A Brief Pictorial History of The Dow Jones Industrial Average and Its Present Outlook!

I have tried to put forth my two cents on the matter with the help of a few very simple pictures that will give us clarity on what to expect from the Dow Jones Industrial Average in the next few days!

I have tried to explain this as simply and pictorially as possible so that everyone who reads it can understand it, without the use of any jargon.

So we witnessed an almost vertical rise in the Dow Jones Industrial Average in July 1998. I’m saying vertical because of the slope of the last few candles of the last leg, compared to the previous leg slopes! Here’s what followed:

A violent move lower, that corrected by around 21.6%  and a swift recoil which resulted in another leg of almost vertical price rise! A better look at that in the chart below:

The vertical rise resulted in a very choppy sideways consolidation, which had violent moves and an eventual fall of 37.6% that brought the price back to 1998 levels! Lets see what happened next!

Another rally was formed, the slope of the rally was again very steep in July 2007! Violent moves ahead? The next chart will show us more clearly…

Again violent days followed. A violent price bounce forming a new high and then an unprecedented price plunge! Of course a lot has been written about the 2008 crash!

DOW JONES INDUSTRIAL AVERAGE OUTLOOK…

Presently the Dow Jones Industrial Average has again entered the steep territory. History suggests that we are to witness a few violent and choppy price moves in the days to come, followed by a definite crash! 

As you must have observed that the violent choppy move generally doesn’t last beyond a few months, barring the fall in the year 2000 A.D., we can expect this fall to occur in this calendar year (i.e. 2018)

Generally, a fall in the Dow Jones Industrial Average triggers a global crash too, therefore people are advised to play it very safe this year and either book profits at every level or hedge their portfolios! In the longer term markets do create a lot of wealth, but in years like these, you have to play it smart and safe!

I leave you with this final image of the last 37 years of the Dow Jones Industrial Average and its present steep vertical exponential rise, so that you can ponder over what I have just said!

 

– Report by Janak Shah