DOW Jones Wave Count Update: Critical High Broken.
Last weekend I spoke about the November 2015 high of 17978 as being a critical high in the DOW. The first image below shows the count as of last Friday, with the critical high marked on it.
As that November high was labelled wave ‘B’, then the triangle count that I was working on would be invalidated by breaking that high.
Well, Yesterday the market broke that high and now the contracting triangle idea has been invalidated.
So back to the drawing board!
Below is the new preferred wave count:
I am still in favour of a large move to the downside in the medium term, just not in the form that I was previously speculating. I am now labelling the longer term action as a flat correction, as shown.
A flat correction is still labelled ‘a,b,c’ overall and we are currently coming to the end of the ‘b’ wave.
This ‘b’ wave should stall out before the high labelled wave 3 in the chart below. And if it sits in a parallel trend channel then it projects a large move to the downside straight ahead which will finish around 15000, given that trend channel.
Wave ‘c’ down in this flat correction should trace out 5 separate waves. ( labelled in blue )
This new count has an invalidation point; it is marked in red in the chart.
Let’s see how the rest of the weeks trading proceeds, and if this count will fit the action. I will update the count, as usual, on Saturday afternoon.
All my trades are based on Elliott Wave.
Disclaimer. The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of any other agency, organization, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author – and, since we are critically-thinking human beings, these views are always subject to change, revision, and rethinking at any time. Please do not hold us to them in perpetuity.
