Week starts up, before short bear run
Updated
Current assumption is that Minute waves A and B are complete and the final Minute wave C should bring the market up early this week to complete Minor wave 4. The high for the week should occur prior the close on Tuesday. This analysis will point out the levels and locations to monitor for this event. An early peek of Intermediate wave 3’s final projection is also included.
METHODOLOGY:
I operate a modified wave theory composed of Dow Theory and Elliott Wave Theory. All data is determined from comparing current wave locations with historical wave relationships. The listed percentages are based on previous movement extensions and retracement quartiles of the data. There is too much data to list all points, but overlap of the quartiles based on specific relationships tends to point to more likely targets. The light pink levels are based on most specific data, light blue is slightly more broad, and yellow levels are the broader set of data used. A red level typically indicates maximum historical move for the current wave throughout the historical data.
MINUTE WAVE C
For the Minute wave C finishing points, estimated end is between the final hour of trading on Monday through the final hour on Tuesday. The general level for the top is 4345-4360, quite a bit of data points to the 4355-4360 area, there is another pocket between 4370-4380 which is the red box. I am not looking for the top that high, but the data says it is possible so it is important to be aware of it.
MINOR WAVE 4
Minor wave 4's target box is the larger yellow box (Minute wave C in Minor 4 was the green box which included the white box). The yellow box was larger before the Minute waves inside of it traded. The overlap of both Minute wave C and Minor 4 end points favors the white box which is my target. Once Minor 4 is over, the market should head down to finish Intermediate wave 3 with Minor wave 5. I will forecast Minor wave 5, once data is available and pointing to the completion of Minor 4.
INTERMEDIATE WAVE 3
Intermediate wave 3 will finish with Minor wave 5 and the updated forecast places the now doable target box between 4040-4140. Strongest data is between 4080-4105 which I will assign as the current target. Back at 4450, 4150 seemed like a long shot, but time and a strong third wave make it possible.
Short-term jubilation could see the upward finish of Minor wave 4 IF a government shutdown is averted as the current downside to this event is a drop in the US credit rating. Typically, government shutdowns are welcomed and positive for the market, but the country has not been under the threat of a credit downgrade should the event occur. Inflation numbers were up on Friday and should continue to look bad through the end of Intermediate wave 3. The $20+ rise in oil over the past 2 months has not significantly impacted the price of goods yet, the OPEC meeting this week could assist in tipping those scales and sending the market into Minor wave 5 down. Still unsure what causes Intermediate wave 4 to take markets upward from mid-October through likely mid-November.
SCHEDULED ECONOMIC NEWS:
Monday will have manufacturing data and Fed speakers while not much on Tuesday. This could point to the gains being more on Monday and slowing on Tuesday if not already reversing. Wednesday is a heavy news day. United States PPI data comes out October 11, which is around the projected time of the market bottom and end of Intermediate wave 3. CPI is the following day. If this is the start of the market reversal and movement upward, it would appear the September inflation numbers did not rise. Next FOMC meeting is end of October and could be a key event for the end of Intermediate 4’s rise and begin the next monthlong market drop.
METHODOLOGY:
I operate a modified wave theory composed of Dow Theory and Elliott Wave Theory. All data is determined from comparing current wave locations with historical wave relationships. The listed percentages are based on previous movement extensions and retracement quartiles of the data. There is too much data to list all points, but overlap of the quartiles based on specific relationships tends to point to more likely targets. The light pink levels are based on most specific data, light blue is slightly more broad, and yellow levels are the broader set of data used. A red level typically indicates maximum historical move for the current wave throughout the historical data.
MINUTE WAVE C
For the Minute wave C finishing points, estimated end is between the final hour of trading on Monday through the final hour on Tuesday. The general level for the top is 4345-4360, quite a bit of data points to the 4355-4360 area, there is another pocket between 4370-4380 which is the red box. I am not looking for the top that high, but the data says it is possible so it is important to be aware of it.
MINOR WAVE 4
Minor wave 4's target box is the larger yellow box (Minute wave C in Minor 4 was the green box which included the white box). The yellow box was larger before the Minute waves inside of it traded. The overlap of both Minute wave C and Minor 4 end points favors the white box which is my target. Once Minor 4 is over, the market should head down to finish Intermediate wave 3 with Minor wave 5. I will forecast Minor wave 5, once data is available and pointing to the completion of Minor 4.
INTERMEDIATE WAVE 3
Intermediate wave 3 will finish with Minor wave 5 and the updated forecast places the now doable target box between 4040-4140. Strongest data is between 4080-4105 which I will assign as the current target. Back at 4450, 4150 seemed like a long shot, but time and a strong third wave make it possible.
Short-term jubilation could see the upward finish of Minor wave 4 IF a government shutdown is averted as the current downside to this event is a drop in the US credit rating. Typically, government shutdowns are welcomed and positive for the market, but the country has not been under the threat of a credit downgrade should the event occur. Inflation numbers were up on Friday and should continue to look bad through the end of Intermediate wave 3. The $20+ rise in oil over the past 2 months has not significantly impacted the price of goods yet, the OPEC meeting this week could assist in tipping those scales and sending the market into Minor wave 5 down. Still unsure what causes Intermediate wave 4 to take markets upward from mid-October through likely mid-November.
SCHEDULED ECONOMIC NEWS:
Monday will have manufacturing data and Fed speakers while not much on Tuesday. This could point to the gains being more on Monday and slowing on Tuesday if not already reversing. Wednesday is a heavy news day. United States PPI data comes out October 11, which is around the projected time of the market bottom and end of Intermediate wave 3. CPI is the following day. If this is the start of the market reversal and movement upward, it would appear the September inflation numbers did not rise. Next FOMC meeting is end of October and could be a key event for the end of Intermediate 4’s rise and begin the next monthlong market drop.
Note
Looks like a day early on the bottom, which should move the top to Wednesday/Thursday. Target around 4355 remains valid.Note
Note
With waves A&B both at 10 hours, wave C could be 7-12 hours. A lower target high begins at 4330. Green box still valid from 4345-4365 which is an increase for the top. The red zone remains on the chart, however, the data is no longer strong for this location and movement above 4365 is unlikely. The duration doesn't make it to Thursday. 12 hours right now falls in the early trading hours on Wednesday, but tomorrow should be an up day if we are in the correct position.
All forecasts are based on analysis of past behavior. Prior movements are not always indicative of future movement. Develop the theory, test the theory. Do your own research. Nothing in this analysis constitutes advice. YouTube For More. Good luck!!
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