The DOW is in a 10 Year Harmonic Reversal Zone

There are two deep crabs on the monthly DJIA chart with the largest spanning nearly 10 years. That puts us right inside of a massive harmonic potential reversal zone. IF this PRZ holds we could see a very deep retracement of the bull run of the last 7 years. HOWEVER, if this harmonic reversal zone fails by becoming support, then we could definitely see higher prices for quite some time and it would be a good idea to be long the market until the market gives a different signal to exit. Remember Harmonics work in both directions, a failed harmonic is usually a strong signal to go long and continue riding out the predominant trend.

This also coincides perfectly with my long-term Elliott Wave and fundamental analysis. So if this zone does end up failing it could be extremely violent to the upside, but for now it looks like the market could be nearing a top very soon. There may be a small amount of uptrend left in this but if this PRZ is going to hold it shouldn't go very much higher than 22000, however, a small wick above those prices wouldn't necessarily invalidate the larger harmonic either, only a sustained move in which the PRZ itself becomes a level of support would be enough to call it invalid.

Also based on my speculative count at the moment, it looks possible that we could break down soon and trend sideways between the top and 15000 for a few years before finally breaking down and testing 9200, but this could be quickly changed with new information because it is very unconfirmed at the moment. Either way the harmonic will likely pick the highest price and from there it will be a long cycle of no growth and eventual recession/depression.

評論:

Now seems like an ideal time for an update. We are nearing the top of the harmonic PRZ so if this continues to retrace from here we could see some significant retracement. Also the above chart is the best EW count I have right now, it appears that we may be in a wave-d which is a triple combination made of two expanding triangles as the first two phases and a diametric as the final phase. That means we are still likely in part of wave-d but that we are also likely at the highest price that it will attain.

So now we have a strong Elliott wave count, multiple long-term harmonics, momentum divergences, and fundamental weakness that are all pointing to a major market top happening around this month. This leaves us with a very high probability of a top happening around these prices, so it may be a good idea to start looking into taking profit and opening some short positions now.

評論:

On the other hand, if the DOW did manage to continue above 22000 from here then all these patterns fail and, as said before, it will likely be a good idea to start going long again. So this leaves us with a really great r/r short, and if we are wrong on the short we can likely make back all those losses relatively quickly by reversing our position and going long above 22000, because a failure will likely be the beginning a very violent and powerful uptrend. For now though, it is prudent to be very cautious with any investments in economically-dependent stocks until we either see some retracement or we break through this incredibly stacked resistance zone.