State of Dow Jones - Calendar Week 41 2021

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State of Dow Jones - Calendar Week 41 2021 Welcome to the second episode of the blog post series "State of Dow Jones", where we look at the leading US stock index from different perspectives and try to determine how solid the current development is. Technical Chart for Dow Jones Every "State of Dow Jones" blog post should start with the technical chart, so here we go (created on tradingview.com): The Dow Jones overcame the old falling highs and the important resistance at 25 000, now trading at 35 294 points. The index is trading above its SMA 20 again and even went into the upper Envelope band. This means the Dow is slightly overheated and it is likely that the index will show a small pull-back before rising again. The RSI is at 60, three trendlines were identified and crossed during the last trading days. The technical chart provides us with enough confidence to say that the correction might be over and the outlook is neutral, or maybe even slightly bullish. Marke

DAX falling and rebounding as expected

DAX falling and rebounding as expected

An arrogant headline, true. Market breadth data simply nailed it and yesterday, I announced on twitter that anti-cyclical traders will have their chance:

 

But also the technical chart provided an indication how deep the DAX might fall today.


Technical chart and analysis for DAX

Technical chart for DAX with Envelopes and RSI, created on tradingview.com

The orange trendlines mark the ongoing mini consolidation for the DAX. The limiting line on the top was already present, but it was unclear, at least for me, where its counterpart at the bottom would appear. But after today's trading day, it is easy to clone the trendline on the top and apply it to the chart.

The price bounced away from this lower trendline and today's strong bullish intraday reversal clearly was a signal of strength. 

The price also was not far away from the lower Envelope border. Hitting that region would have given an oversold signal.

The index still trades below its SMA 20 and the fact that the SMA 20 points downwards confirms the short-term trend (declining).

It is now important that the old high at 15501, which marks a region of strong support, will hold.

Technical: Downside, but in a healthy way ;) Nothing to worry about, at least not at the moment.

Market breadth chart for the DAX

Market breadth chart for DAX provided by www.advance-decline.net

The Envelopes on the market breadth chart for the DAX were not touched by the price (at least not on close basis, but surely on intraday basis). Still, you can see that the index reached an interesting low today, slightly comparable the the one on July the 19th.

The Advance Decline Line for DAX followed the price movement.

The data for Advanced vs. Declined hit 0 today, but did not rise above this level (yet).

The McClellan Oscillator for DAX marked a low yesterday, and again, this is comparable to the low in mid July. It will be very interesting to see if the index will develop in the same way as it did after July the 19th.

The McClellan Summation Index for DAX is on decline again, marking a weaker phase for the index on the bigger time frame.

Market breadth: We've definitely seen weak data here for yesterday and today, but there is hope that a bottom is being formed and that the DAX will stop declining. However, the technical chart says that the index is now trading within a declining range, so we might be in the middle of an ongoing consolidation, and from a technical point of view, it would be a surprise if this consolidation will end within the next trading days.



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