[12:02PM] [FREE/No Pay/No E-Mail] DOW Elliott Wave Update and why it’s down on an up day
Dow Jones Holds Key Wave 4 Support Despite UNH Shock — Bullish Reversal Setup Intact
The Dow Jones Industrial Average is showing relative weakness today, but the cause is extremely specific and important to understand: UnitedHealth Group (UNH) is down roughly 20%, and as one of the heaviest-weighted components in the Dow, it is distorting the index’s short-term performance. When a single stock of that magnitude collapses intraday, it can temporarily mask what the broader index is actually doing beneath the surface.
From a technical and Elliott Wave perspective, today’s action is far more constructive than the headline weakness suggests.
Earlier today, the Dow tested and held its prior Wave 4 support zone, which aligns with the former consolidation area from the previous advance. This level represented classic corrective support — the type of area where Wave 4s typically terminate before the next impulsive move resumes. Importantly, sellers were unable to push price decisively below this level, even with the heavy UNH drag.
That is a critical signal.
Wave 4 corrections are characteristically choppy, overlapping, and emotionally confusing. They often unfold on negative news, create short-term fear, and convince traders that the trend is breaking — right before the market turns higher. Today’s Dow price action fits that profile almost perfectly. Despite early weakness, buyers stepped in at support, and the index staged a modest but meaningful intraday reversal.
UNH’s collapse is fundamentally driven by company-specific news, not systemic risk. Markets frequently need time to absorb a large single-stock shock, particularly when it affects a price-weighted index like the Dow. Once that re-pricing is digested — often within a single session — the broader trend tends to reassert itself.
Structurally, the Dow remains positioned for a Wave 5 push higher, assuming Wave 4 is now complete or in its final stages. Momentum indicators are stabilizing near neutral levels rather than breaking down, suggesting this is a pause, not a trend reversal. As long as today’s lows hold on a closing basis, the bullish Elliott Wave count remains intact.
From here, the most likely scenario is sideways to slightly higher consolidation into the close, followed by renewed upside pressure as early as tomorrow. If the Dow can reclaim short-term resistance levels above today’s VWAP and moving averages, it would confirm that Wave 5 is underway.
Looking ahead, once the UNH news is fully priced in, the Dow should be able to resume its advance toward recent highs, with a strong probability of doing so by the end of the week. This type of single-component-driven dip often creates opportunity rather than danger — especially when support holds cleanly.
In summary, today’s weakness is not a market failure, but a textbook Wave 4 reaction amplified by one outsized Dow component. The broader structure remains bullish, support has been respected, and the path of least resistance continues to point higher once this temporary shock is absorbed.
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