DJIA 1987 & 1929 & 2014

The following charts are from 1987.  One is the DJIA and the other is the McClellan Summation Index.  On the DIJA chart the histogram tells a story when it is above or below "0".  On the McClellan Summation Index (MCSI) chart both the MCSI and the histogram when below "0" indicate a weak market and when above "0" indicate a strong market.   In October 1987 both the MCSI and the histogram in both charts failed to get above "0" when the market tried to rally.

Try to review other tops and see how the indicators/oscillators react to sell offs from tops. 

If you do this several times a pattern will develop.  This pattern will not repeat exactly the same each time but it will be similar.

The next chart below is the DJIA from 1929.  Unfortunately a MCSI chart is not available for this time period but the chart still tells a meaningful story if you look at the price chart against the histogram and other indicators on the chart.  The DJIA tried to rally in October 1929 but it too failed to get the histogram and the indicator/oscillator to get above "0".

All Charts Courtesy of Worden Bros.

There are many more periods available to review the patterns that developed and see if they too formed in a similar way as in 1929 & 1987.  You can do this on your own.
Below is a chart of the 2014 DJIA and the MCSI.  Some differences between 2014 and 1929 & 1987 is that the histograms and indicator/oscillators are still holding above "0" and the MCSI is below "0".  Also negative divergences are not showing up in both the MCSI and the indicators/oscillators against the DJIA.  It shows up only in the MCSI vs DJIA.

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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions. 
Past performance is not indicative of future results