As mentioned in my previous post, Larry Kudlow (there are many more economists) has declared the arrival of a bull market, I still like to maintain my bear market's wave B rebound hypothesis mainly due to the lack of volume and dynamism. Wave (III) of a bull market usually has a volume higher than wave (I) especially if it is an 'inverted head and shoulders' breakout.
Before end of July, I was expecting wave (III) to consist of 5 sub-wave as shown above to take place. However, there is no sign of wave 2 so far, buyers always emerged at the end of the session to push prices higher. Is the market being manipulated? or as mentioned by Vince Farrell, "there is $11 trillions sitting on the sidelines".
Hopefully wave 2 as shown above can come earlier, if wave 1 keeps on extending and has gone too high with low volume, when the correction finally comes and if with high volume, we will have to watch out for the scenario as shown below - major wave B ended with a failure wave (III). We have a single wave (III) instead of having 5 sub-waves for (III).
This scenario is unlikely at this stage. Look out for sub-wave 2 pullback and monitor closely, it should last for 5 to 7 sessions with lower volume. Larry Kudlow is definitely looking for high volume when sub-wave 3 comes, the higher the volume the better.
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