DJIA Elliott Wave Analysis – 21st February, 2012

Elliott Wave chart analysis for the DJIA for 21st February, 2012. Please click on the charts below to enlarge.

Main Wave Count

DOW monthly 2012

This monthly wave count sees the Dow within a double combination correction at dark yellow degree.

Waves (w) and (x) dark yellow are complete. The second structure labeled (y) dark yellow is therefore in progress.

Within wave (y) dark yellow we expect wave (A) black within wave A maroon of wave a teal green is complete and that a little more upwards movement is expected within wave Y blue within a double combination correction for wave (B) black.

DOW daily 2012

This is the main daily wave count which sees waves W and X blue within wave (B) black as complete. Wave (B) black is expected to be unfolding as a double zigzag correction.

There is no adequate Fibonacci ratio within wave c pink of wave Y blue for wave (iii) green with wave (i) green. This makes it more likely that we may see a ratio for wave (v) green with either of waves (i) or (iii) green.

Within the second structure labeled Y blue waves a and b pink are complete. Within wave c pink a little further upwards movement is expected to complete wave (v) green which would likely complete the whole combination correction for wave (B) black.

At 13,231.19 wave (v) green within wave c pink would reach equality with wave (iii) green and at 13,395.44 wave c pink within wave Y blue would reach 1.618 the length of wave a pink.

The trend channel is constructed about wave Y blue by making use of Elliott’s channeling technique 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. Once we can count a five wave impulse complete for wave (v) green and we see movement and preferably a full daily candle below the bottom trend line of the trend channel, then it is highly likely that wave (B) black is complete and that we will see further downwards movement.

Movement below 12,328.47 would invalidate this wave count as wave (iv) green may not move into the price territory of wave (i) green.

DOW hourly 2012

This hourly wave count looks at the structure within within wave (v) green of wave c pink.

Waves i and ii orange are expected to be complete and upwards movement as well as an increase in upwards momentum is expected within wave iii orange.

Ratios within wave i orange are: wave 3 purple is 12.73 points longer than 1.618 the length of wave 1 purple and there is no adequate Fibonacci ratio for wave 5 purple with either of waves 1 or 3 purple.

There is no adequate Fibonacci ratio for wave C purple with wave A purple within wave ii orange.

Movement below 12,753.62 would invalidate this wave count as no second wave correction within wave iii orange may move beyond the start of the first wave.

Alternate Hourly Wave Count

DOW hourly 2012

This alternate hourly wave count looks at the possibility that wave (B) black is complete and therefore completed sooner than our main wave count expects.

We may see a little more upwards movement to complete the final impulse, but if we see movement below 12,753.62 then this wave count would be confirmed as the main hourly would be invalidated.

Movement below the bottom trend line of the trend channel about wave (v) green would increase the likelihood that wave (B) black is complete.

It would however still be possible that we have only seen the end to wave i orange within wave (v) green and therefore further upwards movement would be expected. Once we see movement below 12,529.64 then we would have final confirmation as the downwards movement then can not be a second wave correction within wave (v) green anymore. This would provide a very strong indication that further downwards movement should be expected within very likely wave (C) black.

Alternate Daily Wave Count

DOW daily 2012

This alternate daily wave count differs from the main daily wave count in the structure within wave (B) black.

Wave (B) black is seen as a zigzag correction. This ultimately expects one extra wave to the upside compared the main wave count above.

Upwards movement is expected to complete wave iii pink before a larger correction for wave iv pink which is likely to see price move sideways, before the final impulse to complete wave C blue and wave (B) black.

At 13,231.19 wave (v) green would reach equality with wave (iii) green and at 13,395.44 wave iii pink would reach 1.618 the length of wave i pink.

Movement below 12,257.67 would invalidate this wave count as wave iv pink may not move into the price territory of wave i pink.