Phil,
The Magic #'s are 1012SPX ,8004 Dow & 495 OEX. These numbers will absolutely, positively, prove to hold this current decline. These #'s are double confirmed by two large chart patterns that are so reliable, you could hang your hat on either of them every time. Not even the worst sentiment and panic selling will drive the market through these numbers. And their probability of being met (within 3 S&P points, 25 Dow pts. & 1.5 OEX pts.) is also near 100%, so any buying in this market before they are met, will prove to be futile and hurtful to the buyer.
The break of the recent support will set the market in motion to these #'s. Don Sew thinks it (the break) will happen Monday, and so do I, based on my wave count read that we are right in the middle of this 5th wave down from the 7/20 top. As I've said in earlier posts... The crashes of '29 and '66 occurred in the 5th wave off the peak. There were no interim rallys to speak of before those crashes happened. In '29, the end of the 5th wave off the peak leveled the market by 47% from the top. In '66, it was 25%. At the targets given above, this current debacle will have fallen a relatively mild 15% when the targets have been achieved, and the reversal back up begins. From these levels (1012/8004/495), I expect a 50% retracement back to the highs before the next onslaught of selling begins.
This will target 1101.50 SPX, 8685 Dow & 538 OEX for the relief rally, which should complete by early September. Then we begin the next giant wave of selling that will take the market just below 900SPX, 6800 Dow & 435 OEX before the next substantial rally begins. These lower targets should be met by the end of October. On the bright side, this will only bring the market back to the Januarly lows... so what's all this commotion about anyway? <g> The SPX and Dow will still finish the year in positive territory after the ensuing rally brings relief to the bulls. We'll be OK...won't we? ;o)
Regards,
David
P.S. I expect that if Monday is a down day that breaks this recent support (and yeah, I'm confident it will), then the most likely time for the 1012/8004/495 target to be met is Tuesday at 10am. I will notify if this changes. |
