A Market Forecast That Says ‘Take Cover’

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“I don’t want to agree with him (Prechter) , because if he’s right, we’ve basically got to go to the mountains with a gun and some soup cans, because it’s all over.”

We should have now completed the first wave down from the DJI 11,200 level. It was a complex wave that was hard to follow. The last rally looked like the start of a Wave II with a five wave count, but it was instead a C wave of Wave 4 of the Wave I decline. If Wave 5 of I is now over, we should now start a Wave II rally back to the DJI 10,500 (10,625 for a 0.618 retracement) or so level.
The next Wave III is the wave we should be concerned about, since it is usually the quickest with the mostest, and, according to the rule of alternation, it should be a fairly simple straight drop with a greater length (probably a 1.618 multiple) than the first Wave I drop.
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