The first possible target in time coming out of the 2009 low was 2015.75 for the Dow to reach a Phase Transition and then a crash and burn. We stated in 2011 that the market was off to new highs and even Barrons covered that forecast more as a curiosity. We have constantly warned that the Phase Transition was not yet confirmed.

Indeed, the Phase Transition clearly shifted back in 2014 and appeared as we have been warning to be postponed into 2017. The three price targets were 18500. 23000, and the 30000-40000 extreme target. At the beginning of 2015, we warned it did not appear to be likely that the market would exceed 18500 on the Dow and it looked like it would crawl along resistance forming a high in May. So far that has been the pattern.

Now the question which confronts us is how long of a contraction do we see. Such a False Move must take place with a minimum of 2 month to 3 months which suggests an August low. If we see lower lows intraday or September closes lower than August with a new intraday low in the Dow (not Nasdaq), then we may have a different pattern ahead. Nonetheless, if this pattern with an August low holds, then we may be off to the Phase Transition coming out of the hole. This would be confirmed by electing Monthly Bullish generated from an August low.

In terms of price, we should be aware of this pattern development by exceeding 18500. The next hurdle will be 23000. Exceeding that level and we are now into the Phase Transition with the target in the 30000-40000 level with a really disastrous outcome. This would most likely be coupled with gold as all tangible assets rise driven by the shift from public to private.

This is the pattern and the requirements to see that unfold. It is not a forecast and should not be seen as a promotional forecast like gold promoters.