Dow Jones Contracting Triangle Scenario

By: Enda Glynn | Wed, Jan 18, 2017
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Topping in wave (5)

30 min

Dow Jines Industrial Average 30-Minute Chart
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4 Hours

Dow Jines Industrial Average 4-Hour Chart
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Daily

Dow Jines Industrial Average Daily Chart
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My Bias: Long towards 20,500
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Short term wave count: Upside from 17,066 wave 4 blue
Long term wave count: Topping in wave (5)
Important risk events: USD: WEF Annual Meetings, Building Permits, Philly Fed Manufacturing Index, Unemployment Claims, Housing Starts, Crude Oil Inventories, Fed Chair Yellen Speaks

The Triangle scenario which I spoke about last night seems to be bearing out so far as this sideways churn keeps going.
I have updated the Elliott wave count to make this the primary wave count.

It looks likey that wave (a), (b) and (c) are complete at the lows of the day.
So I am watchin for the market to create one more higher low in wave (e) to complete wave [iv] green.
At this point the odds of a significant rally will be very high.
We could see another 1000 points on the DOW without much hassle.

The larger wave count is still intact, and in fact I favour a final rally within the overall bearish larger picture I am painting here.
One last high above 20500 will complete a nice five wave form off the November lows.

There is a higher target at around 21190, shown on the 4hr chart, where a Fibonacci extension of wave [i] green is projected off the wave [ii] low.
This extreme high is not unlikely from here and will still fit within the larger bearish wave form.

Firstly the contracting triangle must complete over the next few days.

 


 

Enda Glynn

Author: Enda Glynn

Enda Glynn
bullwaves.com

Enda Glynn

I class myself as an Elliott wave trader now, but that's not how I started out though! It took me a long time and a whole lot of pain, to finally understand what drives the price and how to use Elliott Wave correctly!

I have been trading for years and I have tested every trading system and strategy under the sun! I used to pick entry points at random based on emotion or news events or something I heard on TV! It did not take long to destroy my capital! I have blown out my account balance before, and I had to start again,

from scratch!

Believe me, I am well acquainted with failure in trading! Im sure that the above scenario is pretty familiar to you too. We have all been there. About 10 years ago I discovered The Elliott wave Principle and its method of market analysis. Since then, I have spent years learning, testing and trading, using the wave principle as the backbone of my analysis. I even went to college to study macroeconomics and econometrics. I graduated with honours degree back in 2012. The financial market knowledge and statistical edge I gained after my degree added another level to my trading. The difference in my trading approach using the wave principle, compared to before, is like night and day.

The price started to move "my way" more and more often. The wave model, offers me a lens to view market action through, which no other form of analysis can do. Elliott wave analysis, helps me answer four key questions when I am contemplating a trade:

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