Saturday, October 10, 2015

MTU Weekend Ed. - Flat or Triangle Wave Four (10/9/15)

The rebound from the September retest low SP500 has once again regained its 2015 pre-crash range on the current rebound from its September retest low. It also sits between its MA50 and MA200, as well as just below a trend-line resistance. See Chart 1.

We expect the downward gap around 2035 and the upward gap around 1953 to be filled. While most indexes are still marginally below their September rebound high, the Dow is comfortably above it. This bodes well for the 2035 gap to be filled during this upswing.

It's unclear whether the current rebound serves to complete a bearish wave X or represents the initial wave of a larger upswing (Chart 2). Perhaps key tracking counts from the 2009 bottom can help put things into perspective. See Chart 3.

Under the interpretation that the 2015 pullback is a wave [4] off the 2009 low (or the 2010 low), one possibility is that wave [3]-up ended in mid-2014 at 2019.26 in SP500. In that case, wave [4]-down either ended in 2015Q3 in a flat-like structure (Char3, green [4]) or wave [4]-down will likely end soon in a triangle (Chart 3, blue [4]).  The proposed wave [4] alternates well with the wave [2] pullback.