NOTE: For the descriptions below the (large green a) will stand in for "wave one" and the (large green b) for "wave two". The reason for this is that I am temporarily experimenting with the concept of "Harmonic Elliot Waves" by integrating it slowly into the more traditional method I am use to.
As shown in Figure (1-1) below , the DJIA has fallen in a five wave sequence with its expected terminus and resistance point between the 50% and 61.8% extension of waves i - iii, and 161.8% extension of wave i.
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| Figure (1-1) |
As shown in Figure (1-2) below, I am anticipating a fairly mild but rapidly occurring three wave correction to at least 13,154.46 in the DJIA. Because this will be wave two ( green b) , wave one (green a) having completed in and around 13,070, it is possible that wave two may extend up to the 50% or even 61.8% retracement level of wave one. However, I think strong negative pressure in the larger wave sequence will keep pressure on the DJIA price level from rising beyond at most 61.8% of wave one. Though the timing is likely not very accurate, the below chart provides my general outlook through wave two, and a more vague but bearish directional outlook beyond that point.
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| (Figure 1-2) |
Best,
-W
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