Sunday, January 26, 2020

#Dow Industrials Review $DIA

Dow Ind Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to long-term trends, it does not define them. The focus on short-term noise rather than trends, a source of confusion for the majority of investors, leads to the creation of bagholders at major trend transitions.

The Dow Industrials' overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

The selling of fear is popular right now. Pick the driver - excessive valuations, extreme optimism, the coronavirus and claims of weaponized version has been 'accidentally' released, and I assume a global threat of alien invasion will be next to hit the headlines. Fear is common. Anyone with a good memory recalls similar fears of government weaponizing biologicals during the SARS outbreak and Anthrax scares of the past.

What possibly could I offer than the long standing and time tested observation - never short against the primary trend without a damn good reason. Are valuations excessive? Maybe, but the market doesn't care about fixed linear valuation measures like PE, or dividends yields. Investing/trading is all about acceleration, the flow of money between valuation measures. Whether or not stocks should be valued to 2% dividend yield is not as important as how quickly prices move between fixed valuation references. This is the whole concept of the long-term dividend cycles provided in the Matrix.

Is sentiment excess? WASo and WAS1 tells us that it's not.

Corrections, however, can materialize at any time. So subscribers must look for decouplings or unusual energy builds to help identify higher risk periods (zones). S&P 500, VIX, and term structure of the VIX correlation provide some of the best information about growing disconnects within the trend. Highly focused trends (trending markets) show distinct correlation footprints. Deviations from the normal footprint are a prelude to trouble and trend inflections.

Correlation information is found in line 62 of the Trends Tab in the Matrix. The new fully automated computer-driven charts highlight decoupling zones red for us. Watch them and ignore the conspiracy theorists.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.