From a mega perspective, following what I have discussed in my previous posts, with the latest chart formation, chances are high that the rebound since March 2009's low is a bear market rebound. A typical rebound wave whether it is a wave 2 or a wave B, usually it consists of three waves 1-2-3. From the low, so far wave 1 and 2 have been completed. Dow is currently in wave 3 that may last from about 1 months to about 3 months until October, depending on the gradient.
This is a Mega wave (IV) scenario with either a triangle a-b-c-d-e formation that can drag over 10 years or a flat a-b-c that takes 6 to 8 years to finish.
A second scenario is assuming that the Mega Wave (III) has yet to be completed. The bearish A-B-C corrective wave is a major wave 6 in the making, which many analysts have been talking about. The rebound since March 2009's low is a major wave B rebound and Dow is currently on wave 3 of the major wave (B) as shown below. Watch out for the completion of (B).
A-B-C corrective wave can take many forms. The Zigzag A-B-C as shown below is the most damaging version.
Less damaging versions are Flat ABC and Contracting ABC. Flat formation will have B rises to the level of wave 5 with C terminates near wave A level. A contracting ABC will have B stops at a level lower than wave 5 and wave C staying above wave A.
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