DJIA KEY EARNINGS LEVEL - Powerful EARNINGS Support BROKEN
What I've done here is look back at the last two earnings cycles for the stocks in the DJIA-30 stock index.
1. The large green box is the cycle itself.
2. The smaller green box is the high and low of the 29 of 30 DJIA elements (Nike is the outlier).
3. The TRIANGLE is the mid-point of the range of the earnings reporting cycle.
I couldn't help but notice how the market has tested and has HELD on pullbacks to the price level where those DJIA elements reported their earnings, AND THEY TESTED in a very dramatic way on two occasions in December and January. Also in March and April the market pulled back to the mid-point of the Jan-Feb earnings reporting cycle range.
So guess what just happened today? The market has pushed through this same equivalent level that you can see displayed after it tested and held a few times in the last two weeks.
I could deduce that earnings estimates are declining and now there are no buyers at key levels, which is disconcerting given the central bank stance at the moment.
Up until today, I needed to do additional research on this topic and I did some today and I had been thinking that all declines under the KEY EARNINGS LEVEL (marked in RED LINES on the chart, with data in the data window at the top), were buys and rallies over the K.E.L. were sells. Lately that strategy was working like clockwork with all but one winning trade. But now I see a bigger pattern that is extremely interesting. More research to follow....
Stay tuned.
Tim 17766.55 -82.91 today June 8, 2015 4:19PM EST
1. The large green box is the cycle itself.
2. The smaller green box is the high and low of the 29 of 30 DJIA elements (Nike is the outlier).
3. The TRIANGLE is the mid-point of the range of the earnings reporting cycle.
I couldn't help but notice how the market has tested and has HELD on pullbacks to the price level where those DJIA elements reported their earnings, AND THEY TESTED in a very dramatic way on two occasions in December and January. Also in March and April the market pulled back to the mid-point of the Jan-Feb earnings reporting cycle range.
So guess what just happened today? The market has pushed through this same equivalent level that you can see displayed after it tested and held a few times in the last two weeks.
I could deduce that earnings estimates are declining and now there are no buyers at key levels, which is disconcerting given the central bank stance at the moment.
Up until today, I needed to do additional research on this topic and I did some today and I had been thinking that all declines under the KEY EARNINGS LEVEL (marked in RED LINES on the chart, with data in the data window at the top), were buys and rallies over the K.E.L. were sells. Lately that strategy was working like clockwork with all but one winning trade. But now I see a bigger pattern that is extremely interesting. More research to follow....
Stay tuned.
Tim 17766.55 -82.91 today June 8, 2015 4:19PM EST
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