The above chart clearly explains why the 2000 high is certainly not the supercycle peak. It also highlights the perfect alternation between waves 2 & 4 in time, construction and intricacy(subdivisions).
Due to the extremely low volume(which is typical near or at the end of second waves) the wave patterns since the end of the wave (B) triangle seems difficult to read we are currently at the 50% expansion target of wave A, Here are my two counts. The dashed range shows the price zone of the (2)nd wave of the 07-09 decline which is where you'd look for a second wave of larger degree to terminate (after breaching the 4th wave zone).
This market has been able to remain resilient, to an extent, to the declines in the european bourses which suggests that the above count could prove to be the right count, However I would rather jump out my window off of the 14th floor than buy, even if the second count (the one right above) proves to be correct. This is going to fall and its going to be bad. Look at the longer term Dow analysis posted soon after this blog was brought back to life. Every great story has an ending. The rally from 2009 was indeed a great story, infact it saw the s&p more than double in price, the economy improved and unemployment dropped. I see the euphoria surrounding this rally every day on CNBC... I certainly hope they enjoy it now because as stocks plummit in the near future so will thier viewers due to widely shared feeling of disgust that will arise towards stocks. Most of the people celebrating on TV will have to be laid off due to sharp declines in thier advertising revenues. Thats if they dont shut shop competely.
Another point to note is the sudden rise in speculative targets for Apple(1000+ & 2000+), which is nothing more than a guarentee of an approuching reversal.
Regards,
Ahmed Farghaly
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