Dow plunged on Thursday following the Federal Reserve's monetary policy decision, in which policymakers highlighted the ongoing economic concerns spurred by the Covid-19 pandemic and measures taken to contain it.
Dow dropped a massive 1,861 points or 6.9%. From its Monday's high of 27,574, Dow has dropped 8.8%, a magnitude equivalent to that of its wave (ii) pullback of 8%. With this drop, the Monday's high has to be the end of its wave (iii).
At this moment Dow Future has rebounded 200 points. However if Dow were to continue with its down trend movement in the next few trading sessions and to go below its wave (i)'s high of 24,764 level, it is very likely that its wave (iii)'s high of 27,574 is the end of wave B and Dow has started its wave C.
How about the fundamentally unlikely option of mega wave (3) scenario that I mentioned previously? can it be ruled out with Thursday's plunge?
At this moment and for the next few trading sessions, as long as Dow can hold above its wave (i) level of 24,764, technically I still cannot rule out the mega wave (3) option.
Technically there is this possibility that the current correction is the wave (iv) of major wave 1 of the mega wave (3) as long as the Dow does not go below its wave (i).
Just keep the fingers crossed for the next few trading sessions and for the next few weeks.
.
2 comments:
Actually don't you find that Elliott wave principle always leads to "if it is not up then it is down". Always room for an alternative count which is 180degree opposite direction.
If there are tools that can pinpoint the price movement, the market cannot exist. The markets need buyers and sellers complete any transaction. With Elliott wave, I know at this moment probability is high that the Dow has completed its wave B, another 500 to 1000 point drop from its Thursday closing level of 25,128 will confirm this option and that Dow is on its way to 17,000 level or lower. But if the confirmation never come and Dow is able to hold above its wave (i) level of 24,764 level, I have no urgency to sell off the stocks that I am still holding. Without Elliott wave as guidance I may not know where the Dow stands at any juncture and what are the levels to look for to decide my next action. The 500 points up or down has no meaning and implication without Elliott wave interpretation. The mega wave (3) option may be unlikely looking at the Covid-19 pandemic related world economic situation but I would like to remind myself and my friends there is this low probability option (at this moment)as an alternative to look at if the wave B scenario vaporized.
Post a Comment