[DJIA] update

In the back link I was expecting a double top/failed 5th.  Those seem to have pretty much gone out of style lately so I will not be so quick to expect them going forward.  Here was the model from that post.



While the chart ended a bit differently than expected, the result was the same.  5 waves up peaked.  You can see that what I mislabeled as blue 5 was really B of 4.  This is totally legal within the EW rules.

Importantly, wave 2 could not (at least not yet) break back into the range of wave 1 as marked by the horizontal blue line.  Time will tell if this holds.  Clearly, until we get 5 down (per the red path), any move above the blue line will have been wave 4 moving into the region of wave 1 meaning the bearish near term DJIA count is bust. 

Since the conventional wisdom count is that we are retracing a big 3rd wave which took 15 days to play out, this could turn out to be a big 5-3-5 correction with wave red 5 of A needing to finish playing out.   The rule of thumb timing of this is 38.2% of the entire 15 days, thus 5 days.


Of course, the herd has left itself the clear leeway to treat the past 2 days as an a-b-c retracement so we'll just have to see how this plays out in the AM but my primary model says the DJIA count is bearish at this point with initial price target of 17880 (the level of the prior 4th).