Elliott Wave Analysis of the Dow Jones Industrial Average by Sid from ElliottWavePredictions.com. Click on the charts twice to enlarge.

The choppy upward movement since early June reminds me very much of the choppy conclusion to the 90 day 18+ percent nose dive last summer. Its amazing how there are still so many Elliott Wave interpretations of that bottoming process, but almost nobody got it right real-time. In my opinion, the thing that made it so difficult to interpret was a rare running flat right in the middle of the consolidation (from 8-19-11 thru 9-20-11). In my opinion, because virtually every possible structure for the most recent choppy movement since June 4 2012 has been invalidated, it is most likely a WXY formation, this time at blue or Minor degree, and once again, including a rare running flat in the middle. Note to self: Maybe running flats aren’t so rare after all . .

I always keep several alternate counts, and present them in my weekend webinars, but for the many reasons shown on the charts above, as well as those described in the Sunday webinars, I believe that my main count is still most likely, and that upward movement is either complete, or, just a bit more likely, has one more small upward impulse to go.  The most likely targets for the end of wave 5 green are where there will be a Fibonacci relationship between waves “c” and “a” pink, and are shown on the 90 minute chart.  Because downward movement from the July 30 high is, so far, counting best as corrective (see the count on the 5 minute chart), there is a better chance than not that the ECB announcement, or the NFP report, or both will accompany 5 orange waves up to complete wave 5 green, and that should be the end of wave 2 black.   After wave 2 black is complete, my target for the end of 5 black (intermediate) waves down, and therefore wave C burgundy (primary) and wave 2 teal (cycle) continues to be at the 50% retracement of the the March 6 2009 through July 7 2011 impulse, at Dow 9612.

If the top is “in” at the July 30 high, and price continues aggressively lower in wave 3 fashion right away, because the second 5-wave structure down was a diagonal (see the 5 minute chart), it would have to be a starting with a very bearish 1-2-1-2.   Any movement above 13082.89 would invalidate that very short term alternate interpretation.  It is an alternate because typically, the second wave 1 of a 1-2-1-2 is not a diagonal . .

Sid
http://elliottwavepre.wpengine.com