The short-term Elliott Wave view of Dow Futures (YM) suggests that a larger correction is expected against the cycle from the 3.15.2023 low, with the correction unfolding in 3, 7, or 11 swings. The rally to 45183 marked the end of the cycle from the 3.15.2023 low, labeled as wave ((3)) on the 1-hour chart. The current wave ((4)) pullback is in progress to correct that cycle, with the internal subdivision of wave ((4)) unfolding as a double three Elliott Wave structure. Wave A ended at 43941, wave B rally ended at 44556, and wave C lower ended at 42496, completing wave (W) in a higher degree.
The rally in wave (X) unfolded as a zigzag Elliott Wave structure, with wave A ending at 43663, wave B at 42928, and wave C higher at 43746, completing wave (X). The index has turned lower in wave (Y), but it still needs to break below wave (W) at 42496 to confirm this view. As long as the pivot at 45183 high stays intact, the index is expected to extend lower in the near term. The potential target for wave (Y) lower is the 100% – 161.8% Fibonacci extension of wave (W), which comes in the 39403 – 41060 area where buyers could potentially step in for more upside or a 3-wave rally at least.
In summary, the Dow Futures (YM) is currently undergoing a correction against the cycle from the 3.15.2023 low, with the current wave ((4)) pullback unfolding as a double three Elliott Wave structure. The index has turned lower in wave (Y) and could potentially target the 39403 – 41060 area for a bounce. Traders should keep an eye on the key pivot level at 45183 high for confirmation of the continued downside momentum. This analysis provides a roadmap for potential price movements in Dow Futures (YM) in the short term, based on Elliott Wave theory and Fibonacci retracement levels.
