Today the McClellan Oscillator fell below 0. This usually precedes a selloff. Momentum continues to rollover and precious metals seem to be leading the stock indexes by 4 to 6 weeks. Gold topped December 3 and the indexes followed in mid January. Gold topped again March 3. Perhaps we are on the verge of another top in the indexes.
I am still leaning toward the triangle view for the correction. Primarily because there are so many completed triangles in various sectors and stocks. GE is a perfect example. I think the stock indexes will form a running triangle that will last into May at this point.
One conclusion that must be considered now is that wave [C] up may last well into next year if the x wave hypothesis is correct. If the top of [A] was in January then it lasted 9 months. 9 months from this May for a measured move is February 2011. If the top of [A] is now, then that would push [C] even further into 2011. I know this doesn't fit with most other forecasts out there, but I am beginning to take it seriously. However, before addressing it further I want to see a clear and complete correction. Many have forgotten that the market consolidated for 20 months after the January 2004 high. I don't think that will happen this time, but it serves to remind us that markets can move sideways longer than most expect.