Rocky week down, up next weekThe chart holds the expected movement for the beginning of the week if we are in the final wave down of Intermediate wave 1. Minor wave 4 moved nearly on target with a reversal at the maximum historically observed reversal point and ran one hour beyond the models, however it fell drastically as expected. That idea can be viewed here:
I initially believed the end of Intermediate wave 1 could have been completed on Friday with the rate of the drop. However, the historical data is pointing to a new low still to come. The models right now are pointing to the bottom as late as Friday, but most models are pointing to Wednesday. The levels are outlined on the chart above. The most specific historical wave sets are the light blue levels based on waves ending in C115. and most likely contain the bottom’s location. The next set of data is based on slightly broader historical waves ending in 115 and are yellow. The broadest data levels are the white lines.
The markets could drop a little further to open on Monday are begin moving upward right away which would likely plant Minute wave 1 as the low from late Friday. Regardless, the index will likely move up to or toward a high on Monday to complete Minute wave 2. Minute wave 3 down could begin later on Monday and lead to a 50-point loss bottoming out on Tuesday. Minute wave 4 will likely be a quick jog (1-3 hours) upward late on Tuesday or even ending early Wednesday and the final bottom could occur on Wednesday. The end Minute wave 5/Minor wave 5/Intermediate wave 1 will likely be between 4420-4450. My expectations are in the 4430-4400 area.
After Intermediate wave 1 is completed. The market should move up for at least 3-6 days putting a top somewhere into next week (August 14-17) but further analysis will follow.
Intermediate_wave
Will market land hard over next 2 days?INTERMEDIATE WAVE 1
We are potentially wrapping up Intermediate wave 1 and Minor wave 5 at the beginning of Primary wave C. We appear to have completed Minor wave 1 with a low by 12:30 on April 1. Minor wave 2 finished in the first hour of trading on April 5. Minor wave 3 bottom before 13:30 on April 6. Minor wave 4 may have ended today, during the final 30 minutes of the session. There is a chance Minor wave 4 ends tomorrow. This would require a new high above 4521.16. Right now, wave 4 has moved 49.59% that which Minor wave 3 moved. Although 50% is not an official Fibonacci percent, it is a historical reversal price. The biggest forecast metric for Elliott Wave Theory is the length of wave 3. In the current setup, if my wave count is accurate, has Minor wave 3 shorter than Minor wave 1. This means Minor wave 5 cannot be longer than Minor wave 3. Minor wave 3 concluded in 11 hourly trading bars. This means whenever wave 5 begins, it cannot be longer than 11 hours in length. If wave 4 has ended, 11 hours begin tomorrow. There are 7 hourly trading bars (in the 6.5 hour trading session). Minor wave 5 could end no later than 12:30 on April 11. It is also possible Minor wave 5 ends tomorrow. For this to occur, the index will most likely drop below the low (and endpoint) from Minor wave 3 which was 4450.04. At the very least, this requires a drop of 1.57%. This is certainly possible in one day, but something significant geopolitically or economically would likely have to occur. My initial targets are between 4378.34 and 4435.70, although my models have strong agreement at 4442.
INTERMEDIATE WAVE 2
When Minor wave 5 ends, so does Intermediate wave 1. Intermediate wave 2 will be comprised of a three wave (ABC) which moves upward. This will most likely occur next week being a holiday shortened week. Economic calendar is light and earnings season does not kick off until the final trading day next week with the banks. This wave could last 1-2 weeks, until the full earnings picture is realized (forecast not good).
INTERMEDIATE WAVE 3
Intermediate wave 3 is where I am forecasting the most significant downward movement. This could be due to Russia-Ukraine, but it will also occur during earnings season. My guess is the economic outlook, inflation, interest rates, transportation costs, along with the Fed’s pace and rate of rate increases will take center stage during earning calls. This outlook may look bleak in the near-term, but I expect the market to find its bottom before the end of the summer and as early as mid-May.