Borrowing this 1987 Crash chart below from Martin Armstrong.
As can be seen the 1987 crash was an ABC wave, where the devastating collapse came as wave C.
I think the risk of a 1987 style crash now, is much higher than a P3 down event.
I am saving P3 for when the US bond market revolts. This is just Greece.
Prechter sure did misinterpret the wave C as P3 down in 1987. If he does it a second time, it will be a charm.
Note how wave C was disproportionately larger than the A and B waves. We may have a similar situation right now where the Intermediate (C) down, kicked off at 1371. We may just be finishing Minor 1 of (C) as a knee jerk reaction. Minor 2 is a relief rally and then Minor 3 is the recognition and contagion. To be followed by Minor 4 & 5.
We would need to get at least a 20% correction before the Fed decides to intervene.
@ 4 PM
That may turn out to be just minuette i of Minute 5, and not the whole Minute 5.
@ 12 Noon
i looked today...looks like during the kick-off to Primary 1 down -- MINOR 1 down covered about 160 points.
ReplyDeleteWe're currently only about 110 points down from the high. All this you probably know...i guess it tells me that if we are to get a ripping 3 of 3 wave lower...it's about due in the next 1-3 trading days.
The Minute 5 in the chart above can certainly extend.
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