MACRO UPDATE OF @YM – E-mini Dow futures
Dow futures has been following a complex corrective pattern called Double Three or “3-3-3”:
That pattern is composed of three large waves (W) down, (X) up and (Y) down. And each of those waves is composed of three waves labelled W-X-Y.
To complete that whole structure bears need to push YM to a new lower low. That decline would be subwave Y of wave (Y) down.
Note that so far YM stopped at 41.4% retracement of the rally off the pandemic low made in March 2020. The ideal target for the final leg down would be either 50% retracement fib or 58.6% retracement fib (27,000 – 35,400).
The previous wave X up topped at 66.7% retracement of the preceding decline in wave W down on April 21, 2022. I count this rally as another wave X up that can also top at the 66.7% retracement f the preceding wave W down (32,460).
Let’s study the micro structure of wave (X) up from June – August:
Now compare that structure to the structure of the current rally shown on the chart below:
This rally has approached the target. But bulls still can push YM a little bit higher to tag the 66.7% retracement fib (32,460) and may be even slightly overshoot it as they did back in August’22 (let’s say to 32,600).