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Point & Go Figure




Below are some charts that caught my eye, as well as some that were requested by Minyans. If you would like a chart reviewed, let me know here.

I have added text and illustrations to the charts where necessary.

All charts courtesy Dorsey, Wright & Associates.

Dow Jones (DJIA)
This long-term, 100x3 scale chart of the Dow Jones Industrials shows the importance of yesterday's price action. The cyclical trendline from the March lows has now been violated, and confirmed with a double bottom break.

Markets do not move down in straight lines, but as long as this index remains below 10,800, the path of least resistance is lower, to below 9,800 based on an initial price count.

Given that objective, we are now nearly in the middle of the upside resistance and the initial downside target of 9,800. Entry is critical when playing the short side since the general long-term direction and movement though time of the stock market is not supportive of your position and therefore cannot bail you out of poor entry points. Using the Diamonds point scale (the ETF which trades based on the Dow Industrials) the point & figure technicals suggest a better entry for short positions would be above 105. Not advice, just sharing the process by which I evaluate risk/reward.

Diamonds Trust Series I (DIA)

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No positions in stocks mentioned.

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