Nothing has changed radically in the last few days as the markets have not made a convincing move just yet. Any Fed announcement could still send the markets soaring. Any diagonal 4th wave bottom could still be developing. We have a H&S top which does not inspire me to keep a very bullish outlook, but hopefully by the end of the week this mediocre movie will show its true colors. Many analysts are calling for a correction with many different price projections being forecast.
My question is, “How Big Of A Correction”? We have hundreds and even thousands of corrections in a bull market so knowing what degree of correction is critical. I’m looking for a Cycle degree correction, which could eventually take the SP500 back down to the 800 price level. When the SP500 ever gets there, I’m sure all the experts will no longer call it a “correction”, but they will call it a full blown “bear market”.
We can have crashes without bear markets just like the 1987 crash. In 1930 the markets started a bear market that took two years to bottom so any comparable move could also take just a few years. There is no logic to time when using degree levels as we had a Primary degree correction that took 4 years and a Supercycle correction that only took 3 years! All my stock market wave counts are based on finding the 5 waves in Cycle degree because without them, we have no hope of of moving into the world of SC degree wave counting. I spent years, counting the markets in SC degree, but when we were all missing huge bull markets then this raised some serious questions.
I switched to Cycle degree counting in 2013 and I have not found any need to switch again. We can dick around with wave position gymnastics at the smallest degree level, but they mean nothing if we keep missing bull markets.
This market has to produce lower highs, and lower lows with all rallies having a limited life span. This is how conventional wisdom is called a bear market.
My updates are going to be sporadic this week as I have many other things that need my attention, but I will update when I can.