Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21
Last Chance to GET FREE Money Crypto Mining with Your Desktop PC - 2nd May 21
Will Powell Lull Gold Bulls to Sweet Sleep? - 2nd May 21
Stock Market Enough Consolidation Already! - 2nd May 21
Inflation or Deflation? (Not a silly question…) - 2nd May 21
What Are The Requirements For Applying For A Payday Loan Online? - 2nd May 21
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part1 - 1st May 21
Are Technicals Pointing to New Gold Price Rally? - 1st May 21
US Dollar Index: Subtle Changes, Remarkable Outcomes - 1st May 21
Stock Market Correction Time Window - 30th Apr 21
Stock Market "Fastest Jump Since 2007": How Leveraged Investors are Courting "Doom" - 30th Apr 21
Three Reasons Why Waiting for "Cheaper Silver" Doesn't Make Cents - 30th Apr 21
Want To Invest In US Real Estate Market But Don’t Have The Down Payment? - 30th Apr 21
King Zuckerberg Tech Companies to Set up their own Governments! - 29th Apr 21
Silver Price Enters Acceleration Phase - 29th Apr 21
Financial Stocks Sector Appears Ready To Run Higher - 29th Apr 21
Stock Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues - 29th Apr 21
Get Ready for the Fourth U.S. Central Bank - 29th Apr 21
Gold Mining Stock: Were Upswings Just an Exhausting Sprint? - 29th Apr 21
AI Tech Stocks Lead the Bull Market Charge - 28th Apr 21
AMD Ryzen Overclocking Guide - 5900x, 5950x, 5600x PPT, TDC, EDC, How to Best Settings Beyond PBO - 28th Apr 21
Stocks Bear Market / Crash Indicator - 28th Apr 21
No Upsetting the Apple Cart in Stocks or Gold - 28th Apr 21
Is The Covaids Insanity Actually Getting Worse? - 28th Apr 21
Dogecoin to the Moon! The Signs are Everywhere, but few will Heed them - 28th Apr 21
SPX Indicators Flashing Stock Market Caution - 28th Apr 21
Gold Prices – Don’t Get Too Excited - 28th Apr 21
6 Challenges Contract Managers Face When Handling Contractual Agreements - 28th Apr 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Dow Support and Resistance Lines

Stock-Markets / Technical Analysis Jun 08, 2008 - 03:22 PM GMT

By: Mick_Phoenix

Stock-Markets Welcome to the Weekly Report. This week we look at some charts, re-introduce you to a way of calling market tops and have a look at what the Russians are saying.

First up are some charts. An Occasional Letter From The Collection Agency subscribers get a week ahead call on the Dow, FTSE and Gold as well as the occasional share that I think has some interesting opportunities. They also receive the Weekly Report and every so often, an occasional letter. Not bad for $20 a Quarter considering the rest of the site is free with many useful links and charts. New uses for a rather good proprietary indicator are sought and after some back testing are introduced to the site. This week I want to share the new hourly Dow indicator, which is still experimental but worth a look.

The indicator highlights support and resistance levels that adjust to a median price of the Dow, I use it in conjunction with traditional support and resistance levels and chart patterns. There is also a moving average that I believe helps to pinpoint shorter term trades. I subscribe to the simple rule that support is support and resistance is resistance. They normally do what they are meant to. Occasionally they don't and we can be alert for those possibilities but in the main, we look to play it straight.

How does it work? Simple, we look at the trend. The green line is the median, the neutral point. The blue and red lines are the proprietary indicator levels of support and resistance. The purple lines are traditional support and resistance levels, the thicker the line the more important the level. The Williams % indicator is used to spot divergences between price and the W% to help identify old, "tired" trends. For "scalpers" on the hourly chart, the red MA helps with shorter term changes in trend.

Here is the Dow hourly February - mid April 2008:

As you can see the chart finishes with the hourly price at support (second blue line up from the green median) after an uptrend move of over 200 points. So what happened next? Did support break and the up move reverse or did support allow for a new base for a move higher?

And here is mid April to current:

Looking at the left side of the chart, that 2nd blue line up from the green median was resistance, it broke, became support and the uptrend continued. That blue line then remained support until 30th April, although braver traders who held until the close of the candle may have stayed long. The trade exit at the 30th April would have netted 250+ pts. However, if you played the move looking to exit at the next resistance attempt (close up view):

you would have netted circa 280 pts as the spike up open and move higher petered out the next trading day. Either trade was good.

Why did I highlight this trade instead of the more eye-catching move up from the green median line and traditional support level at 12350ish? Well, firstly it was only a tentative support level at 12350 and secondly it was a basing move that lasted over 2 trading days, the real move up was the opening spike on the 16th, most would have missed it. Taking the long, in an already established uptrend, later in the day on the 16th when resistance was broken is more realistic.

Taking us back to the current price and we have a nice set up, here is a close up:

Our tentative traditional support at 12350-ish (thin purple line) that we saw back in April came into play in early June. Of more interest right now is where the Dow closed on Friday, right at a prop'y indicator support level. My long suffering subscribers will get my thoughts for next week but as you can see we could be in for a very simple to call move.

Remember though, the hourly Dow prop'y indicator is experimental, the daily version is pointing to a different possible scenario.

18 months ago I wrote an article that showed a set up, discovered by Dan Basch, which helped to show when markets are topping. It has served me well over the intervening period. Now another set up has appeared. Dan used an example of the Nikkei to show the set up. Whilst he uses diamond formations in his example, I do not purely because I don't like them. However, the rest of the chart is a beauty. Here is the chart Dan used:

The part I like is the move from the low into the rising wedge, culminating in the bearish block. The numbers are to identify turns, not Elliott waves. Here is a chart of ......

To read the rest of the Weekly Report, visit An Occasional Letter From The Collection Agency and sign up to the 14 day free trial.

By Mick Phoenix

An Occasional Letter in association with

To contact Michael or discuss the letters topic E Mail .

Copyright © 2008 by Mick Phoenix - All rights reserved.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Do your own due diligence.

Mick Phoenix  Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in