DOW JONES INDUSTRIALS
Topping in wave (5)
30 min
4 Hours
Daily
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: Unemployment Claims, New Home Sales.
On Monday I published this bullish chart:
This chart indicated the DOW price structure had traced out an impulsive rally and an Elliott wave bullish signal with five waves in the direction of the trend, and a three wave corrective decline, waves 'i' and 'ii' were complete at 19730 and I expected wave 'iii' to rally strongly for the rest of the week.
I wrote "Wave ii seems to be complete at todays low ,and wave 'iii' should begin from here. so the wave structure is setup for a rally this week."
Since that analysis was published on Monday the market has rallied 300 points to a new all time high and broken the illusive 20,000 level.
The larger wave count is suggesting a continued rally for the coming months in a structure called an ending diagonal. The market may be bullish right now, but the current Elliott wave count is calling this rally the end of a very large bull market run which began in march 2009.
The coming top will be one to remember for generations to come, but for now I will be tracking the rally every day as it continues in wave (5) to its inevitable end.
