Elliott Wave Stock Market Forecast - October 3, 2006

We first suggested last June that a new all time high in the DJIA was most likely a "done deal". Today that forecast came to pass...as the DJIA recorded an all time intraday high AND closing high. Others who have repeatedly (since the 2002 lows) warned of a mystical "3rd wave" decline today saw that hollow forecast go up in smoke. Our preferred wave count remains right on target. 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). One more down-up sequence (4-5) or, alternatively, a more complex diagonal triangle formation should complete the pattern. Upon completion, a wave (c) decline should follow and retrace, at a minium, all of the gains since the October 2004 lows.