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If you trade Gold, Silver or U.S. Equities (I realize this is the Commodities Trading Forum, but there is only one chart of the Dow here, as it's an important one), then these charts may provide you with some context of which you might not have been aware.
While making forecasts isn't really "my thing", I will say this: Gold and Silver and the Dow are all trading at very important levels which could turn into major pivots.
I would think that either Silver or Gold (or both) will make another swing to a lower low, possible ending up with one making a lower low and the other making a higher low. Either way, we are at a very good spot to be putting in a major low.
I've heard a lot of people talking about the Dow going into a major, extended run higher after it finishes this "pullback" we've just gone through. I doubt that very much. This entire leg up has been on intensely waning volume, and it has finally reached the underside (and at the exact point at which they cross) of two very very important trend-lines on the Log-Scale chart, making the "Kiss Goodbye". This is the spot to GET OUT if you are long US equities. To make a long-term bet that it will go higher would not be very smart. To make a bet that it will go lower...much lower...would be aggressive, but much smarter than going long, at this point. It will have a lot of work to do to get thru this zone, and on volume such as this, I don't see that happening. I imagine a top like this will take some time to put in, and it will likely be some sort of Rounded Top that might make a new, slightly higher high to suck in the public. But then again, the uptrend line from 2009 might get broken next month. Who knows?
So here are some charts. Very interesting situation.
Very good analysis. On hourly chart at very down there is fs Zerolag Oscillator which has caught my attention and is really spot on zero lag. Could you please let me know more re: that indicator? From where you have downloaded?
Thanks.
Could you please post more info re: fs Zerolag Oscillator here. So every one can benefit from that indicator and you don't have to reply every one by pm. Thanks.
The Zerolag Oscillator is basically a normalized, smoothed MACD which is built from longer period zerolagging moving averages.
If you compare it to the MACDBBLines you will find similarities.
The histogram itself can be used as momentum based trend filter. The zeroline is a volatility based trend filter, which shows the current trend as identified by the SuperTrendM11. The white bars show a short term oversold condition in an uptrend. The yellow bars show a short term overbought condition in an uptrend. The oversold and overbought conditions are identified via a fast Stochastics.
Yellow and white bars are potential setups for retracement trades, if they are observed near the zeroline. White bars that exceed the level +50 are no good for a setup, yellow bars that have values below -50 are also invalid. The retracement trade may be entered when the following conditions are true:
Long trade: price bar with higher high & higher low (aggressive) or lime bar on histogram (conservative)
Short trade: price bar with lower high & lower low (aggressive) or red bar on histogram (conservative)
The Zerolag Oscillator should be used in combination with other indicators such as a daily or weekly VWAP.
