Eliott wave analysis for DOW JONES

S&P preparing for the break out
June 18, 2013
S&P in deeper correction
June 21, 2013

DOW has most probably finished wave 4 exactly at the boundaries of the upward sloping blue channel as shown in the daily chart below. The double bottom formation that we analysed in detail a few days ago, has given the index enough power to break above the intermediate high at 15300 and confirm our view that at the double bottom a new upward move was starting. Our view for some time has been that the downward move from the all time highs was corrective as prices declined in an overlapping form and thus the downward wave was corrective. It is crucial for this upward move, for prices to hold support at 14988 area. I expect prices to continue higher to test and eventually break higher than 15500.

DOWDAILY

The extended 5th wave in DIA is our favorite wave count. Wave (4) has ended and we currently are in the extension of wave (5) of 5. Our bullish view that the correction has ended and a new upward move starts is also confirmed by DIA. The downward correction stopped at the lower part of the upward sloping trend channel and the decline had a corrective form. On the other hand, the upward move that started at 148.31 has a more feeling. Resistance at 152.88 was taken out and we now expect prices to reach to new highs.

dia

Volatility today is expected to rise. Fear of tapering the QE programme could push prices fast in a downward crash. Untill now, only rumours and comments of such possibility has resulted in mini crashes. Our analysis expects prices to continue to rise, but raising your stops and respecting support levels should be your main trading strategy. We are neither perma bears neither perma bulls. Here at Trading2Day our only goal is to analyse the markets and find tradeable opportunities with a good risk/reward ration. Our only goal is to make profits no matter what direction the market takes. We can do it whatever the trend is.

As always, thank you for taking the time to catch up on my thinking. Feel free to ask for a one week free trial of our services and you will see how our analysis adds value to your trading.

impulse-wave-rules

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.