Back to 4400 Before Christmas, Down to...Assuming Minor wave C finished Intermediate wave 4 on Tuesday, next stop is the end of Intermediate wave 5 down. All models and the derivative analysis points to a very quick drop. Preliminary target bottom is 4179 before the Fed meeting. The full, yet narrow target bottom is the white box below. Once Primary wave 1 is finished (Intermediate wave 5 ends it), the market will see-saw upward for possibly a month and a half. The projected up and down is more of a perfect world scenario. The actual ABC waves will likely vary. The endpoint of Primary wave 2 is actually based on Primary wave 1 ending at 4179.50 on October 26th. I was surprised to see the models limit the Primary wave 2 high at 4400. That is basically where the market just was and it will drop about 200 points en route to 4400. The Primary wave 3 drop after 4400 should be pretty significant with lows likely below 3700 over 5-8 months.
I will continue to updates the forecasts as each micro wave completes. It is most interesting to see if Intermediate wave 5/Primary wave 1 complete in the target box as this was based on the new derivative analysis modelling I created. The standard deviation of historical data was very small, which hopefully means relatively accurate.
I currently have AAPL 170 and SPY 431 puts for November 3rd expirations as a test of these new models.
METHODOLOGY:
I operate a modified wave theory composed of Dow Theory and Elliott Wave Theory. All data is determined from comparing current wave locations with historical wave relationships. The listed percentages are based on previous movement extensions and retracement quartiles of the data. There is too much data to list all points but overlap of the quartiles based on specific relationships tends to point to more likely targets. The light pink levels are based on most specific data, light blue is slightly broader, and yellow levels are the broader set of data used. A red level typically indicates maximum historical move for the current wave throughout the historical data.
Derivative models take the annotated waves from the above methodology and compare specific ratioed-relationships to predict future movement based off of smallest standard deviations in processed models. ***Currently in beta testing to determine efficacy***
