DJI darkest times since 2009? (wave analysis) On Dec 27, 2018 I assumed 2 main alternatives for DJI trend in update to DJIA long term forecast (wave analysis) publication.
On last Friday it became obvious that 2nd alternative is in play. (the most probable outcome)
"2) bear market have just completed 1st wave of bigger drop. so price might continue downward move after a reasonable correction." — Dec 27, 2018
Price action overview: Here we have an ABC (red) expanding flat pattern, which forms wave 4 major correction of wave 3 (October 2011 — January 2018 trend).
wave A (red) consists of abc (blue) expanding flat pattern. c = 161.8% of a
wave B (red) consists of abc (blue) zig-zag pattern. c = 61.8% of a
wave B (red) equals 61.8% of wave A (red) in time scale.
Forecast: I consider DJI to drop 29% of its peak value and reach 19463 in late November - early winter. wave C (red) to be 161.8% of wave A (red).
DJI should drop at least to 20423 (38.2% correction of October 2011 — January 2018 price trend)
alternative wave count:
entire structure can be also described as A-B-C-D-E expanding triangle pattern.
wave D = 161.8% of wave B
in this case forecasted price target would be almost the same — 18921. 31% drop.
