ZT murphy

The Dow chart shows what I believe to be the more correct pattern. Chart 3 shows the Dow spending the last three months trading between support at 11750 and resistance at 12750. It has made three unsuccessful attempts to break through the upper part of the range. The fact that 12750 coincides with the Dow's November low makes that resistance barrier even more important (because it increases the odds that the three-month consolidation is a fourth wave in a five-wave decline). The fact that the trading range lasted for three months is also significant. For two reasons. A sideways consolidation shouldn't last longer than the prior downtrend. The downtrend from mid-October to mid-January lasted three months. That means that any rebound from the January low shouldn't last longer than three months. Three months is also the outer limit for an intermediate counter-trend move. Using the January low as our starting point puts a time target for a top in mid-April. This view increases the odds that the intermediate recovery that started in mid-January has probably run its course. A retest of the January lows is now likely.