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Last week’s analysis expected upwards movement from the Dow for the week. Although a slight new high was made price moved overall lower for the week in choppy overlapping movement.

Price remained above the invalidation point on the hourly wave count and the wave count remains valid. However, the choppy overlapping behaviour for this last week indicates a diagonal unfolding rather than an impulse.

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. 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 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

Upwards movement for this last week so far is in overlapping zigzag movements. An ending diagonal may be unfolding for minor wave 5. Alternatively, if we move the degree of labeling within this diagonal down one degree, it may be only minute wave i leading diagonal unfolding.

Price found some resistance at the midline of the parallel channel copied over from the daily chart. It may continue to do so as minor wave 5 unfolds.

Within a diagonal the third wave must move beyond the end of the first wave, so minute wave iii must make a new high above 1,5300.64 next week. At 15,453 minuette wave (c) within minute wave iii would reach 1.618 the length of minuette wave (a). This target may be about two days away. If minuette wave (c) were to only reach equality with minuette wave (a) minute wave iii would not be long enough to move beyond the end of minute wave i.

Within minute wave i there is no Fibonacci ratio between minuette waves (a) and (c).

Within minute wave ii there is no Fibonacci ratio between minuette waves (a) and (c).

Within an ending diagonal all the subwaves must subdivide into zigzags, including the third wave. Within minute wave iii zigzag minuette wave (b) if it moves lower may not move beyond the start of minuette wave (a). This wave count is invalidated with movement below 14,953.45.

When minute wave iii is complete the following downwards zigzag for minute wave iv must overlap back into minute wave i price territory, but may not move beyond the end of minute wave ii. The invalidation point will remain the same.