Bobby,
As for the current wave count, I've gone back over the decline since 7/20 to fine tune, and believe there's very good news here for the bears. In this 5 wave move down from the July 20th highs:
Wave 1 down completed on 7/24 around 1pm (Eastern).
Wave 2 up completed on 7/30 at 3:40pm.(3-3-5 Expanded Flat Corrective)
Wave 3 down completed on 8/5 at 3:25pm.
Wave 4 up completed TODAY, 8/13 at 9:50am (5-3-5 Zig-Zag, A & C perfectly symmetrical)
Wave 5 began at 9:50am today, and we saw the completion of subwave 1 down and a sideways 2, followed by subwave 3 down of 5 into the close (which is what we're currently still in ).
Wave 1 was 62 S&P points in length, and lasted 4.1 trading days.
Wave 3 was 92 S&P points in length, and lasted 3.95 trading days.
Therefore Wave 5, if it holds the same ratio to 3 as 3 held to 1, would last about 3.75 trading days (finishing up late next Tuesday), and could span 136 S&P points (Which would have it finishing up at 962 on the Sep. futures). At a minimum, Wave 5 should run 61 points, meeting Elliott's principle of wave 1 and 5 being the nearly the same length when wave 3 is larger than wave 1. So that would have the Sep futures down to 1032 by late Tuesday.
My conclusion is this... It's a short and hold for the next 3 days, with late Tuesday the most probable end to this 5th wave down. From there we should see a sizeable rally effort into early September before an even greater decline begins. Also keep in mind that the very lowest point of this move down could come BEFORE the end of the day Tuesday, IF wave 3 of 5 is super enormous. Wave 4 could rally up so far that wave 5 of 5 is not able to break (or even approach) wave 3 of 5's low. That's just a little word of caution that the best cover point could come on Monday or early Tuesday instead of at the end of the 5th wave.
Happy feasting on the ignorance of the masses,
David |
