We can go with an Elliott wave based view even supposing March '09 low will hold for some years coming, and yet an outlook anticipating a train wreck remains technically well-substantiated. The above Elliott wave count is one we have covered here before. Alterations made in identifying component waves of wave (b) of B are but slight.
The Elliott Wave Principle's "alternation guideline" finds expression in the components of wave (b). Wave a of (b) is a simple, 5-3-5 "zig-zag" down from May 2011 peak, whereas wave b of (b) forms a 3-3-5 "running flat" up from October 2011 bottom. Five waves forming the "c" wave of wave b of (b) higher have just about completed, as well.
This same "alternation guideline" also finds expression in the corrective wave forming in the Dow Jones Industrials since Y2k. Wave A formed a 3-3-5 "flat" down, ending March 2009. Wave B could be projected to form a 5-3-5 "zig-zag" up from March '09 bottom.
Of course, this view toward wave B could be subject to refutation sometime in the future. It could be that, forming off March '09 bottom is an "x" wave: a "connecting" Elliott corrective wave forming "any three" appearing within a "complex" Elliott corrective wave form. You will recall dynamic overhead resistance the S&P 500 has been and continues bumping up against. This resistance very well could persist over coming years going into the 2017-2018 period. Should this occur, then a case for an Elliott "x" wave forming off March '09 bottom would be a higher probability. Subsequent to its completion we might look for a 5-3-5 "zig-zag" down unfolding, this alternating from the 3-3-5 "flat" already formed from January 2000 to March 2009. As ever, the ultimate downside target of the corrective wave forming off the Dow's Y2k peak is the range in which the index traded in the 1987-1994 period. Bigger picture, the Dow's advance, and the broader market's, too, going all the way back to 1932 presently is seen in the midst of "correcting." Truly, a sinking to the 1987-1994 period will not upset the markets' uptrend since 1932 and before that, as well.
Returning to the here and now, just look at the Dow's current technical state. This is what every mindlessly cheering media squeaker positively ignores. Insanity over the Dow's new all-time record rather appears technically exposed a seedy endorsement. Of course, this being a manner all too typical these past couple decades, who but me should play a real fox watching over the chicken house?
What we see above is the stuff bringing an Elliott analyst to conclude "something's not right." This conclusion is typical of "b" waves. There it is in living color accompanying the "b" wave up from early-October 2011 bottom.
Relative strength? Seen better days.
This is a train wreck waiting to happen...
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