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Hey Market Timer!

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Today we will be covering...

  • Today, we will examine some amazing fractals of significant Dow Jones Industrials peaks.

Fractals of Stock Market Peaks in Dow Jones Industrials

  • The stock markets and financial instruments in general exhibit repeatable fractal patterns and time and price relations.

  • Fibonacci relations, Gann patterns, Harmonics, and Elliott Waves are some of the most well-known frameworks based on fractals.

  • The chart below shows a golden section of Dow Jones Industrials (DJI) peaks in 1929, 1966, and January 2025.

  • The first two were among the most significant peaks in the 20th century.

  • Will the Jan’25 DJI peak be among the most significant in the 21st century?

  • It is possible, given extreme valuations.

  • The same Fibonacci golden section relation exists on a shorter time scale, specifically for the 2020, 2022, and 2025 DJI peaks.

  • The 2025 held, so far.

  • Beautiful and amazing. 

  • This is yet another peak time relation fractal (golden section) of DJI’s peak on a much shorter time scale than the previous two.

  • I posted it on Monday on X. It worked. The pullback does not need to be as deep as in the previous instances, but it could.

Sentiment & Technical Analysis

  • After reaching the Oct’24 levels, the CNN’s Fear & Greed Index (CGI) rolled over.

  • However, if the stock market blowoff top is in the cards, the CGI can push into Extreme Greed (>75). The chart below provides a longer term perspective.

  • The CGI is not a trading signal by itself, but at extremes, it can be useful in conjunction with other technical analysis indicators/tools.

  • I like several technical indicators to get hints about trend reversals.

  • The SPX chart below shows two.

  • The top window shows the NYSE McClellan Oscillator ($NYMO).

  • $NYMO declined for more than a week while SPX rocketed higher after the so-called US-China “trade deal,” which was essentially just an initial conversation.

  • That negative divergence was an advanced warning about a possible trend reversal, and SPX finally dropped last week below the blue rising channel and into relatively strong support.

  • SPX attempted a bounce on Friday off the upper end of the gap and 100D and 200D MAs. 

  • It may bounce more, but it should eventually close the gap (there is another gap in mid-April).

  • Below the gap would be a bearish development, confirming a trend reversal.

  • For trend reversal confirmation and trend following, I like the NYSE McClellan Summation Index ($NYSI) shown in the bottom window.

  • $NYSI curled down, but I like it to cross the 10D EMA as a reversal confirmation signal to minimize whipsaws.

BraVoCycles on X

  • Consider following me on X (former Twitter) in addition to the newsletter, as I often post valuable information there in real time between the newsletters.

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