I can now count five waves down from the July 19, 2007 high and a bounce up is in progress. The low Thursday at 1370 came very close to the lower channel line; Bernanke cut the discount rate Friday and sent the market on a golf ball bounce back to 1450. If the SnP starts closing above 1500 I will be forced to rethink my analysis. The above pattern has played out to perfection so far topping at the .78 ratio 1552 target then dropping quickly to the lower channel which is exactly what I would expect the market to do if the analysis is the truth. To continue this pattern the index must remain below the thin blue 2 STDV line then later this year drop below 1363.
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