The DJIA has finally succumbed to bearish pressure, but we could still see a violent counter rally at any time. The DJIA must trash all support price levels that you see on the chart above, if the decline is more serious than what the investing bulls thinks it is. This DJIA chart I am cheating a bit in that I’m also working it as a potential diagonal decline. This may smooth out once any decline starts to get recognized, but this is still too early to tell.
In the afternoon the DJIA dropped close to 700 points which is a pretty good vertical drop. Sure, we can draw a wedge from the bottom up and if this is as bearish as I think it will be that bottom invisible wedge line will not hold. We do have 3 lower high peaks in this developing trend, and that indicates a bearish phase in progress. I don’t want to abuse wedges and trend lines as they can be extremely biased most of the time. The DJIA saw its peak way back in January of 2o18 which may be the top for 2018 as well. Sooner or later investors will lose patience and when a group sees the same thing at the same time we get mini panic sell offs, like today.
At the top I have 3 sets of 5 waves that have terminated which “must” be stacked from the smallest to the largest, which in this case is Cycle degree wave 3.
My strict rule is that no 5th wave peak should be left uncapped, “EVER” because an uncapped 5th wave clearly tells me an analyst is just guessing or bluffing.