Friday, 8 June 2012

What to expect next in DJIA

 Bullish wave count of wave 4 gets canceled as proposed wave 4 overlapped wave 1. Moreover the move from recent highs has an impulsive form. DJI has stepped out of the long term channel in the daily chart. First try was made to reenter but was not successfull. I don't think that new lows are on the way just yet.
Taking a closer look at the 30m chart, DJI has found resistance at the 38% retracement. Futures spiked yesterday during premarket in response to the rate cut in China, but as I mentioned in twitter we should have thought twice before labeling this as 'good' news. Most probably the market is now in correction status. I think until the end of June the market will not crash to new lows, instead it will form a corrective A-B-C towards 50% and 61,8% retracement. Currently we are at the start of this potential upward correction. A pullback was expected from yesterday to begin as the rise was too steep and too fast. 

Thank you for taking time to read this post.

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