Question of the Week: 5/8/2012

Starting with the high in 2000, you say wave-4 could be forming an expanding Triangle. But, the "thrust" potential of such patterns is limited; therefore, how can the DOW reach your long-term target of 100,000 by the year 2065?


You are correct, the "thrust" out of a 4th-wave expanding Triangle is insufficient to produce a 5th wave extension (which is what my long-term DOW count assumes). As a result, the only way the S&P could currently be forming an expanding Triangle - off 2000's high - is if it is just the first phase of a more complex correction.

Based on discussions in past Questions of the Week, we know wave-4 must take 20-30 years. Only 12 years of that allotted time has so far been consumed by wave-4, which means it is just about half-finished. Consequently, wave-4 has plenty of time to end its current expansion, form an x-wave and begin another a-b-c before its time runs out. Therefore, we must allow the S&P time to move past the "confusing middle section" of this 20-30 correction before we can expect the final design of wave-4 to become obvious.

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