Dow Jones Elliot Wave Analysis 4-3-2012

Dow Jones now hitting 52week highs, SPX and Nasdaq as well. But Euro Zone knocking the ceilings off for some Nation concerns. By April end or around 4^th week, it is expected for Germany, London and France to reveal their Q1 2012 GDP. Once this gets into negative territory, Europe will be declared in Recession. Recession is where a country/nation is in 2 consecutive negative GDP levels. We may be optimistic, but at this important event coming, it is not bad to be defensive..

Dow Jones daily Elliot Wave suggested count is now at intermediate wave 3 with a composition of i-ii-iii-vi-v mini waves of Primary Wave III Bull Market. Last week ago, we noted that possible short term peak may be seen, it is overextended by 1-2 weeks. Now it made a new high, but MACD and RSI isn’t. Weekly charts also shows that MACD levels reached to as high as 2010 peak,2011 peak (so another consideration to take into). Currently, we have negative divergence. A short term pullback is once again expected, and the more the rally, the more the correction needed, as of this moment, a good pullback back to intermediate wave 1 is advised (12284), there is another support near 12500 level for this uptrend cycle, a correction to 12284-12600 is a good entry point, and healthy for this market.

Elliot Wave count suggests that we are still in an ongoing Bull Market pattern (80% to happen), and at worst case, if Europe suddenly slips into recession, 20% chance that 4/2/2012’s peak may be a Bear Market Rally.

Let us see in the next few weeks, what the market evolves to.