Swing Charts of the Indexes

Let’s take a look at the current “Swing Charts” of the major US Stock Market Indexes:

First, the Dow Jones Daily:

• Price is nearing the Upper Keltner Channel
• The recent upswing is greater than prior upswings, but failed to create a new momentum high
• Price is above all key moving averages
• Price is in a more bullish formation than otherwise could be
• Price made a new swing high relative to the prior upswing

Dow Jones Weekly Chart:

• Price is still “in the middle” of a clear broadening formation
• Momentum is in a clear downtrend channel
• The momentum oscillator carved out a new momentum low of the past two years
• Price formed two negative divergences
• Price swings are clearly overlapping, indicating supreme indecision in the broad marketplace

US Dollar Index (Weekly):

The US Dollar Index has been in a clear downtrend since 2006 (and before).

Price made new (relative) momentum lows along with price

The recent price swing lower was far larger than the prior swings lower, and could indicate capitulation or continuation.

US Dollar Index (Daily):

• The most recent downswing in price created a positive momentum divergence which has clearly resolved strongly to the upside
• Momentum made a new relative high, but price is far from making new highs.
• Price formed a new swing high, taking out the prior swing high which is the first step towards a new uptrend
• Price appears to be facing resistance at the key declining 50 period moving average

NASDAQ Weekly:

Despite all the volatility in the market, the NASDAQ composite index remains the picture of bullish strength.

The most recent downswing (correction) created a higher low, supporting at the key 50 period moving average.

The Momentum Oscillator registered a new momentum high, signaling that odds favor new price highs are yet to come.

There is no glaring sign of weakness in this chart, but rather strength on the side of the buyers.

Typically, when the NASDAQ leads the market, higher broader index prices are yet to come.

Always keep in mind the possibility of the “Christmas Rally” ahead at the end of December.