Wednesday, June 17, 2009

Expecting a bounce tomorrow

With today's move off of the bottom, it looks like we have started our wave 2 (or b) off of the high. The move down sports a very nice 5 wave move down, which means that there should be much more to come. I'm looking for any rally to be contained in the SPX 920-940 zone. This will be the area that I will be looking to add to my short position.

Should we break today's lows tomorrow, then look for support to come in at 890 and then 875.


  1. Hi Rich,

    Apologies if this is a repeat question, but i seemed to have lost my post. My question was that you seem to be calling the recent high, the end of Major/Intermediate Wave A in Primary Wave B/2.

    This means you are saying that we have started Major/Intermediate Wave B that will go to around 720 on the spx followed by a move higher to around 1100 which will then complete Primary Wave B/2. This will then be followed by Primary Wave C/3 down past march lows of 667.

    There is an alternative wave count which believes that march lows till last weeks highs was the end of Primary Wave B/2 and we have started on Pirmary Wave C/3 which will bring us past march lows.

    Can you pls comment on this alternative count coz i am really grappling with both scenarios and would like to get your inputs.

    Thanks very much.

  2. bobbyd - glad you're enjoying the charts ;-).

    suresh - have you checked out my chart that is on right bar of the site:

    Essentially, we are in a grandsupercycle correction that either started in 2000 or 2007 depending on how you count it. Regardless, it doesn't impact where we are in our current count and would only impact the final waves at the very very end.

    With that said, we kicked off a primary wave correction off of the 2007 high (see, which after 5 waves will form the larger supercycle wave C.

    Now, the top we just put in, could be the end of primary wave 2; however, the reason that I do not have a high level of confidence is that primary wave 1 lasted 17 mo, and primary wave 2 has lasted a mere 3 mo and has not retraced even 38.2% of the primary wave 1. That is not enough of a correction in terms of price or time to provide a high degree of confidence. Does that mean that primary wave 2 hasn't finished? Certainly it may have, but the waves should tell us as they will infold in an impulsive manner on the way down.