Some Dow Degree Notes

Here are the Dow Jones Futures on a Monthly timeframe. The potential contracting diagonal may still be in play.

Dow (YM) Futures - Monthly - Potential Contracting Diagonal

If the potential diagonal is to play out, price should soon begin to trace out an overlap downward on wave Intermediate (1) in a 'relatively' brief zigzag that might undercut the lower trend line to generate enough bearishness for the subsequent fifth wave higher - also in a zigzag.

Here is an internal look at wave Intermediate (3) which is formed of a double-zigzag and is shown on the two-weekly chart.

We note from the first chart, that overlap would occur at 36,832 and from a visual inspection of the second chart that prior support/resistance might come in at 35,288 which might allow for the overlap and still have wave (4) remain shorter in price than wave (2).

Some Degree Notes for these Charts

• Wave Minor W is shorter in price & time than Intermediate (1), the prior higher degree wave in the same direction. Same with Minor Y.
• Wave Minor X is shorter in price & time than Intermediate (2), the prior higher degree wave in the same direction.
• Within wave Minor Y, wave minute ⓑ is shorter in price and time than wave Minor X, the prior higher degree wave in the same direction.
• Within wave Minor W, wave minute ⓑ is shorter in price & time that Minor A of Intermediate (2), the larger of the two prior higher degree waves in the same direction.
• Also note that if Minor W occurred at the end of 2022, then Minor X would be longer in time than Intermediate (2) which would seem to violate degree definitions, so this count appears correct. This count also agrees with the current ES futures count.

Note that these charts are predictive of a corrective decline at this time, probably back down to the lower two-weekly channel line or just below. This decline should happen as a 5-3-5 wave, and the middle wave, or the -3-, can be "any three" including a flat, zigzag, combination or triangle. And we are not even close to completing the first "five", yet. The wave should look proportional on the two-weekly chart. The exact amount of time of wave (4) is not seen as critical as it is a fourth wave.

Have an excellent rest of the day and the weekend,

TraderJoe