Yesterday's sharp rally is typical in a bear market, but appears to be short lived. With the decline this morning, it has created a clear 3 waves up on all the major indices. It could unfold in a more complex correction by rallying more, but it will be just that, a correction. The above chart shows a possible 5 wave decline unfolding. It's even possible to count the drop into yesterday as a 5 wave decline, which would have the rally yesterday into this morning as a wave 2 rally. But that would mean we're in a wave 3 down now and the market internals and movement does not support that. So I favor the above count for now.
Nothing has changed in my forecast. The market is on its way to breaking 740, the low of 2008.
2 comments:
Do you think this correction rally will last til Obama step into office at 12 pm on 1/20?
See my latest post "large strong rally phase underway"
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