A deeper look at what might be in store for the Dow Jones

Earlier this morning an update here looked at the VIX and the Dow Jones. Following that update, as promised here is a more detailed look at the longer-term technical picture on the cash index. Bank in March 2020, the Dow jones fell from around 30k, to a low at 18,213. The rebound from that low (wave1) rose to 36,952. The wave 2 correction based out at 28,660 at the end of 2022. Since then we appear to have been in wave 3 and that topped this summer at 41,376. The low seen on Monday was around 38,499 and that low was just short of a 23.6% corrective target, at 38,375. More usually (if we are now in a wave 4 correction) that would deliver at least a 38.2% correction of wave 3 and if it does it would infer a fall to 36,518. The problem is as follows- if that is reached, it will fall below the top of wave 1 (at 36,952) and that could ultimately prove terminal for the whole long-term trend. There will be more to add on all this in due course, but first thing is first and it remains to be seen how the index fares from here and does, or does not deliver a deeper correction in the coming days. Right now the Dow Jones futures are currently pricing the opening at around 38,660