| Knight....we already did this morning. That breaks the current down trend. Indexes are now in consolidation mode and clearly in corrective wave structure. Since, this consolidation is longer than the previous consolidations of the last few days, we are no longer within that wave series as it is correctin to a larger degree. That means the 5 wave move down we saw over the last few days was all wave 1 of a larger degree and we are now in wave 2 of that same degree. Just using the DOW as an example, the DOW fell about 550 points for wave 1. Wave 3 is often at least as long, but more likely to be 1.618 times the length of wave 1, or about 890 points. So wherever this "rally" tops out, you can subtract about 890 points and that should be the target for wave 3 down. Another, note, the less this rally retraces the first 550 points, the higher the odds increase that wave 3 may be as much as 2.618 times the length of wave 1...or about 1440 points. Thus far, at the peak, the DOW has only managed to retrace a whopping 29% of the down move and we're still below that key level of 9960, having closed under it for 2 days in a row now. |
