Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Alert: The Dikembe Mutombo Continues to Hold!

Stock-Markets / Stock Markets 2018 Dec 19, 2018 - 04:21 PM GMT

By: Barry_M_Ferguson

Stock-Markets

A lot of people voice opposition to walls. Funny. There is a wall on the Dow Jones Industrial’s chart.

Yeah, I know. Readers of my blog are shocked that Dow 24k cannot be breached. Again, as former NBA star Dikembe Mutombo used to block shots near the basket, the Federal Reserve certainly does the same in stocks. Specifically, they are currently defending the Dow 24k line with great force and determination. Check my previous blog posts for the DML (Dikembe Mutombo Line) origination.


Fundamentally, there are reasons why investors would be selling stocks right now. Since President Trump’s election, there has been an unabated (early 2018 not included and now irrelevant) push higher peaking at, as I estimated in previous articles, at Dow 26k (Actually 26800 - the Fed was just showing off). Many market observers agree that stock prices are pricey, debt of all kind is due to delirium, corporate earnings may erode as the tax cut effect of 2018 ebbs, international problems seem to be proliferating, and the rest of the world seems to be wobbling economically speaking. There are many reasons to sell.

There are few reasons to buy other than Donald J. Trump is the current POTUS. We all know that in January the Democrats will again assume control of the US House of Representatives. Their single-minded mendacity will be directed at the POTUS and by definition or ‘representation’ the american citizenry. Absent the tens of trillions of stimulus money thrown at the economy and zero percent interest rates throughout the preponderance of President Obama’s term, the stock market indices would surely have led a route to depression. We should expect chaos and mayhem to ensue upon arrival of the democrats, socialists, the Marxists, and communists. Yes, the democratic party is indeed inclusive. Anyone that hates America and Americans is welcome.

Will the Republicans be able to stop the Democrats? I hardly think so. The Republicans can’t get in to the House Chamber because they are outside pulling on the door marked ‘Push’.

So, trouble could be in store for investors seeking returns in stocks. But ultimately, the Fed will save us all. As Nick Diaz once said to his opponent in mid-fight, “Don’t be scared, Homey.” 

Chart 1 below shows 4 days of trading with 15-minute bars for period 12/6/18 - 12/11/18. If we were calling a heavyweight fight that had turned into a slugfest, we would say, “…a left to the body, a right to the head, followed by a brutal left hook…” and so on. If we were calling the action on this chart, we would say, “…up 800 points, down a thousand, up 800, down 600, back up 500!” All that action is from 5 dominant waves of buying or selling over the course of just four days. Note the three times on this chart that the DML was challenged resulted in an immediate barrage of buying. Who buys this market when it is diving other than central bankers and other manipulators?  

Chart 1: DJIA - 4 day 15 minute bars ending 12/11/18

 

Chart courtesy StockCharts.com

How important does the DML look on a longer term chart? Chart 2 below is a look at the Dow Jones Industrial average since just before the 2018 election.

Clearly stock prices reacted positively to the election of President Trump. It may have done so had Ms. Clinton been the victor. The markets do what the Fed wants them to do. The important thing though is to stay in the moment. Why is the Dow 24k level (the DML) so important? One only needs to see Chart 2 for a visual as to tracking the most important factor driving stock prices. That, of course, is central banker support. Like most vermin, they leave a trail. I drew a line along the 24k DML. It shall not be breeched!

Chart 2: DJIA - Since just before 2018 election

Chart courtesy StockCharts.com

Barry M. Ferguson, RFC
President, BMF Investments, Inc.
Primary Tel: 704.563.2960
Other Tel: 866.264.4980
Industry: Investment Advisory
barry@bmfinvest.com
www.bmfinvest.com
www.bmfinvest.blogspot.com

Barry M. Ferguson, RFC is President and founder of BMF Investments, Inc. - a fee-based Investment Advisor in Charlotte, NC. He manages several different portfolios that are designed to be market driven and actively managed. Barry shares his unique perspective through his irreverent and very popular newsletter, Barry’s Bulls, authored the book, Navigating the Mind Fields of Investing Money, lectures on investing, and contributes investment articles to various professional publications. He is a member of the International Association of Registered Financial Consultants, the International Speakers Network, and was presented with the prestigious Cato Award for Distinguished Journalism in the Field of Financial Services in 2009.

© 2018 Copyright BMF Investments, Inc. - All Rights Reserved

Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article. 


© 2005-2022 http://www.MarketOracle.co.uk - 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