thursday thoughts, page-14

Here's the EWI summary.

Strong selling pressure has drawn the major indexes to their respective wave b (circle) bottoms. A break of these levels would confirm that wave 5 is underway.

The preferred counts still stands for the S&P and DOW. The markets went a few points short of their (b) of 4 target last night. These targets are DOW 8143.60 and S& P 845.27 If those levels hold, wave (c) up for 4 will complete in a few days, with targets of 950.75 S&P, 9198 in the Dow. Then wave 5 down starts to much lower lows. If (b) levels are broken before a reasonable rally, then chances are wave 4 is already complete and wave 5 down is underway. In any case, preliminary targets are 2002 lows, or lower. They are 788-810, 768 (the Oct. 2002 low), and 688-712 for S&P. Any of these could mark the end of wave 5, but need to wait for the subdivisions of the decline to determine where it will end.

Gold still heading to around $600-650 target zone.

After a rally in the ASX that was clearly corrective, it’s now moved down in five waves. There is downside risk in the Australian stock market right now. Whether we’re completing a zigzag now, or are just in a third wave of a larger five-wave move cannot yet be ascertained, because we just don’t know the degree of the double zigzag that ran from October 24 through November 4. The move up from late October can only be counted as a corrective wave and the decline since then shows a market that is moving in five waves. I think you have to be bearish on Australia now, and we can figure out what degree that wave ending on November 4 was later.