If the top is in, we find the bottomStill awaiting additional price confirmation we are in Cycle wave C downward, but here is the current forecast if the current market top holds. My hourly program generated the usual waypoints based on historical data. Interestingly enough, Cycle wave A (the downward period between January – October 2022 was 1365 trading hours. Not to be outdone, Cycle wave B upward (October 2022 to July 2023) was 1366 trading hours. A common ABC relationship at times is the length of A plus the length of B equaling the length of wave C. I have outlined the most common lengths the program agreed on regarding the length of cycle wave C and placed them vertically on the chart. Of course 2731 hours is one of those values which could place the possible bottom as late as February 2025. The market bottoms based on most specific dataset to the current wave structure are the light blue levels, next slightly broader dataset produced the yellow levels, and the broadest dataset of waves ending in 2C are the white levels.
Based on these potential lengths and overall movements, I determined where Primary wave 1 should bottom based on historical data and each yellow outlined boxed represents these factors. I generally do not trade too much during the first wave, but instead allow the first wave to finish and then begin buying and selling based on the finalized data and historical relationships for expected movement. If Cycle wave C is 910 trading hours long, then the smallest box would likely contain the location of Primary wave 1’s bottom. The left side of this rectangle is the minimum length of time based on historical Primary wave 1 data and therefore the timeframe that wave 1 would likely reach at a minimum. The right side of this rectangle represents the third quartile of historical movement and therefore a possible maximum timeframe for wave 1’s bottom to occur. The additional boxes do the same regarding left and right bounds and all boxes correlate with the next duration in order (i.e. if the overall length is 1366 hours, the bottom should occur between the left and right bounds of the next largest rectangle). Rectangles were created for 910, 1366, 1821, 2047, 2731, and 3415 trading hours.
The top and bottoms of the box relate to the potential market bottoms for the bear market. The top of the smallest box relates to the minimum historical movement if the market bottom is at 3328.09. The bottom of this same box relates to the third quartile of historical data for 3328.09. If the bottom ends between the top and bottom of this box, the market bottom could be around 3328.09. The tops and bottoms of the next box are related to an overall market bottom around 3271.95. Rectangles were created for market bottoms of 3328.09, 3271.95, 3183.44, 2972.71, 2878.89, and 2733.44.
What does all this mean? Once Primary wave 1 ends, the bottom should fall in one of these boxes. We could use the endpoint to potentially rule out what the duration and bottoms WILL NOT be for this bear market. If the bottom of Primary wave 1 falls in the small rectangle which overlaps all rectangles, nothing can be ruled out yet. Additionally, the bottom of Primary wave 1 should get below 4300 at the very least, considering the market is above 4500 today, we are looking for at least a 200 point drop over the next few weeks. My initial projection for the market bottom from last July was around 2400 by March 2025. Based on all the completed data to this point, I am looking for a bottom sooner and likely in the middle of the fall of 2024. The bottom should not be as deep as originally forecasted either, and my initial call is likely no lower than 2700, but likely below 2900.
So far it looks like the country’s credit rating was the first of many dominos to fall over the next year as the market moves lower. I still think a China v. Taiwan situation could do the most damage, but we shall see what happens. Oil prices have been creeping up as well over the past month and the inflated costs of goods have not begun to take form yet. Companies will be refinancing their debts at higher and higher levels moving forward and nowhere near enough companies have failed yet. Big ones will fall, and best guess as at least 4 big names go down before the market is done moving down.
