An amazingly clear Elliott wave patter for the Dow Jones Industrial Average (DJI) indicates U.S. stocks could soon make a very important peak.
Most of the time the S&P 500 has the clearest Elliott wave patterns. Since early December 2024 the DJI has the clearest Elliott wave count supported by extraordinary Fibonacci relationships.
The hourly DJI chart courtesy of Trading View illustrates the action from early December 2024.
The decline from 12/04/24 to 12/20/24 is a clear Elliott five wave Impulse. The subsequent action after the12/20/24 bottom appears to be a developing Elliott wave – Expanding Flat correction.
Expanding Flat corrections are composed of three waves. The first wave “A” subdivides into three waves or a combination of three – waves. The second wave “B” also subdivides into three waves or a combination of three – waves. Waves “B” terminates beyond the point of origin of wave “A”. The final wave “C” subdivides into a five-wave motive pattern that terminates beyond the end point of wave “A”
When Expanding Flats are correcting a down trend they hint at an exceptionally bearish market. The reason is that even as they correct downside progress they still manage to make new lows. The subsequent downturns after an Expanding Flat correction of a bear trend are usually powerful and steep.
The rally after the 12/20/24 bottom to the 12/26/24 peak is a clear three – wave formation. The subsequent decline from 12/26/24 to the 01/13/25 bottom is also a three-wave pattern – note it exceeds the 12/20/24 bottom. The rally after the 01/13/25 bottom appears a developing or possibly developed five- wave motive pattern.
The Fibonacci relationships since the DJI 12/04/24 all-time high are fascinating!
A Fibonacci 61.8% retracement of the 12/04/24 to 01/13/25 decline targets 43,843.92.
The most common Fibonacci relationship between wave’s “C” and “A” in Expanding Flats is 1.618.
The length of Minor wave “A” is 1,227.63 multiplied by 1.618 equals 1986.30 added to the Minor wave “B” bottom of 41,854.33 targets 43,840.63 only 3.29 points from the primary Fibonacci coordinate!
The most common Fibonacci relationship between wave “B” and “A” of an Expanding Flats is 1.236.
The length of Minor wave “B” is 1,519.44 divided by the length of Minor wave “A” of 1,227.13
is 1.238 amazingly close to 1.236!
Please note that on 01/17/25 the DJI presumed Minor wave “C” has already exceeded the presumed Minor wave “A” peak made on 12/26/24. It’s possible the DJI – Expanding Flat correction is already complete.
If not it could be completed on 01/21/25 or 01/22/25, this scenario will be examined in the next blog.
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