The Dow Jones Index (US30) reached the $35,000 target yesterday as was mentioned in our previous analysis “US30 Uptrend Resumes after Bullish Breakout and Aims at $35k”.

The bearish pullback is now testing the 21 ema support zone. Let’s look at the Elliott Wave patterns to understand the larger picture.

Price Charts and Technical Analysis

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The US30 remains bullish with a perfect alignment of moving averages: price action is above the 21 EMAs, which is above the 144 ema and 233 EMAs:

• The Elliott Wave patterns suggest a wave 5 (green) in multiple wave 3s (including blue and orange).
• Price action is testing the 21 ema support zone, which seems to be strong when considering the steep bullish angle of the 21 EMAs.
• The bullish momentum is also strong when reviewing the gap between price action and the 21 EMAs.
• The recent price action was however bearish which could indicate a correction pattern (orange arrow).
• A break below the 21 EMAs places the uptrend on hold (orange button) whereas a very deep break could invalidate it (red button).

On the 1 hour chart, price action seems to have completed a 5 wave pattern (gold) in the wave 3 (brown) at the $35,000 round resistance level. Let’s review what to expect next:

• A bearish ABC (gold) pattern in wave 4 (brown) is likely if price action remains above the 50% Fibonacci retracement level.
• A break below the 50% Fibonacci level places the uptrend on hold (orange button). A break below the 78.6% Fib invalidates it (red button).
• An uptrend continuation is likely once price action breaks above the 21 ema for the 2nd time (blue arrows). The first break is vulnerable to being a wave B (gold) rather than an uptrend.
• The wave 5 targets are located at $35,400 / $34,500 / $35,750 / $36,000.

(Click on image to enlarge)