With the INDI breaking below the low from Friday a week ago, the nested 1-2s count is off the table, and we’re back to the irregular flat count, which I suggested early this year (here and here). Then the SPX 1920 was suggested as a possible target. But, however, that may be a bit too much. Looking at the INDU we can see some nice Fibs (click picture to enlarge):
- green minor c=a, from b: $17,150
- green minor c=1.236x a, from b: $16,935. which is also the (red) 50% retrace of the mid-October to early December move
- green minor c=1.382x a, from b: $16,780, which is also where the 100% extension of Primary I resides
- green minor c=1.618x a, from b= $16,560, which is around the yellow trendline. Note that the (red) 62% retrace of the mid-October to early December move resides at $16,700.
I realize this is quite the target range, but corrections are inherrently difficult to predict since they can take on any form or shape. Note that the c=a extension implies that a bottom is very close. Note also how price closed below the white lower long term trendline, which suggests the yellow line may be next. However, I am keeping an eye on the blue 100% extension to see how price reacts from there. For now all TIs on the daily and weekly time frames are pointing down, suggesting lower lows to come. Regardless, that will be a very buyable low since major 5 will be fully underway by the time new ATHs are reached. Yes, 2015 will still be a great year; it’s simple just of to a slow start (go slow first to go fast later!)