DJI wave formation

Where is the DJI heading?

To recap the Wave A formation when the index plunged on Aug 2011. Such movement signals a possibility a trend reversal. However, the Wave Formation needs a long period of signal to prove its usefulness. As a reference, Fibonacci Retracement (dotted blue line) is used to guide the macro-movement of the index.  During a main wave movement (blue and red continuous lines), those lines are another measurement to gauge the probability of the formation. Now, you can see that DJI is trading above the blue line (11800). For a proper wave B formation, this is the resistance level. But trading above might violate the wave B line, it probability looks like a Wave 4 (instead of Wave A) or Wave 5 (instead of Wave B).

Ignoring the wave theory, the TA is definitely bullish when it is above 11,800 and it is a typical "Resistance turn Support" strategy and probability heading toward 12,800.