Dow closed the week at 11,192, a drop of 2.2% from its peak of 11,444 on November 5. Mini wave 8 has reach its extreme value, it can not afford to drop any further, it has to move upward from here to complete its mini wave 9. However if Dow continues to drop lower next week, then the above wave count can no longer hold. The next likely wave count is as shown below.
Dow has the possibility that wave iii has ended. Under this scenario, Dow will continue to move lower to complete its wave iv. I have been talking about a 7% correction for wave iv, assuming that it has the same magnitude as its wave ii correction.
However under the Elliott Wave Principles, 'Rule of Alternation', wave ii and wave iv are likely to alternate in both 'form' and 'depth' as shown below.
Since wave ii is a simple zig-zag, it is possible that wave iv can be a triangle as shown below. Under such condition, wave iv may not go below 11,000.
Hopefully I can get a clearer picture by early next week.
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