Mini DJIA Bearish Outlook Update

The DJIA has finally peaked last month and now has started an early March decline. March seems to be a popular time for reversals, as the biggest bull market since the depression, started in early March 2009. For now I’m going to stick with the possibility, that we could produce a diagonal set of 5 waves down in Intermediate degree.  This means the possibility of a Cycle degree zigzag correction.

I will run this wave count for as long as I can, and if I’m wrong and the markets make some wild moves that refuse to fit well, then this helps to eliminate the zigzag. Elliott Wave is all about eliminating other probabilities and then if we’re lucky we may end up with a better fitting wave count. In corrections there are “always” 3 simple patterns to chose from, which must be specific to the degree  that we think we are at.  Any  potential Cycle degree correction, has a very specific wave count for three types of “simple” corrections. In a Cycle degree correction, there can be “NO” alphabet wave labels bigger than Primary degree. Trying to count out 5 waves down in Primary degree instantly tells me that the wave analyst thinks they are in a Supercycle degree or higher, wave count already.

As I post the markets were charging back up again, so if this rally starts to break many previous highs, then I may have to throw out this wave count sooner than later.   When this market refuses to constantly push higher, then this historic stock party is over.

The trick is finding that last wave that belongs to the bull market, so we can start the new bearish count.  Oh, this obviously already happened back in January, but how many times did we think it was over, yet it turned and soared once more.

Once investor fatigue sets in,  then it could open the markets for a big “bear” attack.