Dow Futures (YM) is on a bullish path projecting towards the 49,900 level. The cycle from the April 2025 low continues to develop with a clear impulse structure. Wave (4) concluded at 45,810, as shown on the one-hour chart. Following this, wave (5) began a new sequence of five lesser degree waves.
Wave (i) advanced to 46,656, with a corrective pullback in wave (ii) at 46,165. The Index then rose in wave (iii) to 47,796, followed by a retracement in wave (iv) at 47,270. Wave (v) pushed prices to 48,184, completing wave ((i)) of higher degree.
Elliott Wave Zigzag Decline
In line with Elliott Wave principles, wave ((ii)) saw a zigzag decline. From the peak of wave ((i)), wave (a) dropped to 47,663 before wave (b) rebounded to 48,004. Wave (c) declined to 47,504, completing wave ((ii)).
The Index resumed its upward movement in wave ((iii)). From the low of wave ((ii)), wave (i) advanced to 48,245, with corrective wave (ii) ending at 47,859. The bullish cycle is expected to continue as long as the low at 45,810 remains intact.
The upward path for Dow Futures appears set towards the 49,900 level, continuing the impulse wave that began from the April 2025 low. We see the market structure as bullish, with the recent dip to 47,504 likely completing a minor correction. This suggests that the primary trend remains firmly upward heading into the end of the year.
Derivative traders should consider this a dip-buying opportunity. Recent pullbacks, such as the one to 47,859, are viewed as entry points rather than the start of a reversal. Establishing bullish positions, like buying call options or selling put spreads, during these corrective swings aligns with the prevailing upward momentum.
Economic Data and Market Outlook
This technical strength is supported by the latest economic data we’ve seen. The November 2025 jobs report, released last week, showed unemployment holding steady at a healthy 3.8%, beating expectations and signaling a resilient economy. This kind of fundamental support gives us more confidence in the market’s ability to climb higher.
Furthermore, the most recent Consumer Price Index reading for November 2025 came in at an annualized 2.5%, confirming that inflation continues to moderate. This has solidified market expectations that the Federal Reserve will maintain its pause on interest rates through the first quarter of 2026. A stable rate environment is highly constructive for equities.
The critical level to watch is 45,810, which marks the low of the larger wave (4) structure. As long as we remain above this pivot point, the bullish thesis is intact and traders should maintain a positive bias. Any break below this level would require an immediate reassessment of our entire bullish outlook.
We can see similarities in this market action to the strong year-end rally we experienced back in late 2023. During that period, signs of a dovish Fed pivot also fueled a significant advance in equities. Using that as a historical guide, we could expect buying interest to accelerate into the holiday season.
