(MENAFN- DailyFX) Dow Jones Industrial Average gapped higher on the open today with prices eventually driving into a shorter term potential pivot zone. Previously, we wrote how DJIA may be finishing its third wave. Therefore, we are anticipating a fourth wave correction to take hold down towards 20,000-20,400.
Zooming into smaller chart time frames, it does appear the market is seeing cracks forming in the foundation. In the chart below, prices appear to have fallen in impulsive fashion. This suggests a partial retracement higher has an elevated probability of holding below last week's price high of 22,178.
The price rose today to a high of 22,011 that is a normal retracement level. We do not know for sure if the counter trend bounce is over, but we do anticipate that it may end within the next couple of days leading to a resumption of the downward price action.
As a result, shorter term traders can consider trading the shorter term trend lower. Medium to longer term traders may consider waiting out a dip in price towards 20,000-20,400. In Elliott Wave terms, this multi-year bull run appears incomplete, though it has become quite mature. Most of the upside in price is behind us so traders will need to be nimble.
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---Written by , CEWA-M
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