3 To 8 Day Upmove Underway

Today's reversal off of the midday low marked the end of wave (a) of [ii] down and the beginning of wave (b) of [ii] up. Wave (b) will most likely last anywhere from 3 to 8 days depending on its complexity. Afterward wave (c) of [ii] down to retest today's low will follow into the end of May or the first of June.

CNBC had another analyst on today who is calling for Dow 5000 by the end of the year, but to be fair, this analyst did say he expected another new rally high before the real selling begins. Mark Haines joked that this guy should call back if he changed his views before January as they would likely be calling him for their "Remember That Crazy Call" stories. Although I am sure that Haines was talking about the Dow 5000 part, it is interesting that he didn't specify, and his lack of respect for the guest's well thought out views was clear too.

However, the biggest takeaway is the fact that they have had someone on almost everyday that is predicting new lows in the Dow. Even though half of these analysts qualify their prediction by saying that the new lows will be months to years in the future, I find it interesting that CNBC chooses to bring them on during the current correction and to headline their predictions of Dow 5000, etc. They are clearly playing to the perceived fear among traders and investors and this speaks to the real pessimism that has developed since May 6.

If we think back to the top in October of 2007, perhaps I am wrong, but what I remember is that most guests on the show were talking about a continuation of the bull market and how remote a bear market was at that time. They continually played up Bernanke's reassurances that the housing market was not a bubble, etc. That is the kind of commentary I will be looking for when we are at the real top of this rally.