I'm taking today's low of 1101.54 to be the end of subwave 3 of 3. The entire decline from the August 1 top of 1307.83 is 206.29 points. Standard retracements would take subwave 4 to these values.
Today's close of 1172.53 is between the .33 and .38 retracement levels.
Let's say it tops early tomorrow at 1180, a retracement of about 79 points. Subwave 1 down was only 64 points. If subwave 5 is 1.62*subwave 1, then it would cover 104 points, and wave three would bottom at 1078. With waves 4 and 5 ahead, an endpoint in the 1000 to 1050 range for this entire leg should be within easy reach. This will take a few days to play out.
Update: In comments, Susan asks if I factored in Europe. I didn't. But go to Yahoo Finance and check out the Dax, The Nikkei, the CAC. This is not just a U.S. experience. Stocks are crashing everywhere (and mostly had counter-current recoveries today.) This only serves to reinforce my strongly negative stance.
Update 2 (10:10 a.m. Wed, 8/10): Yesterday's close at 1172.53 was indeed the top of subwave 4. Subwave 5 is in full force. The SP500 gapped down to about 1144 at the opening and is now at about 1132, a drop of 3.4% for the day - in the first few minutes. It's pretty interesting to watch this unfold from the sidelines.
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2 comments:
Are you factoring in Europe?
S
Nope. This is just the S&P 500, all by its lonesome.
Cheers!
JzB
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