Is the Dow set for a big fall?

The Dow Jones is in a critical position, says John C Burford. Here, he looks for shorting opportunities as the charts give all the indications of a major fall to come.

In recent weeks we've looked at how to trade Elliott waves. We know that a typical Elliott wave follows a five-wave pattern consisting of three up waves and two corrective waves. And I've been looking for such a pattern in the Dow.

Well since my article on 3 August, the Dow has rallied off my lower tramline. Am I now close to a great short trade on the Dow? Let's look at the chart (below).

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.