Dow dropped 102 points to 16,613 on Wednesday and it has dropped another 140 points after 90 minutes of trading on Thursday morning. The index is hovering around 16,473 level at this moment.
With these drops, I can forget about Dow breaking the 16,800 level as mentioned in my previous post. It is more likely that Dow is forming the wave e of its wave (xii) as shown below.
Wave e is usually quite unpredictable, it can fall short and it can also over shoot. I expect Dow to complete its wave (xii) by end of May. Wave (xiii) may take another one to three months to complete.
Since wave (xiii) can mark the end of major wave (5) or the end of mega wave 1, the correction after wave (xiii) can be either major wave (6), a 11% drop or mega wave 2, a minimum 35% drop. Be careful my friends.
Another possibility is the major wave (5) has more than 13 waves then we will have wave (xiv), (xv) and (xvi) and so on, the up-trend just continues.
To Nouriel Roubini,
" ......... We are in the beginning of a credit bubble .........".
"The risks won't build until about a year or two down the road."
Click 'Nouriel Roubini' for the article published on 8th May 2014.
If he is right, we can forget about the mega wave 2 for the next 1 to 2 years.
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