Time to finish this downtrend and start move for ATHsWith more data available, I am further homing in on the next reversal point and end of Intermediate wave 4. Due to prior projections and EW guideline violations, this forecast should finally find the end. It looks like Minor waves A and B are both completed. I am still projecting a gain early on Monday, but further downward movement during most of the week. All told I am expecting this week to move down at least 209 points from Friday’s close to the low point of this week. This would equate to a 6.31% drop, during the remainder of Minor wave C if it occurred. Minor wave A dropped 7.74% in 40 hours of trading at the beginning of September. This would see Minor wave C dropping 9.30% in roughly 40 trading hours.
The information below is slightly different from a similar forecast I provided earlier this month which at the time assessed Minor wave A to have lasted 40 trading hours, and waves B and C were estimations based on those 40 hours of movement.
What Minor wave A did:
It lasted 40 trading hours (6 trading days) and dropped 277.64 points. The rise over run (R/R) of this was a loss of approximately 6.941 points per hour. On average, A waves tend to make up 36% of the larger wave it resides in (Intermediate wave 4 in this instance). This means Intermediate wave 4 could last around 102 trading hours. At that time of this writing, Intermediate wave 4 is at least 75 hours long with additional time to go.
What Minor wave B did:
It lasted 22 trading hours (3 trading days) and gained 118.45 points. The rise over run of this was a gain was approximately 5.384 points per hour. On average, B waves tend to make up 21% of the larger wave they reside inside. This means Intermediate wave 4 could last around 102 trading hours. This conforms with wave A’s typical makeup of the larger wave as well.
MINOR WAVE C Estimations:
Length: Wave C should last around 40 hours. This is based on wave A making up about 39.22% of the larger wave and wave B providing 21.57% of the larger wave. This would leave wave C to make up the remaining 39.22%, which is also 40 hours. On average, waves A and C in the same wave are almost equal in length. This would also tie the maximum move that has occurred during specific Intermediate and Minor waves (Intermediate wave 4, Minor wave C) in the history of the S&P 500.
Movement: On average, the typical relationship of movement between A and C waves is 0.8632 which would equate to a drop around 3107. Wave B’s retracement of wave A’s movement is typically 0.37909 that of wave C’s extension of wave A’ s movement. This would equate to a drop around 3116.46.
The 5 wave down pattern estimations are based on Minor wave C moving 40 hours and down to roughly 318.92 from the end of Minor wave B. All estimates are based on the average of the average and median for each item.
Wave 1 typically lasts 27.85% of the larger wave it resides in. Wave 2 is around 10.80%, 3 is 36.45%, 4 is 6.33%, and 5 is 17.64%. Wave 1 typically moves 41.58% of the overall larger wave’s movement. Wave 2 is 19%, 3 is 56.5%, 4 is 22.22%, and 5 is 43.69%. This means wave 1 could last 11 hours and drop 132.61 points. Wave 2 could rise 60.59 points over 4 hours. Wave 3 could drop 180.19 points over 15 hours. Wave 4 could rise 70.86 points over 2 hours, and wave 5 could drop 139.34 points over 8 hours. This would have the ultimate bottom around 1230 on September 24 near 3108.24.
Before trading closed on Friday, wave 1 was likely completed. Even though the estimate was for wave 1 was a drop to 132.61 over 11 hours, it appears wave 1 found a bottom at 3292.40 (a drop of 136.52) over 13 hours which is 2 hours longer than forecasted. This could slide all of the following waves to the right by 2 hours. This could mean the market opens high or hits an early morning high around 3350, or wave 2 has already completed and the next 2 days will be down significantly.
Let’s get ready for another week of volatility. My guess is another down week. I still think we will see all-time highs in October before a nice 700+ point plunge beginning in November
