ELLIOT
WAVE ON THE DOW
DOW - ENDING DIAGONAL PATTERN
by Dan
Stinson
E-WaveCharts.com
May 18, 2007
Short Term Forecast
The DOW and S&P500 are in ending diagonal patterns, indicating that the rally is near completion in a terminal pattern. We should see further choppy upside to complete the pattern, but when ending diagonals complete they are followed by a sharp decline to the starting point of the pattern. The ending diagonal patterns began on May 1st, so we should see a sharp decline to the price action near this date. We then would expect to see a corrective rally in wave 2 up not to make a new high, before further substantial downside.Further choppy action to the upside is expected for the ending diagonal pattern and it should complete within the a week and possibly within days.
Ending diagonals are corrective patterns and can extend further and longer but the action should be maintained with in the apex of the triangle, until a break below the lower trendline identifies the reversal.
Many of the indices around the world are also in ending diagonal patterns, so the reversal will be a global event. eg: TSX, HSI, DOW Transports. The other indices covered on the site also indicate that a global reversal is expected. SSEC, BSE, AORD, FTSE, DAX ,SOXX, NIKKEI.
We also identified an
ending diagonal pattern in Feb 2007 before the sharp decline into the
Mar lows.
These charts are only a guide so that you can follow the action and
watch for the expected topping action in the ending diagonal triangle.
The action could play out exactly as illustrated or it may need minor
adjustments as we follow it through.
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Note: We also should see further downside for the metals and further upside for the USD.
If you are interested in viewing these updated charts and other detailed charts with targets on a daily basis, please see the registration details here.
© 2007 Dan
Stinson
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Contact Information
Dan Stinson
Elliott Wave Chart Site
Dundas, Ontario, Canada
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