Dow Jones – Monthly Review
The Dow has rallied 9% since our call on a major technical completion. Is it time for a pullback, or is there still room in uncharted waters? We’ll read the signals—candles and momentum—to map the odds for the next move. Miss it, and you are liquidity.
CANDLES
Dow Jones closed September and Q3 with impressively bullish signals on the monthly and quarterly frames. Smaller frames, including the 15D and weekly, also show notable strength—the index is broadly bullish.
With gains of roughly 5% in Q2 and another 5% in Q3, and given the strength of current signals, a similar advance in Q4 wouldn’t be surprising. That outcome would produce Three White Soldiers on the quarterly frame and set the stage for a strong rally over the next 1–2 years. We’ll see in December whether the candles have it right.
ELLIOTT WAVES
Long Term
Recent events prompted me to make some minor adjustments in the channels.
The Dow Jones continues to be positioned for the red path outlined in my long-term chart. In this setup, wave 5 of the larger impulse could extend for a year or longer, potentially driving the Dow toward the $50,000+ level.
Road Map
The Dow Jones has reached the red-rectangle target outlined in June. Current technicals suggest the advance could be evolving into wave 3 of a higher degree. I’ve added this prospect to the blue count.
Inverse Head & Shoulders (IHS) & Flag
On June 24, I set the next major target for the Dow Jones at $49,600, projecting about a 15% gain from the $43,200 level. The Dow already advanced over 9% and the target remains intact.
SUMMARY:
The Dow Jones remains long-term bullish following September’s monthly and Q3 quarterly closes. Multiple frames and instruments point to a rally that could extend into year-end. Based on our tools, a Q4 advance of 4–10% is plausible; from a candle perspective, the most technically healthy outcome would be a 4–5% gain to avoid overstretch.
As noted in the June 1 Monthly Review: “The Dow Jones appears to be aligning with the red path shown on the long-term chart last updated in December 2024. If this scenario plays out, the index is currently in wave 5 of a larger impulse, which may continue for a year or longer and ultimately carry the Dow beyond 50,000.” That outlook remains intact—and there is a fair chance the Dow reaches 50,000 sooner.
Happy Trading!
