So our call was wrong by a dollar or two but certainly at this level this looks like a solid buy. It is down by 62% measured from the lows of March 2009. It has a nice wedge 5th wave which is a termination pattern. The RSI and MACD look fine here and you are looking at a target of roughly $19 which is 25%. Good luck.

We are short about 150/200 points from our ideal target but this looks like it might be done. More often than not wave 3 is the longest so 5 should be shorter. There is a wedge-like structure as a 5th of 5. In short we would be looking for a good bounce about here. This is a total drop of 3200 points.

So far so good. We are down about 2700 Dow points and are now “officially” in a correction. But everybody knows for sure that you should not sell here as you should look at the long-term etc. etc. The have no idea what they are talking about. I guess it is only the “pro’s “ that know that your first loss is your best loss.

Where from here? This may be a completed, or nearly completed first wave down. If so a bounce of 50 to 60% to the 4th wave of previous degree would be perfectly normal. If it is not a first wave but, say, a wave A, we should also get a bounce. Whatever it is after the bounce we should get another wave down at the very least, a wave B or 3. Time will tell.

If we continue down tomorrow at the same speed as in the last 1/2 hour of trading, we may be in a third wave and things will get unglued a little faster.

The applicable count would be a 1-2, 1-2, and now we are close to entering wave 3 of 3. Targets for this scenario are around 20000, that is all of Trump’s gains!

Simplifying the count, that is taking out the 1-2, 1-2 start and using just a 1-2, we have progressed roughly according to plan. The low occurred early in the morning in the future market – see enclosed Dow mini futures – that hit a low around 23200. It looks to me that we still need a 5th wave down and often the futures show where that might go. If we do get to about 23200 we are looking at 3000 plus points or almost 1/2 of the gains that Trump so eagerly takes credit for. We are already on a path of a government shutdown and we still have low rates, low taxes, 100% first year amortization and soon another trillion or so in infrastructure spending. Can things get better??

P.S. 25200 is about a 50% retracement of wave 3, 25400 about 62%. Both are possible targets before we go down again.