The purpose of the blog post was to show this pattern and relay it was sending a long-term bullish message to stocks. The chart is below, see original POST HERE.
The chart was produced when the Dow was trading at 17,900. Over the next 18-months the Dow rose nearly 50%! A nice push off of the top of the megaphone support line!
Below looks at an update on the Dow Megaphone pattern which looks at the Dow over the past 100-years-
The Dow rose nearly 50% following the support test at (2) back in 2016. The rally off the top of the megaphone pattern now has the Dow testing the top of multi-decade rising support channel at (3). Long-term buy & hold/passive investors we feel should be aware of that the Dow hit the top of this rising channel back in 2000. Buy & holders/passive investors should also be aware that this multi-decade rising channel and the bottom of the megaphone became support back in 2009.
No doubt the trend in the Dow remains up and the 10% decline in the Dow in a couple of weeks has not broken the trend.
The Power of the Pattern is of the opinion that this is not your typical test of resistance at (3). This is a price point where long-term bulls need to pay extra attention should selling pressure ramp up!
The SPDR Dow Jones Industrial Average ETF (DIA) closed at $242.03 on Friday, up $3.36 (+1.41%). Year-to-date, DIA has declined -2.16%, versus a -2.01% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.