Dow Jones – Monthly Analysis
The Dow stands out as the clearest of the major indices based on the signals recorded in February, making it the benchmark for assessing broader market direction.
In this must-read Dow Jones analysis, we examine the index through multiple technical lenses — candlestick structure, trend dynamics, momentum signals, and Elliott Wave context — to identify the most probable forward scenarios and define the key risk levels that could drive the next major market move.
CANDLES
There are quite a few warning flags on the candle map. The daily broke below the 50 DMA support, though not yet confirmed, and recorded a bearish 8/20 EMA cross. The weekly lost the 8 EMA support. The previous three breaks were fakeouts, but this time the index faces aggravating circumstances — a fresh weekly MACD cross of almost record magnitude. That will be difficult to overturn.
The monthly closed with the 10th green candle in a row, with the last three forming an Advance Block. The UnitedHealth chart below is an example of how 8–10+ consecutive green candles capped by an Advance Block can behave. I forecasted that move with near point accuracy two years in advance.
The Dow has a fair chance to unfold a sharp decline, potentially targeting the 20-month EMA, roughly a 0.5 retracement of the latest rally.
The most interesting development was the 2M closure. While the monthly and smaller frames lean bearish, the 2M printed a bullish continuation candle. This suggests a high probability that any bearish reset may be completed within the March–April window, with April having better odds of closing as either a bullish continuation or a neutral candle. It gives pause.
ELLIOTT WAVES
Both the green and red scenarios remain valid, as discussed in the previous overviews. Note that the green wave 2 target would largely align with the level outlined in the candlestick analysis section.
Ending Diagonal
The index has possibly completed an ending diagonal and is very close to confirming this hypothesis.
Last Wave
To the last wave chart I shared earlier, I added the prospective green target rectangle for wave 2 and the 20-month EMA support. While the blue potential impulse remains on the table, I also consider the possibility of a very sharp extended zigzag abc, which would fit well with the most typical structure expected for wave 2.
SUMMARY:
The Dow is flashing some of the clearest warning signals among the majors. A possible completed ending diagonal, combined with a break below key short-term supports and a powerful weekly MACD cross, increases the probability of a sharp corrective move. The most natural target would be the 20-month EMA, aligning with a typical wave 2 retracement. If the diagonal is confirmed, the post-pattern move could unfold with notable agility — fast, directional, and technically clean.
Such a move would likely influence the other indices, given the structural similarities across charts. This also aligns with the recent discussion on VIX and BDI: rising volatility into March–April and a constructive BDI backdrop point to a fast transition phase rather than a prolonged downturn. In that context, the Dow could complete a sharp reset within a compressed time window before broader conditions stabilize.
