The INDU has been “stuck” in 3 ascending trendchannels lately:
- the long term yellow dates back to the 2011 lows
- the medium white dates back to the 2012 lows
- and short term the red started in October this year
(click to enlarge)
Since the trend is your friend, and thus as long as price remains in any or all of these trend channels the trend is up. The steeper red channel may indicate an acceleration of the uptrend, not uncommon for a 5th wave. Note the red “i/a”, and “ii/b” annotations since at this stage we cannot be sure if price (i.e. sentiment) will make a none-overlapping intermediate i,ii,iii,iv,v up or if it will form an overlapping ending diagonal, which counts best as a,b,c,d,e. In the former case, minor 1 of intermediate iii is now forming. In the latter case minor a of intermediate c. Regardless, there will be more upside after the next retrace. The difference is that the ED targets ~18,820 (pattern not shown) and will cause price to collapse, whereas the impulse structure targets DOW 20,820 to 21,320 before a larger correction will occur.
Staying closer to home, if price is able to remain above the upper white trendline, then it will logically target the yellow trendline, which is now at 18,288 and rising by 6 points per day. Price will have to break above the yellow trendline to remain in the red trend channel. That would be quite a features since it has been unable to do so since 2011. Until then: the trend(channels) are your friend and they’re pointing up!
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