Long term outlook on Dow Jones Industrial Average – US Equity market!
US Equity Bellwether has continued to maintain its uptrend which started from 2009. Although in corrective manner but prices have touched the new life time highs near 22000 level. However now it is important to look at the long term chart which we have shown below. We follow Elliott wave theory to understand the market behavior and along with this, use of basic technical’s like Channels and Trendlines is very important. Look at the below chart which is taken from “The Financial Waves Monthly Update”.
DJIA Weekly chart:
“US Bellwether Dow Jones Industrial Average has continued to maintain its upward journey. This index is now trading at life time high along with psychological level of 22000. This may be the surprise for majority as it has continued to move higher irrespective of the Global news or events or Fed decision on Interest rates. It seems that this market is busy following its trend rather than focusing on any negativity. However at times it is better to look at the technical structure rather than getting carried away by the ongoing trend.
Elliott wave perspective: On a bigger degree since 2007 this index has been in corrective mode in form of primary wave  which we have shown many times in previous monthly updates. In the current report we have shown weekly chart since 2009 to understand the internal structure. From 2009 intermediate wave (X) is ongoing which is forming Triple standard correction pattern.Here we can see that first standard correction formed Zigzag correction pattern and post the same Diametric pattern was …..
Expanding Structure: The entire rally from 2009is in Expanding structure.Here we can see that trendline resistance is connecting all important highs from where correction was witnessed earlier. Hence this is the time where one should be cautious and alert.
Monthly bar technique: This is one of the tools to follow the trend which comes under reactive methods. It is interesting to see that from last 9 months prices have not violated the low of prior month. So as long as this continues trend continues to be positive but as mentioned above due to the strong resistance, one should always keep strict risk management level in place. Prior months low is placed at 21280 level, so any close below this level will provide ……
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