Dow Jones Contracting Triangle Scenario
Topping in wave (5)
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
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.