Just thought I’d wander over to the XJO threads for a first post...

Just thought I’d wander over to the XJO threads for a first post here. I normally only analyse individual stocks but reflecting on the year ahead I thought I better have a look at the DJIA for the big picture.

The last thirty years view (I did say big picture!) just looks like a giant head and shoulders pattern, with volume declining into the right shoulder since the March 2009 lows showing less commitment to the move.

The last push up covered by the blue box on my chart coincides with the 12months lead in to the Presidential elections. My impression is that the US economy is slowly recovering, but who knows what pumping of the economy or fudging of statistics was done in the election year to make things look good, on top of the Federal Reserve liquidity shots.

I don’t have the skills to analyse time, but based more simply on price and pattern the DJIA looks exhausted and hard to see it going anywhere but down. That doesn’t mean it will and for all I know it could go on to make new highs, but I think the next quarter particularly is a time for caution.

I’ve been impressed by the posters in the XJO forum and appreciate the efforts of many of the contributors here (mind you I have been hanging out in the LYC threads so I’m starting from a low base!). I’ll be reading with interest the analysis by posters here in coming weeks on the major indices.

Happy New Year to all.