|Potential Leading Contracting Diagonal for Minor A of Intermediate (3) in the DJIA|
So far, within this wave we are getting the deep retrace - - on an hourly closing basis of 78.6% in the DOW for wave minute ii (circle ii) of A. Upward movement has apparently started, and price found initial resistance at the prior gap.
Because we counted the down sequence in live chat, as an (a), (b), (c) zigzag, then this fully completes minute wave ii (circle ii). If upward movement of minute wave iii (circle c) has truly begun, then we can move up the invalidation point for minute wave iii (circle iii) to the low of today. Again, notice how few Elliott analysts tell you the clear and precise invalidation points for a count.
We have now sketched in tentative diagonal trend lines assuming that minute iv (circle iv) also makes about a 78.6% retrace, but first we need to see the minute iii (circle iii) wave develop properly. It does not have to make a new all-time high, but it easily could - just depends on the lengths of the waves at the time. Wave minute iii (circle iii) however is required to make a new high above wave minute i (circle i), for the entire diagonal to be counted properly.
The most important concept we want to stress is that "counting risk has gone up" in the market. Look at the ranges being made, and how many points it takes to validate a count now. That may not change for quite a while, and we suspect that if it does it would be a surprise to the down side.
Meanwhile, we are staying relaxed, patient and very flexible. Hope you are, too!