How Long can they String this Out

With 126 daily candles on the chart of the cash Dow Jones Industrial Average, the count appears to be getting quite mature, but maybe just not quite there ... yet. According to The Eight-Fold-Path-Method for Counting an Impulse (see featured post in the upper right-hand-corner of the main blog page) we should now be in a fifth wave.

DJIA Cash - Daily - In the Fifth Wave

I'll mostly let you ponder over this chart, but as we noted earlier, this week was the first in which the Dow cash and futures both made a new all-time "intraday" high above the May high. That is what is supposed to happen in a contracting ending diagonal. Waves (i) & (iii) usually make new all-time highs to express their motive character. So far, a wave (i) would have. And if it is truly the ending diagonal pattern, then wave (iii) must, by rule, also make the new slight higher high. Only wave (v) in such a pattern is allowed to fail, but, it too, is generally expected to make a new high.

We must note that most of the earlier work on wave counting was done on the Dow - and other cash indexes - before the invention of stock index futures. So, it might be that this chart becomes the easier one to follow in the next several days/weeks.

We will also note the Dow may have tipped its hand on a smaller intraday time-frame, as well. See the chart below.

 

DJIA Cash - 30 Minutes - Lower Low

 

Note that on this intraday chart, the Dow made a new lower low - which the ES futures did not. That tends to rule out a triangle count for the Dow cash. So, this means the Dow has a slightly higher odds of not going over the high on Monday - not for sure - just higher odds.

This is the second post this weekend, and if you have not seen the first one yet, you might like to view it now.

Have an excellent rest of the weekend.

TraderJoe