Breaking News: The markets have tumbled terribly.
Yeah, so obviously we are all familiar with the markets’ problems, but, unless we experience the greatest bull run of all time, it could be some time before we even get close to breaking out of this slump.
Many traders are looking at this week as a breaking point. Will the markets show some life and pass some minor resistance, or will they fall below some major support? It seems like everyday we have hundred point swings up and down, yet the down movements is always larger.
Since there is no quick fix solution to all the problems that are currently existent, I tend to look at long time frames when going through charts of these markets.
If we quickly look at a 5 year frame of the Dow Industrial Average, two things come to mind:
- There is about a 4000 point trading range between the key support and resistance.
- We could see heavy swing volatility for some time to come and with no significant breaking points.
Another interesting thing to note from this chart is a possible bottom?
From the point of where the Dow officially headed down (the middle green line), it looks like the current high and bottom of the chart are equal distant apart. While it doesn’t mean this market couldn’t go lower (in fact it makes it more significant if it does), it gives us a ray of hope and a spot to watch.
If we take this current pattern even one step further it looks like we can add a two year time frame until we hit the 11,000 area. Seems a little weird saying that as we were just there a couple months back, but things always drop faster than they rise.
It certainly is interesting following the movements of these crazy markets, and, with every move, we could potentially bust out some new scenarios.
Whats your take on the market and its path to recovery?
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