DOW JONES starting new rally to 36000.

14 апр. 2022 г.

Dow Jones (DJI) has been correcting inside a Channel Down ever since the March 29 Top. This was the top of the March rally that broke emphatically much higher than the 1D MA50 (blue trend-line), effectively confirming that this was the market bottom during the Ukraine - Russia war and the ongoing battle with inflation.

During uptrend technical structures, short-term Channel Down corrections are considered to be Bull Flags that serve as opportunities to buy for the continuation of the long-term bullish trend. The last such Bull Flag pattern, after a market correction of similar structured magnitude, was in May 2020 following the March 2020 correction due to the COVID pandemic market crash. Note that in both cases, the 1D Death Cross pattern (when the 1D MA50 crosses below the 1D MA200 (orange trend-line)) was formed on the market bottoms.

As you see, both Bull Flag patterns formed around the 0.618 Fibonacci retracement level and corrected as low as the 1D MA50 inside the Red Ichimoku Cloud. In 2020, shortly after the Bull Flag broke to the upside, the 1W MACD formed a Bullish Cross. On the current (2022) pattern, the 1W MACD is very close to forming that Bullish Cross, potentially meaning that we are currently on an early buy signal.

When the Bull Flag broke to the upside, the 2020 pattern made its next Higher High just above the 0.786 Fibonacci retracement level. On the current pattern, the 0.786 Fib is just below 36000. That is our target on Dow for the medium-term.


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