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Saturday, August 1, 2009

August 2009 Forecast Bull or Bear?

How long more will this Bear Market Rally continue?

When will Phase 3 of this Bear Market start?

Will a retest of the March 6 2009 low occur in 2009, 2010, 2011, 2012 …..?

Will the March 6 2009 low hold?

Hmm... these are million dollar questions!

I need to take a deep look into my Crystal Ball for the million dollar answers! Oops!

For now, let's review the Elliott Wave Counts. Now there are 3 alternate wave counts. Wah! So complicated one!

  1. Wave C up will be 5 waves, wave 1 up looks topping out.

  2. Wave C up will have 3 waves, wave A up looks topping out.

  3. Wave C of Wave 4A (Phase 1) looks like topping out, next will be Wave 5A (Phase 1) down.

Which will be the correct wave count?

I guess we will know the answers by looking at the Chart Pattern!

Remember I mentioned some experts were very bullish when they see the inverted Head and Shoulder Pattern. Did you notice there is another bearish Chart pattern?

Yes, few experts noticed this Bearish Expanding Triangle Pattern.

Here's my guess:

  1. If a major correction occurs, the triangle support line is broken and rebound is no where in sight, then likely rally has ended. Possibly Alternate 3 Wave Count is in play.

  2. If a major correction occurs, the triangle support line holds and rebound, the rally might continue. If the rally hits the triangle resistance line, drops and break support line, then likely end of rally. Possibly Alternate 2 Wave Count is in play.

  3. If a correction occurs and rebound, the rally might continue. If the rally hits the triangle resistance line and breakout, likely Alternate 1 Wave Count is in play.

Look at the Dow, S&P500 and Straits Time Index Charts attached – Bearish Expanding Triangle Pattern labelled as wave counts A, B, C, D, E in Straits Time Index. Note the forecast is not drawn to scale!

Still confused? Lookout for Stock Market Forecast for August 2009 – coming soon!

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Bruce said...

On the short term of the daily STI chart, the momentum indicators are turning down. With the pricing price, it looks like a divergent setup. High chance there will be a pull back next week up to National day, plenty will take profits and take a break...I see the STI pulling back to 2430 and may break if your elliot count comes true...I will hate to be in the market next week on long positions...


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