IvanLabrie
Short

Dow Jones Industrial Average: Terminal pattern spotted

FX:US30   Index of top 30 shares on Wall Street
We might be in the presence of a terminal impulse, concluding a larger corrective structure in the Dow Jones.
The longer term wave count is incredibly complex and I won't attempt to perform the proper Neowave analysis of it, but, I'd like to point out that the recent juncture appears to be a terminal pattern, which would imply we might see a rapid decline and a 100% retracement of the advance from 2015's low. This is one of the possibilities we have been contemplating while discussing with my mentor, Tim West (who spotted this pattern).
It's possible the market remains sideways for a long time, so I wouldn't pass on going long at the bottom of the decline. Most people will probably miss out on that, since they might end up expecting a way larger decline, so, don't go overboard and keep expectations in check. React, don't predict.

The post pattern implications are that we must drop in 25-50% of the time the pattern took to form, and that we must cross the wave 2-4 trendline in less time than wave 5 took.
I also added a time at mode technique, the range expansion validation target, to give this forecast an additional edge. We need to see 17595 hit within the next 3 weeks to hold shorts, else, we might be in the presence of yet another pullback and further upside continuation, which would put the terminal impulse thesis in question, since time to hit the target is limited.

That being said, I'd reccomend keeping a diversified portfolio, and not simply forfeiting all long positions, but, on the contrary, use the sharp declines in many stocks, to go long against solid levels of support like the ones provided by Tim West's 'Key earnings support' indicator, found in his 'Key Hidden Levels' indicator pack.
Pairing this tool with the RgMov and CCI indicators we can easily identify swing trading opportunities in individual stocks.
I'll hold my SPX             shorts, and look to go long for example the Nasdaq 100 CFD             in the short term, during pullbacks, but also, long quality individual stocks off key levels of support.

Stay tuned for more updates on this forecast.

Good luck!

Ivan Labrie.
Comment: Holding shorts in SPX cfds, SPXL, XOM, FB, NFLX, DB, BAC and NEM currently.
Comment: I'm out of all shorts for a 11% gain.
I'll watch the developments here though, this is an analysis piece.
The time to reach the target is on chart, let's see how it evolves.
See my new IBB post for information, that confronts this thesis.
Comment: 2 weeks to go to validate the range expansion. If 17595 isn't hit in time, and/or the trendline isn't breached solidly, we can expect this forecast to fail.
In my opinion.....DOWI will be going down to 17000 by end of year... 50% fib ret. Thanks 4 Chart.
+1 Reply
Yes, it could be a different pattern and have a slower pace on the move down. But downside is pretty certain at this point.
+2 Reply
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