The crash today should start to wake some of the permabulls up, and give them pause as they fret about how deep this bear market can go. I will work it as a bad impulse for now, as the last rally peak is now confirmed as being a bearish rally. Complete retracement helps to confirm the inverted pattern. A very steep drop can happen in a bull market as well, but in potentially diagonal declines waves they can do the same thing.
Otherwise, this can be mistaken for one single zigzag crash. I don’t think this is the case but, I like to keep my options open.
Mr Steven Jon Kaplan has already Tweeted, in what he expects from the impending bear market, and we are not that far apart, in price or time. At this time the markets are still heading down, so any wave three type bottom, may still be some time away.
It may take until the counter waves are much bigger before, I can where the zigzags are connected, but ultimately we want to catch the “A” wave bottom in Primary degree. It may take an Intermediate degree zigzag to get there.
On the bearish side, we could see huge drops that defy logic, but confirm that gravity is a real science. Somewhere down the line the public may scream “Black Monday” or any day of the week, which may actually be the end of the “A” wave bear market.
We still have a long way to go, so surprises can jump out at us at any time. All the traders betting this market to go down, will be leaving “buy” stops above all present prices. We can see many of the sell stops got hit in a domino fashion, producing the straight down move we had today.