We seem to have have an expanding triangle on the Dow as it moves lower. The bottom line has moved south slightly past few days and I counted 7 touches to that bottom line today on a 1 minute chart. The EW count seems to suggest we've had a 5 wave sell off and this is some sort of complex correction at the end before a rally starts. We also have some divergence again on RSI today.
The above chart shows an expanding diagonal (triangle) according to Elliott Wave in a bull rally - notice the "fake out" at the extreme before the market moves the other way. I think we might be seeing this on the Dow (but the other way around) so while there could be a move below the lower trend line I think we are poised to see a major rally kick in any time now. I would be wary of selling a break of the lower trendline!
I've flipped the EW expanding diagonal chart upside down - Does it resemble that first chart of the Dow above?
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