I thought it appropriate to update my Bearish Butterly pattern on the Dow Jones weekly, as it's looking pretty vulnerable here.
First chart below was my initial Bearish Butterfly identified on 21st April 2016, with an Interim target of 18,667.
The peak so far has occurred 1 point away from this at 18,668.
This April chart was a price analysis, but it doesn't gauge time. I just assumed May 2016 would be the top based on an assumption of running straight there. Turns out its needed a lot of sideways work, (which was exceptionally boring and drove me out of my big stock trading), with the peak occurring in week of 19th August.
I made a number of updates to this chart, including my XMD post of 16th July 2016 link
http://hotcopper.com.au/posts/18288134/single
@TANOTFA also gave quite a neat update on 11th Sept 2016 once my alternate (interim) target appeared confirmed, link here
http://hotcopper.com.au/posts/19081932/single
Second chart below is the current update since a top was suggested to the pattern on the week of 19th August. There is still some risk it would head back up to my original target for the pattern of 19,162 but that's looking increasingly unlikely.
Since the suggested top, we've had a slow decline, but it hit some interesting levels so looking very structured.
It broke down from a bearish rising flag pattern (blue lines) and retraced, which is normal in a breakout. Should fall away.
It fell to a horizontal line (dark blue dotted) formed by the previous peak at 17,978 and bounced. Then was rejected by the horizontal resistance at the prior peak of 18,351.
Its also hit the top of the green channel that's forming, and as seems typical these days it gave a false break to the upside and then reversed.
So the index seems to be testing various structural levels as it pulls back. It should now test that horizontal support again at 17,978. It this breaks I expect it will accelerate to the downside and confirm the end of the 7 year bull market. Still a chance to recover yet and get a final leg up, but looking very dangerous nevertheless.
View attachment 289913
View attachment 289916
(20min delay)
