Major Equity Averages Face Weekly Chart Downgrades

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The five major equity averages ended 2021 with a positive weekly chart. This is no longer the case at the end of the first week of 2022.

Dow Jones Industrial Average (DJI) It set its all-time high of 36,952.65 on January 5. Its weekly chart is positive. S&P 500 Index (SPX) On January 4, he set his all-time intraday high at 4,818.62. Its weekly is positive but overbought. Nasdaq Composite (IXIC) It set its all-time high of 16,212.23 on 22 November. It is declining towards its 200-day simple moving average at 14,681.41. Its weekly chart is negative.

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Dow Jones Transport Average (DJT) It set its all-time high at 18,246.51 on November 2. Its weekly chart is neutral, but turns negative considering its weekly close below its five-week revised moving average at 16,150.58. Russell 2000 Index (RUT) It set its all-time high of 2,458.86 on November 8. Its weekly chart is neutral, but the index maintained its half yearly and yearly pivots at 2,118 and 2,106 since the week of January 15, 2020.

The December 31st expiry established key levels from my proprietary analysis. I have monthly levels for the month of January, quarterly levels for the first quarter of 2022, half-yearly levels for the first half of 2022, and yearly levels for all of 2022.

Traders and investors need guidelines to assess the risk and reward of all stocks traded on the stock market and exchanges. I use daily and weekly charts and levels for my analysis.

My daily chart shows price bars for each day going back one year. I include 50-day and 200-day simple moving averages. A golden cross occurs when the 50-day SMA crosses above the 200-day SMA. A death cross occurs when the 50-day SMA crosses below the 200-day SMA. I like to buy weakness in the 200-day SMA. The horizontal lines below the stock price are the price levels from my analysis. The horizontal lines above the stock price are risky levels from my analysis.

My weekly chart shows price bars for each week going back five years. I include the five-week modified moving average and the 200-week simple moving average. Study at the bottom of the chart is the 12x3x3 weekly sow stochastic readings that range from 00.00 to 100.00. A reading above 80.00 is overbought. A reading below 20.00 is oversold. Moving between 20.00 and 80.00 is positive. A fall between 80.00 and 20.00 is negative. A reading below 10.00 indicates that the stock is ‘too cheap to ignore.’ A reading above 90.00 indicates that the stock is in an ‘inflated parabolic bubble’.

Please refer to this article as a guideline for my methodology.

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