Last week I was dead wrong in assuming we might have a turning point. The market did drop by some 400 points intraday by mid Teusday but then came roaring right back to make new highs. So what is wrong with the analysis? Probably just a week (or two); here it is again.
We were looking for an irregular flat (there are other possibilities) that would be complete when the market action crosses the green line, however it may go beyond that (which it is doing). Secondly, given the marketâ€™s predilection for symmetry we are approaching a time equidistant point in the coming week but are as yet just shy of that point. (this charting system does not allow for fine tuning so I am not sure which point in June was the real top.)
In more detail notice that the symmetry in distance, not time , also shows up in the (two??) up-legs from the low. However the original thought of a wedge due to the over lap (in red) is simple not possible as this entire structure as a c wave must have 5 waves within it. So I changed the count (now in green) by making Mondayâ€™s 311 point collapse a wave 4. If correct we know that this structure cannot rise by more than about 300 points as this would make wave 3 the shortest. Also at about 9650, give or take we have a veritable cluster of points suggesting the probability of an end to the up-leg. These are to repeat; 1 time-symmetry, 2 amplitude symmetry, 3 structure, an irregular flat, 4 RSI above 70 ,5 MACD already dropping, 6 at or near 200-day moving average and 7 an approximate 29% rebound from the lows, equal to the HIGHEST rebound in the C â€“leg during the great depression (yes history is good unless you want to repeat it). Also, quite obviously, this market has been just a little too bullish for its own good. US markets such as S&P are in different but similar positions and may already be moving down.