We are pretty sure that the recent ‘lows’ were a backtest of the 100 year trendline. It might be that price did not touch the trendline (which is true on this chart) but readers should not forget that these type of charting services are not desiged to make create 100 year charts. Arguably, the lows of September and the first days of October marked a backtest of the 100 year rising trendline. That was pretty ugly, to say the least.Īs said, it gets more impressive the lower we go.Īnd this is the daily chart featuring the Dow Jones in 2021. Note on the above chart what happened back in 2000 when the Dow Jones was not able to clear its 100 year resistance line. How can we not have a bullish Dow Jones forecast for 2022 but even beyond 2022? Let’s repeat this once more: the Dow Jones index cleared a 100 year resistance line, and it did so in 2021. It is really on this timeframe that we start seeing how impressive the breakout is. This is the monthly chart on some 25 years. The lower the timeframe on the same chart the more impressive it gets. It is a chart format that allows us to zoom in which is really key in understanding what is currently happening. However, we use a different chart format. The next 4 Dow Jones charts feature the 100 year pattern. The chart is self explanatory: we are one year into a ‘risk on’ period, in the bigger scheme of things, and those ‘risk on’ periods tend to last longer than one year.ĭow Jones Prediction Bullish even beyond 2022 The difference with the previous chart is that we focus on the timing axis while on the above chart our focus was on the price axis. Stated differently, how long does a ‘risk on’ period usually last? The ‘risk off’ periods and how long they lasted. This gives us a target of 39 to 40k points. If recent history is any guide we expect the current ‘breakout’ to move 30% higher. Interestingly, those breakouts printed mostly approx. The areas in red are periods in which a ‘breakout’ took place. Here is one attempt: the next chart outlines periods in recent history in which the Dow Jones started a bull run. How on earth is it possible to calculate upside potential based on logic resistance levels? The 100 year Dow Jones chart is in uncharted territory! It has cleared 100 year resistance.
This time is different! #charts #charting Click To Tweetĭow Jones Forecast – Upside Potential in 2022? Similar breakout attempts resulted in the mega crashes of 1929, 20. They help us understand medium term upside potential.Ī must-see #dowjones chart: a 100 year breakout was confirmed in October of 2021. That’s why we include the 2 charts in the following section. The problem with the 100 year chart is that is really hard to see what is currently happening in order to understand upside potential (or lack thereof).
The Dow Jones chart above shows the epic breakout in the green circle. That’s also why our Dow Jones forecast for 2022 is bullish with a price target of 40,000 points. The 100 year trendline on the secular Dow Jones chart was broken to the upside in 2021 and this is the basis for higher prices in stock markets, at least that’s how we interpret all this.
If we include 2020 though we have 3 crashes every time this index touched the same 100 year trendline. Arguably, in 2020 we got a similar attempt to clear the 100 year trendline, but it wasn’t as outspoken as back in 2000. On the first chart we did indicate what happened when the Dow Jones touched this 100 year trendline back in 1929 and in 2000 (see red arrows): an epic crash started.
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