NYA update: will it revisit the lows made in 2009?!

Of all the major indices the broader NYA looks the worst. It has already dropped over 20% since its ATH made in 2015 and the trend is down on all time frames. If we look at the chart we see that price has dropped below all important long term trendlines and is struggling to regain some lost ground. Since what once was support may now act as resistance, the bulls have a lot of resistance up ahead. A lot. So what does this mean? Cont’d below.

nya trendlines and wave count

In fact if we take a careful look at the wave count off the low made in 2009, we can (yet) not identify 5 waves up. The whole move and structure is clearly 3 waves up, with likely an irregular B-wave correction. There are many lines of evidence that suggest this as well: the 1.382x extension of A at the ATH, from B. The almost 100% retrace of c of B, and the clear 5 wave structure up off the B-wave low made in 2011 for the C-wave up. C-waves are often made up of 5 larger waves. In addition, the C-wave high is just barely over the ATH, suggesting it was part of a very larger B-wave. Why? Because B-waves are always 3 waves and B-waves (in flat corrections) do not extend much beyond the prior high. In addition, the A-wave down was a clear 5-waves down structure from the high made in 2007 high to the low made in 2009.

Now please note that this count pertains to the NYA and NOT to the SPX, DOW and/or NAZ, which all have a count different from the NYA (5 up vs 3 up). However, what this count does suggest is that NYA will revisit the lows made in 2009 and likely go below them for devastating C-wave down. Given that the NYA was 20% down, whereas for example the SPX was ~14% down, already suggest the SPX will not drop as much as the NYA. But still…

We are aware we’re sticking our neck out here on this one. But, once in a while one needs to make a bold call, and just tell it as it is: the charts simple do not present us with a large 5-wave structure up in which the corrections are of similar depth and/or %. It’s 3 waves. Price has lost all major trend line support and is merely retesting the breakdowns from below…

As you notice, Intelligent Investing tracks many lines of evidence to determine the market’s next big move, Elliot Wave, S/R, TIs and TAs are several of them. Holistic objective analysis allows us to be on the right side of the market more often than not, without any preconceived notion or opinion. We use just the facts. Just like we did here! Do you want to be on the right side too? Of course! Then please join us here.

 

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