The Dow is at a similar turning point as the S&P 500. Prices have risen from 12471 in what looks like a complete 5 wave impulsive move upwards toward 14684. The sharp decline that started yesterday makes us challenge the bearish scenario that says we should at least expect a downward correction towards the previous 4th wave level (14000).
This is the minimum correction we may see if indeed the top is in. Many challenge this idea, however, and still remain bullish. What do they see? The recent decline is currently in 3 waves. What does this mean? It means that wave 5 could have an extension, so 14684 is not the end of wave 5 but only wave ((i)) of (v) of 5.
In these charts you can see what I’m talking about. In order for the bearish scenario to be confirmed, prices will need to break below the 14380 level. If this happens with an impulsive wave, then bears will be expecting an even worse scenario.
But until then, we have to respect the behaviour of the market. If support does not break, then bears should not feel comfortable. On the other hand bulls will need to show strength and stop the decline and push prices upwards above the intermediate high at 14625.
Disclosure: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions.
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DOW: Elliott wave Analysis
Published 04/05/2013, 05:03 PM
Updated 07/09/2023, 06:31 AM
DOW: Elliott wave Analysis
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