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Elliott Wave View: Dow Jones Future YM_F Rally Should Fail

Short term Elliott Wave view on Dow Jones Future (YM_F) calls for the bounce to 25952 as wave ((B)). This move higher is a correction to the decline from April 24, 2019 peak. The first leg of the decline from April 24 high ended wave ((A)) at 25215 (not shown due to limited space in short term chart). This suggests that the entire decline from April 24 is unfolding as Elliott Wave zigzag structure. A zigzag is a 5-3-5 structure and wave ((C)) thus should unfold in 5 waves.

In order to avoid a double correction in wave ((B)) and provide validity to this view, Dow Jones Future needs to break below wave ((A)) at 25215. However, technical analysis on US Sectors such as Financial (XLF), Technology (XLK), Consumer Discretionary (XLY) suggest they have broken lower. Thus, we think it’s likely that Dow Jones Futures also extends lower.

Wave ((C)) is currently in progress and unfolding as 5 waves. Down from 25952, wave (1) ended at 25628 and wave (2) ended at 25904 as an expanded Flat. Wave (3) of ((C)) subdivides as an impulse in lesser degree. Wave 1 of (3) has ended at 25320 and the Index is correcting cycle from May 22 peak within wave 2 before the decline resumes. We don’t like buying the Index and expect sellers to appear in 3, 7, or 11 swing as far as pivot at 25952 peak stays intact.

YM_F 1 Hour Elliott Wave Chart

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