Elliott Wave Forecast for the Dow (update)

By: Joseph Russo | Fri, Jun 22, 2012
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This is a follow up to last weeks forecast, which provides a greater level of detail in explaining the efficacy of the tools that we use to forecast price and economic conditions.

As reality intrudes intermittently against the backdrop of failed political and economic systems around the world, price action throughout the financial sphere reflects such despite the gift of general calm provided by the extraordinary interventions of the failed statist authorities - who still maintain the absolute totalitarian monopoly to do so effectually. How much longer they can keep confidence elevated amid unequivocal failure is the trillion-dollar question. It could be a matter of weeks, months, or even years.

Under every circumstance, there exists no better means by which to anticipate the rapidly changing state of global economic conditions than to accurately interpret price charts, which telegraph predictable human reactions to the price mechanism at work in real time.

As we render the following forecast based on such, we will explain the charts mark-ups, which will walk you through how we have hit recent targets and arrive at our present conclusions.

Dow 30-Minute bars

We left off last week correctly anticipating further upside toward the 12876-resistance level. We reminded our NTO and ECB subscribers of a potential turn date slated in advance for arrival on Wednesday June 20 (+/- 1 session).

As if right on cue, the Dow registered a print high of 12898.86 on Tuesday June 19, which was just 23-pts above our resistance level and did so in the session preceding our effective turn-date.

The 30-minute chart above illustrates the Dow plausibly completing five waves of progressive advance to the 12898 crest, then reversing downward toward the blue uptrend stopping initially ahead of the Fed at 12745.45. During and after the Fed-meeting, note how the Dow then thrashed violently higher, lower, then higher once again.

In today's chart shown below, we observe the second erratic fed-induced high as wave 2 - or -b-.

It is critical to note that on Wednesday, before the big plunge on Thursday, we provided subscribers with a rising red trendline trajectory citing a 163-pt sell-trigger boundary if breached.

Dow 30-Minute Bars

By the time the cash market opened up on Thursday, the Dow had breached our 163-pt sell-trigger, which then translated to a downside price target at 12592.

Prior to Thursdays close, the Dow set a print low at 12561.46, which was around 30-points beyond our price target, easily capturing our predicted level of downside.

Heading into Monday, the 12561-pivot low is holding following Friday's 67-pt reaction rally.

From here, we will wrap up the balance of the forecast precisely as extracted from Friday nights Near Term Outlook. >> You may access the wrap up by clicking here.

 


 

Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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