Look Out Below Market Trends Up This Week
Working on very preliminary theories of where we could be based on the movement so far. Check out my last analysis from a month ago to see why I thought we were due a major market correction.
Theory has us in:
Supercycle 2, Cycle wave 1, Primary wave 1, Intermediate wave 2.
Assuming we are in the very early stages of a large macro level wave 1 down (Cycle 1), we are likely inside the first wave (Primary 1) of that movement. We may have just completed Intermediate wave 1 down, however, the pace was so fast it may still be early in Intermediate wave 1.
The wave 3 reversal indicators signaled much more than normal which means they all called the end of the impulse waves correctly, or the first group in the currently marked Minor wave 1 was inaccurate. As it is laid out now, Minor wave 2 retraced around 50% of wave 1's drop. Wave 3 extended nearly 161% of wave 1's movement. Wave 4 retraced nearly all of wave 2's movement and wave 5 extended nearly 261% of wave 3's movement. These are all close to Fibonacci movements commonly used for identifying reversals. Although Minor wave 3 as marked is short at just 12 bars long, wave 5 was 11 bars long (as marked) maintaining a wave principle on 3's length. There is enough here to consider Intermediate wave 1's movement complete. Confirmation of this theory should occur if Intermediate wave 2 sees general upward movement over the next week. Intermediate wave 1 currently measures 82 bars. 38.2% of this length is 31.324 bars, so I have rounded up to 32 bars for a premature potential length of Intermediate wave 2.
As far as real world catalysts, the primary earth mover is likely in the Middle East. The world is bracing for a coordinated Iranian strike against Israel. A few articles today mentioned the Tisha B'Av which takes place on August 12-13 as a potential retaliation date. This would begin around bar 33 for Intermediate wave 2.
IF we truly are in the early stages of a wave 2, a third wave with a simple common wave extension of 161.8% would place a low at 4731.93. The next normal wave 3 retracement at 261.8% would put a low at 4150. IF we are truly in a longer term major bearish cycle, 4150-4731 is a normal move here. A catalyst to get the market there could be significant unrest in the Middle East capable of not only disrupting energy supply, but shipping, manufacturing, and elevated geopolitical tensions.
Theory has us in:
Supercycle 2, Cycle wave 1, Primary wave 1, Intermediate wave 2.
Assuming we are in the very early stages of a large macro level wave 1 down (Cycle 1), we are likely inside the first wave (Primary 1) of that movement. We may have just completed Intermediate wave 1 down, however, the pace was so fast it may still be early in Intermediate wave 1.
The wave 3 reversal indicators signaled much more than normal which means they all called the end of the impulse waves correctly, or the first group in the currently marked Minor wave 1 was inaccurate. As it is laid out now, Minor wave 2 retraced around 50% of wave 1's drop. Wave 3 extended nearly 161% of wave 1's movement. Wave 4 retraced nearly all of wave 2's movement and wave 5 extended nearly 261% of wave 3's movement. These are all close to Fibonacci movements commonly used for identifying reversals. Although Minor wave 3 as marked is short at just 12 bars long, wave 5 was 11 bars long (as marked) maintaining a wave principle on 3's length. There is enough here to consider Intermediate wave 1's movement complete. Confirmation of this theory should occur if Intermediate wave 2 sees general upward movement over the next week. Intermediate wave 1 currently measures 82 bars. 38.2% of this length is 31.324 bars, so I have rounded up to 32 bars for a premature potential length of Intermediate wave 2.
As far as real world catalysts, the primary earth mover is likely in the Middle East. The world is bracing for a coordinated Iranian strike against Israel. A few articles today mentioned the Tisha B'Av which takes place on August 12-13 as a potential retaliation date. This would begin around bar 33 for Intermediate wave 2.
IF we truly are in the early stages of a wave 2, a third wave with a simple common wave extension of 161.8% would place a low at 4731.93. The next normal wave 3 retracement at 261.8% would put a low at 4150. IF we are truly in a longer term major bearish cycle, 4150-4731 is a normal move here. A catalyst to get the market there could be significant unrest in the Middle East capable of not only disrupting energy supply, but shipping, manufacturing, and elevated geopolitical tensions.
Nota
A new target is in sight at 5390 region:
Nota
We will have to see what the overnight brings and the PPI number in the morning. Based on my prior analysis, the current top was slightly early and below my suspected target of 5390. It is possible the upward movement is done, however, a "good" PPI number or calming of Middle East tensions could thrust the market higher. I am still bearish, but anything is possible.
As it stands right now the large wave B retraced 73.14% of Wave A and Wave C extended 109.396% of Wave A. Inside of this Wave C, Wave 2 retraced 64.46% of Wave 1 while Wave 3 extended 331.75% of it. Wave 4 retraced 30.80% of Wave 3. The current top would have the fifth and final wave extending 114.294% of Wave 3 which can be close to a common Wave 5 extension of 114.6%. As it stands, this second macro wave did not quite retrace 50% of macro wave 1.
Tomorrow will determine if wave 2 is over and the market is heading down, wave 2 is not finished the market briefly moves higher before reversing downward, or we are not in a wave 2 at all and the market is ready to run toward all-time highs once more.
All forecasts are based on analysis of past behavior. Prior movements are not always indicative of future movement. Develop the theory, test the theory. Do your own research. Nothing in this analysis constitutes advice. YouTube For More. Good luck!!
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