Long term Dow Jones Industrial Average Support and Resistance Levels using ARIMA, Monte Carlo Simulation and Gaussian Mixture Model
Data as of 14 August 2025 If you believe that the US economy still has potential (which I do not) and if you also believe that MAGA Man's antics will not destroy it (which I do not) then you may want to sit on the Dow Jones Index (through an ETF) for a long time. If the $37 Trillion debt, the rout in the Bond Market, de-dollarization, and Stagflation does not deter you, see above for the Support (cut loss if price breaks from above) and Resistance price levels (take profit if price crosses from below) for the DJI. How the S/R levels were determined It's rather technical but I shall try to explain in simple language. We first smoothed and fitted the raw 270 data points time series of the DJI Close price with ARIMA (1,1,1,) We then ran the fitted ARIMA data through 5000 trials of Monte Carlo Simulation to see how it behaved. The post-Simulation data was then put though a Gaussian Mixture Model (GMM) with K=3 components. The highest density interval (HDI) at 60% probabili...