(C) 2013 www.tigersoft.com 11/10/2013
>Momentum strongly favors an upside breakout above a flat resistance
zone in a DJI trading range, even when the A/D Line is lagging. Breakouts
are less likely in November than in January.
> Peerless Buys will likely tell us when there will be a big decline from
resistance (November 1980 or on a false breakout (January 1973 or
September 2012. .
> 5%-6% DJI pullbacks above flat resistance occured without Sells
in 1984 three times: September, October and November)
and in 1986 (November).
> Novembers brought reversals down, not breakouts, in 1980. However,
1972 did yield a successful November breakout, as Nixon's re-election was
celeberated.
>Breakouts are more common in late December or January. Valid late
December/January flat topped breakouts occurred in 1985, 1987 and 1991.
The breakout in January 2000 was quite false. The Peerless Sells in January
2000 were unmistakably bearish.
>The NYSE A/D Line is lagging the DJI now. Flat topped breakouts can still
work out in these circumstances, but the advances are more likely to be limited
than bring big advances that last more than 3 months.
Flat Topped DJI Breakouts with Peerless Buys and A/D Line NCs.
DJI Breakout Result
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9/26/1968 11 weeks advance
11/14/1972 7 weeks advance
Dec 1986 much higher later in 1986
May 1990 7 weeks advance
9/17/1996 much higher...
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What happens when DJI belatedly breaks out after SP-500 and
NASDAQ have been making new highs for more than a month?
Too few cases to reach a firm conclusion. They can wobble out of
synch for a year but still maintain an upward trend OR if there is a
PEERLESS Sell, the SP-500 first and then the NASDAQ, a month or so
later will be tripped up. It is the dangerous NASDAQ climactic advance
that we have to be worried about.
DJI BREAKOUT SP-500 BREAKOU NASDAQ BREAKOUT
-----------------------------------------------------------------------------------------------------------------------------------
Feb 1993 false breakout 11/23/1992 NASDAQ had been much stronger
(4% decline) and then Rallied until March than DJI since October 1992 but
higher for rest of year Then 5% decline. NASDAQ peaked on 1/26/1992
and fell 9% and lagged Ausust 93 breakout.
IF DJI DOES BREAKOUT, THIS
WOULD PARALLEL PRESENT SITUATION.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
January 2000 false breakout 12/23/1999 10/29/1999
(10% DJI decline) NASDAQ advanced until 3/9/2000
IF DJI DOES BREAKOUT, THIS
WOULD PARALLEL PRESENT SITUATION.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Earlier than DJI Later than DJI.
DJI Breakout/Failure S&P-500 NASDAQ
------------------------------------------------------------------------------------------------------------------------------------------
11/14/72 Breakout 11/6/1972 12/6//1973
1976 repeated failures 7/12/1977 false bo 12/9/1976 breakout at 94.10
at resistance 9/21/1977 false bo and peaked at 97.22 on 1/4/
1977 decline 1977 decline NASDAQ held up for 6 months more.
THIS PARALLELS
PRESENT SITUATION
OF DJI LAGGING SP-500
Nov-Dec 1980 breakout failure uptrending before Nov peak and small head/shoulders.
(S9) breakout like now. 1983 was up until May with DJI.
Peaked with DJI
in Nov-Dec 1980
1/22/1985 1/16/1985 1/16/1985
6/28/1985 5/13/1985 5/17/1985
9% Nasdaq decline from July to October
Dec 1986/Jan 1987 1/8/1987 2/18//1973
NASDAQ had been lagging DJI for
6 months.
May 1990 6/1//1990 There was no breakout by NASDAQ.
It has been lagging since October 1989.
12/30/1991 12/26/1991 10/16/1991
DJI did not peak unril Earlier False breakout But pullback followed.
6/1/1992 in August 1992 12/27/1991
SP-500 oeaked on 1/16 NASDAQ peaked a month before DJI
Feb 1993 false breakout 11/23/1992 NASDAQ had been much stronger
(4% decline) Rallied until March than DJI since October.
IF DJI DOES BREAKOUT, THIS
WOULD PARALLEL PRESENT SITUATION.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
9/16/1996 9/16/1996 10/15//1996
January 2000 false breakout 12/23/1999 10/29/1999
(10% DJI decline) NASDAQ advanced until 3/9/2000
IF DJI DOES BREAKOUT, THIS
WOULD PARALLEL PRESENT SITUATION.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Sept 2012 false breakdown Concurrent breakout. Concurrent breakout.
7% decline a few days later. 7% decline a few days later 12% decline a few days later
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2013's well-tested resistance
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11/14/1972 Buy ADNC 7 weeks advance
