I don’t like charting the Dow.  Of all the manipulated indices in a manipulated market, it’s the “manipulatedest.”   Nevertheless, I received a query from a member today and thought it’d be interesting to take a fresh look.

This comes as a shock, but it continues to be manipulated higher.  A year ago, I noted it had reached significant resistance at the 1.618 Fib extension of its drop between 2007-2009.  It had struggled to reach this level, requiring a breakout from the rising channel dating back to the age of dinosaurs.But, as luck would have it, Trump was elected and stocks tanked…for several hours.  The resulting panic prompted a response by USDJPY, CL and VIX that was so dramatic that DJIA broke out past the 1.618 extension and the rising red channel. 

Not even bothering with a backtest, it has since soared nearly 20%.  Is there anything that can stop it?

continued for members…

The rising white channel is alive and well.Though the red channel midline is being tested — just north of the latest 1.618, of course.We could get a reaction here, but I wouldn’t count on it dropping further than the 1.618 at 22536 (-0.6%.)  If it does, there’s downside potential to 22179 — a  2.2% drop and, below that, 20193 in Mar 2018.  I suspect it’ll catch support from the rising red channel .236 line or one of several SMAs which are rushing to catch up before that happens.

There is no shortage of downside targets, but we’ll wait to see if it can break trend before getting excited about it.  While I like the idea of a serious correction, I wouldn’t hold my breath.