Is Dow Jones in a Trouble?

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BraVoCycles Newsletter
February 05, 2024

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Market Summary

Many people consider Dow Jones Industrials to be the Market. Like “How did Dow close today?” So, looking at the Dow, we get a similar picture to that of SPX and NDX. In my humble opinion, it should start a correction any day. Although a downdraft could take a year, we will focus on an expected cycle trough in about March.

The market may have made a top on Friday afternoon in the short term, but the drop and bounce are not 100% clear from the EWT perspective. Thus, although I prefer further down, I leave a possibility for another pop higher open. Tuesday morning will clarify; down in the first two hours will be positive for my preferred view.

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Technical Analysis

The technical chart of Dow Jones Industrials ($INDU) is shown in Figure 1.

$INDU momentum peaked in the 2nd half of December, and RSI and MACD developed negative divergences since then. Negative for $INDU.

Note the black channel defined by the October 2022 and 2023 lows. $INDY slightly penetrated the channel's upper trendline, an overthrow, but it was rejected and pulled back below it.

These are good arguments for a bearish case if you are a bear. And there are more arguments. Another one is the potential Dow Theory sell signal, which I presented about 4 weeks ago. Here is my YT video, still relevant. I do not have any good bullish argument currently.

Figure 1 – Dow Jones Industrials daily chart with technical indicators.

Nothing about the sentiment today. We have beaten it to death recently.

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