If Dow can hold above the 13,000 level, the bottom of sub-wave iv, then the up-trend is not over yet. The current pullback is the wave 2/(v), one degree lower, as shown below.
However, if Dow were to go below the 13,000 level, it is very likely that the mega wave 1 that started in March 2009 has ended. Mega wave 1 of the super wave VII as shown in the long-term chart below.
Projection for mega wave 2
If the 13,000 level cannot hold, the first stop for Dow is likely to be the 12,100 level, the bottom of wave (iv). Dow may have a rebound to form a 'head & shoulders' reversal pattern before its next journey to a major support level of 10,655, the bottom of major wave (4) for a 20% correction. This will tie in nicely with the 20% correction mentioned by Marc Faber recently.
Mega wave 2 can either have a 'shallow side way' A-B-C-D-E consolidation within the 20% margin as shown below.
Or it can go for a 'sharp and shorter duration' zig-zag A-B-C correction. The bottom for wave C can be anywhere between 10,655 and 6,547 levels with the 100% retracement to 6,547 being the worst that can happen.
No comments:
Post a Comment