From 10/13/22 to 12/13/22 the Dow Jones Industrial Average (DJI) retraced 71% of its January to October 2022 bear phase, over performing both the S&P 500 (SPX) and Nasdaq Composite (IXIC). After 12/13/22 the DJI underperform the SPX and IXIC. However, during the week of 02/06/23 to 02/10/23 the DJI exhibited subtle signs of strength that could have bullish implications until at least April 2023.
The DJI and SPX – 15 – minute chart courtesy of Trading View compares their recent performance.
Note that prior to 02/06/23 the DJI and SPX made simultaneous tops, then after a decline the DJI upside move was weaker than the SPX. After 02/06/23 the situation reversed with the DJI having two rallies that were stronger than the SPX.
Another factor could be coming into play. The 02/08/23 blog “Fascinating Elliott Wave Pattern” noted that the DJI could be forming a nine-wave Elliott – Horizontal Triangle. This pattern may still be under construction.
If within the next one or two trading days the DJI declines yet fails to go below 33,591.91 it could complete the nine – wave Horizontal Triangle formation.
If this scenario plays out, a future blog will examine the nine – wave Horizontal Triangle and its potential outcome.