[Early Warning] Dow Jones showing weakness, will dip further

29 May

DJI has formed 5 waves down in daily timeframe. Unless this 5 wave structure turn into a 7 or 11 wave (counter-trend) formation, this is likely a beginning of short term down-trend.

Now, this down trend could play out in different ways, 2 of the most likely options are highlighted in the chart. This 5 wave decline could be a larger ABC (or WXY/WXYXZ) which is highlighted in red color. Or worse, this could be beginning on a larger trend down and this is just minor wave i of larger 1. This is highlighted in blue color.

Both of these alternatives are bearish in nature. We can expect a bounce which might go around 61.8% (~39,500) though it doesn't need to be that much.

Just remember that for this scenario to play out, this 5 wave structure shouldn't change into a 7 or 11 wave structure as mentioned above.