August 29 forecast: down early, end upBLUF: Down early tomorrow, finish up for the day, next possible near-term market top on Thurday.
NOTE: All times eastern.
The leading theory that does not bust everything has the index possibly back in Intermediate wave 2 and near the end of it. The far-right side has the levels of interest previously identified for Intermediate wave 2’s possible movement. All median levels have been surpassed and the maximum level on the most specific dataset is the next target at 4521.44. Remaining duration targets for Intermediate wave 2 are 56 and 62 hours. Hour 56 is the first hour of trading on August 29 while hour 62 is the final hour of trading on that day. If the analysis below is correct, the top would likely occur closer to hour 62.
The first projection to work on is the end to Minor wave C based on the location of Minor waves A and B in yellow letters. The levels to monitor are on the far-left side of the chart. The most specific historical durations yet to occur are at 24 and 40 hours. Hour 24 which is plausible and would occur on or before 1430 tomorrow afternoon. Hour 40 would be the final hour of trading on Friday September 1. The movement extensions point to a minimum of 87.26%, median of 111.365% and maximum of 224.28%. The next set of slightly broader wave data points to durations of 24 and 26 hours after the strongest agreement at 34 hours. The strongest model agreement resides with 34 hours, however, this was the length of wave A and not likely the duration here. Frequently, in shorter duration micro waves, the relationship between waves A and C can be 1:1. Minor wave A in this case was much longer than those observed in micro waves and not necessarily the sought after endpoint here. Hour 26 would be the first hour of trading on Thursday. The quartile movement extensions are 110.40% (first quartile), 126.14% (median), 126.49% (third quartile). All of these have been surpassed at this time. The next historical target is 132.33% and max historical for this dataset is 212.58%. The broadest dataset points to 24 or 34 hours for duration, with 34 hours possibly being ruled out as mentioned above. The quartile extensions are 110.54%, 126.49%, and 172.42%.
The next wave to attempt to place is Minute wave 3 (small green numerals) based on the probable completions of waves 1 & 2. Wave 3 could be complete, but it is better to see where it should complete instead of calling the most recent bar an endpoint. Strongest model agreement for duration is at 6, 11, or 12 trading hours. Currently Minute wave 3 is believed to be at 9 hours. Hour 11 is the second hour of trading on August 30. Wave 3s inside of wave Cs tend to be large and the historical quartiles for the most specific wave data has a minimum move of 128.71%, first quartile of 148.98%, median at 293.64%, and third quartile at 310.56%. It is unlikely the median would be hit in this case, but the first quartile has already been exceeded. The next set of slightly broader data points to a duration of 6 hours, with secondary agreement at 10-15 hours. The movement extension quartiles are 127.17%, 198.80%, and 273.68%. The final dataset has strongest model agreement for duration at 6 hours, then 12 hours, 24 hours, and then 8 and 10 hours. The quartile levels are similar to the ones from the last dataset.
Based on this data, either wave 3 has topped and the market will move down for a few hours into Minute wave 4, or the market will move up to start and then down into wave 4. Once waves 3 and 4 complete tomorrow. If the market moves up toward 4510 and then down to 4485, Minute wave 5 could last around 4-6 hours based on historical data. Additionally, there is a possible prior support/resistance line around 4527/4528 that could be an interesting test. Minute wave 5 inside of Minor wave C tends to account for 31-55% of Minor wave C’s movement. If wave C tops at the potential 4527 resistance, this would mean Minor C could move 53.34 to 94.85 points. 53.34 points added to a hypothetical bottom at 4485 would place the top around 4538. This would mean a Minute wave 4 bottom around 4475 would be more likely to allow Minute wave 5, Minor wave C, and Intermediate wave 2 to top at 4527. Depending how long it takes Minute wave 4 to find a bottom, the end of Minute wave 5 would more likely occur on Thursday. The RSI is high and tomorrow's wave 4 will help it come down a bit before the next near-term market top.
