Dow Jones Industrial Average (DJIA)
The Dow Jones Industrial Average (The Dow), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 1.20% per annum.
- Dow Jones Industrial Average (DJIA) at the close of May 17, 2024 was 40,003.59 and was higher than the top border of the primary price channel by 4,086.92 points (11.38%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 12.18% per annum.
- Dow Jones Industrial Average (DJIA) at the close of May 17, 2024 was inside the secondary price channel.
- The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of Dow Jones Industrial Average (DJIA)
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: March 8, 2021
End date: November 14, 2023
a = 10.4635
b = 0.0000
s = 0.0430
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0000) – 1
= -1.20%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0430) – 1
= 18.79%
March 8, 2021 calculations
Top border of price channel:
Exp(Y453)
= Exp(a + b × X453 + 2 × s)
= Exp(a + b × 658 + 2 × s)
= Exp(10.4635 + 0.0000 × 658 + 2 × 0.0430)
= Exp(10.5277)
= 37,334.88
Bottom border of price channel:
Exp(Y453)
= Exp(a + b × X453 – 2 × s)
= Exp(a + b × 658 – 2 × s)
= Exp(10.4635 + 0.0000 × 658 – 2 × 0.0430)
= Exp(10.3555)
= 31,429.72
November 14, 2023 calculations
Top border of price channel:
Exp(Y1,131)
= Exp(a + b × X1,131 + 2 × s)
= Exp(a + b × 1,639 + 2 × s)
= Exp(10.4635 + 0.0000 × 1,639 + 2 × 0.0430)
= Exp(10.4951)
= 36,138.04
Bottom border of price channel:
Exp(Y1,131)
= Exp(a + b × X1,131 – 2 × s)
= Exp(a + b × 1,639 – 2 × s)
= Exp(10.4635 + 0.0000 × 1,639 – 2 × 0.0430)
= Exp(10.3229)
= 30,422.18
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 1.20% per annum.
- Dow Jones Industrial Average (DJIA) at the close of May 17, 2024 was 40,003.59 and was higher than the top border of the primary price channel by 4,086.92 points (11.38%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 10, 2022
End date: May 17, 2024
a = 9.9792
b = 0.0003
s = 0.0362
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 12.18%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0362) – 1
= 15.58%
June 10, 2022 calculations
Top border of price channel:
Exp(Y772)
= Exp(a + b × X772 + 2 × s)
= Exp(a + b × 1,117 + 2 × s)
= Exp(9.9792 + 0.0003 × 1,117 + 2 × 0.0362)
= Exp(10.4033)
= 32,969.03
Bottom border of price channel:
Exp(Y772)
= Exp(a + b × X772 – 2 × s)
= Exp(a + b × 1,117 – 2 × s)
= Exp(9.9792 + 0.0003 × 1,117 – 2 × 0.0362)
= Exp(10.2585)
= 28,523.90
May 17, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(9.9792 + 0.0003 × 1,824 + 2 × 0.0362)
= Exp(10.6259)
= 41,189.32
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(9.9792 + 0.0003 × 1,824 – 2 × 0.0362)
= Exp(10.4811)
= 35,635.87
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 12.18% per annum.
- Dow Jones Industrial Average (DJIA) at the close of May 17, 2024 was inside the secondary price channel.