My 01/30/21 blog “Dow Jones Transportation Average – Major Top?” speculated the Dow Jones Transportation Average (DJT) may have completed a five wave Elliott impulse pattern from the March 2020 bottom. As it turned out the DJT finished a correction on 01/29/21.
The daily DJT chart courtesy of Trading View illustrates the subsequent upside action.
After the 1/29/21 bottom DJT rallied to a new all-time high. It now appears the 1/29/21 bottom may have been the completion of Intermediate wave (4) which counts as an Elliott wave – Expanding Flat. This wave count fits in with Elliott guidelines for alternation. Waves “fours almost always have a different pattern from wave “twos. In this case Intermediate wave (2) was a single Zigzag and Intermediate wave (4) alternated with an Expanding Flat.
Another interesting aspect is that Intermediate wave (5) appears to be an Ending Diagonal Triangle. The supposed Intermediate wave (1) counts as a Leading Diagonal Triangle.
The alternate bullish Elliott wave count has the move up from the 1/29/21 bottom as Minor wave “1” of Intermediate wave (5). If Minor wave “1” is still developing, the DJT could continue rising in the first week of March.
If the DJT declines next week it could signal the beginning of a bear market.