Johnny P.,
The bigger picture count remains the same... That we entered a new supercycle off the 10/8/98 lows. Primary Wave 1 off the 10/98 Lows ended 4/13. Since then, we've been in a Primary Wave 2 correction
Here's what the wave 2 corrective count looks like from the 4/13 highs:
To the 4/20 low - a of A
To the 5/13 high- b of A
To the 6/11 low - c of A
To the 6/22 high- a of B
To the 6/24 low - b of B
To the 7/19 high- c of B
To the 7/26 low - 1 of C
To the 7/28 high- 2 of C
To the 8/10 low - 3 of C
From last Tuesday (8/10's) low, we seem to be in flat wave 4 of C corrective, with a of 4 completing at 8/12's high, b of 4 completing after the 8/12 close/before the 8/13 open, and since 8/13, we've been in c of 4, with 1 of c into the 8/16 a.m. high, 2 of c into the late 8/16 p.m. low, 3 of c into the 8/17 opening high, and 4 of c completing in expanded flat fashion at this a.m.'s lows, which is why i took that long position at 1337... looking for a 5 of c rally before we begin the Wave 5 selloff which will complete the C wave of this Primary wave 2 corrective that has been with us since 4/13. This 5 of c rally I'm playing for now should go no higher than 1358 or so (since higher than that would push wave 4 of C into 1 of C's territory), and it must see at least 1344 (which it now has already). So we COULD start down from right here, OR we could go higher... I'll stick with higher for now.
The coming wave 5 selloff is very difficult to guage on what kind of damage it will do. Wave 5's MUST retrace at least 70% of the wave 4 rally, so assuming we make it to at least 1350 before the selling begins, 1350 - 1274 = 76 pts. X 70% = 53.2 pts MINIMUM SELLOFF for wave 5 of C, which would push it to at least slightly below 1300 again. From earlier calculations in my last EW update, it was established that wave 5 can go no lower than 1156, so that's the range to look at. As always, it will be very difficult to pinpoint the end of this wave 5 decline, which could last anywhere from 5 to 25 trading days.
Fasten your seatbelts!
Bull Dodgah
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