How much longer?

The stock market has taken the term sell off to an entirely knew dimension.  The year of '08 is set to go down as one of the worst years on record.  It is to the point that even if you wanted to sell, do you really want to do so when the market is sub 8000?  There has been a lot of mention lately of a target on the Dow near the 6,600 level.  I have begun to see this pop up all over the internet, to the point that it's almost a forgone conclusion that we are headed to this price level.  So, in an attempt to look at potential bottom spots for the market, I did a quick elliot wave analysis of the current market action.

Currently the market is experiencing what ellioticians call a 5 wave down with a 3rd wave extension.  This is one of the strongest types of elliott wave patterns. 

Wave Structure of the Dow

Wave 1 on the Dow took us from 14,198.10 down to 11,634.82, representing a 2,563.28 point move.  This was followed up with a complex wave 2 which pushed the Dow up to 13,136.69.  We then experienced one of the most vicious wave 3 down in the history of the market when the Dow fell from 13,136.69 down to 7,773.71.  This produced a minor wave 4 bounce up to 9,794.37, from which we made fresh lows this week.  So, what does all this mean?

This is a wave 3 extension because wave 3 was greater than 161.8% of wave 1 (5362.98 vs. 2563.28).  When this occurs the 5th and final wave is generally equal to wave 1.  This would mean a 5th wave target would come into play around 7,231.09 (9794.37 - 2,563.28).  Now another real possibility is that wave 5 is 161.8% of wave 1 thus placing a downside target as low as 6816.  So, from this we can see that our support zone will come into play between 7,200 and - 6,800, which leads into my last point.

With everyone looking for this 6,600 level is it realistic that we hit it?  Maybe, but maybe the next leg up will begin right before everyone believes the world is coming to an end.