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The last couple of weeks are what an Elliott Wave 3rd of a 3rd wave looks like! We still may not be finished with the current 3rd wave, although we should be close. We will then see a pretty good bounce; however, it will NOT be a start of a new bull market.

As the chart implies, we have much lower prices to go yet. We have a corrective wave 4 and then a wave 5 to complete the first 3rd wave. After that, then we will see another wave 4 and 5. I am afraid to guess at this point at what level that will be and when.

If you are not familiar with Elliott Wave, the reason we have two waves 1 & 2 is that the second wave 2 overlaps the first wave 1. One of the rules for Elliott Wave is that wave 4 cannot overlap wave 1. That is why we have consecutive waves 1 & 2. This implies a big move down which is what we have witnessed this month.

This looks ugly! It’s going to look uglier before it’s over. EWI states that we are just in a much larger wave 1. To clarify, that means in the above discussion, that once we have the next consecutive waves 4 & 5, will only be wave 1 of a much larger wave C.

I guess you can see the picture. I cannot imagine the price levels of the Indexes at the levels of this wave 1 much less the very bottom at wave 5. This is when you can buy and hold, that is if anyone has any money to buy stocks at that time!