Shortly we identified the head-and-shoulders formation we computed the possible targets for downside waves. These may have seemed fanciful at the time. But the achievement of target measurements occurred with breathtaking celerity. In our charts of late there was another target lurking — like a crocodile beneath the water. That was the 4th target of the rule of seven measurement we made — 903.x on the spx.
Here in a long view is that target, lurking like a bear waiting to gnosh on Barron’s (stocks to buy now!) and Marketwatch (3 stocks which will double!!) Sometimes we file these absurdities with the intent to make fun of their authors at some later point in time. Authors who evidently cannot read a chart. The twiddle-twaddle that passes for financial journalism is nothing short of astounding. A bear can hit them in the face and they regard it as a buying opportunity. !!!! These people are the legitimate objects of our ridicule. But enough of heavy duty economic philosophy. It is our duty to take their (and their dupes’) money.
Anyone who is looking for an excuse to add-on to short positions now has it. The major indices broke down below the defining bottom line of our formation and also mostly took out the lows of the panic. Naturally we went long today. Don’t have a heart attack. It’s looking for a scalp. The SPX rallied more than 40 points in the last half hour today — probably large put sellers manipulating the market. Implying to us that we should see an upside move tomorrow. Also it was the 6th day of the downwave and that’s about as long as they last these days.
Given the violence of the conflict since August we could see some blood flow here. In fact since the dimensions of the pattern were 139 points and the lower boundary is 1101 we have an implied target here of 962. As Edwards was fond of remarking these targets are probable minimums. And that is still not down to our rule of seven target of 903.
Remember. We do not predict or forecast. We just look at the charts and report what they tell us.
P.S. The Dow Theory is short.