Talking of big tectonic shifts Captain, I thought I'd update my...

Talking of big tectonic shifts Captain, I thought I'd update my Dow Jones Bearish Butterfly Harmonic pattern that I've been tracking since April. Previous post linked here.

http://hotcopper.com.au/posts/17573430/single

We appear to be in the final weeks of a year long reversal pattern that is occurring at the top of a 7 year bull run. This is very significant as there will be a big fall once complete. The pattern is priced based, so completes when price target is hit, however long that is. In April I assumed it would compete by May but we had all that sideways working in the index. The current drive up without a good daily pullback feels like a blow off top and looks like targets can be hit in next two or three weeks. When is that DOMC meeting?





I've shown above how the bearish butterfly fits on the weekly chart of the DJI. Target is the 127% retracement of the August X-A falls that started the move. This is a very strong pattern as it has formed over a year and at the top of a 7 year bounce from the GFC. Also makes sense shorter term as intuitively you can't start this year with the January falls we had and then expect the rest of the year to play out all neat and steady.

In the chart below, I've shown the Bearish Butterfly pattern in context of the whole move up from 2009. However, I've also overlaid it against two other forms of analysis.

The Gann Fan from 2009 shows how price has been moving along each arm and then when it breaks through moves to the next line. Whereas something like Pitchforks looks at the current channels created from the last turn or two, these fans are anchored back at the start of the move in 2009 which makes it particularly useful to see how the momentum has unfolded.

There is also an Elliott Wave subwave count identified in black lines which reinforces the butterfly targets.

We are very close to the top of this 2009 Post-GFC liquidity-pumped rally. Plenty of catalysts around.