DOW daily chart
Pretty much self explanatory
But some key levels:
Bounce target = previous support 24236 - which coincidentally is the 61.8 % Fibonacci retrace of the downtrend from 3/12/18.
May slightly overshoot or undershoot
May take more time
Possible medium term scenario: (very rough !)
1 rally to around 24236
then next leg down to new low (20k)
that should complete 5 waves down for larger wave I
2 Then a rally correcting that 5 waves -
if the 5 waves down starts at 26200 and ends near 20k = 6200 points then :
62 % retrace = 23844
78 % retrace = 24830 - if this is wave II up can often retrace a large percentage of wave I - this is where Joe Public believes that the bull market has resumed
3 Then the next decline wave III - this will be the longest
Time frame? after new low - rally into the spring - with the fall starting in summer
This will indicate if the correction is of 2016 bull trend, 2008 bull trend or even larger 1980 bull trend (worst case)
Other markets - DAX and FTSE still on target for 10k- 10220 and 6300 respectively
In the normal 20% correction done in bull market in progress scenario, this looks like Feb'2016 bottom which produced next 24 months LEG UP of bull market. Similar thing is possible with next BULL LEG UP now with agreement on China-US trade deal. (last time it was tax overhaul that triggered the leg up, which was told to us after the fact!) Again we will see how the price action develops this time and adjust and adopt our thinking!
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