Looking at the long-term semi-log chart, I am thinking of only two possible patterns for Dow. The first possibility is a major wave 6 formation as shown below. I will talk about this major wave 6 some other day.
The second possibility is a Mega Wave (IV) as shown below, where I have shown a simple a-b-c pattern for (IV).
In one of my early post I have shown an a-b-c-d-e pattern for Mega Wave (IV) as shown below.
But whether it is going to be a-b-c or a-b-c-d-e formation, Dow is currently at wave (iii) of wave (2) of the major wave 'a' as shown below. The current (iii) hopefully can last until October.
My projection for a is about 5,500. In actual fact, theoretically there are Six possible Corrective Patterns for Mega Wave (IV) as shown below. Based on the current form of the corrective wave, I would like to rule out zig-zag, too bearish, it will lead Dow to 1,000
In this Mega Wave (IV) that I am talking about, Dow is only half-way through major wave a. If a really goes to 5,500, that can be a good buy at this level if one has cash. The subsequent major wave b can be very juicy. For example, for the 'Flat' pattern formation, major wave b can move from 5,500 to 14,000 and for the 'Irregular' pattern, as shown above, major wave b can move very much higher than 14,000. Reaching 16,000 may not be a surprise as it is an 'irregular' pattern.
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