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Sunday, September 11, 2016

Sunday, 9/11/16 update

Awfully heavy hit on equities on Friday - down 53+ on the SPX, NYSE declines over advances by 17 to 1 and down volume over up volume by 27 to 1!  Very strong.

Last update proposed a 4th wave expanding diagonal in progress with a quick 5th wave yet to come.  Obviously that's not happening.  Looking at the pattern of recent weeks there are all sorts of possible counts.  One of those possibilities is that the 5th wave anticipated in the alternate referenced in the last post has in fact occurred.  Reworked count using that idea is as follows:

Hourly bars

Daily bars

If this count is the one that is in play then the ES is in Primary W IV which should be a significant decline - several months and several hundred points.  A prior 4th wave of lower degree is the usual target for a 4th wave, in this case Major W4 bottomed around ES 1800, so that would be where Primary W IV may be headed.

The main alternate here would be that the top that was established in August was Minor W1 of Inter W3 of Major W5 as below:

In this case the ES is in a 2nd wave which should bottom relatively soon with far less damage than the 1st alternate proposed earlier.  A continuation of the bull market in the form of Minor W3 should ensue.  This count is invalidated with a drop below the starting point of the proposed Minor W1 at ES 1981.50.
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