Dow closed Thursday trading at 10319, down 58 points (-0.57%). Its intraday of of 10268 is 32 points below the support line of 10320 which is alright for me.
Besides the possible pattern that I have mentioned in my previous post as shown above, there are many other possibilities for the future short-term direction for Dow. At this juncture, the next two possibilities that I can think of are as shown below.
The possibility that the rebound since March 2009 may end before September cannot be written off as shown above. I have given this outcome a lower possibility for one reason, it is very rare that sub-wave (iii) can have a diagonal wedge formation.
As diagonal wedge formation can either be an ending diagonal or a leading diagonal. If it is an ending diagonal, it leads Dow to a possible outcome as shown above, an "a-b-c-X-a-b-c" pattern, it means the wave 2 of the rebound wave (Major wave B) has not even ended. For this scenario, the wave 3 may last longer, possibly until end of the year or further.
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