Dog and DJIA Afternoon Update 12-7-2018

Dow Swings Lower - DJIA Afternoon Update 12-7-2018

Will DJIA Swing Higher for the Close Like Yesterday or No?

Good Dog? Maybe

Had to take my dog to the vet this morning for his annual checkup. He has occasional seizures so he needs blood work periodically to make sure his dose of medication is still right. Fortunately, it's still good. In fact, will probably try to reduce his dose further and see if he can maintain the same level of seizures or not.

He also has a bit of lenticular sclerosis which is not uncommon for a ten year-old dog.

Lenticular sclerosis or nuclear sclerosis is the medical term for a bluish transparent "haze" that develops in the lens of the eye in middle-aged to senior dogs. This is considered a normal change in the lens associated with aging, and is observed as a cloudiness or bluish discoloration on the pupil.

Vision does not appear to be significantly affected in dogs diagnosed with lenticular sclerosis. This condition is not the same as cataracts. Cataracts are white and opaque and represent a change in the ability of light to penetrate to the retina. Cataracts cause diminished vision. Cataracts and lenticular sclerosis are two of the most common eye problems seen in dogs over the age of 9. Some estimates show the prevalence of lenticular sclerosis or cataracts at 50% in dogs over nine years of age and 100% in dogs over the age of thirteen.

Other than that, he has pretty normal dog issues. He's a little bit overweight and has a little bit of tartar on his teeth that needs to be cleaned. He's a mix between a Jack Russell Terrier and Cocker Spaniel. The vet tech commented that he certainly has not lost his energy. He's pretty much been a wound coil waiting to spring since he came to the house as a puppy. Our previous dog was a Shih-Tzu, so it was quite a change when our tiny puppy suddenly starting bounding up and down all the stairs in the house and jumping into our somewhat tall bed.

For some reason he doesn't much like the vet and tries to bit or at least nip at him. It's not something he tends to do with anyone else. The vet is very nice, but it doesn't seem to matter - I guess my dog holds a grudge for all of various shots, poking and prodding of him by the vet in the past.

Now that he's home, he has become a Stage 4 Clinger

Back to the DJIA...

The Dow Jones Industrial Average has been down as low as 24,350.42 on the day, and is down about 520 as this is being written. We're once again below 24,576 which marks the line between the 7th and 8th levels (of 9) - or, 22,258 to 24,576 and 24,576 to 26,624, respectively.

A close below 25,088 would give the Dow a more bearish outlook. A close above 27,648 would signal the DJIA was attempting to enter into the next higher leg of price expansion.

The DJIA managed to finish just above the 25,088 level at the end of October, closing at 25,115.76. November's close was higher at 25,538.46

Signs, Signs

There have been worrying signs for the DJIA, including continued trade tensions with China, the recent arrest and threatened arrest of Huawei's CFO for allegedly violating the United States' Iran Embargo, interest rate inversions, weakening economic numbers, falling housing prices, etc., etc.

Psychological Support

The DJIA has managed to stay above psychological support at 24,000 for most of 2018. Should the Dow continue to decline, that would be one the next significant levels to keep an eye on. The 24,576, as the line between the 7th and 8th DJIA is also worth watching, but it hasn't proven to be a significant barrier either as support or resistance. It has been a level that gets crossed over and under, seeming to act as little more than a small speed-bump.

The Big Swing: DJIA Evening Summary 12-6-2018

The Big Swing: DJIA Evening Summary 12-6-2018

A Wild Ride on Dow as it Swung as low as 24,242.22 and as high as 24,951.01

Today's DJIA session was the kind that gives an investor whiplash. Tuesday's market close (there was no trading on Wednesday due to President George H.W. Bush's funeral) was 25,027.07. The market opened today with a large gap down and traded as low as 24,242.22 - 784.85 lower than Tuesday's close - before rebounding all the way to 24,947.67, or 79.40 lower for the day.

Despite everything, from the arrest and possible extradition to the US of Huawei's CFO, fears of a wider US-China trade war, an interest rate inversion, and recession fears, the Dow has not yet fundamentally moved from where it was at either the end of October or November. The DJIA sits near the top of a range which began at 10,240 and extends to 28,672 long-term. With a few exceptions over the past few months, the Dow has remained at the 8th and 9th levels of this range. The 8th level ranges from 24,576 to 26,624. The 9th level ranges from 26,624 to 28,672. After topping at 26,951.81 for an all-time high, the Dow has mainly traded within the 8th level, while spending a little time in the 7th level which ranges from 22,528 to 24,576.

There is a fair deal of psychological support for the market near the 24,000 level and the market has not spent a relatively small amount of days trading below 24,000 during all of 2018.

On a monthly basis 25,088 is an important level, as closing below that level for the month would signal the market is turning more bearish. A monthly close above 27,648 would signal that the market could be getting ready to continue moving higher to the next higher leg of market price expansion.

For now though, the market waits for a definitive price signal to indicate which direction things are heading.

via GIPHY

Dow Under 24,576 - DJIA Afternoon Update 12-6-2018

Dow Under 24,576 - DJIA Afternoon Update 12-6-2018

The situation on the DJIA has improved when compared to being down over 700 points earlier today, but is not vastly improved versus the predicted opening predicted by Futures Fair Value this morning.

There are any number of reasons that the news points to as to why the DJIA is declining - continuing trade tensions with China, the arrest of Huawei's CFO, the recent interest rate inversion, forecasts of recession either next year or the year after, etc., etc., etc.

But a simple answer is that the DJIA has been near the top of a long-term range that runs from 10,240 to 28,672 for a while now. As a reminder, there are 9 levels which are:

  1. 10,240 - 12,288
  2. 12,288 - 14,336
  3. 14,336 - 16,384
  4. 16,384 - 18,432
  5. 18,432 - 20,480
  6. 20,480 - 22,528
  7. 22,528 - 24,576
  8. 24,576 - 26,624
  9. 26,624 - 28,672

The all-time high on the Dow was 26,951.81 which was within the 9th level - although near the lower end.

When the price of a market, or a commodity such as gold, nears the top of a range one of two things is going to happen. It will either punch through the top of the range where it can continue to move higher in a new leg of a bull market or it can fall back down. Of course there are other options. It could travel sideways, rise to the next higher level and then fall back, etc. But the two basic choices are higher or lower. Stay within the current set of ranges or move to the next higher set. In the case of gold back during its bull market it reached a high around $1,900 depending on how you choose to measure - intraday, daily, etc. The high end of the range for gold was a little above $1,950. So, where the gold price stopped was not terribly surprising either in terms of its range or the psychological level of $2,000 per ounce.

We shouldn't be shocked either that the DJIA would near the top of a long-term range and see some price action to the downside. We do not yet know for certain whether the downside movement will be sustained. A close below 25,088 for the Dow will indicate the market has taken a more bearish stance. Closing below 24,576 would move the market from the 8th level into the 7th level. There is nothing magical about 24,576. It is merely the boundary between two levels. The Dow has crossed above and below it several times recently. However, it is good to just be aware that it straddles two levels and a close below 24,576, if sustained could be an early sign that the market may slip further. But really, until we get the December monthly close, any of this is just speculation.

Bad News for the Dow - DJIA Morning Update 12-6-2018

Bad News For the Dow

DJIA Morning Update 12-6-2018

The news this morning for the DJIA has not been good:

Futures Fair Value indicates that the DJIA could open down nearly 450 points from the previous close of 25,027.07.

If downward pressure continues it may well be worth watching the 24,576 level which represents the line between the 7th and 8th levels of the DJIA price. The long-term DJIA range runs from 10,240 to 28,672.

The 7th and 8th levels of the DJIA are:

  • 7 - 22,528 - 24,576
  • 8 - 24,576 - 26,624

Should the DJIA come off lows then 24,832 and 25,088 would be the next higher levels to watch for. A monthly close below 25,088 would indicate a more bearish market. The DJIA has been perched near the top of its long-term range with the all-time high being 26,951.81.