DJIA Forcast_Harmonic Elliot Wave Update_1_13_13

The following is a possible alternative count to the Harmonic Elliot-wave count I posted on January 6th. Here the target top of Intermediate [Red] degree ends not around 14,400 but with a very specific target zone, between 14,100 and 14,141. There are significant correlations in the Fibonacci resistance points for this prediction, and this alternative represents a 8 point reduction in target range from the count I published on 1/6/13. It is also about 300 points lower in terms of its termination point.

However, there is a major difference in that this count is a motive, not a corrective count. In other words, the bear market correction following this wave intermediate wave sequence would retrace, at most to 6,400. This would represent a strong, though not uncommon, wave 2 retracement of wave 1. This would be the extreme of its downward potential however, and would set the stage for a very powerful bull market 3 wave to follow.

This prediction will be supported, though not made definitive, by termination of the current intermediate wave in the DJIA between 14,100 and 14,141. If the DJIA pushes up toward 14,400, it is my belief that it is a double three and part of an extended sideways correction on the cycle level (forcasts for this fractal degree coming soon). Please see the  depiction of the Intermediate degree system I am describing in Figure [1]

If this alternative count is accurate, it seems likely that the debt ceiling debate will serve as a catalyst for a bear market wave 2 correction.

Figure [1]

Elliot Wave_DJIA Update_1_6_12

The recent resolution, or at least present resolution, of the "fiscal cliff" gave rise to a very strong upward movement in the DJIA. Although I was counting this movement as part of a wave "2" of a larger bear market motive wave, and although that count is technically not yet invalidated, last weeks movement seems less in line with a corrective wave than a motive one. As a result, I have looked again at my wave count, and have found that Ian Copsey's perspective, utilizing what he calls the Harmonic Wave Count, greatly illuminates the current intermediate and minor wave structure. I have just started learning and applying this method and recommend his book (Harmonic Elliot Wave The case for Modification of R.N. Elliots Impulsive Wave Structure, Ian Copsey; John Wiley & Sons, 2011.) for an accurate understanding of this perspective.

The following wave count provides something of an astonishing correlation in wave relationships. "A" waves at both the Intermediate (Red), Minor (Blue) and Minute (Green), all find common Fibonacci resistance ratios within a forty nine point range, between 14484 and 14435. Waves 1-3 (Blue), as offset by wave 4 (Blue) also create a 61.8% extension ratio which matches very closely with the larger Fibonacci resistance points provided by the A waves of varying degrees. The consistency in expected resistance ratios spans from the intermediate to the minute degree. Further confirmation of this count will be visible upon completion of wave (ii) and (iii) (pink).

Including alternatives, the primary count for this wave structure may vary between a double three correction,  a wave [1] motive wave or a wave [D] in an extended sideways 5 five pattern. I think the possibility of a double three or an extended sideways 5 wave pattern is more likely, though further confirmation of this will come after the correction of the current intermediate wave structure.

Thus, if the DJIA moves past 13661.72 (the alternative minute wave one peak), which I think it will, the next target area for intermediate and minor wave completion is between 14484 and 14435. These would be both peaks and new highs for the index.