Thank you for providing that link. I’ve added it to the blog post.

It’s possible we’ve moved now into “Which 5th Wave are we in” if the 4 is finished. We still may be in a major complex corrective 4 (which would hint that the circled 3 was over if so). If we break 800 on the S&P, odds will shift dramatically that we’ll be in a 5th and virtually put the nail in the 4th’s coffin.

I don’t have the Elliott skills yet to distinguish definitively between the circled 3 as being finished or completing.

I wouldn’t go as far as to say a new government will form. I haven’t read Dr. Hugh’s letter.

I tend to be turned off by rampant bearishness and try to play the market one swing at a time and not get caught up too far into the future that I miss developments in the present.

Things aren’t good. And I do think we’ll crack new lows, but once we do, we’ll need to reassess the probabilities then.

I’d rather not say what the final target is. We would be expecting Wave 5 to equal (roughly) Wave 1.

I hate to say it but that’s the way the market cycle works. It starts with investors distrusting the market then headlines are made as price keeps going up and there’s a sense of complacency. Eventually, people will feel so confident that they’ll invest all but that’s often when the market tops – there’s no one left to buy.

Price then begins heading lower and people keep buying more if they can, thinking it’s a good opportunity then finally we get way down like we are now and people just are in so much pain that they just can’t take it so they sell. And when no one is left to sell, there is the bottom.

I kept mocking TV Financial shows earlier this summer when they kept saying the word “Bottom” every 5 minutes. The bottom will occur when the TV People stop using the word “bottom” and start saying “everyone, sell now, this bear market will continue forever” or something.

The only way to learn this truly is to experience it for a cycle or two. The market is a backwards game.

About the analysis paralysis – yes, I definitely have a case of it. After losing money for 6 months (mainly due to impulsive overtrading to make back earlier losses) I made a commitment to learning this and decided to keep most of my trades as paper trades until I demonstrated more competence. That’s worked out well but whenever I go to put real money down I start second-guessing my analysis and looking for further confirmation, which leads to me ending up sitting on the sidelines instead of sitting on tidy profits in my short positions.

My thoughts exactly. There’s pain on both sides. It’s not as easy as “get short, rake in dough” though I wish it was that easy. Bulls are getting gored with at least two recent, valid bull traps but bears aren’t getting the profits that easily either. That’s the nature of corrective waves – they’re horrific to trade.

We need to have at least two or three plausible pathways for price but one thing seems certain – almost all counts have us making new lows sooner than later. If we don’t make those lows, a lot of bears will be burned beyond recognition I’m afraid.

Indeed. I showed a link back to an earlier post of mine which asked that question – which 4th are we in. I’m using this count under the assumption we’ve completed the 3rd. We may not have. If so, we are now in the 5th of the nasty 3rd wave and then we’ll make a decent sized 4th into mid-year that could indeed take us to 1,000 or 1,100 before we break into the violent 5th wave to take us to lower lows than the count I displayed above would show.

I think if we break the 800 level, we’ll see a ‘knife through butter’ trade as that level is carefully watched and guarded by the bulls. If they lose that zone, literally nothing will stop a run to test the lows and then we’ll see what happens there. You’re right – if this is the 3rd, it will take us beneath November then there will be a 4 up and then a 5 will take us to lows beyond that so we have – according to this count – two new lows to be made in price before we can consider the possibility for a bottom.