MarketVox: catching up

A week or two ago, I mentioned that if Wave 3 began in Feb-March, that it could be expected to run downhill until July 2006. One thing interesting about yesterday’s swoon was that in addition to breaking the important supports at 1080 and 1074, the SPX actually managed to get ahead of the schedule I proposed for it.

With 16.56 percent of the estimated 640 days to the next major bottom, the SPX has fallen 17.06 percent. The NDX, on the other hand, has only fallen 18.63 percent since its top, in 21.25 percent of the time. (The NDX usually tops differently than the SPX and DOW, although they bottom together at the big turns. In this case, it came 30 trading days earlier.)

Since the market never moves in straight lines, we’ll probably see a mini-rally soon, but I wouldn’t start looking for a multi-day one until the NDX falls another 5 percent or so. The last two short term moves were (i) down 10.86 percent and (ii) up 3.89 percent, so 6.87 percent in five trading days would seem too little movement in too short a time to mark the end of (iii).

All of this assumes, of course, that the wave patterns are meaningful. Always take it with a grain of salt.