Possible directions for Dow

(Double click on chart for enlarged version)

Possibility No. 1 - Dow has completed its major wave (I) as shown above. Major wave (II) is about to begin. This (II) can either take the form of a sharp in magnitude but short in duration a-b-c formation or a shallow but long duration a-b-c-d-e formation. This major (II) provides an opportunity for those who have not participated so far to board the train.

Possibility 2 - This is a very bullish formation. Dow as shown above has completed the major wave (I) and (II) and has just completed sub-wave 1 of major wave (III). The sub-wave 2 of (III) will take about a week before the dynamic sub-wave 3 of (III) starts to run.

Possibility 3 - This is a very very bearish option. I put in this slim-chance possibility is purely based on some of my other indicator's cycle study. As shown above the formation is typical rebound wave of 3-waves with a short wave (III). This is a major rebound wave (6) of the bear that started in October 2007 as shown in the long-term chart below. The following wave (7) will take Dow to the bottom of 5 at 6,547 or even lower.

There are many other possibilities and whatever is the final outcome it can fit into one of the Elliott's principles.