By the begining of January, we put subscribers on high alert to any high and the start of a multi-month decrease. Based on each marking we could find of the big 10-month progress off March’s lows, it became clear that the advance is at a very terminal stage with an important high pending. As then, price has turned violently lower, taking away support and key levels at the same time. This weakness only increases the setup for continued downside pressure, since again, there is not any good way to label the 10-month advance in a way that allows it to continue. Instead, from a larger degree perspective, recent weakness fits as the beginning of a much larger down move that will in the end correct the 10-month advance before it’s done. elliott wave theory
While there is huge debate on the subject among Elliotticians, we are confident that the current decline will only perfect the recent 10-month progress. Others believe the current decline is the start of an even bigger down move, the one that will retrace the complete 10-month fall and then some as a greater bear market off the 2007 highs takes on out. Were receptive to this more bearish idea, but right now, really not the best reason of price movement. That comes down to one very important question: Can be the 10-month advance off the March 2009 levels an impulse? If the answer is yes, then the only conclusion is that the current drop will be a static correction of this year’s progress. By every measure, we assume that the big progress was impulsive. Not only does it count away as an impulse, it looks, feels, and stinks like an impulse. It absolutely was historically quick, one-directional, and strong. That doesn’t audio like a corrective move to me. The good thing is that it doesn’t matter too much right now. If the decline will be a modification as we contend, it will take on overall corrective form as the move progresses. If the decline is the start of something more important, it is going to prove impulsive. Because is, given the evidently impulsive look of the 10-month advance, we foresee the former. This matter will be visited frequently in the weeks and months ahead.