Guest commentary by Henrik Becker
The Dow Jones continued its upward trend. The index was thus able to confirm my latest forecast. But is there now a reason to fall into euphoria? A look at the chart shows that the index is only a few points away from the medium-term goal. Even though I don’t expect a crash for the index, as shown in the long-term chart, there is a bigger correction.
Currently, the Dow Jones wave 5 is still forming the higher-level wave (iii), the longer-term upward trend. With the 2.62 retracement at 25,845 points, the ideal target of the expanding wave (iii) is already within reach. I expect to reach this obstinate line of resistance in the days to come. Including a slight overshoot, the index can still rise to the large 1.00 line at 26,975 points without shaking the rules.
Wave 5 only comes to an end with a break of the support at currently 24,289 points (0.24 retracement). (iii) would only be completed with falling below the larger 0.24 retracement (currently 23,245 points) in accordance with the rules and regulations. In this case, however, the step described above would make a final decision. Something dramatic is not to be expected from the imminent correction (wave iv).
As usual for a wave “4”, this wave will only fall into the space between the two 0.24 and 0.38 retracements (currently 23,245 / 21,911 points). The following final movements (wave v) will cause the quotation to rise slightly again, whereas this wave should not be misunderstood as a new trend.
As a result of an upward trend, the Dow Jones continues to move in the direction of 26,845 points (2.62 retracement). Due to the final character of the wave structure, I still advise against a new engagement at the moment. To hedge your positions, you should use the 0.38 retracement at 21,911 points at the latest.