Could Dow Jones be doing a bearish Wolfe wave?
מעודכן
I won't be suggesting a buy or a sell here but Dow Jones Index is currently forming quite a convincing bearish Wolfe wave pattern.
We have been forming a rising wedge (green channel) for a while since mid-late 2019 and now that the 6th extension has failed above the rising wedge resistant and breaking below the channel support, by using a bearish Wolfe wave analysis, the EPA line can be drawn as shown in pink (see simplified Wolfe wave example in link attached). This suggests a potential drop to around 24000 so as long as the price remains under the channel support.
If you're looking to short then the SL would be above the channel support (~27600) with TL at the EPA line. However, be careful with shorting here as the index is currently at 50EMA TF weekly, so I do expect a short recovery before heading toward 24000 if it is to continue its downward spiral.
If this bearish Wolfe wave scenario does play out, we are potentially getting into a deep C wave as the Elliott wave count for the rising wedge formed can be counted as B wave (in this case it did make a new high - aka a "bull trap"). This means a potential toward and even beyond the 2018 low. But as I mentioned, we are right at the 50EMA weekly chart now so let's wait and see where this will go.
I haven't seen Wolfe wave developing on a big TF before. I find that interesting and so just like to log this down here as neutral.
Wolfe wave example: https://ibb.co/Nn5dyF7
What do you think?
We have been forming a rising wedge (green channel) for a while since mid-late 2019 and now that the 6th extension has failed above the rising wedge resistant and breaking below the channel support, by using a bearish Wolfe wave analysis, the EPA line can be drawn as shown in pink (see simplified Wolfe wave example in link attached). This suggests a potential drop to around 24000 so as long as the price remains under the channel support.
If you're looking to short then the SL would be above the channel support (~27600) with TL at the EPA line. However, be careful with shorting here as the index is currently at 50EMA TF weekly, so I do expect a short recovery before heading toward 24000 if it is to continue its downward spiral.
If this bearish Wolfe wave scenario does play out, we are potentially getting into a deep C wave as the Elliott wave count for the rising wedge formed can be counted as B wave (in this case it did make a new high - aka a "bull trap"). This means a potential toward and even beyond the 2018 low. But as I mentioned, we are right at the 50EMA weekly chart now so let's wait and see where this will go.
I haven't seen Wolfe wave developing on a big TF before. I find that interesting and so just like to log this down here as neutral.
Wolfe wave example: https://ibb.co/Nn5dyF7
What do you think?
הערה
That's 5th extension, not 6th.העסקה בוטלה באופן ידני
Came down all the way almost touching the EPA line but closed in green with rejection candle. I'm expecting a short term rebound and hence, close trade.
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