Critical Update to DJIA Prediction from 8_9_12

I was pleased to see the resistance off of the top of my target area this week (labeled in pink on the last chart, posted 8_9_12). The below chart consists of my daily wave count. Through tomorrow and into next week I expect to see more downward movement with the characteristic bumps of wave 2 and 4 along the way. It is likely that this drop off will occur quite quickly.

Listed below is an hourly chart for the past 180 days of the DJIA. Note that this correction reached 61.8% times the length of wave 1 (green) at right about 13327 points. The resistance to this Fibonacci level is, in my mind at least,  a strong sign that this corrective wave 2 (green) has completed and the negative future movement will occur promptly. Wave 3 (green) will move downward briskly and likely take the market to at least 11500 before it completes.

 Notice as well the decrease in overall volume as the market has gone up in the past few weeks, as compared to the level of volume when the market was moving downward or sideways. This further gives me confidence in labeling 2 (green) as complete and expecting the sharp downward movement of a  (3 - green).

Because the very start of wave 1 (green) began above the top of the market fall last August, and because the correction leading to the start of 1 (green) occurred in a 3-wave pattern. I am inclined to call this coming downward shift as the 3rd wave within a larger downward c-wave. As a result I believe it likely that the market will, as mentioned before sink to at least .618 percent the length of the drop from last August, bringing it to at least around 11,500 before it corrects in a significant way. Minor corrections along the road to this lower target are, of course, expected.


-W