It is quite clear by now that Dow is in its down trend channel. How low will it move is the next question.
The wave form above is the most optimistic option. As the technical indicators and OBV are bearish, this option is possible but is unlikely.
Most likely the 2009 March's low is the end of the 2007/2008 bear market. If Dow is in its new cycle since March, the current pull back has to be major wave (IV) correction, we can stand on the sideline until mid-December 2009.
This is very very bearish, but at this moment it appears that there is no strong reason for Dow to go below March's low of 6547.
The wave form above is the most optimistic option. As the technical indicators and OBV are bearish, this option is possible but is unlikely.
Most likely the 2009 March's low is the end of the 2007/2008 bear market. If Dow is in its new cycle since March, the current pull back has to be major wave (IV) correction, we can stand on the sideline until mid-December 2009.
This is very very bearish, but at this moment it appears that there is no strong reason for Dow to go below March's low of 6547.
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