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Last week’s analysis expected upwards movement for the week. This is not what happened. Minor wave 4 continued further lower and breached the invalidation point. This has necessitated a reanalysis of the wave count within intermediate wave (C) on the daily chart.

Click on the charts below to enlarge.

DJIA daily 2013

There are several possible ways to label this long upwards movement of intermediate wave (C). This wave count sees minor waves 1 through to 4 complete with the first wave extended. I have moved the labeling of the end of minor wave 1 and minor wave 2. This has just as good a fit as last week’s labeling. This interpretation sees the strongest momentum as within the third wave.

Minor wave 2 is now seen as a rare running flat (the subdivisions fit nicely) and minor wave 4 shows nice alternation as double zigzag.

There is still no Fibonacci ratio between minor waves 1 and 3. This makes it more likely there will be a Fibonacci ratio between minor wave 5 and either of 1 or 3. At 15,689 minor wave 5 would reach 0.382 the length of minor wave 1.

At 15,729 intermediate wave (C) would reach equality with intermediate wave (A).

Because minor wave 3 is shorter than minor wave 1 the upcoming minor wave 5 will be limited to no longer than equality with minor wave 3, as a third wave may never be the shortest wave. This limit is reached at 15,942.59.

Draw a channel about intermediate wave (C) using Elliott’s second technique. Draw the first trend line from the ends of minor waves 2 to 4, then place a parallel copy upon the high of minor wave 3. Expect minor wave 5 to find resistance about the upper edge of the channel.

The wide maroon channel is drawn about cycle wave b at the monthly chart level and copied over here to the daily chart. Upwards movement for last week found resistance at the upper maroon trend line and should continue to do so.

Minor wave 4 may not move into minor wave 1 price territory. This wave count is invalidated with movement below 14,684.49.

DJIA hourly 2013

On the hourly chart we have a clear channel breach of the downwards channel containing minor wave 4 drawn as a best fit. This is a good indication that minor wave 4 should be over and minor wave 5 should be underway.

Within minor wave 4 double zigzag minute wave x is a contracting triangle still in this position. There is no Fibonacci ratio between minuette waves (a) and (c) within minute wave w. Within minute wave y minuette wave (c) is just 12.88 points longer than 1.618 the length of minuette wave (a).

The first upwards movement of minor wave 5 labeled minute wave i subdivides nicely as a five wave impulse on the five minute chart. Minute wave ii found support at the upper edge of the parallel channel containing minor wave 4.

If this wave count is correct we should see upwards movement next week, with some increase in momentum during Monday’s session. At 15,568 minute wave iii would reach equality in length with minute wave i. This target will remain valid only as long as minute wave ii does not move lower.

Minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement below 14,844.22.