DJIA Elliott Wave Analysis – 13th January, 2012

Elliott Wave chart analysis for the DJIA for 13th January, 2012. Please click on the charts below to enlarge.

DOW daily 2011

Wave (2) black is seen as an incomplete double zigzag correction with a zigzag for wave W blue joined by a three for wave X blue. Within the last zigzag labeled Y blue waves a and b pink are complete.

Further upwards movement is expected within wave c pink of wave Y blue of wave (2) black.

At 12,761.30 wave c pink would reach equality with wave a pink.

The trend channel was constructed about wave Y blue by connecting the start of wave a pink to the end of wave b pink and placing a parallel copy at the end of wave a pink. We may see wave c pink finish in the middle of this trend channel or more likely at the upper trend line.

If the bottom trend line of this trend channel is breached with a full daily candle below it, then our alternate hourly wave count presented below would increase significantly in confidence.

Movement above 12,876 would invalidate this wave count as wave (2) black may not move beyond the start of wave (1) black.

Movement below 11,735.19 would invalidate this wave count as no second wave correction within wave c pink may move beyond the start of the first wave.

DOW hourly 2011

This main hourly wave count sees waves (i) and (ii) green within wave c pink as complete.

Wave (iii) green is seen as subdividing into orange degree with waves i and ii orange complete.

Wave iii orange has subdivided into purple degree with waves 1 through 4 purple complete.

Upwards movement is therefore expected within wave 5 purple to complete wave iii orange.

Wave 5 purple is seen as an ending diagonal that would require all the sub waves within wave 5 purple to subdivide into zigzags. Waves (1) and (2) aqua are expected to be complete.

There is no adequate Fibonacci ratio for wave 3 purple with wave 1 purple and therefore it is more likely that we would see an adequate ratio for wave 5 purple with either of waves 1 or 3 purple.

Movement above 12,514.62 would provide confirmation for this wave count as the alternate hourly would then be invalidated.

At 12,602.37 wave 5 purple would reach 2.618 the length of wave 1 purple and at 12,671.63 wave iii orange would reach 1.618 the length of wave i orange. This provides us with a 69 point target zone within which we may see wave iii orange complete.

Movement below 12,284.05 would invalidate this wave count as no second wave within wave 5 purple may move beyond the start of the first wave.

I expect this wave count is less likely than our alternate below, it however remains a possible wave count and we will assume the current uptrend is likely to continue until proven otherwise. It is therefore very important to wait for one of the wave counts to be confirmed.

Alternate Hourly Wave Count

DOW hourly alternate 2011

This alternate hourly wave count has a much better look than the main hourly presented above.

It sees wave (2) black as complete and therefore expects a trend change has occurred. Wave c pink is seen as an ending diagonal which required all the sub waves to subdivide into zigzags.

Downwards movement is expected within wave (3) black. Once we have more of the structure within wave (3) black complete and the wave scenario for the main hourly wave count is likely invalidated, then we will calculate possible targets to the downside.

Movement below 12,284.05 would provide confirmation for this alternate as the main hourly wave count would then be invalidated.

Movement above 12,514.62 would invalidate this wave count as no second wave correction within wave (3) black may move beyond the start of the first wave.