The last hurrah is here. All aboard to 2400As projected yesterday, Intermediate wave 4 could be complete based on the early morning low on June 8. There is a slim chance Minor wave B inside of Intermediate wave 4 is the current location, but that will be invalidated if the index goes above 4300 tomorrow.
To recap. Intermediate wave 1 was 25 trading days and gained 360.62 points. Intermediate wave 2 dropped 121.2 points over 12 days for a retracement of 33.61%. Intermediate wave 3 then gained 251 points over 21 days which was a price extension of 135.99% from the starting point of Intermediate wave 1. Intermediate wave 4 was likely completed today and would have retraced 15.22% of wave 3 by only dropping 38.21 points over 3 days. I am surprised by the accuracy of the models to project such a shallow drop over very few days in Intermediate wave 4 but the historic data was spot on. I put is in Sub-millennial wave 1, Grand Supercycle wave 5, Supercycle wave 2, Cycle wave B, Primary wave C, Intermediate wave 5. I use shorthand to call it 152BC5
Intermediate wave 5 must now be less than the 21 days of Intermediate wave 3 as wave 3 cannot be the shortest wave. Based on models ending in 2BC5, strongest model agreement is on wave 5 to last 2 or 17 days, second most agreement is at 4, 5, and 18 days. The quartile movement extensions based on Intermediate wave 3’s movement (light blue lines) are 121.05%, 153.2%, and 186.17%. The first quartile of all historic movement reverses after a move to the 121.05% level which is 4352.12. The median movement reverses after a move to the 153.2% level which is 4432.81, while the third quartile is at 186.17% which is 4515.57.
Based on waves ending in BC5, largest model agreement places the length at 5 trading days in length, second most agreement is 6 and 18 days, third is 3, 4, 10, and 12 days. The quartile movement extensions (yellow level) are 122.06%, 137.71% and 153.2%. Final projections are based on waves ending in C5 where largest model agreement has the length at 4 days, second most at 6 days, third most at 5 days, fourth at 12 days. The quartile retracements (white line) 109.46%, 122.9%, and 151.06%.
There are also two major resistance lines in play. One stems from the end of Primary wave A from December 1, 2022 and aligned with the Intermediate wave B top from Primary wave B on February 2, 2023. The other trendline has been solid resistance since February 21st and the market never closed above it since then. If this second trendline proves the fatal resistance, it could be tested as late as June 26 around a level of 4352.12. If the first resistance line is the fatal level it could be around 4393.93 and achieved as soon as the day of the next Federal Reserve meeting on Wednesday.
I dramatically call this next top a fatal level in that I expect it to be the final market top for many years. This will be the end of Cycle wave B and a continuation of the Bear Market which ultimately topped on January 4, 2022. I am projecting the length of Intermediate wave 5 to last between 4 and 12 trading days. I have three key dates which could contain the top based on the historical data above. Day 4 is the next Federal Reserve rate decision on June 14th. Day 11 is June 26th where nothing major appears to be occurring which is the same on July 5 or Day 17. I do not expect the top to surpass 4410 and could possibly top out around 4393. 4393 is within 100 points from today’s close which means Intermediate wave 5 will likely be very fast. The TVC:VIX is very low right now and a huge indicator of complacency in an economy that is quickly slowing and on the immediate verge of higher inflation and/or recession. A break above the second mentioned resistance trendline may get the bulls fired up but I am 95% certain it is a false breakout and bull trap.
My initial calls for the bottom are around December 2024 somewhere between 2200-2400. I have been projecting this entire run up and final bottom since July of last year with pretty decent accuracy. I am using math, statistics and history to project forward market movement. I have figured this next drop could revolve around China taking Taiwan and disrupting the world’s microchip supply. Not sure if this happens next week but it could still be an issue that further escalates the selling over the next 12 months. There is a chance the US economy is heavily impacted now that students must continue paying their student loan debt and thus not spending money on luxury items or other facets of their daily lives. There is also a chance of Russia doing something exotic in Ukraine to attempt to upend the conflict. And as always the other black swan event most people have not seen coming. Metals will likely become more expensive and most companies selling luxury goods that are not necessary will get crushed (I am thinking NYSE:DIS and NYSE:DRI here). Casinos and gambling websites could have issues sometime next year when money starts to get very tight and people can not afford to make the gambles they will likely take in the beginning. Some companies will outright fail and go bankrupt while others will be forced to slash prices to remain relevant once the world comes out of this recession. Don’t panic, invest wisely.
