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Dow Jones Industrial Average – Elliott Wave Cycle Analysis

Following the market crash of 2020, the DJI initiated a new long-term impulsive wave cycle:

- Wave 1: Began on 30 March 2020 and extended through 27 December 2021, marking a strong bullish recovery phase.
- Wave 2: A corrective zigzag pattern unfolded, bottoming out in October 2022.
- Wave 3: A powerful rally commenced post-correction, culminating on 2 December 2024, consistent with the characteristics of a third wave—typically the strongest in momentum.
- Wave 4: A complex elongated flat correction formed, concluding around 7 April 2025.
- Wave 5: The index has since resumed its upward trajectory, entering the final leg of the cycle.

🔺 Structural Implication:
Wave 1 remains the largest in magnitude, suggesting the development of an Ending Diagonal in Wave 5. This pattern typically occurs in the final wave of a motive sequence and is characterized by converging trendlines and weakening momentum.

📉 Key Technical Signal:
To validate the Ending Diagonal structure, the price must breach the 1–3 trendline, which is currently within close proximity. A breakdown below this trendline would signal the completion of the long-term bullish cycle and potentially usher in a broader corrective phase.

⚠ Investor Note:
The DJI appears to be approaching the terminal phase of a multi-year impulsive cycle. Traders and investors should exercise caution and monitor key structural levels closely, as the risk of a significant reversal increases upon completion of the Ending Diagonal.

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