Thursday, November 18, 2010

11/18 8:45am

The rally occurring with only 1 session into the I1 low increases the odds of a Minor 4 triangle because we have a complete 3 down and the probability of smashing below yesterday's low in a single session is low. I was hoping for and betting on the rectangle being wave 4 and a 5 down developing.
The conclusion is that this I1 cycle will only form a 3 down unless the market extends the decline beyond the I1 low, which is again a lower probability. 
The forecast posted 11/8 and again on 11/16 holds:
I am counting the March,2009 - April,2010 rally as a 5 wave, an abc correction from April to early July, and a 5 wave, of which Minor wave 3 finished 11/5.

The upcoming Minor wave 4 will probably last into December 21, with an initial low 11/18, a rally to 12/3-4, and a retest of the low of 11/18 occurring on 12/21. So, odds favor a rectangle or triangle. Wave 5 will probably not break out until after the 1st week of January then rally into the 4th week of March.  When complete this 5 wave will complete wave C up from 2009.


  1. Steve,

    Any thoughts on a Wave 5 target?

  2. Good morning, Steve. So I'm guessing you're planning to exit all your short positions today? Do you have a target for your exit point?

  3. I have a feeling in my water today will sell off very hard, a bull trap has been set.
    I think there is a decent chance we do take out the recent low.
    But what do I know!

    I am interested in how the May decline fitted in with I1, is it possible that I1 pressures that have built up over the past month could follow through in the markets even as I1 bottoms?
    Dollar looks to have bottomed, and GM IPO got to market just in time maybe?

  4. Gary
    I would like that as it would confirm a 5 down and set the process in motion for an altered larger degree count. Fingers crossed!

  5. If DJI does not cross 11,200 then I'll exit near the close. I think the rally is finished now at 11,186

  6. Wave 5 would find stiff resistance in the 1257-1270 range. 1257 is the bottom of Intermediate wave 1 in March, 2008. 1270 is the Minor wave 3 low leading into Intermediate 1.