As many of you know, I like to use technical analysis to augment my Market Alert Signal. I will post a weekly chart of the DOW to get you familiar wtih the white channel that started in early 2016. It is directly below:
Note the green circle. When price hit the channel, the channel rejected the price and propelled it higher. Will this be the only test of the white channel? I don’t know…but I’ll be watching it carefully.
Now a daily chart of this same DOW but much closer in time, not a 3 year chart, but a one year chart, starting January 2017. Note the burst above the channel in October, a test in November, and then whoosh…straight up to the high we just saw in late January 2018. The white dashed line is the 50-day moving average and “nothing bad happens when price is above a rising 50-day moving average.” We aren’t back above it, but it is still rising! Again, we bounced pretty darn close to the white channel line, and we didn’t close a day inside the channel. THAT is what I’m worried about…closing inside the channel on a weekly basis.