The I1 peaks on 7/21 at 3.6 and 8/13 at 4.6. A buy signal is an I1 peak >= 5.5. The Aug high is not a formal buy signal and so has less weight. The current wave count will be invalidated on a rally past 10,600. If this occurs then the rally could conceivably continue to the 2010 high. I don't expect us to break 10,600. We have 5 trading sessions to the 7/21 high. The daily technical composite is at +21 after hitting a peak of +31 and I expect it to return to +4 before it's buy signal is nullified. So we are bullish here but I think that the 7/21 I1 high should be the price high. The reason is that the sentiment numbers are delayed and this rally has run all of the shorts out of town. An 9% rally in a week very few are going to be able to stomach. The speed of the rally is convincing people that they should be long rather than short. This is how bear market rallies function. Another week and sentiment and technicals should be resolved.
Steve
ReplyDeleteCan you see investors buying here at the 200 day and break the trend line set from the 4/26 high? I tend to think we are going to start to roll over from here and start to fall of by 7/21.
Jack C
Jack,
ReplyDeleteI still am at odds with the EWI count, that being that the rally is over and we are going down immediately. I think the decline over the next day will be a buy. The market has to go lower first. I'll pick a spot when I'm able to see the market structure during the third leg of the decline.