STU has moved the count to Yelnick's: we are still in wave 2, and have a final 5th wave up to go. We have been in either a fourth wave triangle, which ended two weeks ago, or in a fifth wave diagonal triangle since early July. This count fits the corrective behavior of the market over the last 7 weeks. Either way the prognosis is the same: we should see a little more upside, then a correction that stays above Dow8997, and a final fifth wave thrust up. As the STU says, This final leg will likely break briefly above the upper trendline on a quick spike in volume, and then be swiftly reversed. One or more indexes should hold back confirmation of the Dow's final advancing leg." This then is the signal of the beginning of wave 3 of 3 etc. down. Note that it could spike as high as Dow9930.
This expectation matches broader events. Greenspan pumped substantial liquidity into the markets on Friday, to minimize any impact of the large blackout in Eastern North America. This should result in bullish activity in the near term, but should not buck a more substantial set of concerns over the economic recovery, the spike in interest rates, and now indications of a return of inflation, which, even if momentary, should cause the markets to pause.
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