Carl,
I was saddened with cognitive dissonance when I wrote the private post to you this morning on my take on the market, because something just wasn't right about the concept of the "C wave" of this 8 day decline beginning on Tuesday morning (7/28). I finally came to my senses though, and now feel very confident of what stage we're in. Unfortunately, I don't think you're gonna like it, or at least, won't agree, but let's see.
Our read on the market last week was indeed correct, and the ABC zigzag was nearing the final stages of completion on Friday. It actually wrapped up at the lows Monday morning, then we had a 5 wave rally higher from there into Monday's close. That wave 1 up was followed by a brutal wave 2 correction, comprised of the "A" part of 2 down that lasted until Tuesday's low at 2:35pm. The "B" wave up of 2 lasted into Wednesday's open, then "C" down of 2 rode down into 3:15pm on Wednesday. That concluded wave 2, and from there, we sprang up into wave 3 higher, some of which we felt the brunt of in today's rally.
I'm sticking by my overall read that Primary 3 began June 4th, and Intermediate 1 up of P3 completed on July 20th. I believe the intermediate wave 2 correction completed on Monday morning's low (7/27), and that we have since begun intermediate 3 of primary 3 of this cycle wave 5 that began on Nov. 12th.
I understand you may still have a problem with wave 2's terminating lower than the beginning of wave 1, and I do too. I wish they wouldn't do it, but obviously, the mm's and locals are feasting on the blood of the masses every time they pull it off. If you're still not a believer, take a look at the action from June 4th to June 15th. however you would ascribe the occurrance, in the way of the second low exceeding the first, just happened again.
Thus, I expect sharply higher prices into at least the middle of next week, with 1180 cash the first area of major resistance after we clear the 1152 area. If 1180 clears quickly, and 1190 gives way shortly thereafter (and I think it will), we could be in for one of the most explosive rallys (point-wise, in a short time span) that this market has ever seen, with 1240 to 1250 quickly achieved.
Keep me abreast of your thoughts please, and if you're shorting from here, I hope you are extremely vigilant, and with a tight leash.
Regards,
David
P.S. 1350spx/10700dow, here we come!! |
