DOW is at a similar turning point as S&P. Prices have risen from 12471 in what it looks like a complete 5 wave move upwards towards 14684. The sharp decline that started yesterday makes us challenge the bearish scenario that we should at least expect a downward correction towards the previous 4th wave level (14000). This is the minimum correction we may see if indeed the top is in. Many however challenge this idea and still remain bullish. What do they see? The recent decline is currently in 3 waves. What does this mean? It means that wave 5 could have an extension, so 14684 is not the end of wave 5 but only wave ((i)) of (v) of 5.
In these charts you can see what I’m talking about. In order for the bearish scenario to be confirmed, prices will need to break below 14380 level. If this happens with an impulsive wave, then bears will be expecting an even worse scenario.
But until then, we have to respect the behaviour of the market. If support does not break, then bears should not feel comfortable. On the other hand bulls will need to show strength and stop the decline and push prices upwards above the intermediate high at 14625.
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