If the uptrend is to continue, we need a bottom soon

There are three technical patterns that I am following now:

1. An Elliott Wave count on the Dow, S&P, and NASDAQ:

Dow Elliott Wave 2011-2014

2. An Ascending Middle Section on the Dow:

Dow Ascending Middle Section 2014

Idealized Pattern here:

3. A Three Peaks Domed House Pattern on the Dow:

Dow tpdh 2014

Idealized Pattern here:

The phase of the bull market from 2011 onward could easily be considered complete based on the Middle Section and the Elliott counts. The Three Peaks Domed House is the only pattern which implies continued upside. If the TPDH is still playing out, we have just begun the “five reversals” (points 15-20).

The Dow and the S&P are currently down about 4% from their highs. On my Elliott Wave
count, we are in an Intermidate-degree 5th wave following a rather extended 3rd wave. In my opinion this is a vulnerable phase, and I would not expect a subwave drop to be much bigger than what we’ve had so far.

If the selloff doesn’t slow down , or if the next big drop isn’t immediately followed by a strong rally, most likely a correction of 15-25% lasting 7-8 months has begun.

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