Elliott Wave on the DOW

By: Dan Stinson | Sat, Mar 3, 2012
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DOW Ending Diagonal Pattern

DOW Short Term Forecast Update

Many investors have been frustrated with the choppy action on the DOW, so we have provided a chart to illustrate our forecast on the expected price action.

This corrective choppy action is an ending diagonal pattern which is a terminal pattern. We should see further downside below the lower trendline with a a sharp decline to at least the starting point of the ED pattern at 12550. We should expect to see a brief rally at this level before further downside.

DOW

DOW Ending Diagonal

We have seen a minor breach of the lower trendline, but a continued move below the lower trendline will confirm that this pattern is complete. The price action is still near the lower trendline so there is a possibility that we could see another wave up in this pattern, but that scenario is unlikely at this juncture. Further downside will mark the end of the current rally with two possibilities on the downside targets, both significantly lower.

We have been following an ending diagonal pattern for the SPX which also appears complete.

These charts are only a guide so that you can follow the action and watch for the expected outcome. The action could play out exactly as illustrated or it may need minor adjustments as we follow it through.

Happy Trading!!!

 


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Dan Stinson

Author: Dan Stinson

Dan Stinson
Elliott Wave Chart Site
ewavecharts.com

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