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Bubble Watch - Maybe it only just started, Dow 50000 - Update 2
Created on: 8/7/2021 6:45:01 PM   Last Update: 8/7/2021 6:48:35 PM Posted by: RTT

bubble-watch--maybe-it-only-just-started-dow-50000--update-2A brief chart post of why Dow 45,000 to 50,000 is on the table.

Many are forecasting a blow off top for stocks. This is fair, and it has happened a few times before, one lead into 1987 (first chart below, see A)  and another into 2000 (first chart below, see B and C) Dow Jones market tops.

The Detrending Price Oscillator (DPO) indicator measures price away from a simple moving average in percentage terms.

POINT: In short it measures how far the rubber band is stretched. 


Lets look at the DPO indicator. Currently today's price position is at 3 (or 60%) this is equal to prior positions of 1 and 2 (first chart below). The DPO price (3) can move all the way up to prior tops of A,B and C, to X. If this happens, it will be equal to a Dow Jones price range of 44,000 and 50,000, see X??. This a percentage gain of 25% to 45%  (current Dow Jones is 35,000).

POINT: Investors will not want to miss out on these gains.


The red cycle shown on the Dow as worked very well over 100 years, please review the red cycle high during the 1987 top, this can happen again in 2021/22. History may not repeat exactly, but it sure can rhyme. 


Chart 1 - Dow with the DPO.

DOW 1




Chart 2 - Price bands


DOW 2



Divider




NOTE: Posts here are the lite version, more depth on each subject can be found via our RTT Plus membership.

Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, Cycles, Wyckoff and Ney logic is the best way to ride the change, after all these methods have been used successfully for 70+ years. This post is a delayed and small sample of what is avaliable to members. Sign up to enjoy the full service.


NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote...

.."Successful tape reading is a study of force. It requires the ability to judge which side has the greatest of pulling power and one must have the courage to go with that side"..

Richard D Wyckoff


.."Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected"..

George Soros


Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

Nobel Laureate for Economics Paul Samuelson


..“Bull markets are born on pessimism, grow on scepticism, mature on optimism and die of euphoria.”..

John Templeton


...“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”...

Martin Zweig (The inspiration behind a number of Martin Zweig’s methods came, from Jesse Livermore).




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