Dow Time Oscillator (updated)

Do you see the non confirmation between time oscillator and price? The non confirmation between the oscillator and price clearly suggests negativity going ahead for DOW. This is a case for an impending reversal. The oscillator structure also looks weak and ready to resolve lower.

This is what we said on 2 Jan 2010 for DOW Jones Industrial Average.

“Any January positivity should be an illusion. The first quarter of 2010 should be negative for DOW.”

Prices are up 0.96% from Jan high (10,729) to March lows (10,832). On one side we were wrong as prices did not reverse, but less than 1% upside is enough choppy action to prove that the best of TIME strength is over for DOW in the ongoing CYCLE.

March 2009 we started illustrating time oscillators with nesting momentum triads. We have been refining it since then. The current form of time oscillator combines three time frames. The oscillator moves like a cycle and should atleast push lower back till zero levels before anything. Time oscillator takes into account three time periods viz. minor (14 days), Intermediate (70 days) and primary (210 days). Here we have illustrated the time oscillator for NIFTY (India 50). The oscillator has clearly topped and should break down below key neckline supports soon. This keeps us looking at a topping price absolute price performance.

Published 2 Jan, 2010

Time Oscillator is a range bound indicator suggesting increase and decrease in time periods. Starting 30 Nov 1988, DOW witnessed a confirming increase in time periods till 30 Sep 1998. From 1998 time oscillator fell till 31 July 2001 along with the prices. Since 30 Apr 2008 the oscillator is falling till date. It is too early to assume that the rise in DOW is a new bull market and 2010 will be a positive year. Till the oscillator sees a further fall till 60-100 levels, the current rise on DOW remains a bear market rally that should correct into 2010.

Primary (multi month) perspective

Intermediate (multi week) perspective

Considering the primary (multi month) time is still pointing lower (above), the intermediate time oscillator at 250 days suggests an intermediate top might be near or already in. Only once since 2002 has the time oscillator breached 300 days.

Minor (multi day) perspective

On the minor time oscillator, the 2009 cycle seems over and prices should get ready to trend. Seeing the minor trend in light of intermediate and primary perspective, any January positivity should be an illusion. The first quarter of 2010 should be negative for DOW.

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