StonkSignaler

Blueprint for remainder of bear market

Short
SP:SPX   S&P 500 Index
We are unveiling our finals paths based on the completion of waves 1 and 2 inside of our suspected final downturn for 2022. We believe we are in Sub-Millennial wave 1, Grand Supercycle wave 5, Supercycle wave 2, Cycle wave A, Primary wave 5, Intermediate wave 3, Minor wave 3, and believe we may have completed Minute wave 4 at the close on Friday. Our next steps would be to complete the final Minute wave 5 drop which will simultaneously end Minor wave 3 sometime early next week. We consider our current position as a wave labeled 152A5335, which will be referred to as a wave ending in 5335 or 335. We expect this wave to be completed Monday or Tuesday at the latest. This does mean we should not only go lower than the Friday close, but we will also likely take out the June low.

DETERMINING END OF MINOR WAVE 3

We expect an extension greater than 172.04% to occur for the Minor wave 3 bottom based on Minor wave 1. This would put the low beneath 3633.78. Furthermore, we expect Minute wave 5 to extend 122.05-134.03% beyond Minute wave 3 which puts the bottom between 3598-3616. This would mean we drop around 80-95 points from the Friday close which is around 2.5%. If this holds true Monday and part of Tuesday will likely continue the major drop in the index. The historical minimal move extension for waves ending in 335 is 89.35% which means Minute wave 5 must drop below 3662.62. The first quartile move is at 3616.11 and the median move would place the bottom at 3599.07. Historical moves are not necessarily accurate but most times they provide a good ballpark figure for wave movements. These levels are left most lines on the chart below.


The right most lines are the historical extensions for waves ending in 533. These are the projected movement extensions for Minor 3 based on the completed movement of Minor wave 1. The yellow lines represent the historical first quartile movement (133.48%), the median (160.79%) and the third quartile (221.60%). The blue lines are the same but for waves ending in 33 (so based on many more data points, slightly less specific to our current situation). Minor wave 3 appears to be on the higher end of retracements according to the right most lines and our forecast of the bottom around 3600.

Minor wave 4’s position is a complete guess right now and we will have a better idea once Minor wave 3 ends. Minor wave 2 moved up about 70 points over 24 trading hours. The movement was slow and not exactly at steep climb. Through most of our research wave 2 OR wave 4 is a quick and sharp move, while the other is slower and not as steep. Right now we would classify wave 2 as the slower one, which opens the door for Minor wave 4 to be quicker than 24 trading hours and a steeper gain. This could see a gain greater than 70 points in a much quicker timeframe ergo a 1-2 rally.

Intermediate wave 3 (purple/pink/fuchsia) is placed roughly where we believe it will fall timewise, while the movement will be clarified once Minor wave 3 is completed.

WHERE AND WHEN WILL PRIMARY WAVE 5 AND CYCLE WAVE A END?

We try to plot out our waves and adjust once each wave completes. We firmly believe Intermediate waves 1 and 2 are complete and wave 3 is nearing completion. Wave 1 was 14 days long according to our wave count and wave 2 was 4 days long. We estimated from the beginning of Intermediate wave 3 that is would be 16 days long which still appears to look valid. We are projecting Intermediate wave 4 to be slower and not as quick as Intermediate wave 2 because wave 2 appeared to meet the criteria for quick and steep movement. Lastly, we are estimating Intermediate wave 5 will be around the lengths of waves 1 and 3 so we are projecting 15 trading days.

We begin to look for real world events to explain our estimates AFTER we have plotted our estimates. In the current case. We strongly believed Intermediate wave 3 would be shaped by a bad inflation report, a week of pre-Fed speculation and then a more pronounced decline after the Fed rate decision. These appeared to hit the mark and these forecasts are viewable in our TradingView profile forever. As far as why will Intermediate wave 3 end around October 4 is a slight mystery. It is possible the JOLTS report shows some fewer jobs openings which would begin to meet some of the Fed’s dovish criteria. Nonetheless, we expect upward movement for Intermediate wave 4.

Why does Intermediate wave 4 end? After we plotted this estimate we later learned this top aligns with the next inflation numbers. We project Wave 4 to end on October 12 and the inflation report arrives before the market opens on October 13. A bad report (or the perception of one) would likely tailspin the final Intermediate wave 5 down. This downtrend will likely occur all the way to the Fed rate decision which is slated for November 2. Coincidently enough, our Intermediate wave 5 projection places the market bottom on November 2. Our explanation is that the Fed reduces the rate hike to a potential 0.5% or maintains a 0.75% in order to not “interfere” with the elections which happen the next week. This was a similar consideration the Fed made before the November 2020 elections.
We are forecasting the start of a major rally after the Fed decision simply based on Elliott Wave Theory. Stay tuned for more!

All statistics and the full analysis are available for free as always at the site below.
Website: https://legalsteals.com
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