Dow Jones in Focus: Fake Rally?

29 Feb

Today, we're taking a closer look at the Dow Jones Index, specifically the E-Mini Dow Jones Futures. It appears we're in Wave (2), overshooting the target and forming an Expanded Flat correction. If there's a turnaround here, typical for such waves, we might see a correction somewhere between 50% and 61.8%. We consider more than 78.6% unlikely, so we're betting on a correction in the 50 to 61.8% range.

Digging deeper, we've spotted an exciting pattern: a short Wave (i), followed by a long Wave (ii), a quick Wave (iii), and a very brief Wave (iv). This sequence could lead us to either Wave (v) or a larger B wave. Should the index continue to climb, we'll need to rethink everything. Surpassing the $40,000 mark would mean we're entering a new uptrend, requiring a different analysis. For now, we're leaning more towards a downward movement than an upward one. After much consideration, we've decided to initiate a short position on the Dow Jones as a bit of a hedge. We're particularly cautious about unexpected market movements triggered by insider trades. This strategy isn't about putting all our eggs in one basket but about spreading our risk.

In short, this strategy is our insurance policy. If the market continues to rise, any loss on the short position would be offset by gains in our long trades. Conversely, if the market declines, the short trade will help minimize our losses. This balanced approach keeps us flexible and eager to see what unfolds.