If this is the Elliott 5th wave, and diagonal as it seen, then a long period of bearish trend is just begin.
If it breaks the channel, the lower side of the channel will be seen in a very short time and it will be the first target (wave A)
Price action shows us that the DOW is still following a regular upward cycle. Excitement at a new local high has driven instability in the last few trading sessions, but the strength of the underlying economic forces has not changed at all. There may be a short term easing of the price over the winter quarter, as the Stochastic oscillator shows it to be overbought...
DOW has peaked out and the down move has started. Based on Elliott Wave Analysis the ending diagonal has completed 5 moves after which a big correction is expected, giving the confirmation is the Candle stick signal patterns a Bearish Shooting star as well as Evening Star. Expect market to correct till 15500 as 1st Target and then beyond. Looking at Fibonacci...
On the one hand - we have the triple top, on the other hand - we are waiting for the end of the impulse and the breakout from consolidation. The market, as usual, will go its own way.
thepatternsite.com
thepatternsite.com
Here is my logic:
1. Fundamentals don't support record highs. High stock prices don't represent real economic activity. Unemployment. situation still not pre-crises levels yet prices are way above that.
2. Oil showing lack of demand.
3. US dollar becoming more expensive. End of low exchange rate.
4. China weakening as well as imports.
5. End of easy money and fed...
Of course, the projected future waves are pure speculation and I'm not expecting any patterns to repeat themselves exactly. There do exist, however, 7-year and 13-year cycles in the market that deserve consideration and further research, considering the similarities I believe to be showing quite clearly in this comparison. I have made an effort to simplify this...
DOW is set to go down further to 16100 levels where it will find Daily Support as well as Fib 127.2 Extension of the current down move. One can short Dow at current levels for a nice risk reward position.
Happy Trading!!
Looking at Dow Jones, while there has been a strong recovery, i am looking at the fib6 of the recent downmove.
3 confluences for me:
fib6 of recent downmove ,
d1 line chart, which is sort of a neckline for a half head and shoulders
EMA also show possible flying buddha to be formed.
and lastly which is something new for me,
the up volume does not seem to be...
Obviously, the bull market is finally coming to an end. This is a huge divergence here with a very bearish end of the week. To be long in this market is gambling.
Dow is running weak with a rising wedge pattern. From 2008/ 09 lows inverted FIB 1.414 around 17400 would be a resistance. Considering this rally as a Wave B correction rally from 2008 Lows we can expect a big crash going to as low as 11300 on DOW. The short term correction would occur till 16300. Trade with Caution. Take partial profits on your portfolios. Good...
Dow Jones, like the S&P, are destined to rise before the long-awaited correction.
Judging by the volume of the past month or so, large bets have been placed on the long side. As for the past trading day, the large volume bar was a pseudo-indecision bar.
I'll be on the sidelines for right now, as I would have entered at the completion of the Gartley that formed.
