End - Fibonacci - 5

In one sense the market did exactly what we expected today. The Dow went exactly to that 0.618 x net (1 through 3) level we have been showing you in previous posts. During live chat, I commented, "that I would be remiss if I didn't tell you that there are five closes at that 0.618 level, and the market knows it is there.". I even placed a tentative top at that level, which when the S&P 500 Index fell through it's invalidation level (that we also clearly showed you), meant, it was, in fact, most likely the top.

Here is the Dow's chart at the close of trading today. Everyone is going to hear stories now about the supposed flash crash on the FANG stocks. Gee, why did that happen exactly at the Dow level we've been pointing out for days? And, while just barely maintaining the divergence with the Elliott Wave Oscillator on the chart, below?

DJIA 15-Minute Chart with wave 5 at 0.618 times net (1 through 3)

Secondarily, the DOW also did something we were expecting, and that is a likely truncation at the top. But, the overnight futures did something on the British elections we were not sure how to interpret, so we started off the day, with questions about the diagonal count. At this point in time, a diagonal count has been ruled out for the S&P500 Index, because, today the S&P had an outside key reversal day down in the cash index and in the daily ES futures, as did the NQ futures. But, again, the cash S&P crossed below the wave 4, low.

Therefore, it is likely that the top is in for the Dow, too, but, as good Elliott analysts, we must allow that if the Dow want to clean up the count a bit, it could make another marginal new high - as an alternate - and form a nicer looking expanding diagonal wave upward from the wave 4 indicated. It could do this but certainly doesn't have to, and this option is not available in the S&P500. No, it is somewhat more likely the Dow has a diagonal down, and may only make a "deep retrace" of that diagonal before continuing lower. But, again, we'll be flexible as things clear up.

Further, with this fifth wave wrapped up or nearly wrapped up, we again indicate this is likely a (b) wave upward in the Dow, and a strong (c) wave down should follow. If you think we're kidding, here is what the NQ futures did by the close of trading today. Notice, that the slow stochastic has become un-embedded, and price is now trading below the 18-day SMA.

NQ Daily Futures at the Close - And Cross of Slow Stochastic Lower

 Well, that's it for today. Have a good start to the weekend.
TraderJoe