Elliott Wave chart analysis for the DJIA for 3rd January, 2012. Please click on the charts below to enlarge.
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.
Movement above 12,328.47 would provide confirmation for this wave count as the alternate daily would then be invalidated.
At 12,761.30 wave c pink would reach equality with wave a pink. Once the fourth wave within wave c pink is complete then we may be able to calculate a more accurate target making use of two different wave degrees.
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. The alternate daily wave count presented below sees wave c pink as having completed in the middle of this trend channel.
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 any second wave correction within wave c pink may not move beyond the start of the first wave.
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 wave i orange complete. Wave ii orange is expected to move price lower within the final wave of the zigzag correction labeled C purple.
Wave A purple within wave ii orange is a clear five wave structure and therefore wave ii orange is expected to complete as a zigzag.
At 12,105.96 wave C purple within wave ii orange would reach equality with wave A purple.
At 12,619.91 wave (iii) green would reach 1.618 the length of wave (i) green.
Movement below 11,999.97 would invalidate this wave count as wave ii orange may not move beyond the start of wave i orange.
Alternate Hourly Wave Count
Edit: this alternate hourly wave count is invalid because wave (iii) green cannot be the shortest wave.
Alternate Daily Wave Count
This alternate daily wave count expects wave (2) black is now complete and that further downwards movement should be expected within wave (3) black.
A ratio within wave (2) black is: wave C pink is 40.86 points shorter than .618 the length of wave A pink.
Once we have a full daily candle below the bottom trend line then it is highly likely that wave (2) black is complete and would increase the confidence in this wave count.
Movement above 12,328.47 would invalidate this wave count as no second wave correction within wave (3) black may move beyond the start of the first wave.