Dow Industrials – Correction Likely Before Rally Continues

The Dow Jones Elliott wave pattern is probably unfolding as an expanding ending diagonal since early April 2018. We expect to see another down-up sequence in the Dow Industrials to end minute wave v(circle).

The upcoming (b)-wave of minuette degree will probably dominate price action during the next couple of weeks or so. Momentum indicators continue to diverge and the swing up appears to lose steam. We expect the DJIA to correct inside the 24,850-25,050 price cluster. It will most likely coincide to a similar correction in the S&P 500. We see for S&P 500 a strong support and resistance cluster at 2,790-2,800 index points.

The main takeaway remains that the pattern is most likely to resolve to the upside sooner or later. Moreover, we expect prices to carry not far beyond the January high.



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