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Elliott Wave Update and the DJIA - New Bear Market?

Elliott Wave Update for the DJIA

Is the new bear market here?

Not so fast, although indicators have certainly took a jolt. An Elliott Wave Update for the DJIA and the broader stock markets for March 18, 2011 from our technical analysis... He made this stock market prediction for 2011 based on the EW charts he saw and now he has this to say:

"Looks like we are really in for a down turn, but the real proof will come in much lower then where the markets are now (See Elliott Wave Update and counts for the DJIA in the chart below) . For now, it looks like we have completed the major top (Wave 2 (circle)) and are now in the process of Wave 1 down. We have completed three sub-waves down so far (Wave i (circle), ii (circle), and iii (circle). We are now in a bounce up to complete Wave iv Circle up. The bounce should take us back up to around 11,900 DJIA and 1,285 S&P 500. We are half way there with the big move today. Then we will have the 5th wave, Wave v (circle) down to a new low. This will complete Wave 1 down (a small wave). A good bounce here for Wave 2, then Wave 3 of Wave (1) of Wave 3 (circle) down. Markets will move up on Friday into next week before the next Wave v (circle) down.

Click to Enlarge

In this 1st sequence of down waves, we should go down to around 10,950 to 11,450 on the DJIA and around 1,170 to 1,225 on the S&P 500. This is the area of the previous 4th wave on the last major move up. This is where a major bounce should occur and is the real test area to determine if the markets are really going all the way down to major ultra low levels. The wave count from the top to this resistance area must be 5 waves and the resulting bounce must look corrective. Then we will be sure that the major bear market is here again and a double dip worldwide recession is beginning. We can only hope for the best.

That is it for now. We will know pretty soon if the big bear market is back."

© John Dilling March 18, 2011
This is not trading advice and merely a hobby.

Looks like the stock markets, with the current geopolitical tensions, will show us their hand quickly here. At least the wait appears short, no pun intended... New bear market? This has been your Elliott Wave Update for the DJIA.

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