Stepping back for a minute .... if we are not going to new all time highs in this rally that started in 2009, then we are in a "B" wave on the D-Wave Quarterly chart. The monthly chart shows that a possible A-B-C sequence has completed at the May 2011 high. This zig-zag interpretation is favored since the monthly RSI topped out in the zone reserved for bear market resistance. With that assumed background, the weekly chart shows that an A-B-C or 1-2-3 structure has formed from the May 2011 high. These D-Waves match (in this particular instance) the price pulse x and y pulses shown on the chart. Since the RSI has broken below 38 I favor the bear market 1-2-3 D-Wave count.
Note that the May 2011 high was associated with the failure to make a qualified break of the risk level associated with the completed sequential sell countdown of February 18, 2011. In retrospect, this analysis results in viewing the five months from February 18th to July 22nd as topping action. Since then we have confirmed the the break of weekly TDST support (horizontal dashed green line) at 1219.50. This strong market decline has been the Z-pulse of the price pulse model. Recall that the Z-pulse often contains the sharpest declines as the Delta-pulse often contains the largest rallies.
Simply put, the cash SP500 is now in a bear market at this time frame. Note that the low of August 12th came right at the 38.2% retracement level of the 2009-2011 rally. One week later the RSI bounced off of the level reserved for support in bear markets and the Composite indicator made bullish divergence with the RSI. This suggests either a bounce or consolidation is underway. I favor the consolidation scenario in a D-wave fourth wave.
Bottom Line: At this time I think the levels to watch are the long (green) moving average and the Demand Line (dashed green line). Qualified, confirmed breaks of these lines would point to; respectively, either a bounce (vice consolidation) or renewed decline. The allocation meter is at +25% and I am expecting the August low to give way after this consolidation/bounce completes.
2 comments:
Fully agree with the ABC read on the weekly. It has provided good background clarity while so many E Wavers are fussing over how to read the Primaries, Intermediates, Minors, Minutes, etc.. One of the advantages of D Wave is being able to easily jump time frames to get a better and more consistent angle on things. Very good post and good to see you back.
Thanks and glad you are back!
Post a Comment