Elliott Wave Stock Market Forecast - August 30, 2006

In our last update in July, we reiterated our view that the DJIA would exceed its May 2006 high and rally to new all time highs. So far, only the OEX and Major Market Index (XMI) have exceeded their May highs. At today's close, the DJIA was only 3.2 percent from the high it made in Janunary 2000. Our preferred wave count remains unchanged from last month. The DJIA appears to be tracing out the final wave of a (b) wave triangle. Wave e of the triangle, a three wave a-b-c, appears to be tracing out an inverted flat (3-3-5). Once the final phase of the pattern begins, the DJIA should explode to the upside.