Although the outcome may be better or worse this time around, the pattern unfolding is nonetheless hauntingly familiar.
As it was 4-months post high back in
February of 2007, the move down from the current all time high is thus far
corrective in nature. The down-arrowed red trend lines mark lines-in-the-sand, from
which all hell will break loose if decisively breached amid a bearish monthly
close south of said border.
For comparative reference, if the top is in place at the 2015 May
high, and we have a precise replica of the last bear market, in terms of
duration, the Dow won’t be nearing a bottom until October of 2016.
A similar “percentage” decline will pummel the Dow way back down toward
its secular uptrend line near the 8360 level. A similar “point” decline will
send the Dow down toward the 10,000 handle. The three garden variety Fibonacci retracements
rest near 13,800, 12,400, and 11,000 respectively – all well below current
levels.
On a bullish note, there remain two outstanding upside price
targets that have yet to be achieved. The two remaining upside targets are
18721 and 19725 respectively. It is always possible that the recent move down
is only that of a (4) wave of intermediate degree that when complete, will lead
the Dow back up to fresh all-time-highs.
In closing, the questions everyone needs to be asking themselves
right now are; “am I feeling lucky,” “should I just let it all ride for the
long haul,” and “what can I do to protect my capital if things really get ugly”
– and “when should I do it.”
The Long-Term
Trend Monitor provides participants with
unbiased guidance in this realm, and has an outstanding record of successfully navigating
long-term market trends, especially at junctures such as these.
Until Next Time,
Trade Better / Invest Smarter
The Chart Cast Pilot and Elliott Wave Technology’s Guardian Revere Long-Term Trend Monitor are the proud sponsors of this communication.
