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.

Here is one possibility. We are presently in a wave 4 of 3, then a wave 4 followed by a wave 5. That would complete a first wave down which  by that time may have travelled about 3000 points. Today,for instance, chances are real good that no deal can be made given the political hostilities in Washington. A shutdown may give that 5th wave push. Who knows.

This would be just wave one of wave A of a large corrective downturn.

Last Friday the Dow did another 200 points or so before stopping. Today the futures indicate another drop of perhaps 250 points. The chances that this is just a small a-b-c correction are getting smaller by the minute.

In any event it is not a good idea to stay long as the 4th wave of previous degree is at about 7000!

Below is a chart as per 1.30 pm.

There are other ways of counting this but at the very least we would need another 4-5, that is if we assume that 3 is done at about these levels, which is not at all clear at this moment.

Just a little update. So far we have two almost equal legs down with one intermittent upleg, lasting for five days. This could be a standard textbook 5-3-5 a-b-c correction good for about 1000 points. It will all depend on what transpires later on, but there can be no doubt that this is damaging for the longer term prospects.