Dow refuses to die.

Dow moved up 140 points (+1.3%) after 90 minutes of trade. Its daily range for the first 90 minutes is between 10,752 and 10898 as shown above, staying within its upper resistance of 10,960 and lower support of 10,682. The tug of war between bulls and bears continues.

In my yesterday's post, I have indicated a possible scenario as shown below, the possibility of wave iv in progress. The slow stochastic %k(15) line has cut through %D(5) line.


Under this scenario, the major wave B is projected to end before November.

However, if Dow refuses to give way and instead it moves into 11,000 territory, a possible scenario is as shown below. Last week's intraday height of 10960 is not the end of wave iii, it is only the end of sub-wave 1. The pull back is sub-wave 2 as shown below. Sub-wave 3 will be the next wave up. Usually sub-wave 3 of wave iii is more dynamic, no hesitation and with high volume.


Under this second scenario, major wave B will be able to last longer and can go into December 2010 or January 2011.