Be Careful Out There....Dow 5-Day Chart

looks absolutely wild. For two days in a row, Dow Jones Industrial Average, along with S&P500 and Nasdaq, went down in an above-average volume. Back to back distribution days.


This doesn't feel like a healthy consolidation, which you call when the index goes down modestly on a subdued volume. This is a high-volume dump. The 5-day 15-minute chart of Dow below does look like a whip-saw action you would see near a market top.

People who follow Elliott Wave Theory are gleefully calling the start of P3, a big down-leg which will undercut the low of the initial P1 down-leg.

On a one-year weekly chart, Dow almost touched (but never did) the 89-MA and turned back. It could be the start of a temporary but sizeable pull back, like the one we had from mid June to mid July, or it could indeed be the start of P3.

The stock market crash of 2008 started in earnest on October 1st, 2008. Dow kept dropping for 8 trading days straight. Just the friendly reminder.

Dow 5-day Chart: Ascending Triangle?

It looks to me like "ascending triangle" formation over the two days. Usually the break is to the upside, but since today is a quad-witching day I don't think it will happen. But who knows? It's Mercury Retrograde, after all...



(If a breakout ever occurs out of this pattern (if this is an ascending triangle pattern, that is, LOL), the target for Dow is about 100 points up from here, bringing the index very close to 10,000. DISCLAIMER: I am not not qualified to advise, recommend on the stock market, and this is only for your and my entertainment.)

EOD (end of day), the crooks otherwise known as market makers and specialists, managed to end Dow Jones Industrial Average right on the dot on the lower ascending trendline. The ascending triangle formation is still intact, which may or may not be significant, as this was a quad-witching Op-Ex (option expiration) day.