardless, the red line remains my minimum downside expectation for the near term. _______UPDATE (Mar 8, 8:35 p.m. EST):  With today's slippage, the Dow now sits 120 points above 'mechanical' buy-signal territory. I'm more interested in seeing what kind of bounce it gets from those levels than in jumping on a trade with a perhaps 50% chance of going bad. In any event, the red line remains my minimum downside target, so let's see what the next couple of days brings.