Gap Down Thursday, Up Fri, Down Monday?We will try to fit a few analyses into this one. First and foremost is forecasting the end of Minor wave 3 assuming Minor wave 2 ended in the first hour of trading on September 11. Based on historical models for Minor wave 3s inside of Intermediate wave 3s, the minimum movement extension was 119.45%, quartiles are 144.66%, 160.615%, and 197.56%, with a max move at 261.87%. The models agree the most on a durations of 15, 22, and 25 trading hours. Secondary agreement is at 16, 23, 28, 38, and 46 horus. A broader set of data based on waves ending in C133 has a minimum at 147.27%, median of 200.135%, third quartile at 209.98%, and maximum at 350.33%. The duration models agree the most at 21 trading hours with secondary at 42 hours, and third scattered at 13 and 25-38 hours. The broadest data has quartile movement extensions at 141.03%, 180.29%, and 230.56%. Duration models agree the most at 21 hours, secondary of 42 hours, third at 28 hours, fourth at 18 hours, fifth at 35 hours. Minor wave 3 levels are on the right.
The market is moving quite slow to hit any of these levels which eludes to two obvious choices: 1) The market is not in Minor wave 3 yet; 2) A large drop is coming within the next few trading days. The first theory would be confirmed if the market moves above 4490.77 before breaking below 4430. The second option would likely see a gap down at the open on Thursday, Friday, or Monday. The low so far was 14 bars into the purported Minor wave 3. The market close on September 13, was hour 20. The high end of potential lengths was 42 hours which would occur on September 19 in the first hour of trading. Based on this data and assuming Minor wave 3 is correct, the bottom could occur early next week around 4350.
If the current low point in Minor wave 3 was the end of Minute wave 1, and the top a few hours later was the end of Minute wave 2, then Minute wave 3 could do the following and the levels are outlined on the left. Based on Minute wave 3s in Minor wave 3s in Intermediate wave 3s, the quartile movement extensions are 121.14%, 143.025%, and 193.34%. Duration models agree the most at 6, 10, 12, 17 and 36 hours long. Secondary agreement is at 8-9 and 18-35. Based on waves ending in 1333, quartile movement extensions are 148.92%, 182.64%, and 276.57%. Duration models agree the most at 12 and 14 hours with secondary at 28 hours. Third is 24 hours while fourth is 8 and 18 hours. The broader dataset has quartile movement extensions are 148.35%, 183.46%, and 247.14%. Duration models agree the most at 14 hours, second at 12 hours, third at 8 and 28, fourth is 16, fifth is 24 hours, sixth is 42 hours and seventh at 6. Minute wave 1 may have been 14 hours, and the same for Minute wave 3 would place the bottom in the first hour of trading on Friday. The path to Minor 3 still looks do able but it would have to start with a gap down tomorrow, likely based on an increase in the August PPI number. Minute wave 3 could bottom in the final hour of trading on Thursday or within the first hour on Friday below 4420 before the market rises the rest of Friday to end Minute wave 4 and the final Minor wave 3 bottom is set for late Monday or early Tuesday. Any deviation to this plan should invalidate the current wave positioning. Minor wave 3 could be a little longer and drawn out, but it would require a deeper bottom than the projected 4350 neighborhood.
