I know a lot of people are expecting a potential big crash on Sunday into Monday — and it’s possible, but I view all the overlapping waves from May 12 and 13 is not representative of how a big 3rd wave down begins.
Instead, I see similar pattern develop in the S&P from last year in June 2015 – that is very similar to the pattern that is happening now.
Does history always repeat itself?
No, but I do find that it does rhyme.
I don’t plan to short even if it continues to fall because the pattern preceding this drop just doesn’t seem like a recognizable pattern before a large drop. However, I won’t be buying immediately either. I will give the bears to capitalize on their opportunity Sunday into Monday — and if they are not are able to capitalize on this drop “setup” — then I will step in on the bullish side. But I do have to give bears a window of opportunity just in case to reduce risk.
I reveal my thinking and thought process in the upcoming members only video in which I compare this pattern to the previous S&P pattern from history and why I believe the potential pattern above is structured the way above. (The similarities are quite compelling).
I also compare the S&P, Nasdaq, and Russell for additional clues in this members video. I also look at large 3rd wave drops over the past few years and compare how they began with the current setup, pointing out how similar/different they are.
For now, here’s last week’s member’s video that is now available to the public: