Executive summary
- Trend Bias: Down as the Dow Jones Industrial Average (DJI) may have finalized its first bearish leg lower.
- Key Level: ~50,499 (start of the bearish wave).
- A break below 45,369 may usher in another 10% decline to 42k .
Previously, on February 24, we warned that a break below 48,731 opens the door of a decline to 45,728. That door was opened and 45,728 was reached on Friday, March 20.
It appears a bearish impulse pattern is completed and a partial recovery bounce higher may lift some of the oversold readings, but lead to another bearish impulse.
Current Elliott Wave analysis
Previously, we were closely monitoring two Elliott wave counts we are following regarding DJI. The bearish count took control and it appears a series of bearish trends are beginning to develop.
The first wave analysis counts all of the minimum waves in place for a completed bullish pattern going back to April 2025 and topping February 2026. This means the top is already in place DJI on February 11 and DJI has created the first of 5 waves lower to today’s low.
This makes the February/March decline wave ((i)) of a larger 5-wave sequence.
US equity indices likely stage a partial recovery, targeting the 38% to 61% Fibonacci retracement level of the 2026 downtrend. This implies a recovery target $47,280 – $48,488. This price zone is also guarded by the 200-day simple moving average crossing near $48,210. Additionally, the 200 SMA appears to have changed its slope from up to down signal market weakness.
If this analysis is correct, then a secondary lower high becomes wave ((ii)) and leads to wave ((iii)) lower later on in Q2 that breaks below Friday’s support level. Wave ((iii)) may reach 42k and possibly lower levels.
Bottom line
The DJI appears to have completed its first bearish wave lower from the February 2026 high. A partial recovery may carry DJI up to 47,280 – 48,488 where a secondary high may develop and lead to a wave ((iii)) downtrend.
If DJI falls below Friday’s low at 45,369, then we’ll consider it wave (b) of ((ii)) or the beginning of wave ((iii)) down.
These forecasts remain in force so long as DJI holds below 50,499.
Source: https://www.fxstreet.com/news/dji-elliott-wave-forecast-trying-to-recover-202603240716
