I think our present little rally doesn’t have a very long life span as we just completed a potential expanded zigzag type of a move. Since diagonal wave structures can act about the same way, which should be ready for some hidden surprise moves as well. In the last year or so I have developed a damn paranoia about markets, reversing and charging to new record highs. Once the entire January rally is retraced we might get a better feel if this market is already over on the bigger bearish side. It’s still better to catch a crash bottom that has turned into an “ABC” crash than not catch it at all.
I’m sure every wave analyst goes through the same situation. This is also a great reason to keep intraday wave counts at the smallest degree levels because it makes us more sensitive to the moves that are going on. We are now on the 5th day of a market meltdown, which many only think is a correction, so buying on the dips is being encouraged. Little do they know that this impending big correction will be the, ” The Mother Of All Dips”.
At every major top in 2000 and 2007, the analysts all mentioned buying on the dips, but these dips turned into Grand Canyon like gorges.
I’m looking for a Cycle degree correction and for a potential 3 waves in Primary degree I would need a specific wave count in order for the entire move to confirm itself.
I need 6 sets of 5 waves in Minor degree, 5 sets of “ABCs” in Minor degree and just one set of 5 waves in Intermediate degree.
Sure, we’ve seen all the fundamentals improve, which is expected in a big bullish price move, but 5th waves are always the weakest compared to wave 3 bullish phase of any bull market. From March 2009 the SP500 enjoyed a 430% gain, which only the true contrarians of this world can take advantage of.
The two major tops since 2000 are all wave three peaks that must be completed with a “higher” degree sequence. 2000 was an Intermediate degree wave 3 peak followed by a Primary degree, wave three peak in 2007 and now in late January, we are faced with a wave 3 in Cycle degree. Sometime towards 2029, we could be faced with a Supercycle degree wave three peak. Each 5 wave sequence leading up to any wave 3 peak must also be in sequence with the right degree. The 5 waves up from the 2009 bottom were 5 waves in intermediate degree, so the next bull market must contain 5 waves up in Primary degree.
Flipping wave counts around like a line cook flips burgers is not an option. Most wave analysts refuse to go back to 1932 and start a fresh count, as that sounds too much like work. Most wave analysts could not draw out an extended wave three because if they did, we sure would not be counting waves in SC or GSC degree.
The SP500 is resuming its downward trend as I post, so get ready for the wild ride to continue.