Primary Wave 4 expansion

Primary Wave 4 of Cycle Wave 1 looks to have expanded and may soon be complete. This was the alternate possibility given at the April update. The wave counts have met the minimum requirements. If not it may be complete by mid January/2019 although this week looks more likely due to the bearish sentiment. Primary Wave 5 would then be upcoming which would take the market above the September high and possibly a lot higher. The 3rd year of the election cycle is the strongest with an average gain of 17%. That would agree with a strong Primary Wave 5 outlook.

A strong weekly close below the April/2018 low may cancel that count and may indicate that Primary Wave 5 ended at the October/2018 top. That would portend that Cycle Wave 2 is in progress which would be the largest correction since the 2007-2009 period.

The bearish Cycle Wave 2 scenario would apply mainly with a weekly close below the April/2018 low that occurs after mid to late January/2019. A close below the April low until then could still be part of Primary Wave 4.

Dow monthly chart. Click to enlarge.