The Stock Market traced out an extended first wave into the end of April. This has had the effect of extending the entire Intermediate Wave (1) rally since the Primary wave 4 low on March 23, 2020. Intermediate Wave (2) is now due, and should retrace between 50% and 61.8% of the entire rally, as illustrated on the chart below. A 61.8% retracement would also line up with the previous minor wave 2 low, which is a feasible target given that minor wave 5 was relatively short in price. Hence, expect the Dow Jones Industrial Average to find support between 22,600 and 22,800 on a closing price basis. In terms of time, a 50% time retracement of Intermediate wave (1) up from March 23 falls on November 23, 2020.
Of note is the fact that minor wave 3 is shorter in price than minor wave 1, and minor wave 5 is shorter than minor wave 3. It is therefore reasonable to assume this will also be the case for Intermediate waves (3) and (5). This is consistent with the assertion that momentum will wane for quite some time into the final top of the bull market in 2022.
