Dow Jones Industrials
Topping in wave (5)
My Bias: market top is in.
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Long term wave count: Topped in wave (5)
Important risk events: USD: Existing Home Sales, Crude Oil Inventories.
After a flat week for the stock market Tuesday's action jolted it back into life!
On Monday night I released my daily analysis and I spoke about the precarious state of the DOW saying
"The DOW has lost its upwards momentum completely, as evidenced by the momentum indicators in both the 30 minute and 4 hr chart.
A bearish downwards cross of the centerline happened again today on the 4hr RSI and MACD.
The wave count off the high is unusual, as we don't often see the wedge pattern, BUT, the rarity could signify the rarity of this moment.
A turning point to remember, so to say."
On Monday night the DOW stood at 20908,
With the wave count looking very bearish and calling for a drop in wave '3' red.
On Tuesday evening the market dropped to 20640,
a 250 point decline in a single day!
This is the power of Elliott wave analysis in action!
From here the downside momentum should continue,
with only intermittent corrective rallies.
The action today is fitting for a third wave, this is usually the longest and strongest wave.
Wave '4' should be a three wave affair, and should complete before resistance at 20777.
The alternate wave count still views the current decline as wave (iv) grey, so this is something to watch out for.
further declines below 20525 should cement the trend change and herald in the bear market.