With all possible counts for a basic advance from the 2011 lows having expired and a right shoulder (9/17/14) printed and confirmed by middle section counts we know that the bull market is complete. However, it never hurts to have some affirmation along the way that rallies like Friday's are nothing more than hiccups in the bear market.

The key to knowing if Friday's rally was the beginning of a new basic advance is in understanding the nature of Thursday's low. The low on Thursday was confirmed by the high of a flattened top (or point E of a non-symmetrical descending middle section) on 11/30/07. It counts 1,249 days to the high of the previous basic cycle (black) on 5/2/11. Thursday's low was exactly 1,249 days beyond the high in 2011. This is the first of two steps in identifying the sort of low that the bears would be worried about.

Thursday's low was also forecast with a count from an important low on 10/18/00. It counts 2,549 days to the high of the multiple cycle (green) on 10/11/07. All important lows must be confirmed with forecasts from both the basic and multiple cycles. Thursday's low was exactly 2,548 days beyond the high in 2007.

But here's the rub for the bulls. The multiple cycle forecast is a low-high-low count and not a middle section forecast. All important lows have always been confirmed with middle sections. The fact that one of the forecasts used a method other than a middle section should be a big red flag for anyone who expects higher highs in the Dow.

Is the bull market complete?

Try a "sneak-peek" at Lindsay research (and more) at Seattle Technical Advisors.

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

© 2014 Copyright Ed Carlson - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.