I have been busy aligning the Wave structures among the various Indexes that we are following. Starting with the SPX, I believe that we are seeing a larger degree wave structure on the decline than on the way up. Because SPX has broken the 4-year trendline, it is possible that Primary Wave [1] or [A] may reach its target at 1650. Diamond and Broadening Top formations usually indicate targets for Wave (C) or (3). In this case there is not enough time for a fifth Intermediate Wave, I am becoming more certain that we will see an (A)-(B)-(C) Wave of Primary Wave [A] ending next week. After a 2-3 week retracement we may see a 5-Wave Primary [C] of Cycle Wave I ending in March, 2016.

The Premarket is down nearly a percent as investors who have had enough volatility begin their migration out of equities. Margin calls are mounting because many investors used their margin loans for everything but stocks.

This corresponds with the VIX that had its low on July 3, 2014. This (A)-(B)-(C) Wave had a very long Wave (B), but now seems to be in sync with the SPX.

I hesitate to put Elliott Wave labels on the Hi-Lo, but the last three days’ behavior is much like a Wave 2 that I have labelled.

TNX has seen much the same behavior at a smaller degree. The Chinese bond-selling ramp, rallying interest rates, was very much a part of the larger picture. Treasury rates are now tumbling as money flows back into bonds.

Regards,

Tony

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