Dow Jones – Weekly Analysis
The first week of November was quite a challenge, and the Dow recorded conflicting signals across multiple frames. Let’s examine them from several angles and outline the most probable outcome. We’ll dig into candles, technicals, and Elliott Waves—continuing a story we’ve been ahead of from the start.
CANDLES
The Dow closed October with strong bullish long-term signals and reinforced the outlook by recording a strong 15D bullish continuation early in the week. After that, the index lost its short term momentum and began building a bearish case. It might have succeeded if a wake-up call hadn’t brought bulls to their senses in the middle of Friday’s session. The move formed several strong combos and signals on all hourly frames up to the daily and effectively preserved the weekly at the 8 EMA. Even though the weekly formed a Bearish Engulfing, the technical momentum may prevent bears from confirming it. All eyes are on Tuesday’s close, which will either extend or disallow bearish momentum from infiltrating frames larger than the weekly.
All trends remain bullish after the monthly close. The short term is bullish; the mid term is bearish-neutral, pending confirmation; the long term is bullish.
ELLIOTT WAVES
Road Map
The blue count has better odds at the moment. The index possibly formed waves i and ii of (iii).
Inverse Head & Shoulders (IHS) & Flag
On June 24, I set the next major Dow Jones target at 49,600 — about a 15% advance from 43,200. After reaching the lower boundary of that target zone, the index pulled back and may be forming a Rising 3 Methods, best seen on a 3D chart. As I said before, a $50,000 Dow would make a nice New Year’s present — and it wouldn’t be a big surprise.
Possible Flag
The Dow Jones may be close to completing a significant bullish flag. A convincing break above the upper boundary, as shown on the chart, would likely start a 3.3–6% rally, with a mid-target around 4.5% between now and the New Year. One more lower low is possible but not necessary.
SUMMARY:
The Dow Jones remains long-term bullish following October’s monthly close. As discussed in the monthly report, the index signaled a minor pullback, which arrived in the first week and now appears likely finished. Unless bearish odds extend on Tuesday, we can treat Friday, November 7, as a short-term bottom, opening a path to a 3.3–6% rally before year-end.
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 a 50,000 Dow this year would not be a surprise.
Happy Trading!
