Terry Kinder

Dow Weakness? DJIA Afternoon Update 12-11-2018

After Rising to 24,791.26, Dow Struggles

Slip Sliding Dow

The DJIA managed to rise as high as 24,791.26 earlier today, crossing the 24,576 level which marks the line between the 6th and 7th levels of 9. Afterwards, the Dow resumed what has been, generally, a downward trend.

Tensions - US and Abroad

It seems that political tensions, both at home and abroad, aren't aiding the US stock market. Brexit negotiations, and a potential vote to approve the terms of a deal negotiated by the May(be) Government, appear to be threatening continued support of the PM's government and thrashing the British Pound Sterling. Continued ratcheting up of trade and military tensions between the US and China may also be restraining the market. In addition, there is the instability in France - possibly busting their budget - as well as continued budget issues for Italy. As if that weren't enough, the potential for further Russia-Ukraine conflict and Russia's deployment of the nuclear capable Tu-160 Bombers to Venezuela threatens to further sour deteriorating relations between Russia and the US plus Europe. Certainly not the ingredients you want for political stability and happy markets.

A Topping Market?

Apart from all the pieces of bad news - whether it be interest rate inversions, or some worse than expected economic numbers - the market has also been nearing the top of a long-term range which began when the DJIA crossed 12,288 and tops at the 30,720 level. The Dow has reached as high as 26,951.81 which placed it within the 8th level of 9. It has yet crossed into the 9th level. This is not necessarily anything abnormal. It would be completely unsurprising if the market needed several runs - and maybe even a period of lower prices - before it gained sufficient momentum to cross 30,720 and begin the next leg of price expansion. Unless the market can get a monthly close above 27,392, there exists the possibility for the market to make its way down - at least initially - to the 22,016 level.

Testing the Psychological Level?

Aside from any technical type level, we should also consider psychological market support levels. The primary psychological level providing some support to the market for most of 2018 has been 24,000. The market has been testing this level, and may continue to do so. Below that, the 23,808 level could also prove important. This is another level where the market could potentially bounce should downward price pressure push it below 24,000. While 24,576, so far, has not provided much strong support or resistance as the market has moved up or down, should the downward pressure become more sustained, it would be worth watching to see if the market begins to have difficulties sustaining price above that level.

Is Santa Going to Give the Stock Market a Lump of Coal This Year for Christmas?

It has been a rough sled for the market lately. Will Santa Claus give the market a rally or put a big lump of coal in investors' stockings this December for Christmas?

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Dow Bounces off Support? DJIA Morning Update 12-11-2018

Is the 24,000 Level Safe for Now?

Housekeeping: Revision of Levels

Was doing some testing and revisions last night of the DJIA levels and realized that my original hand-written levels on printed spreadsheets were incorrect. However, the result of that is that the bottom of the long-term market starts at a higher level than previously stated and the top end comes at a higher level than previously expressed. The corrected 9 market levels are as follows:

1. 12,288 - 14,336
2. 14,336 - 16,384
3. 16,384 - 18,432
4. 18,432 - 20,480
5. 20,480 - 22,258
6. 22,258 - 24,576
7. 24,576 - 26,624
8. 26,624 - 28,672
9. 28,672 - 30,720

These levels make a little more sense in terms of the price movement of the current market. The all-time high of the Dow was 26,951.81. This is within the 8th level. It is common for markets to struggle and take time to not only reach their 9th level, but also to exceed that level and move into the next expansion leg. This correction of our levels signifies the current market has never entered into the 9th level, and the times it fell below 24,576 it actually entered the 6th level.

DJIA Futures Fair Market points to a nearly 350 point bounce this morning which would move it back to within the 7th level. The correction of levels also means that the market is currently targeting 22,016. Only a monthly close above 27,392 would invalidate that.

Buy, Buy, Buy!

This is not a recommendation to buy. It is, however, a comment that - at least for the moment - it appears that the market may be tilting away from selling mode and towards buying. Market sentiment has been largely negative as reflected in news headlines and stock prices. After 3 days of declines, the market finally finished slightly positively yesterday, closing at 24,423.30.

Levels to Watch

Today watch the 24,576 should the market begin to slip from its strong opening. The 24,576 market represents the line between the 6th and 7th levels of this market after our revisions. Above that watch 24,832 to see whether or not that level presents resistance to the upside or not. If for some reason the market were to slip into negative territory below 24,576 - which doesn't seem likely, watch the 24,064 level which is also near the market's psychological support level of 24,000.

That Cat is Still Alive

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Psychological Support - DJIA Afternoon Update 12-10-2018

24,000 Has Continued to Provide Psychological Support for the Market

Afternoon Rebound

The DJIA has rebounded off today's low (at least thus far) of 23,881.37 to over 24,100. The 24,000 has continued to provide psychological support to the market. The market has been bracketed within a range between 23,808 and 24,320 though there is nothing keeping the market from trading outside that same range.

Running out of Sellers for Now?

The opinions about the market - given events ranging from a US-China trade war plus heightening military tensions, to a Parliamentary vote delay on BREXIT vote, have soured the mood of stock markets in the US.

At some point fear will be overcome by greed and sellers relative to buyers of stocks will halt the ongoing slide of the DJIA. After losing ground on the 4th, 6th and 7th of December - falling from 25,826.43 to 24,388.95 - and pessimism will be wrung out of the market in favor of  - if not optimism - some kind of hope that losses will not continue to pile up.

Somebody Has to be Wrong

The stock market works on the basis that somebody has to be wrong and somebody has to be right. It is something so obvious that is more often than not goes without saying. However, it is good to consider that not only does somebody have to be wrong, but that quite often most people will be wrong and this is a significant factor in moving markets.

Some Levels to Watch for Remainder of Today

As stated earlier, the market has been bracketed within a range from 23,808 to 24,320 today. Above that watch 24,576 which is the line between the 7th and 8th levels of this market of 9 overall. Whether or not the market falls within the 23,808 to 24,320 today, or above it, could help indicate the strength or weakness of the current market. Finishing above that range would indicate at least a slight - if temporary - strengthening.

Can the Market Get Some Lift?

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Can DJIA Snap Losing Streak? DJIA Morning Update 12-10-2018

Dow Down Last 3 Sessions

More of the Same for the Dow?

On December 3rd the DJIA closed at 25,826.43. Since then it has had the following closes:

• December 4th - 25,027.27
• December 6th - 24,947.67
• December 7th - 24,388.95

So, after 3 down sessions for the Dow and a flood of news about the outlook for the market looking negative, can the DJIA have an up day today or not?

Some Numbers to Watch

With Friday's close of 24,388.95, that put it below 24,576 - which marks the line between the 7th and 8th levels of this market's long climb between 10,240 to what would be the 9th level top end of 28,672. On the monthly level a close below 25,088 would point to a bearish outlook for the market. A close above 25,088 for the month would be somewhat neutral. A monthly close above 27,648 would indicate that the market could attempt to move through the 9th level and on to the next higher leg of price expansion.

Psychological Support at 24,000

Near the 24,000 level has provided psychological support for the DJIA for most of 2018. Generally, the Dow has not spent much time at or below this level before moving back up. That could prove the level to watch which determines how the Dow ends this year and could play a significant role in what the market looks like in 2019.

Climb Back up Those Stairs or No?

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Disappearing Dow 2018 Gains - DJIA Evening Summary 12-7-2018

A Tough Pearl Harbor Day for the Stock Market

It was a rough day on the Dow as stocks got hammered, falling back to a loss for the year, on the anniversary of the bombing of Pearl Harbor.

The Dow Jones Industrial Average fell 2.24% and is down 1.34% year-to-date. The S&P 500 fell 2.33%, while the Nasdaq Composite fell 3.05%.

Pick Whatever Reason for the Drop You Like

Any number of culprits are being blamed for the stock market's reversal of fortune:

• Potential US-China trade war
• Interest rate inversion
• Decreasing job growth
• Wage growth falling short of forecasts
• Recession fears

Big Picture

But, when push comes to shove, the DJIA has been sitting near a top for a while now. The big picture on the Dow is that it has been within a long-term range stretching from 10,240 to 28,672. This range is divided into the following 9 levels:

1. 10,240 to 12,288
2. 12,288 to 14,336
3. 14,336 to 16,384
4. 16,384 to 18,432
5. 18,432 to 20,480
6. 20,480 to 22,258
7. 22,258 to 24,576
8. 24,576 to 26,624
9. 26,624 to 28,672

Some Levels to Watch

The DJIA's close of 24,388.95 puts it below 24,576 which marks the line between the 8th level of 24,576 to 26,624 and the 7th level of 22,258 to 24,576. 24,576 has not been an overly strong level of support and resistance so far. Whether or not that changes remains to be seen.

On the monthly level 25,0888 is still the number to watch currently. A close on the month below that would provide a bearish tone to this market and open up the possibility to a further decline.

Pychological Support

Psychological support still remains around the 24,000 level. For most of 2018 the Dow has managed to stay above the 24,000 level. Periods under 24,000 have been relatively brief. So, if the DJIA continues to decline during the course of December, the 24,000 level will be the psychological line in the sand that will either support the market or will break its back.

Reversal of Fortune

Should the Dow make a comeback then the following levels would come into play:

• 24,064
• 24,576 (the line between the 7th and 8th levels)
• 24,832
• 25,088 (the number to watch for the monthly close)

Conclusion

You can pick or choose or mix and match whatever reasons you like for the current decline in the DJIA. However, the levels outlined previously pointed to the area above 26,624 as one where resistance would likely stiffen. At this point it would seem to require some new input of energy, information, excitement and perhaps a return to the US role as a safe harbor for investing in light of events in Europe and abroad to provide the catalyst and launch the next leg higher of the market. At this point there isn't much that can be definitively be said about the market, but each move lower puts a monthly close above 25,088 a little further out of reach.

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