If I believe that the governments and bankers will continue to support the market and the Federal Reserve and ECB will continue to print money whenever necessary, Dow will continue to move up in the short and medium term. Under this scenario, Dow is likely to continue with its wave (v) formation. It is possible that it is forming its mini wave iv of sub-wave 3 of wave (v) as shown below.
However, at this stage I am unable to rule out technically my previous pessimistic options for Dow.
Option 1 is the more pessimistic scenario. Assuming a major wave 1 formation from March 2009's low of 6547 to May 2012's high of 13279 (+102%) has been completed. Dow is forming its major wave 2 that has a possible low of 6547 for a 100% retracement.
Under Option 2 scenario Dow is forming sub-wave c of wave vi with a possible low of around 12,000.
Take it easy
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