Elliott wave analysis of DJI - New all-time high at 18,638 could have long term consequences

DJI - New all-time high at 18,638 could have long term consequences 

Yesterday a new all-time high was seen for the DJI at 18,638. From an Elliott Wave perspective this is important as we now have a five wave rally from the March 2009 low. We also can count a five wave rally from the January 2016 low and finally we can count a five wave rally from the June 2016 low, so we are now in a territory where a long term top could be found anytime now. 

I don't say that the top is in place, but just that all requirements has been fulfilled from an Elliott Wave point of view. 

The ideal mathematical target for the five wave rally from June 2016 calls for a rally to 18,843, while the same calculation from the January 2016 low calls for a rally to 18,742, while the ideal mathematical target from the March 2009 low is seen at 19.989 close to the ideal target from the 1932 low at 20,098 (see the long term count from 1932 by clicking here). So yes, more upside could be seen as long as minor support at 18.468 protects the downside, but a break below here will be the first warning that a long term top could be in place, while a break below important support at 18,247 will be a very strong warning that the top is in place.

So stay cautiously bullish, but keep your stops tight and in place. Or look for other kinds of protections like the (SDOW - Proshares Ultrapro Short Dow30 or SPXU for the Ultrapro Short S&P 500). The Ultrapro means the shares are leveraged 3 times, so you "only" need 1/3 of your portfolio to get you covered, if you don't want to sell out.

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