Aug 282012

After my recent posts on the S&P500 provoked some animated discussions, I was persuaded by one reader to look at the Dow. What follows below are three charts that offer my Elliott Wave Analysis of the Dow Jones Industrial Average.

Elliott Wave Rules and Guidelines continue to be observed here. However, I must confess that I am trying to squeeze in a count to fit my view. This is not an entirely recommended approach to using the wave analysis. However,because I am not able to honestly call the current recovery from the June low of 12035 as impulsive, the wave counts that I offer you on the Dow here is my best effort. We shall know soon enough. Good luck folks.

Dow jones chartDJIA chartDow chart

Sep 182011

Exactly a month back, on 18th August, when we discussed the Elliott Wave outlook for the Dow Jones Industrial Average, we identified 11725 as a key level. The index topped out at 11712 and came off by over 7%. However, we are witnessing yet another recovery in this complex correction, and so a new key level emerges for our next directional trade. This comes at 11940. If we approach that level with diminishing volume, it makes sense to turn short there with a nearby stop. I still have not given up on the move to 9970 at this point in time. Ramki

Aug 182011

Dow JonesHaving prepared this on the 15th, with an intention of sharing with readers the same evening, I went out for a walk. I suddenly remembered that I had promised my wife that we will go to the movies, and promptly forgot that this update was ready! Anyway, we are still not too far from where we were on the 15th, So here goes.

In the big picture, we should still lookout for a move down to 9970. ANy failure to move and stay above 11725 will see the next round of sell off. Indeed, we could even fail near the prior fourth wave at 11,575. So take care.

Jan 122011

The last time I looked at the chart for the Dow was back in May 2010, where I warned of a downmove to 9000 levels. The correction went only to 9600 area, (still a nice 11% down from the time of the update). Examining it with fresh eyes and more price action reveals that the top seen at that time was not the end of the 5th wave. (Readers should realize that traders need to actively engage in following their own markets in order to be successful. I am looking at it after 7 months and didn’t warn you of this change in count. But you could have easily spotted it with shorter term charts. Wavetimes is only a source of reference for you, to give you numerable examples of how to read the markets).

The outlook for the Dow, in my view, is still positive in the bigger picture. We could see a bit of back-and-forth movement in the coming days because we are likley beginning a complex fourth wave. But later on the market will sort itself out, and a new upmove is likley to happen. The charts give more reasons. Enjoy.

May 122010

Here is the Elliott Wave Analysis of DJ Industrial Average that I presented to an audience of over 200 traders this morning.  You will see that I am bearish in the slightly medium term for a dip to at least around the 9000 level and would recommend any recovery to get out of longs. If you get an (unlikely) rally above the recent high, then you can even buy out-of-the-money puts because I would then label such a recovery as an irregular B wave and still look for a move down.

Jan 242010

One of the readers, Jim to be specific, has asked for the internal counts of waves (1) and (3)  of the wave count of the Down Jones Industrial Average that I had posted on 17 Jan 2010. He requested this because he wasn’t sure if they looked impulsive. As I have mentioned elsewhere, Elliott Wave Analysis is a flexible tool in the hands of the analyst. Counting the waves is more like art than a science. One could label these waves in a variety of ways and still come to the same conclusion. Again, one could count them differently and reach a completely different conclusion. What, then, is the “RIGHT” count?  Unfortunately, no one can be sure until the move is all over.  The only way to trade the markets using Elliott Wave Principle is to be faithful to any one count until the market signals that you are wrong. I have provided my internal counts of the Dow Jones Industrial Average in the attached chart. There are several Fibonacci relationships that you can observe between alternate and adjacent waves. Also, the three main rules governing wave principle are all respected. Hence, there is a reasonably good chance that I am on the right track. I always grant that I could be completely wrong, and will be more than happy to share my mistakes, not just because no one can claim complete mastery, but also because once I am corrected, at least my next trade on the Dow Jones will be on the right track!  Please feel free to share these comments and links with your friends. After all, this blog is meant to share our experiences in the market. With best wishes, Ramki

Jan 172010

Here is the Elliott wave update on the Dow Jones as of 17 January 2010. It has been a while since I looked at this chart. Someone sent me a note that Bob Prechter has called the top in this index, and he had read about it in Planet Yelnick. So I decided to take a fresh look at the chart for the Dow, and you can see my wave count right on the chart itself.

One of the frequent criticisms against Elliott Wave analysis is that the same chart is capable of so many different interpretations. However, the experienced trader knows that in order to make money, one should follow any ONE count at a time. Only then can the trader know when he is wrong. As soon as he realizes he is wrong, he can take quick corrective action, perhaps switching to the alternate count that he prefers. As for the Elliott wave counts for the DOW, no one can be sure who has the correct wave count until the move is over. By that time, it will be too late to do anything, and the whole exercise will become academic. So I urge traders to read Planet Yelnick for comments on Prechter’s count, then go to Tony Caldero’s page, and finally come back and read my own count. Then you decide which one you wish to adopt for the time being, and stick with any one of us. At some point you will know whether you are on the right track to making money or not, and then you can decide your next course of action. Good luck. Ramki