The DJI (The Dow Jones Industrial Index) has since the January 2016 low at 15,451 moved almost 50% higher and since the March 2009 low at 6,470 we are 258% higher. My preferred weapon of analysis is the Elliott Wave Principle (EWP), but sometimes, when we are in uncharted waters, a supplementary weapon is needed. Most often that extra weapon is the Andrew's pitchfork. The reason for that is, that is holds some outstanding predictable capacities for the future resistance points and in combination with the EWP, we get a better possibility to spot these possible resistance points.
The relentless rally since January 2016 has broken through the normal calculated targets, as they didn't exist at all. So what to do? The EWP says the next possible upside target is seen at 24,176, but does this calculated resistance hold any value? This is where the Andrew's pitchfork comes into play as a helpful weapon. As depicted below, I added the first pitchfork from the October 2002 low and used the high in October 2007 and the low in March 2009 as the anchor points. As it can be seen, this pitchfork's upper resistance-line was broken in December 2016, this is where the more advance use of the Andrew's pitchfork comes into play. What you do is adding a clone of the first pitchfork an place it on top of the first pitchfork and you now have the future resistance points. Of course the mid-line is the most important and we can see the mid-line currently is sitting near 23,944 close to the calculated 24,176 target. The 24,176 calculated EWP-target and the pitchfork mid-line will share this target in December 2017.
So for now stay cautiously focused towards the upside for a test of resistance near 24.176 in the coming months. However, as we close in on the 24,176 target the risk of a correction in wave 4/ is rising. As wave 2/ only corrected 38.2% of wave 1/, we should expect a deeper correction of wave 3/ into the 50 - 61.8% corrective targets, which is seen between 19,744 - 20,611 as the low of wave iv of one lessor degree is seen at 20,554 the most likely target for the wave 4/ correction will be between 20,554 - 20,611 form where the final rally in wave 5/ of 5 should be seen.
The relentless rally since January 2016 has broken through the normal calculated targets, as they didn't exist at all. So what to do? The EWP says the next possible upside target is seen at 24,176, but does this calculated resistance hold any value? This is where the Andrew's pitchfork comes into play as a helpful weapon. As depicted below, I added the first pitchfork from the October 2002 low and used the high in October 2007 and the low in March 2009 as the anchor points. As it can be seen, this pitchfork's upper resistance-line was broken in December 2016, this is where the more advance use of the Andrew's pitchfork comes into play. What you do is adding a clone of the first pitchfork an place it on top of the first pitchfork and you now have the future resistance points. Of course the mid-line is the most important and we can see the mid-line currently is sitting near 23,944 close to the calculated 24,176 target. The 24,176 calculated EWP-target and the pitchfork mid-line will share this target in December 2017.
So for now stay cautiously focused towards the upside for a test of resistance near 24.176 in the coming months. However, as we close in on the 24,176 target the risk of a correction in wave 4/ is rising. As wave 2/ only corrected 38.2% of wave 1/, we should expect a deeper correction of wave 3/ into the 50 - 61.8% corrective targets, which is seen between 19,744 - 20,611 as the low of wave iv of one lessor degree is seen at 20,554 the most likely target for the wave 4/ correction will be between 20,554 - 20,611 form where the final rally in wave 5/ of 5 should be seen.