Look At The Big Picture To Put Recent Volatility In Perspective

Whether the Dow is down nearly 20% from the highs of a few months ago or it experiences a 1,000 point rally, what should one do to give proper perspective to these big price moves we’ve experienced of late?

In my humble opinion, the best thing to do is look at the big picture, by taking a glance at a long-term monthly chart.

This chart looks at the Dow over the past 38-years on a monthly basis, reflecting that is has spent the majority of the past 30-years inside of rising channel (1). From this viewpoint, the long-term trend remains higher.

The Dow has spent the majority of the past 8-years, inside of rising channel (2), where the declines of the past couple of months have the Dow testing 8-year rising support at (3). This rising channel reflects that the upward trend remains in play as support is support until broken!

With the Dow now below its 10-month moving average and monthly momentum at levels last seen in 2000 & 2007, the Big Picture would suggest an extremely important rising channel support test is in play this month at (3)!

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