The fourth wave has been extremely frustrating. It has lasted longer than expected. Another reminder that patience is needed in trading. Has the trend changed from up to down beginning wave 5? Time will tell. Wave 5 will contain 5 minor waves. It appears that minor waves 1 and 2 have already been completed. We should now be in wave 3, always the longest wave. What is our strategy at this time? Most investors should be in cash awaiting the end of wave 5. More aggressive investors are short the market. As we approach the end of wave 5, short sellers should take profits and prepare for the corrective 3 waves. How low will the market go? You have to look at past support levels to answer that question. The S&P index indicates that around 1100 would be a good time to take profits. Interesting times.
