The current count looks like we are ending a little wave 4 to be followed by a 5 to complete wave C of 2. The ewavers have all backed off trying to pick the top. If Monday opens weak, little wave 4 may have a few more days to go. If Monday opens strong, we should zip up in the final 5 wave. Look for possible top during the next fib turn period of May 20 - 31.
How high might it go? We have been knocking at the neckline of the 5-year head-and-shoulders pattern in the S&P. This neckline reflects two major interim bottoms - the Long-Term Capital Management fiasco in 1998 and World Trade Center collapse in 2001. We crushed through it in July 2002 and have since come up to touch it several times. Currently it is around SP970 and we may see one last approach in the coming weeks. If we breach it, maybe the bull is back. If we turn south again, likely the dreaded 3 of 3 is on. Recall that the technical consequence predicted by kissing the neckline goodbye is a drop to as far below the neckline as the 'head' was above it. The head is 600 pts higher, so the prediction is 600 pts under or below SP400.
In the meantime relish the last chart on this web page, which is page 3 of a series of analysis by Wavespeak. This chart is about as good an example of extreme bullishness as one could imagine. It shows that the number of new lows on the NYSE got down to single digits - 5 one day, 3 another - much lower than has happened for the past 6 years - even during the manic frenzy of 1999! Wave 2 bullishness can often exceed the top itself.
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