I have decided instead of doing a video or chart to explain in detail why I believe the DOW or DJI will hit 20,715 or even 33,346(!) in the coming few years. The videos people tend to fast forward because they are after all almost 10 minutes long and people would rather want to see text instead of listening for that long. Also, the reason why I want to do a long text description of the long term DOW chart is because charts have limited space.
Anyway, here’s the detailed wave count of the DOW from 1987 to the peak in 2000 to the low hit in March of 2009, which I believe is the bottom of a big C wave after a flat that started way back in January 2000.
This is where I will start…the drop from approximately DOW 14,200 to 6500 was a pure 5 wave impulse that completed a Wave 2 flat that started back in January 2000. The reason I call it a Wave 2 flat is because how far we retraced…the first wave started at the bottom the year 1987 and ended in the year 2000. The .618 retracement level would have ended up being in the 6000-6500 range, and we bottomed right at 6500…it was one big ABC Flat Wave 2. I actually called this bottom right on the number in one of my Youtube videos in late Feb 2009. Just go to wavegenius.com/proof and watch the video there if you want to see my explanation.
The C wave formed a perfect 5 wave formation down which is why I was able to pinpoint almost the exact date and the exact level of the DOW’s major bottom. I believe this will be the FINAL bottom before what could be a multi-year or even multi-DECADE bull market.
Each wave was perfect, W1 from 14,200 to 12,200, W2 was close to .618 from the bounce at 12,200 to 13,100, the downward 3 was 1.618 X W1, the W4 was .382 of the W3 and the final 5th wave was close to the length of W1 (W1 = W5). The bottom in March 2009, again was the FINAL BOTTOM before the bull market that started that month.
The RSI was the lowest since 2001, the slow stochastic was 0 and we had a pure 5 wave impulse down. RSI and Slow Stochastic used in tandem with Elliott Wave and Fibonacci is the main formula I’ve used for years to pinpoint the many bottoms that I’ve called for almost 12 years now…also the VIX also got close to record highs and the bull/bear ratio had an extreme amount of bears historically. These are the forms of technical analysis that I’ve found the most reliable.
Now for the wave count of the bull market that started in March 2009. Yes, I said a BULL MARKET THAT STARTED IN MARCH OF 2009.
Basically, I believe that we got a pure impulse off the March 2009 lows from DOW 6500 to DOW 12,876 in 2011…each wave was perfect fibonacci and fit the standard length in each move. Yes, I said it was a PURE IMPULSE, and it was the first wave (W1)
Within this new bull market impulse we ended up getting the W1, or the first wave from 6500 to approximately 8800 in the DOW. The Wave 2 was a perfect 3 wave ABC zigzag that retraced in an A = C from DOW 8800 to DOW 8200.
The 3rd wave from 8200 to approximately 11,250 was near 1.618 the length of the W1 which fits standard fibonacci length for a W3, and occurred in a 5 wave extension. This is a standard move.
The 4th wave from 11,250 to approximately 9700 retraced about .382 of the 3rd wave rise from 8200 to 11,250 and occurred in a 3 wave pattern ABC zigzag. This was the so-called flash crash.
The 5th wave is what gets me the most excited. The most common 5th wave patterns are W1 = W5 and .618 X W1 + W3. We got a precise .618 X W1 + W3 move from 9700 to 12,876. Take .618 x w1 + w3, tack on the length from the low of the W4 at 9700 and you have a perfect 5th wave up.
Now after this impulse completed from 6500 to 12,876, we got the “European Crisis” W2 zigzag.
W2 zigzags tend to retrace to the previous 4, and we ended up reaching the middle of the previous 4 around 9700-10,700. It occurred in a 3 wave pattern down with a short C wave. It was A wave = 12,876 to 10,600, B wave up to 11,700 and C wave down to 10,404. This was again a 3 wave zigzag off the 12,876 high to the previous 4.
Now the “pattern break” setup. If you’ve followed my site for the past decade you know that I trade a pattern which I’ve nicknamed the “pattern break W3.” Whenever I’ve seen this pattern in indices, stocks or currencies, not only do we “go up” we actually HIT the 1.618 target that I set for it 80%-85% of the time. No kidding. For proof go to wavegenius.com/pdf and look at the PDF’s from 2009 and 2010. You’ll see that 80%-85% of the stocks had the 3rd wave pattern break setup and 80%-85% of those stocks hit the precise 3rd wave target or higher. I know it’s pretty insane, but there’s NO SLEIGHT OF HAND. I have the time stamp of each chart that I analyzed on the blogs.com site and if I manipulated these results in any way it would be ILLEGAL. Anyway, the point is that 80%-85% of the time I see the “pattern break W3” we hit the 1.618 target or higher.
The pattern is like this..W1 impulse, W2 zigzag in 3 waves and a break above the top of the W1, which in this case is 12,876. We broke the pattern break recently and are currently trading around 13,000 in the DOW..
The most conservative 1.618 golden ratio fibonacci target is 20,715. Take the distance from 6500 to 12,876 and multiply that result by 1.618. Add that number from the low of the W2 at 12,404 and you end up with 20,715.
The most insane 3rd wave target for the DOW, which I haven’t mentioned in any of my videos and charts is the W3 that’s 1.618 X the percentage gain of the W1. The first wave travelled 1.98 x 6500..which is almost double. Take 1.98 and multiply that by 1.618 and you get 3.205X… If the low of 10,404 was the bottom of the W2, and the 3rd wave travels that distance a potential target could be 33,346(!).
Just take a look at my track record for the past 10-12 years on my website wavegenius.com. You’ll see that not only am I 80%-85% accurate on my long term forecasts, I’m also 80%-85% accurate with my trading. 80%-85% I make a profit on a trade, and that’s pretty much the entire point of following the stock market. To make money.
So my long term DOW forecast targets are both 20,715 conservatively and as high as 33,346 if it travels the nose bleed full length…