Hit the target top, now for the bottomIf Intermediate wave 1 is finally done, it was a few days late, but on target. Next forecast is for Intermediate wave 2 which should see the anticipated market decline over the next 5-12 days. This means the bottom should occur prior to May 2. As of now, Intermediate wave 1 was 23 days long. Waves ending in 2BC2 have been 20-50% the length of their first wave’s length. The projected retracement percentages have not change, but the values have slightly as the initial estimates were based on Intermediate wave 1 topping at 4160. The most specific datasets correlate to the retracement levels in light blue. The 33.44% value represents the first quartile of historical movement for waves ending in 2BC2. The median is 60.60% and the third quartile is 77.87%.
The next specific values are in yellow and the are tied to historical waves ending in BC2. The third quartile is not displayed in yellow because it is also the 77.87% from the first dataset. The length of wave 2 based on this slightly larger dataset has it lasting 5-12 days again, with the strongest model agreement on 7 days. This could put the bottom around April 25.
The final set of values are based on a larger and broader dataset based on the behavior of waves ending in C2. These values are in white and the median value is omitted because it is close to the yellow value of 67.86%. The strongest model agreement suggests wave 2 could last 23 days (18 models) followed by 8 days (14 models), 12 days (12 models), and 7 days (6 models).
Declines could be related to earnings and speculation on the Fed which will provide the next rate hike determination and hint toward the future during the first week in May. Based on all the data, I am placing the bottom around 3922-3950. This will depend if the index starts moving down tomorrow or if another new high is reached. After this next bottom we should jump into the final strong rally of this uptrend possibly gaining 350-450 points over the course of 4 weeks. A perfect catalyst for this would be the Fed doing what is expected and hinting at a pause on rate hikes. While I do not agree it is a smart thing to do, it will be one of the many catalysts for the massive declines set to begin around mid-late June. Let’s play the drop, the big gain, and then its prevent defense time (after wave 4 down and wave 5 up).
