Executive Summary

• Trend deviation: Down like Dow Jones Industrial Average (DJI) he could have finalized his first bear leg lower.
• Key level: : ~50,499 (beginning of bear wave).
• A break below 45,369 could trigger another 10% drop to 42,000.

Earlier on February 24, we warned that a break below 48,731 opened the way to a decline to 45,728. That door was opened and on Friday, March 20, the number was reached at 45,728.

The bearish impulse pattern appears to have ended and a partial bounce to the upside could lift some oversold readings but lead to another bearish impulse.

Current Elliott wave analysis

Previously, we closely monitored two Elliott wave numbers that we tracked DJI. The bearish numbers have taken over and it looks like a series of bearish trends are starting to develop.

The first wave analysis takes into account all existing low waves, creating a completed bullish pattern stretching back to April 2025 and peaking in February 2026. This means that the DJI high is already in place on February 11, and DJI has created the first of 5 lower waves to today’s low.

This makes the February/March bearish wave ((i)) a larger sequence of 5 waves.

US stock indexes are likely to see a partial recovery, reaching the 2026 Fibonacci retracement level of 38-61%. This means the recovery target is $47,280-$48,488. This price zone is also guarded by the 200-day elementary moving average near $48,210. Additionally, the SMA 200 indicator appears to have changed its slope from upside to downside, signaling a weakening market.

If this analysis is correct, then the second lower high becomes wave ((ii)) and leads to a lower wave ((iii)) later in Q2 that breaks below Friday’s support level. Wave ((iii)) may reach 42,000. and possibly lower.

Conclusion

The It looks like DJI has ended the first wave of declines from the February 2026 high. A partial rebound could lift the DJI to 47,280 – 48,488, where a secondary top could develop and lead to a wave ((iii)) of the downtrend.

If DJI falls below Friday’s low at 45,369, then we will consider it as wave (b)((ii)) or the beginning of wave ((iii)) down.

These forecasts remain in place as long as the DJI stays below 50,499.