It appears that the Dow and all of the major U.S. stock indices have finished minor wave W. We should now begin minor wave X.
It is worth noting that it is also possible to count all of the wave degrees from the June 16 low as one degree higher, and instead of beginning wave X, we could be beginning the major decline. In this case, minor wave W would simply be the completion of minor wave C (currently minute wave C). All major indices have hit sufficient Fibonacci retracement levels, making this a possibility. However, I believe this outcome is less likely because intermediate wave 1 took the forming of a leading diagonal, and the most common retracement level for wave 2 following a leading diagonal is the 0.786 Fibonacci level. I'm not saying that the market will retrace a full 79% before beginning the major decline, but I do think it is probable that it will at least retrace 62%, and we aren't quite there yet. Thus, I think intermediate wave 2 will probably develop as a double zigzag, and we are currently beginning wave X.
It is worth noting that it is also possible to count all of the wave degrees from the June 16 low as one degree higher, and instead of beginning wave X, we could be beginning the major decline. In this case, minor wave W would simply be the completion of minor wave C (currently minute wave C). All major indices have hit sufficient Fibonacci retracement levels, making this a possibility. However, I believe this outcome is less likely because intermediate wave 1 took the forming of a leading diagonal, and the most common retracement level for wave 2 following a leading diagonal is the 0.786 Fibonacci level. I'm not saying that the market will retrace a full 79% before beginning the major decline, but I do think it is probable that it will at least retrace 62%, and we aren't quite there yet. Thus, I think intermediate wave 2 will probably develop as a double zigzag, and we are currently beginning wave X.
