DJI Elliott Wave forecast: On thin ice

Executive summary

• Trend bias: The Dow Jones Industrial Average (DJI) may have topped leading to a large bearish reversal.
• Key level: ~48,731 (this week’s low).
• A break below this week’s low opens the door to 45,728.

Dow Jones Industrial Average has been skating sideways for 2026. The frozen pond DJI has been skating on may be about to break as this consolidation appears to be part of a topping process.

Current Elliott Wave analysis

There are two Elliott wave counts we are following regarding DJI. The first is bearish and forecasts a decline back to 45,728. The second model points to a new high to finalize the pattern and produce a top, then roll over to 45,728.

The first wave analysis (above) counts all of the minimum waves in place for a completed pattern going back to April 2025. As a result, the top is already in place DJI on February 11 and DJI is starting its new trend lower to 45,728.

Since we can count the minimum waves in place from April 2025, the price could trend lower than 45,728 and possibly reach 41,396 – the 38% Fibonacci retracement of the April 2025 uptrend. A break below this week’s low at 48,731 will be the first step towards confirming the potential top in place. If prices were to push to a new all-time high, then this wave count would be voided and alternatives would need to be considered.

The alternative wave count we are following is that DJI is carving an expanded ending diagonal pattern. These patterns are rare which is why it is listed as an alternative. The choppy and overlapping nature of the price action since October is a big clue to the potential for a diagonal pattern.

Under the expanding diagonal model, price could rally to reach a new all-time high in a terminal wave (v) of ((v)). Once the rally exhausts, then a top would form and a large decline to 45,728 and possibly lower levels would take place.

Support at this week’s low of 48,731 would be critical to this pattern’s validity. Therefore, the key level to watch is this week’s low.

Bottom line

The DJI appears to have completed its bullish wave from the April 2025 low. The key level to determine which count is favored is how DJI’s current price behaves against this week’s low of 48,731. So long as this support level holds, then the potential for a new all-time high is possible. A break below 48,731 elevates the potential that a top is in place and prices likely are trending towards 45,728.