I think I have a fair handle now on the pattern playing out on...

I think I have a fair handle now on the pattern playing out on the Dow Jones chart. Its pretty clearly a bearish Harmonic pattern. Forming over a 12 months period, this will be a major market reversal if confirmed, presumably reversing the whole 7 year move since 2009.

The most likely of the common patterns is the Bearish Butterfly. You can Google these and there's plenty of information about them. Bat, Gartley, Crab etc are alternatives.

The critical numbers appear to be the 78.6% retracement leg A-B. We've got 88.6% which is a legitimate fib number and applies in some patterns, so this is good enough for me. The other more critical level for the Butterfly is the 127.2% retracement of X-A leg, meaning the pattern would complete around 27th May at 19,162 points.

Patterns may not always play out perfectly so I've put a logical target range of 18,667 - 19162 being hit from 6th to 27th May, as highlighted in the pink box. Nevertheless, this should be a major market reversal and it's just a matter if refining the final turning point and date.

Intuitively this makes a lot of sense to me, as it feels like we're in the final blow-off phase of a bull run, with shorters being forced out and fund managers having to follow the momentum. It should exhaust next month and a significant bear market commence.