Homing in on market topIf we are in the final Intermediate wave 5 up in Cycle wave B, it is possible we are in the final Minor wave up (wave 5) as well. This would mean Minor waves 1 and 2 lasted a single day, wave 3 was 2 days and wave 4 was 3 days. The original projections for Intermediate wave 5 are the vertical white lines marking the end of day 10 and day 12 as well as the movement extension levels to the outside right side of the chart above. The inner extension levels relate to Minor wave 5’s movement in relation to Minor wave 3 as described below.
Based on waves ending in BC55, the length of Minor wave 5 has strongest model agreement at 1 trading day long, with secondary at 6 days long. All models point to a possible extension of Minor wave 1’s movement to place the top around 4519. Based on models ending in C55, strongest model agreement remains at 1 day long, secondary is 2 days, third is 3 days, fourth is 5 or 6 days. The quartile extension levels are 114.82%, 139.60%, and 148.58% which are represented by the yellow lines. Finally is the data for waves ending in 55, wherein the models strongly point to 1 day, then 2 days with third agreement at 3 days. The remaining models are not close and pick up at 5 days.
These leads me to believe that Minor wave 5 will likely not surpass 3 trading days in length which places the top on or before the close on Tuesday July 11. Comparing the levels for Minor 5 and matching the levels from Intermediate 5, the top will not likely occur above 4520. Best guess is the market closes the final gap created yesterday and likely tops out around 4484 and possibly no higher than 4500. CPI number comes out Wednesday before the open. There is strong belief the Fed raises rates again soon based on the jobs report from yesterday. A CPI reading with an equal or higher number would all but cement this fact meaning a new top would not occur on Wednesday and would occur Tuesday at the latest. The market will likely close the gap today or it already has which could make this Minute wave 3 up. The day could close stronger, a slight pullback could occur Monday and the final top would be Tuesday.
The Fed does not meet until later this month which would mean CPI would likely need to increase in order to spook the markets enough to cause the top now. Many companies have loads of debt that can no longer be refinanced at next to 0% interest levels which will further cause a sell-off and degrade their already inflated evaluations.
