On Friday, Dow managed to recoup all its previous three days of losses to close at 13,096 level.
However, it was not able to break its upper trend line. If Dow follows the above wave count, it should be able to break out of the uptrend channel as well as its May's high of 13,279.
Short-term bullish, another 7% gain at best.
Following this possible wave count, 14,000 is a likely location to end the major wave 1. For major wave 2, the worst case scenario is a 100% retracement to the 6,547 level. This can be triggered by events in Europe coupled with recession in China.
Long-term bearish, a possible 53% loss.
To tie in with the latest wave count, the long-term wave count since 1900 possibly takes the form shown above. After the March 2000 dot-com bubble's peak when mega wave V ended, Dow has formed an expanding triangle a-b-c corrective mega wave VI, that ended on March 2009 at 6,547 level.
The following is an interesting video
"Do we really need to audit the Federal Reserve?"
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