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 28, 2024 was 38,852.86 and was higher than the top border of the primary price channel by 2,949.31 points (8.21%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 12.28% per annum.
- Dow Jones Industrial Average (DJIA) at the close of May 28, 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 = 10.4594
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(Y367)
= Exp(a + b × X367 + 2 × s)
= Exp(a + b × 535 + 2 × s)
= Exp(10.4594 + 0.0000 × 535 + 2 × 0.0430)
= Exp(10.5277)
= 37,334.88
Bottom border of price channel:
Exp(Y367)
= Exp(a + b × X367 – 2 × s)
= Exp(a + b × 535 – 2 × s)
= Exp(10.4594 + 0.0000 × 535 – 2 × 0.0430)
= Exp(10.3555)
= 31,429.72
November 14, 2023 calculations
Top border of price channel:
Exp(Y1,045)
= Exp(a + b × X1,045 + 2 × s)
= Exp(a + b × 1,516 + 2 × s)
= Exp(10.4594 + 0.0000 × 1,516 + 2 × 0.0430)
= Exp(10.4951)
= 36,138.04
Bottom border of price channel:
Exp(Y1,045)
= Exp(a + b × X1,045 – 2 × s)
= Exp(a + b × 1,516 – 2 × s)
= Exp(10.4594 + 0.0000 × 1,516 – 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 28, 2024 was 38,852.86 and was higher than the top border of the primary price channel by 2,949.31 points (8.21%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 10, 2022
End date: May 28, 2024
a = 10.0148
b = 0.0003
s = 0.0361
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0003) – 1
= 12.28%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0361) – 1
= 15.54%
June 10, 2022 calculations
Top border of price channel:
Exp(Y686)
= Exp(a + b × X686 + 2 × s)
= Exp(a + b × 994 + 2 × s)
= Exp(10.0148 + 0.0003 × 994 + 2 × 0.0361)
= Exp(10.4025)
= 32,942.64
Bottom border of price channel:
Exp(Y686)
= Exp(a + b × X686 – 2 × s)
= Exp(a + b × 994 – 2 × s)
= Exp(10.0148 + 0.0003 × 994 – 2 × 0.0361)
= Exp(10.2581)
= 28,511.78
May 28, 2024 calculations
Top border of price channel:
Exp(Y1,178)
= Exp(a + b × X1,178 + 2 × s)
= Exp(a + b × 1,712 + 2 × s)
= Exp(10.0148 + 0.0003 × 1,712 + 2 × 0.0361)
= Exp(10.6305)
= 41,375.77
Bottom border of price channel:
Exp(Y1,178)
= Exp(a + b × X1,178 – 2 × s)
= Exp(a + b × 1,712 – 2 × s)
= Exp(10.0148 + 0.0003 × 1,712 – 2 × 0.0361)
= Exp(10.4860)
= 35,810.64
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 12.28% per annum.
- Dow Jones Industrial Average (DJIA) at the close of May 28, 2024 was inside the secondary price channel.