Best guess is that we just completed an expanding wedge wave 5 of 3, which should be retraced entirely, so back to $24, but after that it should be down again. Keep an eye on oil, if it gets well under $65/$60 it could accelerate down as a result of stranded capital investments.
On the 26 of August, about 2 months ago this was my expectation with regard to the TSX;
One of my better charts, I think, with the A-B-C B-wave loud and clear in this stylized format. That, as it happens also puts an initial low very near the 10700 level where 62% of the entire correction will itself be corrected. Notice that we did and are doing pretty well exactly as expected, except that wave 4 is sharper to the upside having already regained about 800 points in just a few days. It could have another two days of 300 points to get to 12200 or so for wave 4.Time will tell. In the meantime here are some updated charts of the TSX and the XIU (the same thing in a slightly different format);
Rather than two 1-2 to start , as in the top chart, I have used three, so the pattern becomes 1-2,1-2,1-2,3-4-5,4-5,4-5. using the first top which is actually higher by 4 and 1 point respectively. It is actually possible to add even a fourth 1-2. What speaks for the first top is that the entire drop so far is perfectly contained within a channel. It is possible that there is one too many 1-2 as well, but even then we need a fifth down to complete the entire thing. If we get to 12200 or a little under that it would be a fairly fast move of more than 1000 points. In all probability this would be wave A of a triangle (all waves 2 are zig-zags) so I would look for alternation. We will see.
This one certainly did not stick to the script as tightly as one might expect, but not too many alternatives are available. It went right down to the max. of $13 but now seems poised to go higher with new agreements between the Chinese ( Mongolian) government, Rio Tinto etc. etc. See previous blogs. To some extent this mine should be quite insensitive to the price of copper itself, it is that big and the costs are that low.
The alternative,with low probability, would be consistent with the TSX as a whole and would consist of a series of 1-2 (with irregular corrections as wave 2). In that scenario the stock should not trade above $23 (overlap).
Just to belabor the point, here is another example of ambiguity. Both charts are of Nasdaq, just different time frames. Again there is the question which top is the top, in this case THE top seems to be the one in red as it is the highest one. But there is no 5-wave move leading into it and also wave 1 down (in red) is definitely not a textbook 5 wave movement. There is some overlap and wave 3 might even be the shortest, a definite no-no. But if we push on, the count in red suggests that we need one more drop (in a wedge as there again there is overlap) to complete 5 and with it the total of Wave 1. By the way, waves 2 and 4 also overlap by a rather large margin, also a no-no. Suppose one sticks to this interpretation than the next big move – once wave 5 is complete, would be Wave 2 up by about 50/60%.
A better , and perhaps more correct – way of counting this would be to place a large, irregular a-b-c flat in front of the top. The red top would actually be the top of wave b (always a 3-wave move!) and c would be the red wave 1. The top then becomes the blue top which actually fails to make a higher top than the red one but is at least at a higher point than the start of the irregular flat. Wave 1 down now becomes the blue count and even the mess in early August starts to make sense. The low point of wave one itself might be a miniscule failure, not surprising given the idiotic moves up and down at that time. From that low a very clear a-b-c correction occurs with every detail in accordance with the pragmatic rules. The c of the correction is a nice wedge as is normal and the whole thing retraces a very nice 62%. That is wave 2, ergo we are now in wave 3 and just the start of it and rather than go up we should drop sharply ! A completely opposite conclusion.
To add a little confidence to any count it is good to look at the bigger picture, on the right. The big B-wave, stylized is clear enough. The next serious target normally is at the B level of the larger B-wave. So far we are not even close. This does not unequivocally favour one count over the other (neither fits particularly well) but ultimately the Nasdaq should make new lows and that fits best with the blue count. Because most readers do not care that much, if at all about EW niceties, the end result in English is that nothing is certain but we could have a precipitous drop any moment now as wave 3 fully develops.