Dow - Thursday August 27 Opening Low

2 hours after the opening bell, Dow is about 57 points lower moving side way around 9486 as shown above. The less than 100 points drop is expected as Dow is currently in sub-wave ii of wave 3 of (III).
Since the March low of 6457, Dow, as shown above, has completed major wave (I) and (II) and wave 1 and 2 of the major wave (III). In the last 7 trading days Dow has formed its sub-wave i and is entering sub-wave ii as shown below. It will take another one or two days to complete its sub-wave ii.


The coming sub-wave iii is crucial because its form may be able to provide an answer to the question of whether the rebound since March is a bear market rebound or the rebound is the starting of a new market cycle.

As shown above, if the current sub-wave ii and the following sub-waves iii, iv and v are not dynamic with low trading volumes and are unable to break the upper trend line as shown, Dow is very likely to go for wave B formation with 10,500 as the likely target.

However, by end of next week, if sub-wave iii can punch through the upper resistance line as shown with high trading volume exceeding 8 billions and with a sub-wave iii magnitude bigger than that of sub-wave i, there is a good chance that March's low is the end of the October 2007 to March 2009 bear market and is the beginning of a new phase for Dow.