Elliott Wave Projection – Descending Triangle

Wave IV is seemingly consolidating into a bearish Descending Triangle formation. Wave D of the Descending Triangle may be completing at which point, price action may rally towards creation of wave E. Final fifth wave V ought to see a breakdown of the Descending Triangle towards Oct 2002 lows at approx 7200.

4th-Wave Triangle ?

Since mid-August 2008, the Dow has declined 33% projecting a three wave Elliott decline. Current price action is consolidating into a corrective triangle pattern which ought to conclude the formation of wave IV. Usually, as triangles occur as part of the fourth wave, the market thrusts out of the triangle in the same direction as the third wave III; this marks the beginning of the final fifth wave V towards new lows.

Nikkei, Elliott Wave 2003 to 2008

As of 10 Oct 2008, the Nikkei is within 5% from testing the low of 23 April 2003 which saw the beginning of a 5 year bull market lasting 1537 days (17th Fibonacci number) ending 09 July 2007. The entire bull market consisting of a 5-wave Elliott formation is currently concluding wave C of an ABC corrective pattern which is poised to retrace 100% of the bull market. Notice how the 423.60% Fibonacci extension level projected from corrective wave 2 has defined the extent of impulsive wave 3.

Calling the Bottom ?

Final 5th Wave In Progress ? -Update

Speculative fifth-wave Elliot projection targetting renewed and probable final YTD low.

Final 5th Wave In Progress ?

The decline from Aug 12th has traced a probable Intermediate four wave Elliott formation with the final fifth wave in progress as of Sep 19th. Completion of Intermediate wave IV on Sep 19th also marks the beginning of Minor wave 1; the Minor wave cycle as of Sep 30th ought to have completed formation of Minor wave 4. Continuation of Minor wave 4 may overlap the price action of Minor wave 1 thus invalidating the formation. An entrance into a short position with stop on close above the high on Sep 30th may serve as a low-risk trade towards completion of Minor wave 5 and Intermediate wave V; -possibly truncated creating a double-bottom formation or making a final new YTD low.