DJIA (US): Elliott Wave Counts


The Dow Jones Industrial Average, also called the Industrial Average, the Dow Jones, the Dow Jones Industrial, the Dow 30, or simply the Dow, is a stock market index, and one of several indices created by Wall Street Journaleditor and Dow Jones & Company co-founder Charles Dow. The industrial average was first calculated on May 26, 1896.[1]Currently owned by S&P Dow Jones Indices, which is majority owned by McGraw-Hill Financial, it is the most notable of the Dow Averages, of which the first (non-industrial) was first published on February 16, 1885. The averages are named after Dow and one of his business associates, statistician Edward Jones. It is an index that shows how 30 large publicly owned companies based in the United States have traded during a standard trading session in the stock market.[3] It is the second oldest U.S. market index after the Dow Jones Transportation Average, which was also created by Dow.

The Industrial portion of the name is largely historical, as many of the modern 30 components have little or nothing to do with traditional heavy industry. The average is price-weighted, and to compensate for the effects of stock splits and other adjustments, it is currently a scaled average. The value of the Dow is not the actual average of the prices of its component stocks, but rather the sum of the component prices divided by a divisor, which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate a consistent value for the index. Since the divisor is currently less than one, the value of the index is larger than the sum of the component prices.

From wave perspective, it is very clear that prices are moving in an upward sloping blue channel. After completing wave x in the month of November 2012, prices continued its upmove in triple correction pattern (a-b-c-x-a-b-c-x-a-b-c) where it completed wave y. Currently it is moving in wave x which is also corrective in nature. If we observe, the index has completed wave w and wave x of the current wave x and it seems that wave y of the current leg remain pending on downside. On Friday we have seen DJIA moving down by 140 points, it seems this fall may further extend and can test that support of the blue channel which is around 16100 levels.

In short, the bias remains negative for DJIA as it can move down and test the support zone of 16100 levels over short term.



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