Bobby,
Looks to me like from the early '96 peak on the CRB, we began an ABC correction. Looks like the 5 waves of A completed in 2/97. Then we saw an expanded flat B wave, with a of B ending in 5/97, b of B ending in 7/97, then c of B ending in 10/97. From 10/97, the 5 waves described in my earlier post probably show the end of C coming in at this time. A & C match up very well time wise. Looks like we're in a bottoming area now for the CRB.
As for the S&P, I have to stick with the read that had the 1st wave down of A off the 7/20 peak finishing last Sunday night. Wave 2 (corrective/up) began from there, and we saw A of 2 complete Wednesday. This selloff into the end of the week was B of 2, and at Friday's lows, we concluded B of 2 and began C of 2. If it matches A of 2 timewise, it would conclude Tuesday morning. Otherwise, it could extend out into the week a bit. This "V bottom" we made yesterday is an ominous sign of things to come, as V bottoms have a high degree of probability for coming in just before huge collapses... Case in point-October '97, just before the crash (easily seen on the daily charts). I don't think I've ever seen a V bottom that wasn't followed by a crash like move lower.
You'll hear alot of people talking about the "hammer" made on the Daily charts Friday. But there's a big problem with that analysis... Hammers don't come afer a 450 pt. Dow upswing. Coming after an upswing, the bar is known as a "Hanging Man", with bearish implications.
I believe wave 3 of A will begin this week, and will drive the market through the 1055 support once and for all. Wave 1 of A lasted 4 weeks, and shaved 150pts. off the S&P futures. Wave 3 of A will certainly exceed that performance.
Regards,
David
P.S. Favors went 50% short yesterday with ALL his clients (short & long term, with a stop at 8610 the Dow. He'll committ the other 50% on a break of 8316, or at a good termination point for this rally begun Friday morning) |
