DOW JONES Is a new rally starting right under our nose again?

8月7日Consistent with our macro approach to investing (particularly with stocks), we continue to address the recent stock market correction by examining similar behavioural patterns of the past.

It was 10 months ago (October 11 2023, see chart below), when Dow Jones (DJI) was under another short-term turmoil phase that turned out to be exactly that, short-term:

As you can see on that chart, while most were panic selling, we addressed the idea that Dow was "starting a new Bull rally under our nose". And as you can see, the index did exactly that, as it rebounded at the bottom (Higher Lows trend-line) of the Rising Wedge, starting a new +23% rally.

Our basis for this projection was the similar Rising Wedge pattern of September 2015 - November 2016 (almost 1 year), which after a fake-out for the week hands (green circle) on January 2016 (as it was on October 2022), it rebounded in October 2016 at the bottom of the Wedge and posted a +19% rally.

You can see that so far the lows are highly symmetrical as the first was priced in the month of October (2016 then and 2023 now) and the next in April (2017 and 2024 respectively).

The initial rally that broke above the Rising Wedge in 2017, had a small upward extension that then gave a new pull-back for an August 2017. If symmetry continues to dictate the price action, then the current August Low (2024), may be our new bottom as Aug 2017 was.

On the past fractal, the new rally was concluded on a +30.72% rise. As a result, we see it highly possible to get a new long-term peak early next year (January 2025 if symmetry continues) at around 49000.

High as this Target may seem at the moment with the current economic slowdown fears, these are the standard conditions that make rallies start "under our nose".. Especially as November's U.S. elections are approaching.

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