When you want to send a big file to someone you zip-compress it. The markets have zipped a crash and recovery (maybe) into 31 days, if you can believe that. Faster than the fastest hands at the good old shell game the market compressed an 15.84% downwave into 14 days, then compressed a bottom and (perhaps) recovery (10.45%) into 17 days (to present). (The long downwave which demolished the market in 08-09 was 292 (elapsed) days.)
Do we believe it?
We try to steer clear of questions of belief (O ye of little faith…) and stick to the chart. Here’s the problem with the chart: the C wave (or Gamma) wave doesn’t look like to us that it did its work. It should have taken out the previous low. But you can’t disbelieve the Zeta wave here taking out tops and the trendline.
If you look at the A-B-C lines in the previous downwave you see a paradigm for trading the present situation. The signals are certainly there for a long trade. The completion of the Gamma wave will be postponed till October 19. That’s the tradition.
The avidity of Wall Street traders has probably taken your breath away (also your money). Readers had plenty of warning of hurricane flash trade. Now that your basement is flooded you should stay long term — as we have said this is mostly naked knife fighting between the big hedge funds and Wall Street traders. For ourselves we believe that we should encourage them by taxing short term trading more heavily.
Stay tuned. All this has not shaken out yet.