Today 11/16/16 the DJIA had the possibility a truncated 5th wave top could have been in place. The subsequent decline was shallow and choppy, which is typical of a corrective pattern. Additionally the pattern taken appears to be an Elliott wave Horizontal Triangle. If the pattern is complete a post triangle trust up is most likely to begin on the open 11/17/16.
The widest part of the Horizontal Triangle was 128.00 points added to the bottom of wave "E" 18,853.10 targets DJIA 18,981.10 Also .382 of wave (1) is 137.90 adding this to 18,853.10 targets 18,991.00 And of course round number resistance at 19,000.00
Even if you're not trading DJIA - watch this index as a guide to shorting.
Mark
Komen
JimBCM
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Personally speaking (3) should be in the position of the HI on the 10th. Followed by (4) down and (5) in place of (3). We have completed A and B of A-B-C down as of this post.
markrivest
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Hi
Thanks for the information.
Mark
indkitty
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Does the Fed rate hike go to turn down this rally? As DJI has made 18934 another 64 points to reach 19000. Will it have a strong/medium/weak retracement from 19000?
Thanks for the simple explanatory chart without too many lines, curves arcs.
markrivest
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Hi If there is a rate hike it of course could have an effect on the stock market either bullish or bearish. I believe the next FOMC meeting is in the first week of December? That's a long time in terms of what can happen to the DJIA. I think a decline could start on 11/17/16, the DJIA from 11/4/16 rallied 1,000 points in four trading days and could easily decline 1,000 points in the next four trading days. As for how strong/medium/weak a retracement could be, assuming the 19,000 area is resistance we will just have to wait. As I mentioned in my reply to Zhilin, take each trade one step at a time. Mark
indkitty
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@markrivest, Thanks Mark for the clear information. I'll wait and see.
jiukun
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Thank you for the clear analysis. Is it possible that DJIA continues a range move between 18800 and 19000 for several weeks or even a month? That is to say, no sharp down and up (less volatility)?
markrivest
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Hi Zhilin Yes the DJIA could continue in a narrow range. There is nothing in Elliott wave theory that could prevent that scenario. If the Elliott count I have illustrated is correct and lets say the DJIA peaks at 19,000 the range we would measure to calculate a downside target would be the 11/4/16 bottom of 17,883 to 19,000. A .236 retrace of that range would be DJIA 18,737. Assuming you were to short near DJIA 19,000 this would be the minimum downside target for a position trader to take profits. The DJIA could of course go much lower. How fast the DJIA reaches this target would be a factor in deciding to exit a short or reverse the position. Take each trade one step at a time. First lets see if the DJIA can reach near 19,000 on 11/17/16 if it does this is a low risk area to short. After you are in a short position and the market is moving down, then start to consider downside targets. Mark
jiukun
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@markrivest, Thank you! Btw: are you interested in IWM? If so, have you analyzed it? It seems to me that the top of IWM may be on tomorrow @ 130.2, or in 2-3 days @132 or so.
Best,
Zhilin
markrivest
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Hi Zhilin I don't follow IWM because it is an ETF for an Index which is RUT- Russell 2000. Stock indices give better signals than ETF's. I do follow RUT and it should move down with the DJIA. Mark