Dow Breakout Within Reach
|The breakout above the trend channel remains unconfirmed as we publish this. This situation could certainly change. However, the best overall picture results if we get a bigger pullback at this point. A 4-5% pullback, which shakes the weak hands out has slightly higher odds than the red scenario. It results in a beautiful cross-market Elliott wave picture.
What are the best hints whether the breakout failed or not? A continuation to the upside within the red scenario should record broad increasing momentum as part of a 3rd wave. Hence, the black scenario gets a bloody nose if the well known US indices push strongly AND together through this week’s highs.
All in all, we continue to expect new highs on the Dow Industrials. This may happen sooner if we see immediate bullish commitment or later after a pullback. We slightly prefer the black scenario.
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