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Joseph Russo

Joseph Russo

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Hauntingly Familiar

Just as it did exactly 4-months following its print high in October of 2007, the Dow (within the few trading days remaining in September) is once again on path to breach its cyclical uptrend from a previous bear market low. Although the outcome may be better or worse this time around, the pattern unfolding is nonetheless hauntingly familiar.

As it was 4-months post high back in February of 2007, the move down from the current all time high is thus far corrective in nature. The down-arrowed red trend lines mark lines-in-the-sand, from which all hell will break loose if decisively breached amid a bearish monthly close south of said border.

Dow Jones Secular Trend

For comparative reference, if the top is in place at the 2015 May high, and we have a precise replica of the last bear market, in terms of duration, the Dow won't be nearing a bottom until October of 2016.

A similar "percentage" decline will pummel the Dow way back down toward its secular uptrend line near the 8360 level. A similar "point" decline will send the Dow down toward the 10,000 handle. The three garden variety Fibonacci retracements rest near 13,800, 12,400, and 11,000 respectively – all well below current levels.

On a bullish note, there remain two outstanding upside price targets that have yet to be achieved. The two remaining upside targets are 18721 and 19725 respectively. It is always possible that the recent move down is only that of a (4) wave of intermediate degree that when complete, will lead the Dow back up to fresh all-time-highs.

In closing, the questions everyone needs to be asking themselves right now are; "am I feeling lucky," "should I just let it all ride for the long haul," and "what can I do to protect my capital if things really get ugly" - and "when should I do it."

The Long-Term Trend Monitor provides participants with unbiased guidance in this realm, and has an outstanding record of successfully navigating long-term market trends, especially at junctures such as these.

Until Next Time,

Trade Better / Invest Smarter

 


The Chart Cast Pilot and Elliott Wave Technology's Guardian Revere Long-Term Trend Monitor are the proud sponsors of this communication.

 

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