Dow - It is wave 3 of (III)

Dow put on 155 points (1.67%) on Friday and with that it confirmed that Dow is in wave 3 currently.

The volume at 6.7 billions, was much higher than the 4.9, 5.0 and 5.6 billions on Tuesday, Wednesday and Thursday respectively. It is likely that there were some short covering activities; some buying by those that were at the sideline and consistent buying by the hardcore bull trend believers.

With this latest development, the a-b-c-d-e wave 2 that I have mentioned two days ago is no longer possible. The next thing to monitor is the magnitude and volume of the currently wave 3. A shorter wave 3 (compared to wave 1) with low volume indicates the likelihood of wave B whereas a longer wave 3 with high volume indicates the likelihood of a new bull cycle.