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Category Archives: DJIA

DJIA 2000-2017 Elliott Wave Bull Bear Market Reviews


The chart above is a stretched weekly chart which shows any vertical moves in a more dramatic fashion. The Elliott Wave Principle was observed using the DJIA charts and coincidentally the DJIA and the other indices all have similar patterns and wave counts. Always reviewing the largest degree levels is very important, as we have to make sure that it still fits into the larger picture that we think we are in. The reason why all these 3-4 sets of waves appear, is because we always have to look for wave 3 to be the longest or extended wave. Since 1932 any wave 3 has never been extended, but it’s always been the 5th wave that the experts extended. 5th wave extensions “never” travel across multiple generations as 5th waves are fundamentally very weak.

When the majority of expert wave analysts didn’t see the bull markets coming both times in 2002 and 2009, I knew this SC and GSC degree hype had “MAJOR” flaws in it.  As soon as any part of the largest degree level has failed, then the entire 5 wave sequence from its start, “MUST” be thrown out. Of course, this is too much like work, so the majority of wave analysts just makes a few cosmetic changes, and “bingo”, they end up with a new and improved,  wave pattern. Cosmetic wave counting doesn’t work, and if we just keep making pretty changes, we will miss every major bull market that will ever come in our future.

Just by not being prepared before any high degree bull market starts, makes the Elliott Wave Principle very inefficient and pretty useless. I was brainwashed with this GSC degree mania myself, and once I realized that the DJIA would not implode in 2011, I knew a major flaw was still present in all our wave counts. It’s pretty sad when expert wave analysts miss a bull market and leave 300% gains on the table.

Any person with a very healthy investing account can not afford to miss any bull market in their lives. It takes time to make the mental switch from a long bearish phase and then back to an impending long bullish phase. It takes time to accumulate strong ETF positions so we need lots of early warnings. Even Warren Buffet screamed how bullish he was back in 2008, and my favorite contrarian was turning very bullish as well. It wasn’t until March 2009 that any wave counts were ending, so wave analysts were close to 6 months out, in recognizing that a major bottom has arrived.

In late 2008 conventional conditions were already showing us that the 2008 financial crisis was coming to an end. Insiders buying their own shares back, is a clear sign that the bull market was coming to an end. Insiders don’t buy if the 2009 bottom was just a wave 1 in Primary degree. They already knew that the markets were  oversold on a massive scale, so it was a no-brainer for them to buy stocks. Even the VIX started peaking out in late 2008, which all helped to seal the coffin containing all the stock bears.

My top in 2000 was wave 3 in Intermediate degree with its start in 1982. Once the markets crashed in 2002, it was followed by a 5 year bull market that most wave analysts also missed. From this 1982 bottom it was exactly 20 years to the 2002 bottom, which is part of the 20 year cycle so prevalent in the markets.

Each peak progressively gets higher in degrees, but Supercycle wave 3 is still far away in time and price. SC degree wave 3, never mind GSC degree wave 3, may not end until the 2029 time period.  Not until “All” 5 waves in Cycle degree are found and confirmed, can we progress into any SC degree world.

The 2009-2017 bull market was a very choppy bull market, further confusing us into believing it was just another bearish rally. It wasn’t until the DJIA was past the 2007 peak did wave experts look for alternates.

Hindsight has to be turned into foresight, and I have been very specific with the wave counts that we need to confirm a Cycle degree bear market. This is so we can catch any major errors as soon as possible. When I’m wrong, I’ll be wrong in spectacular fashion.  Short term, wave counts are always foggy to say the least, but we want to get the biggest degree as close as we can, well before any real bottom is in.

When the markets are pointing up, and the majority are all guessing how far that this bull market still has to go, I have already painted the picture for when the markets point down again. Bull market tops are the breeding grounds for bear markets, and the reason this is so, is because there’s “nobody” left to get in.

The bullish preachers are preaching to the crowd that has been converted for months already. All we need is for the, “Greatest Fool” to  crawl out of his cave and he will be left holding the bag of falling asset prices.

Buy Low, Sell High  is a very important PDF to understand, which combined with the beautiful color PDF chart below, makes a powerful case for contrarian thinking.  ‎www.longwavegroup.com/market/charts/_pdf/Anatomy_of_A_BullandBear_Market_with_Money_Flow_0930.pdf

Like Rick Rule says, ” you’re either a contrarian, or you become a victim”.

If you have progressed, or lucky to have a strong net worth and you would like to enhance the contrarian point of view, then I strongly suggest that you subscribe to  Steven Jon Kaplans True Contrarian Newsletter.  

 

DJIA 2000-2017 Review

I review the past more than other wave analysts do because we always have to check that everything remains in sequence to the largest degree. All the idealized charts are posted and online. The professional wave analysts do not do this so everybody thinks we are in extended 5th waves. This creates bearish fundamental forecasts of doom and gloom that will never happen. One such bear market forecast is that the DJIA will hit the 5000 price level.

There is nothing at this 5000 price level to offer support, so that number is just a number picked out of thin air. In the case of this DOW chart, wave 3 and wave 5 were the two extended wave’s, while wave one was a bit smaller.  I used the simplified version of 5 waves up in Intermediate degree, except for the last 5th wave which I turned into an ending diagonal.  

These vertical runs never last, especially if we get a Cycle degree 4th wave bear market.  Just a simple Intermediate degree correction would take the DOW below 16,000. We could see another big rally at that time, but eventually the DJIA will fall below the 2011 lows, of 10,000.

Can the entire sequence be wrong? Sure, it can but how wrong were they in 2009 when they said DOW 1000 was coming! Many believe that fundamentals drive stock prices, but that has never been true. At the 2009 bottom, where did it show, that fundamentals drive stock prices.  Even during the great depression the DOW created a “V” like bottom totally ignoring fundamentals as stocks started on a 5 year bull market. In 1975 stocks imploded as well, with investors being very bearish, yet the market turned and soared until 2000. 

Since 2000, we have been looking at 3 peaks, all containing wave 3 tops. These wave 3 tops must all be in sequence in a Cycle degree  extended wave three.  Since the 2002 bottom each 5 wave bull market has increased by one degree, so the next big bull market must have 5 waves up in Primary degree.   When the DOW is at 24,000 it is an easy call for DOW 30,000, but when the DOW is sitting at 7000 or 8000, then DOW 34,000 will be my call. 

DOW 23,000 You Got To Be Kidding!

I never thought that the DJIA could hit the top of the trend line for the third time, but sure enough it is close to doing just that. Three trend lines can give us a price level where we cross over to a higher degree than what the 5 diagonal waves were. Any decline below the middle trend line would push this market into the Primary degree world. 

Most trends like this also produce about the same angle, from the bottom left corner, to the top right corner. Any market that has a sustained bullish phase, can switch into a blow-off situation. Long tall skinny wave structures can do the trick, but this has been going on for some time already and it seems it’s not ready to die just yet. Of course, when the bearish crowd throws in the white towel and gives up, it turns and crashes. 

When the intraday charts are fuzzy then it is best to review the daily charts. In February of 2018 Donald Trump may bring in a new fed chief as Janet Yellen could be leaving her post. If and when it happens, this can bring turmoil into the markets and hasten any Cycle degree 4th wave decline. 

DJIA In Supercycle Degree 1929-2017

It would take an ‘immaculate conception’ to create bear market in stocks right now: analyst – MarketWatch


One analyst believes it will take an act of God for a bear market to materialize anytime soon. What else is new as these bullish remarks always come out at the peaks of stock market formations. Back in 2008 everybody hated stocks and the retail investors were selling out as fast as they could, while insiders were buying their owns stocks. 

Just to give us a bit different perspective, I replaced 2 sets of wave 3-4 peaks by one lower degree. 2007 and now 2017 are Cycle and SC degree respectively.  I also added some trend lines, showing us a potential SC degree 4th wave base at the 2000 price level. The high degree wave counters have tried all this before, several times, and both of them failed, so why should this SC degree work? 

It won’t work as the only previous 4th wave is the bottom of the 1987 stock market crash, about 3 degrees lower. We need the previous 4th wave bottom of one lesser degree, so that would make the 2009 bottom a target, and not the DJIA 2000 price level.

I have repeated it many times that the DJIA will “never” decline that low, and come anywhere near that price range.  Just for the reason, that the solar cycle won’t let it fall that low. Besides that, the DJIA would be massively oversold long before it came anywhere near these bearish price levels.

There is no way that a price forecast can tell the difference between a SC and a Cycle degree bottom. If a Cycle degree bottom came to a rest at 7000, would the 5999 price level suddenly make it a SC degree bottom?  Not on planet earth! Maybe on Kepler 186f, but not on earth.  🙂 

DJIA 1929-2017 Linear Chart Cycle Degree Review

I love to show the DJIA in a linear chart as it shows the last year or so as a near vertical move. This move was what they called the Trump Bump and a few other names. The majority, though the bull market was over as the markets plunged in reaction to Donald Trump being elected as president. I was one of the few that didn’t fall for that and sure enough the stock market reversed its losses and proceeded to soar.

It soared higher with a constant barrage of new record highs being broken, and it still may not be finished as I post. 22,773 seems to be the present record high.

1929 to 1932 was a major bear market, producing a depression during that time. From some of the worst fundamentals in stock market history, the markets turned and charged up for many decades with many crashes and corrections along the way. Crashes, corrections and bear markets are going to continue to happen if my single idealized wave pattern is true. These bull market phases since the 2000 peak  are the results of extended wave 3s that have been happening since the 1932 bottom. If our wave count is wrong for 1929-1932 then all the cosmetic wave counting in the world will not find us a better fit.

Yes 5th waves extend, but 5th waves also tend to be the shortest waves most of the time.   Since the 1932 bottom I use no 4th waves in SC degree or 4th waves in Cycle degree in the 70s bear market. The EWP clearly says that wave 3s are never the shortest wave, yet the majority of all expert wave analysts in the world, are based on 5th wave extensions.  Extending 5th waves and never looking for the alternative wave 3 extensions will always force the wave counts into a much higher degree. The next thing we know is that 2000 becomes a SC or even GSC  wave 3. Any wave 4 in any degree has a very specific simple idealized wave structure, that must get confirmed.

Of course I followed along and used to count everything in GSC and then in SC degree, yet none of the waves required never materialized. When that fails, it’s not a failure of the EWP, but it is a failure of humans to think objectively and sequentially. Most people are biased in some shape or form and wave analysts are no different. It took me until 2013 before I dumped all SC and GCS degree thinking. I use an idealized wave structure to tell me what I’m supposed to be looking for, and try not to practice cosmetic wave counting.

Markets never make it that easy where the wave count is so clear. If they were, we would have many wave counting billionaires in the world today. Yet when you look at the contrarians today most of them will never be caught dead drawing out a bunch of numbers and letters.

I’m anticipating a Cycle degree stock market correction, which the majority will call a bear market by the time it shows itself. A big bear market is just a correction in an ongoing bigger bull market, which from my perspective, is the SC and GSC degree levels. Both degree levels are already in extended waves.

There are three main price hurdles that this impending wave 4 needs to retrace in the next 3-4 years. One of them is the complete retracement of the Trump Rally, and then as a bare minimum, the markets must dip well into the 2007 peaks in all indices, not just the DOW.

With the DJIA this would be well below the 14,000 price level. The last hurdle to cross would be a complete retracement of the stock mania that started in 2011. That would take us below the DJIA 10,000 price level. Once the Trump Rally is completely retraced, then we will be left with a single long spike to the upside for many years to come.

Our present tall skinny looking 5th wave is the opposite of the long skinny spike to the downside that ended in early 2009. From a bear spike in 2009 to a bull spike in 8 years or so, is a nice Fibonacci round number. Many markets move in Fibonacci years, but the underlining driving force of the markets is the solar cycle.

At this time, many experts are still expecting for stock prices to “melt-up” so to speak. This is very standard bullish talk at the peak of any bull market. At the extreme, wave positions cannot be in sympathy with the bullish herd, as the waves always act the opposite of popular opinion.  Investors love to buy high as they feel safe amongst millions of others doing the same thing.

In reality insiders have sold in May 2017, and in the long run retail investors will be left holding a portfolio of worthless paper, again.

What amazes me many times, is how short of a memory investors really have, as they have learned nothing in the last 17 years. It is mathematically impossible for the majority to win at this investing game, as they are always too early or too late when making a decision. Seasoned contrarians know this very well, and have perfected the art of buying low and selling high to the emotional investors.

As scary as it sounds, I watched more 1929 documentaries and there is not much difference as investors were extremely bullish in 1928 as well.

DJIA Weekly Chart 2009-2017 Review: Time To Get Into The Stock Market?

A third of millennials think now is the time to jump into the market – MarketWatch

Since the 2009 bottom as the majority were exiting from stocks as fast as they could, insider buying reports were flooding the internet. Insider buying was a very important key contrarian indicator that the market crash was coming to an end. Insiders don’t buy their own stocks on a whim, and they never buy as a short term trade. Once they buy, they can hold onto them for many years before they think their company’s share price is out of line with reality. In late 2008 and early 2009, the majority of all experts were still looking, for the markets to go much lower.

Many expert Elliott Wave analyst, were still calling for DOW 1000 as the majority all had the 2009 bottom as a wave 1 in Primary degree. What this meant was that all wave counting experts were in sympathy with the majority of investors.

In hindsight, the wave 1 in Primary degree failed, as the market charged higher. Nobody was screaming in late 2008 and 2009, that a major bull market was on the way. My favorite contrarian sure called it correctly in late 2008, as Steven Jon Kpalan coined the phrase, “Biggest stock market rally since the depression” was on its way.  This was in direct contradiction to all the bearish wave counts produced by expert wave analysts of the day.

The 2009 bottom was not a failure of the Elliott Wave Principle, it was the failure of analyst not going back in history to double check our work.

When we use too high of a degree we become very insensitive to the markets, as we are always waiting for the next big move lower.

This morning the DOW peaked at about 22,055 but it does not mean it can’t still go a bit higher. We will have to wait until next week before we can become more certain. One thing we do have at this record top is a wild and choppy pattern, that works best as a diagonal wave structure. In 5th waves is where we find the diagonal waves, but we need to know what freaking degree this entire movie has been. Five waves up in Intermediate degree would finish off this bull market, and we should expect a Cycle degree wave 4, bear market.

At this time I’m looking for a Cycle degree flat that must divide into 3 sets of waves. (3-3-5)

I made this chart a day ago to show readers where we are after an 8 year bull market. I kept the wave count as a simple impulse, but in reality it is a diagonal 5th wave. From the 2016 bottom stocks charged up in a near vertical move that can never be maintained, yet many think this is a good time to get into the stock market. What? You got to be kidding, after an 8 year run, and leaving a 338% gain on the table many see it as the place to be?

I cannot stress it enough that when we ignore past history, we are doomed to repeat it. Since when does buying in at the peak of a major bull market, sound like a good investment strategy?  That may work if you live on Mars, but it will not work on earth. I use 3 simple corrective patterns from an idealized wave count to figure out how deep a Cycle degree 4th wave could go. I’m pretty sure we will hear about DOW 5000, 3000 and even DOW 1000 forecasts in a few years time, but is this reality? 

The 2007-2009 crash was reality and it retraced the entire previous 4th wave of one lesser degree. The same move now would put the DOW right back down to 6500, and even a bit more if it wants to. Markets have a bad habit of always making moves that the majority do not expect. The markets could fall just short of the 2009 lows in a Cycle degree crash. 

The first thing that has to happen is the 4th wave in Intermediate degree must get retraced at the 15,000 price level. 15,000 would just barely get the bears warmed up as it would be just like a bee sting in the big scope of things. There may be temporary support at 15,000, but ultimately the markets will have to fall below any 2011 lows at the 10,000 price level. This would retrace the entire “Stock Maina”  bullish phase, which I have talked many times.

When this starts to get close in a few years time, the markets will already be in a massive oversold condition, but the real bottom would still be 2000-3000 points away.

A massive bubble can only be seen with long term charts and I like to display them in linear style to show how insane this market really is. Markets may look insane to the season contrarian, but to the majority buying high is normal behavior. 

DJIA Intraday New Record High Review

 

This morning the DJIA is recording another new record high breaking the 21,869 price level.  More upside can still happen, but the DJIA should also be ready to give us another correction at the end of this month. It is next to impossible to count any clean impulse sets of waves as we fight through these choppy wave structures.  Any new record high can also be the last record high, but that sure hasn’t happened at this time. 

It may look like it is a strong move, but the choppy patterns of these waves tell us otherwise.  They are unstable waves which can make dramatic moves in the opposite direction when we least expect it. How long can this still drag out, is very uncertain at this time, but any new record high can always give us a surprise correction. 

Eventually, my Cycle degree wave 3 will find a home, but at this slow rate it could take another 100 years. 😉 You have to have a sense of humor counting waves, as this market just keeps on extending at least in the short term. I think the expanded flat scenario is best pushed back to the bottom of my list of choices, as that may be a better fit at a Primary degree “B” wave top.

Any of these extensions are the smaller degree levels that come out of hiding, as big and tall waves, does not mean that higher degree levels have miraculously arrived. Just because it has gone much higher in the last year or so, it will not turn into a Supercycle degree wave 3.  SC degree wave 3 may not happen until the 2029 time period. Add another 100 years to 2029,  and it could take until 2129 before we see a Grand Supercycle degree wave 3 top in any asset class.

Add yet another 100 years, from 2129  and we may be lucky to reach Submillennium degree wave 3 by 2229.  As close as I can count the years, I think Submillennium degree waves travel in 400-500 year lengths.  Of course, all the climate change expert scientists forecast the end of the world, long before 2229. They claim that the world will end in a, ” Runaway burn your face CO2 global warming”.  When the experts predict the end of the world, then they are also predicting the end of the Elliott Wave Principle. 

I have always been fascinated with the Medieval Warm Period and the following Little Ice Age, as this fits Submillennium wave 1 and 2 extremely well. People that lived in those time periods, adapted to climate change otherwise they died. Is modern man still that stupid that he cannot adapt to climate change? 

DJIA, 1970-2017 Primary Degree Elliott Wave Count Review

I started with a bigger time chart of the VIX and have arrows pointing to many of the peaks where important turnings have occurred. Many times, turnings start to show well before the crowd realizes it, especially when solar cycle #23 ended in late 2008.  When one solar cycle ends the next one starts, so by early 2009, solar cycle #24 had already turned the corner.

 All stock markets that I cover, also found their bottoms in early 2009, after which they started a massive bull market. This was inversely reflected in the VIX as it started to crash.

I couldn’t resist drawing in the wedge as they can forecast a potential reversal that will surprise many. Also, the stock  market bull run would keep right on going, if the VIX is not at record lows. 

The last weeks COT report also confirmed, that the commercial traders are net long with their VIX bullish positions by a margin well over 2-1. Commercials added 9,930 long contracts, but at the same time they removed, 17,305 short contracts. This is a huge swing, which I expect to see happen when a reversal is getting closer.    

When we look at the wave patterns in the VIX we can’t see those pretty impulse waves that Elliott Wave analysts love to make. From my perspective the VIX wave structure is all about diagonal waves, which can produce any of the overlapping, choppy waves that it can throw at us. 

Without first looking at the VIX, the DOW chart below will make little sense. There is an inverse relationship that the contrarians understand, but the majority ignored the VIX just like all the expert wave analysts did. 

Starting back in 1970 was not a Cycle degree 4th wave triangle, as 5th waves do not extend like this.  With stocks, we should always look for wave 3 to extend and occasionally the 5th wave extends, but in the case of the DOW, it extended in Minor degree.  When something extends, it is the smaller degrees that come out of hiding, and just because they look big and tall, does not mean they are huge degree levels as well. 

The two parallel lines show that the 5th wave never even came close to touching the top trend line again, as the DOW  started to roll over and away during the 2002-2007 bull market.  It’s just another example how trend lines can screw us up before they ever help us.  Besides, it’s not rocket science as even just a quick glance we can see the bullish trend.  It still may take the rest of this month to get a better picture if a major top is starting to hold, as this market sure wants to move in knee-jerk violent moves. 

When we look at many of the expert wave analysts, stock market charts, we see that the majority believe that we are in a SC or GSC degree type of a market. This can only happen when we count everything from the 1932 bottom as a 4th wave base in SC degree. I believe that a multi generational 5th wave can never extend like this, and through multiple solar cycles as well.

From the 2009 bottom to our present top is  just “One” move, but it subdivides into a sequence of 5 waves. I don’t ever recall counting out any 8 year bear market rally before, besides a real bear market rally would’ve produced far more extreme swings than what we actually observed happening in the real world. 

Insiders or smart money has left this market back in May 2017, so the only people remaining in this game are the emotional traders, investors and cheerleaders.  I’m sure you have heard the expression, ” Elvis Has Left The Building”, well this is a shining example, when smart money has already, “Left The Market”.  Only the fans remain, cheering for another encore!  

The odds are still extremely high that a Cycle degree wave 3 may still be in the process of completing, after which we should see a big correction that the majority will call a stock bear market. This entire process can still take years, but the start of solar cycle #25 will kill any bear market already in progress.

Mini Dow 30 Important Cycle Degree 2009-2017 Review

When I post a potential Cycle degree wave 3 top, it is always important to review the wave count and see if everything still fits.  We need a specific point to count from, otherwise we can create wave counts that send us chasing mythical fire breathing dragons, that forecast nothing but doom, gloom, economic depressions, and or the end of the world. I know because I chased those same mythical dragons for  many years, and it wasn’t until about 2013 that I realized that there is a degree issue that needed to be addressed.  I started by slowly decreasing all my wave counts from GSC degree, then down to SC degree and by 2013, I was thinking in Cycle degree. 

   When we look at the chart above, we can see that the DJIA has already rolled “away” from the top trend line. It would still need to soar dramatically, if the DJIA is to ever hit that top trend line again. When I see this, then I always ask, “Which lines will get hit first”?  I would bet that the markets will hit one of the bottom two lines, before it ever meets the top line again. 

This DOW chart is now what could be an expanded top, giving us the false believe that a diagonal wave  5 in Intermediate degree is still completing.

I love these expanded patterns, but seeing them before they happen is a constant challenge. In the end, it’s never a good thing to completely throw out any wave count until it is either confirmed or trashed.  Most of the time any trashed wave count is put back into my inventory of simple patterns, but an expanded pattern is not a simple pattern anymore.  It would now be classified as a complex pattern. In reality, I’m back to using two potential Cycle degree corrections, for the foreseeable future.

The bottom trend line may now have some use, as it could point to another price level for a potential turning. Usually these “C” wave drops can show a very steep angle of decline, even to the point where very few counter waves can be seen.

Without a doubt the “C” wave would have to travel well below the 15,000 price level, but a deeper decline would not be a problem as well. The end of the “C” wave would now come to a halt at an “A” wave in Primary degree, after which we should experience another strong counter rally.

We can have a big bearish phase until solar cycle #24 has completed, by the time the 2021 time period rolls around.  After that,  you don’t want to think bearish thoughts anymore, as solar cycle #25 will certainly destroy them for us. In 2009 the start of  solar cycle #24 destroyed all the bearish market forecasts, and I fully expect that the same thing will happen again, again and again. 

When we constantly focus on new record highs while everybody is bullish, then it’s always time to look in the exact opposite direction, staying busy figuring out the potential idealized bearish patterns yet to come. 

Some may think we are going into a 4th wave triangle, but triangles are not that plentiful. Any Cycle degree triangle would have 5 massive swings, 3 swings down and 2 swings up. These would be monster swings with about 14,000 points for each swing. 

 I’m sure the idea of long term investing would be seriously tested if this scenario were to happen. I don’t think a Cycle degree triangle can happen and still finish by 2021. 2021 is the end of a 100 year time period, if we count from the 1921 low, and 2021 would also be the 89 year time period from the 1932 low. 

I have not defined the 2009-2015 wave count just yet, as this potential expanded top may be short lived. I will work the same expanded top with the SP500, but others may not even have this expanded pattern.

The only way to see if a wave count is real, is by constantly throwing your best wave count in front of a bus, or a stampeding gang of bison, and take the wave counts that survive the best. 

Knowing that an expanded flat top may be taking place is a big deal, as these waves have extreme forecasting powers built in.  In other words, when the wave counting gang is screaming DOW 5000, 3000 or even 1000, then I will be screaming DOW 24,000-34,000 for the next SC degree wave 3 top. That may not happen until after the 2029 time period is reached.

What will be certain is that these markets will become massively oversold long before they will ever hit their real bottoms,  but the majority will never even look at that, as they will be busy selling out in despair.    

DJIA 2000-2017 Review

The above chart is a simpler version of what I see as 3 sets of wave 3 tops. Every 4th wave correction is followed by a 5th wave, with the 2009 to present fitting better as a diagonal than an impulse. Any diagonal bull market should tell us that we are in a 5th wave, as the huge bearish rally concept will not fit. I have never run into a big 8 year bear market rally and we can go back a hundred years or more.  Long term readers know this old pattern, but new readers may not have had a chance to see it. 

The majority of expert wave analysts today, are still counting in SC degree, or they think we’re in GSC degree. The reason so many are in this high degree count in the first place, is because they are all working from a 4th wave base, thinking that a 5th wave can extend several generations. Hey, I followed the same wave count as well, but realized something was very wrong with their counts. 

We will never find any SC degree if the entire set of 5 waves in Cycle degree, is not found first. From my Cycle degree perspective, which I switched to in 2013, has not forced me to move any peak or gully since the 2009 bottom. This can provide a strong confirmation that we are close to a real wave count that we may be able to forecast with.

I think counting out the DOW is very important, as you have to understand the extended wave 3 principle, but if we don’t get that 1970-1980 wave count right, then all the little numbers and letters in the world will mean nothing! My Submillenium wave 2 ended with the Little Ice Age, so at a minimum, we can expect an extended wave 3 terminating some time into the 21st century. 

All the different wave 3 peaks have an increasing count by one degree higher each time, so I’m very confident that the next major wave 3 peak will be SC degree. This may not happen until 2029 or a bit later as 20 and 30 year cycles are also involved. 

We have a very good chance of heading into a Cycle degree 4th wave correction, followed by another 5 wave impulse type of a market.  This 5 or 8 year  bull market, must be 5 waves in Primary degree, which would terminate at my 5th wave in Cycle degree and wave 3 in SC degree.

I may not know exactly what wave count we may be at, at any given moment, but I sure do have the confidence in knowing what will never fit, once I figure out their degree list. 

I’m pretty sure that these high degree fear mongers would be expecting a decline well below the 2009 crash bottom, but the markets have a nasty habit of always doing something else. Just to prove these mega bears wrong, it would be great if any Cycle degree crash never ended past 2009 lows, but that the markets stop well short, leaving everybody wondering what happened again.  

If we look back (hindsight) to the 2008-2009 bottom, and still not be convinced that it was the place to be with a major long position, then the next time this happens we will still be too scared to take any strong position.

I’m not the type of a person that sees a depression, boogie man, or the end of the world around every corner, because If the climate or a comet is going to exterminate humankind, we will never know what hit us before it happens. 

 

Mini DJIA Intraday New World Record High!

Since the first top in June, the DJIA has created another two peaks, with each being a bit higher than the previous peaks. This can be called a triple top, and this recent record high has only made minimal gains.   When those emotional bullish investors realize that their gains are mediocre, then they can decide to sell or, new greater fools refuse to show up!

Mirror, Mirror on the wall who is the greatest fool of us all?  Who is that last guy thinking that stocks are still going to go to the moon?  We just finished another world record high this morning, so we will get another chance for a different type of a decline in the next bearish cycle.

On a bigger scale Cycle degree wave 3 will have to be moved to a new home. The majority of wave analysts are working on SC degree, but in reality not a single wave pattern has been confirmed even remotely close to any SC degree.  SC degree wave 3 may not come until the 2029 time period and GSC degree wave 3 could still be a 100 years away.

Of course the man-made global warming crowd is predicting the end of the world due to runaway CO2 in our atmosphere? This is the biggest line of crap we have ever seen, because if something is human caused, it will show in the Elliott Wave patterns.

The EWP is very good at picking out wild claims as every bubble has ignored doom and gloom predictions many times. Y2K, Peak Oil, Tulip Mania and the Civil War gold hoax, are all just a few of the fake myths people believed in at one time or another.  Oh yeah, we can’t forget the Tooth Fairy and Santa Clause!

Man-made global warming by CO2 emissions is a scam, developed by corrupt, climate science officials and governments that want to tax your carbon emissions.  It has been proven that the temperature charts have been manipulated with the Climategate revelations.

So if the world is going to end, what will happen to the wave count of the DOW?  What these alarmists are not telling us, is at what level of CO2 we can’t go under?  Under 150 parts per million “all” plant life begins to starve and die. By forcing the majority to reduce the CO2 content in our air, those man-made climate change artists, are creating a death sentence for all life on earth.  CO2 is the food source for plants which all life depends on and I will not be part of any action that condemns the world to death.

Al Gore is coming out with a new sequel, So if you want to keep being brainwashed, by a non scientist, then watch the sequel when it comes out.  Of course, if you never heard about the Medieval Warm period in school,  or the little Ice Age that followed, then any large degree wave count I am working will not mean very much.  Any warm period in the past correlated well with the expansion of civilization, but it was global cooling that crushed all advancements.

The Mythical Supercycle Degree Reviewed

The ELLIOTT WAVE lives on – Anthony Caldaro – Public Chart List – StockCharts.com

Before you read the posting below, please follow the link above and look at the Caldaro DJIA wave count, for the 2007-2009 crash. He labels the 2009 bottom as a Supercycle degree wave 2, (SC2) but in doing so he has destroyed every wave count since the 1929-1932 crash.  In order for SC degree wave 2 to be real, a very precise sequence has to unfold to confirm it. 

I am commenting on this because he has also altered the degree list, inserting an extra degree (Major Degree) and renaming a few of the smallest degree levels with Nano and Pico degrees. 

When it’s convenient all the wave analysts ignore their own time span claims. They brag about these SC and GSC degree bear markets lasting 100 years or more, while they count SC degree patterns lasting only 3 years.  This is all very hypocritical work!   Now we have another SC degree wave 2 crash and they are trying to tell us that it lasted even less than 3 years. WOW! SC degree wave patterns are getting shorter and shorter.  It must have something to do with man-made climate change, bending time as well. 

Making cosmetic changes will never work, as any single change also cascades backwards in time, much like a set of falling dominoes.  The entire SC degree wave count going back 100’s of years has to be recalculated. I have recreated the wave 1-2 in SC degree below, and from my perspective, a very specific 5 waves in Cycle degree “must” follow. 

The wave count below is so large that they can claim to be right with any move the markets might take.  The next correction must not fall below 2009 levels, otherwise the entire wave count “must” be thrown out. It may take many years before this can get confirmed, and that’s far too long to carry a worthless wave count for.  Any lower degree changes all that, as lower degrees are far more sensitive. It only takes less than a Minor or Minute degree move, to find out that we are wrong.  

 

I have mentioned it many times, in saying that any SC or GSC degree wave count has never been confirmed by anyone. Since 2000,  the EWP has turned into a short term trade setup tool, and nobody makes the effort to go back in history, and recount everything.  I take a 100 year perspective where you have to mentally transport yourself back 100 years, (1917) and then look forward and up, to see what can continue to happen. 

Yes, my wave counts do have a SC degree in our future, but that can take until 2029 before we even get close. It sure will not be any wave 1-2 in SC degree, but it will be wave 3 in SC degree.  I will reduce or drop any GSC degree comments in the future, as we will not even get close to any GSC wave 3 until 2129. Of course by that time, the end of the world will have arrived as mankind will be buried under a mile of ice!  😯 

The majority of charts produced by wave analysts, bog their chart’s down with every conceivable tool and prices. This is so bad   that we not longer can see any waves that need to be counted. Baffle us with bullshit and fear, is the name of the game, as the expert wave counting wizards continuously create smoke and mirror side shows. 

Sure, I may not always know exactly where we may be, at any given time in the big scope of things, but I sure do know when any Elliott Wave count will never fit into the idealized sequence. 

E-Mini DOW 30 Intraday Decline Review

Just before I worked on this chart, I looked at the DJIA from a weekly chart perspective. We would need a magnifying glass to see any movement at all. The 3 degrees I am starting with, is still not small enough as I have used up Micro, Submicro and Miniscule degree levels. I would have to dip into my extra 3 custom degree levels to keep going. 

This is not a big deal, as degree levels can be adjusted when we progress for another few more weeks. The markets are now soaring as I post, so it will be critical for this rally to stop, and then reverse. When the markets constantly produce, lower highs, with lower lows as well, then this is a good sign that the markets are over on a bigger bearish side already. 

Violent swings in both directions, end up attacking bulls and bears alike, as they both get into mini traps. I included Cycle degree wave 3 for the big top, but it’s not glued down just yet. Everybody that has been reading my work for any length of time, knows what the three choices are. 

In the beginning very few people know that a bear market is even coming, as we would have to hit a 20% correction before the herd of analysts will declare it a bear market.  This is still over 4000 DOW points away, which would retrace the entire Trump rally. 

Mini DJIA Intraday Crash Review

The DJIA stopped this morning and then started to soar again. How high this counter rally will go all depends if a real top has already completed well over 5 days ago. One thing is certain and that is we have overlapping waves that are not allowed to happen in an impulse. Any starting set of 5 waves can be a diagonal, and that’s what I look for, in the immediate future.

The DJIA has roared back so fast that it was approaching the top trend line already, while I post. Violent moves to the downside and then reverse violent moves to the upside, is the pattern we have to put up now and for the foreseeable future.

We need the markets to hold that bullish top on the 19th to help confirm and potential Cycle degree top we may have. So far it looks good, but in the markets, looks are always deceiving. It’s one of the reasons to be a bit more cautious before I plunk down a Cycle degree wave 3.   I doubt a new price low will have time to play out by the end of today, but by month’s end, with some big holidays in July in Canada and the USA, anything can still happen.

Eventually the summer could end up being pretty slow, so it is a good idea to keep the wave counting options open, at least for the short term. Long term this market is going down, and the only real question is which one of the three bear market patterns,  will we get?

We will hear horror stories about some DJIA 5000 price forecast, which they are playing the Doom and Gloom fear card. The more fear they can spread, the more money they can suck out of our pockets.  I’m pretty sure that future price forecasts of 3000, and 1000 will also hit the media, but those 3 price forecasts will never happen if a SC degree wave 3 is still well over a decade away. SC degree wave 3 is an extended wave as well, which may not finish until 2029, it surely did not end in 1929.

Where is GSC degree in all of this? Well, GSC degree wave 3 is still going strong, but we may not see any GSC  wave 3 peak until 2129. Any GSC degree wave count or forecast you may hear is based on 5th wave extensions not on wave 3 extensions. If someone comes along and can’t believe that wave 3’s are extended, then all we have to do is point to 1929 and remind them that 1929-1932 was a SC degree wave 1-2.  There was no Cycle degree wave 3-4 in the 70s, and until those two main patterns are wiped out and recounted, the debate of degree levels will rage on.

Those SC and GSC degree wave forecasters, have never confirmed any SC or GSC degree waves anywhere, and as a wave analyst, we need very specific wave counts to confirm any higher degree.

In the last 7 years not a single wave counting reader has come forward and told me they want to switch and help confirm any Cycle degree pattern. The EWP today is used as a short term trade setup, and therefore never saw the biggest bull market coming since the depression. This is pretty sad indeed, as missing a huge bull market should never have happened.

Contrarians do a much better job of reading tops and bottoms, and they are some of the wealthiest people in the world.

Insiders have sold out in May, which is not a good foundation for another major leg up.

Due to holidays and long weekends, I try to reduce any wave analysts, on our holidays. 

Mini DJIA Intraday Review: Is There More To Come?

In the last 2-3 days we have seen the markets decline and now has gone  sideways since yesterday. There is no way I can work this as a clean impulse so the diagonal wave counting must continue.  Right now the markets are in a bit of a rally so, and if this movie breaks out, and we are all ready over on the bearish side, then a new top must not happen. 

The longer this takes for the markets to return to making new record highs, the more discouraged investors will get, as they see no more gains.

Insider Selling Skyrockets in May

Regardless of what the wave count may be, insider selling soared last month, while retail investors were buying. Insider selling is a contrarian indicator, and it is warning that this bull market will die.  We are short of steaks to put on the barbecue this summer, so the stock bears have to slice and dice their way through the herd, until no more stocks bulls are left.  

As usual, we should always expect some wild rallies with spikes, until we can recognize that a bigger correction is starting to play out.  We need a lot more short term evidence, to make sure that the peak on the 19th of May will hold. 

I can no longer look at this market as a staunch bull, even though we may hit another record high. One day the daytrading herd will panic, and they will put their mouse over the sell button, and run to the hills. More and more protective sell orders will congregate below present prizes, but any lingering bull market mood will take some time to wear off or disappear.     

DJIA 2009-2017 Bull Market Review

When the big markets are pointing up and the talking heads are also pointing the markets in the same direction, then this is when I’m already building the next pattern heading down. I’m not that concerned in how much higher this market can go, as I’m building a potential picture in how low it can go.

How low this market can go, all depends on where our original wave two starting point was, and how popular 5th wave extensions really are. With stocks 5th waves do extend, but many times it will be one of the last 5th waves in a run. It is wave 3 that has to be the longest wave.

The last 5th wave extension happen from the 1987 crash bottom to the 2000 peak. From the 1987 crash bottom, the markets exploded with a wild sequence of 5 waves in Minute degree, which translates into just one move in Minor degree.

It took me until about 2013 to finally look at the bull market from a 5th wave perspective. Not as an impulse, but as a diagonal wave structure.  Diagonals, are just zigzags connected together with flats or triangles in a 4th wave position, which the EWP does not explain very well.  In the book they label an ending diagonal like an impulse, but in reality they are zigzags linked together. To separate the normal impulse waves from diagonal impulse waves, I use a specific wave counting method that is also shown in the book, which most experts seemed to ignore.

When I see analysts turning diagonal wave patterns into impulse wave patterns, then they are ignoring all the zigzags that are linked together in waves 1, 3, and 5. 

On the chart above, I show 4 horizontal lines, that had significant meaning on the way up, which on the flip side can provide some major turning price levels on the way down.

We have been told over and over about markets, retracing back to the previous 4th wave of one lesser degree. When all wave analysts are walking to a different drummer, then who had late 2002 as a previous 4th wave?  The 2009 bottom 4th wave went much deeper than the late 2002 bottom, so the previous 4th wave is more of a guideline, than any strict rule. In short, I never use the previous 4th wave bottom like a rule, but I use it as a very strong guideline. 

 Now we are faced with a potential move that is two degrees higher than anything that the late 2002 bottom produced,  and one degree higher than the 2009 bottom. Many experts will look for new record lows, with DJIA forecasts to 5000, 3000 or even 1000, becoming very popular  again.

One thing is certain, by the time the markets get to the next major low, fear mongering by the experts and the mainstream will be front page news. When that day arrives, fear will keep investors out of the markets and at best you will be holding a token position just before the Roaring 2020’s get started again.  

 

Mini DOW 30 Review: Another New Record High

This morning the DJIA seems to have peaked yet again, and then very quickly reversed.  After constantly breaking new record highs, the DOW is ripe for a big correction. How big of a correction all depends on the size of the degree top we may be coming to.

The million dollar question is if it is a Cycle, SC or a GSC degree top?  Fear or fear mongering is the name of the game, and the more fear they can spread, the more we are brainwashed and manipulated.  Since the 70’s we have been brainwashed by Elliott Wave enthusiasts, that a GSC degree depression is coming. DOW 5000, 3000 and even DOW 1000 have been forecast by the wave counting experts. 

I think this market will fool us into thinking extremely bearish thoughts, but it would not surprise me if the DOW never even cleared the 2009 lows.   Why should the markets do something that the majority of wave analysts, have been trying to forecast, since 2000?

Since 2000 not a single wave count has developed, that even begins to confirm SC or GSC degree. Very specific wave counts have to show up before we ever get into any SC degree guess work.  I get very annoyed when I see a high degree wave count, based on some mythical past where 5th waves are the extended waves.  With stocks wave 3 is always the extended wave, and rarely does the 5th wave extend. Back in the 1900s we had a Cycle degree 5th wave extension, where 5 waves up in Primary degree was a long diagonal, and not the pretty impulse waves that analysts seem to see. 

Any Cycle degree 4th wave bottom is still far away and it could take until 2021 before we actually see a bigger and better picture. 

 

E-Mini DOW 30 Intraday Record Top Update

This chart is showing the DOW 30 which doesn’t trade in the night sessions, but only moves during the day trading hours. This chart smooths out at times hiding the worst of the mini choppy moves that make up the June contract.  We are still at record highs, but the DOW backed off just a bit., forming a few small double top spikes. These are very small waves that can still go either way, up or down.  

My Cycle degree wave 3 is eager to find a permanent home, but markets are not that cooperative. Many claim that wave counting is easy or they talk about east trade setups all the time. I find this rather funny as most of these claims are based on wave counts that have “Never” been confirmed by anyone. Since the 2000 top, not a single wave count has been confirmed that puts us into a SC or GSC degree correction.  Very specific wave patterns should have developed after 2000, which is 5 waves in Primary degree. 

Five waves in Primary degree, up or down is the cutoff pattern.  It separates everything from Cycle degree wave counts and SC degree wave counts.  The analysts that think they are soaring with 5 waves in Primary degree, or if they are looking for a 5 wave decline in Primary degree are already in SC degree. This is a massive two degrees removed from my Cycle degree perspective. The only way to begin to fix that problem is, analysts have to go back 100 years or so and dump all those silly 5th wave extensions and acually do a review. Of course that sounds too much like work, so a past review by the experts doesn’t sound like it will happen anytime soon.  It is easier to follow the herd of wave analysts, than it is to look at it from the idealized chart perspective. 

This market has been frustrating to count out, but I know it’s the job of the markets to keep us all confused as to the next direction.  The markets can keep these choppy rallies going and then suddenly pop again when we least expect them to. 

E-Mini DOW 30 Intraday New Record High Review

From the May, 18th DJIA bottom, the markets have charged back, in what looks like a strong move. In reality they show the desperation of participants to ride this bullish phase.  They only ask, How much higher can it go”? 

They should be asking how deep can the markets crash down to?  Every bull market has a start and an end, but knowing the exact wave that it will end on, is always a crap shoot in the short term. One good thing about any new record high is that we don’t have to fight with multiple tops. Double tops or what some call, “truncated tops”, makes it more difficult to figure out where to count from, which so far is not an issue. 

In the long run, we are heading up to a Cycle degree wave 3, which is now off by a Minute degree, from my previous Cycle degree top. 

All my work starts from a wave 2 base as the majority of expert wave analysts have been working from a 4th wave base since 1932.  5th waves never extend this much as they usually are the weakest waves. They can also contain diagonals which further amplify any weaknesses.  The only time that any 5th wave really extended, started just after the 1987 stock market crash. 

Since the 2000 top, not a single wave analyst has confirmed any part of any SC degree, let alone GSC degree. We need very specific patterns to confirm any potential SC degree, that we may think we are in. This wave structure is 5 waves in Primary degree.  

Any wave analyst that is presently working 5 waves up in Primary degree, in any asset class is already in SC degree, and if they are looking for 5 waves down in Primary degree, at a minimum they are also in SC degree.  GSC degree would need many 5 wave trips in Primary degree, up an down. 

From the 2009 bottom we have a diagonal 5th wave, not some 8 year bear market rally that has never happened in market history anywhere. 

As I post the markets have pushed higher, which makes my wave count still a bit too early.   Any new record high can be the last record high, and sooner or later the greatest fool rushing in, will have bought his DOW long position.

Insiders have long left this market, and only the retail, and speculator  trend chasers are left playing this game.

The VIX has also hit new record lows, so it can make a nice bounce when fear strikes again.   

Mini DJIA Bouncing Around Record Highs

This DJIA chart is just starting to make another decline, which can still reverse and even soar. Even though it looks like a new record high, it could be a fake. The DJIA still has not exceeded the March, 1,2017 peak of 21,106.   We are down to the wire as one  little fast spike up would create a new record high, which would move any Cycle degree top over to a new location.

This would make it about a Minute degree of a difference, which I can live with, but being out by 2 or 3 degrees, would be unacceptable.

This market has produced many wild rides, combined with some stunning reversals.  This may continue for some time into the next bearish phase, so pretty impulse waves will be hard to find, except for some very small degree levels. The 2009-2017 has been a diagonal 5th wave bull market, or that’s what I see it as.

Not until this market creates an obvious decline that the majority of bullish investors, will not suspect that a bigger bearish phase is coming.  We are 5 months away from the 30 year anniversary date of the 1987 stock market crash. Usually  the media will call  it  a “Black Anyday” kind of an event, but by the time they may do that, the bearish phase will be over. Well, maybe the first stage of it, as the markets, even rallied in 1930 before they resumed any decline.

DJIA 30 E-Mini Intraday Review: The Top Is Still Holding!

 

This DOW 30 chart produced a major top way back in early March 2017, and at this point it still has not soared like the Nasdaq has, and the SP500.   This puts the DOW behind in the game of pushing higher and higher.   We can also see the  many huge gaps in the charts, which makes the DOW look like it is floating on air.  It would be floating on air, if we want to call this a bubble. Only the people inside the bubble do not see any bubble, and they will always say, “There is no bubble”. One thing we did get is a stock mania run, that started in 2011, and is still going.

All this could reverse if this market has seen its last bullish days, but even now there is always a threat of one more crazy move to the upside, and until that has passed, it is wise to remain open minded.

Again, any long term correction is based on an impending  Cycle degree 4th wave, where SC degree wave 3 is still decades away. If we are lucky SC degree wave 3 may happen around 2029, and GSC degree may not finish until after 2100.  Steven Hawking, the great physicist, has given mankind 100 years to get off this rock, which fits well with any Armageddon GSC degree 4th wave crash!  There is no way that I can argue with this doomsday scenario, but I can only see at what wave count it can happen at. Most of the time the EWP will never confirm false forecasts, as the Y2K fears clearly demonstrated. 

The super bears also say that a depression is in our future, but again, they have been crying “wolf” for so long, it is hard to take this forecast seriously anymore. 

Sure, recessions will always be part of the market cycle, but as soon as they see the fundamentals of a recession, then the recession is already over! 

DJIA Intraday: Market Top Review

This DJIA chart is in bar type, but when I switch to line type we can see a huge difference in wave patterns.  How deep or how high the chart has gone  can change dramatically when  switching  between the two.  The Bar type is great for seeing all the spikes and gaps, but in the case above the intraday chart has been stretched which allows us to look back a bit further in time. 

The wave analysts that force these waves into impulse waves don’t understand that there are two types. With diagonal waves, we have zigzags linked together and the intervening correction acts like glue in holding the zigzag together.   You sure can’t call them “WXY” waves as we have to sort out what the flats are.  Any double flat is rare if not impossible to find. Sometimes the 5th wave ends up which contains a type of pattern, something that reminds me of an elbow joint. 

By this chart the DJIA saw a peak over two months ago, followed by a run down that still has not broken to new record highs. After the diagonal 5 waves down, the DJIA blasted upward, which may or may not be finished as I post.   Another three wave blast did not carry the DJIA to a new record high, so technically this pushes the DJIA over to the bearish side of the markets. 

For now I have to keep the degree levels pretty small as from daily and weekly chart perspectives, these moves hardly show up.   We need more evidence that this market has had enough, but all the exhaustion gaps sure give us a clue. 

The mid April rally alone contained two big gaps which makes it look like it is suspended in mid air, like a magician levitation trick. These are not signs of a stable market, as the public is brainwashed to stay in the markets.  Any crash that may come, will wipe out all the paper gains, and investors that were brilliant during the bull run, will leave all those paper gains on the table. The majority cannot win money from the majority, as it is mathematically impossible to achieve.

What type of correction, we are going to get is open for debate, but you can leave out any idea of a cycle degree triangle. I think triangles are pretty rare even in 4th wave positions, as we haven’t had one in 100 years. The mid 1900’s fits into a diagonal 5th wave in Primary degree before you will ever force it into a triangle.   

At this point, even SC and GSC degree 4th wave corrections may not develop any triangles as they may just alternate between flats and zigzag corrections.

Stephen Hawking, the world famous physicist, says we have 100 years to get off this planet, for mankind to survive the coming of the end of the world. 

Ask yourself, At what wave count will this happen at?  To get to GSC degree, we still need 5 waves up in Cycle degree, after our present Cycle degree 5th wave is found. 

 

DOW E-Mini 30 Intraday Rocket Ride Review

 

This Mini DOW chart still has not broken any new record highs. Since the early March top we had what sure could pass as an impulse decline except that the 4th wave dipped into the wave 2 price territory. This alone kills any idea of an impulse, but it sure would work as a diagonal decline. The DOW would have to make some impressive moves to catch up to what the Nasdaq has been doing, but this is nothing new as the Nasdaq seems to march to a different drummer which it has done many times before.

It should be very obvious to any observer is that this DOW rally has opened up two extremely large gaps, which I think this market will have no problem in filling again. It may take more time, but the odds of filling  any gaps are always 90%.  There are more open gaps far below so all these will eventually all get filed as well. 

The Nasdaq pushing hard to new record highs can brainwash into thinking the same thing is going to happen to the DOW.   The DOW needs to keep on this decline if it is over the, hump of Cycle degree wave 3.  Only time will give us more answers as price has very little to do with it. Any prize can be obliterated,  if the pattern is there, so we are just witnessing this at a smaller scale. 

Many Wave counter now thing they are at a SC degree top with still many others working this as a GSC degree top.  Good luck with that, folks, as you must have the 5th wave in Cycle degree down pat in order for a SC degree correction to occur. Many have tried to count out from the 2000 peak, a double expanded flat, but double flats anywhere do not happen. 

I can just see it happening again, when the markets are in another oversold position. The big degree wave counting experts will miss that bottom as well as they are hell bent on forcing us to believe that the markets are going to 1000! Folks, there is nothing down at DOW 1000, 3000 or even 5000, that fits a previous 4t wave of one lesser degree. 

The big question is what pattern  may develop once the Cycle degree wave 3 top holds. Our EWP book tells us we can have 3 simple corrective outcomes, with the triangle being very low on my list.  The SC degree crash from 1929 to 1932 only took 3 years, so there is not going to be a 100 year SC degree correction, or some mythical 600 year GSC degree correction.

Even Steven Jon Kaplan does not anticipate a complete meltdown below any 2009 prices, which he has hinted to me already in an email. 

The entire problem with the EWP is that the majority  seem to love the higher degree wave counts, as it can make them sound very impressive, which sells more subscriptions and books.  Big and tall moves have no correlation to big degree patterns, because when markets extend it is the small degrees that come out from hiding. 

This market has to give us much more of an idea if we are to get a zigzag or a flat for a Cycle degree correction. Either way somewhere we should get an “A” wave bottom, followed by a “B” wave counter rally.  We are still far away from that, before it becomes more clear what the corrective pattern will be. 

 

Important DJIA 1929-2017 Review

 

It is always a good idea to review the entire  bull market at critical turning points.  In this case it is the DJIA, which has a good long history we can see. I have made it pretty clear that I follow the Cycle degree wave counts, which without them, we can never move into any SC degree or GSC degree positions. The chart above is in Logarithmic  or “Log” scale which shows some beautiful patterns.  The big problem is the degree we should be in, and that wave 3 is always the extended wave, with a 5th wave extension as  being more rare than a common occurrence.

I show three places,  where the wave 3 is extended, and one where the 5th wave extended dramatically. In the 1950’s it was wave 3 in Intermediate degree that was extended pushing wave 1-2 in Primary degree into the 1970’s. The majority of expert wave analysts do not extend wave 3,  as they called the 1929 peak  a wave 3 in SC degree.  1929-1932 fits far better as a wave 1-2 in SC degree. Right in the middle of a depression the historic bull market began. This ended up with the markets basically ignoring all fundamentals and proceeded to soar into a super bull market.  The crash from 2007 to the 2009 bottom looks identical to the 1932 decline, but it was 2  degrees lower.  Many have the 1970’s as a sideways Cycle degree wave 4 which basically extends all 5th wave in the process.

Sure the 70’s looked like a sideways pattern, but looks are deceiving. There is no rule that says we can’t have an expanded flat in a wave 1-2 position,  as I see them on a smaller scale many times. Wave 2 in Primary degree ended in early December 1974, which was followed by another 1-2 wave in Intermediate degree which contained a running flat. (Red). Then again, after wave 1-2  with Intermediate degree, we had the third 1-2 wave but in Minor degree.  It was the 5th wave in Minor degree (blue)  that extended dramatically after the 1987 stock market crash.  The only time since the 1932 bottom that a 5th wave extended.

Sure, I was in the same trap  as I counted everything just like the majority have been doing. This will never work as the majority can never be right!  If we look back, we can see that 1977 contained a corrective move, followed by another 1987 corrective move. The years ending in 7  and corrective moves are still not finished as 2007  was followed by a crash as well.  Now we are in 2017, so if the theme stays true, we could see another corrective move but in Cycle degree.

 

This chart is in linear scale which displays the stock mania very well. Since 2013 I have abandoned the idea that we were on a big bearish “B” wave, until I realized I can’t have the same wave count as the majority had at the time.  Any 5th wave can contain an ending diagonal, but that is not the case this time.

A choppy bull market acts  like a diagonal which can happen in “Any” 5th wave. They are zigzags joined together with flats or any complex correction in the “B” wave positions which on the chart above,  I did label it the way it should be labeled.   When we look at the charts in this bigger scale, we can see the  wild spikes to the downside in early 2009, now followed in early 2017 with  a massive spike to the upside which also contained another zigzag.  Vertical moves like this can never be maintained, so it is just a matter of time before it reverses.

The majority of wave analysts that are already in SC or GSC degree, will never agree that we may be at a Cycle degree top, but that no longer surprises me anymore. I’m sure the 2002 bottom and the 2009 bottom is pointing a Megaphone pattern to 5000. The problem with that is, there is nothing down at DJIA 5000, nor is there any previous support at 3000 or even at 1000.  These numbers are all pulled out of a magician’s hat,  as they have no logical reason to exist.

I think in the bigger picture, this impending Cycle degree 4th wave will fool us by falling short of any 2009 bottom (6500)and roar up again in another 5-8 year bull market.  This will leave all wave counters empty handed again waiting for that horrible depression we have been hearing about.  I doubt very much that any 4th wave correction in Cycle degree,  will bring any depression at all. These major ugly forecasts are based on wave counts that have never been confirmed by anyone. From the idealized charts we can figure out exactly what degree positions we need to confirm any wave count.

Elliott wave has nothing to do with what we see in the real world charts, but it has to do with well drawn out idealized charts. In any impending correction, we always can have a choice of three simple patterns, with the triangle being very low on my list. Matter of fact, there were no triangles in the entire 1932-2017 bull markets, so I doubt very much that we are going to face some mega years in a SC or GSC degree.

These super long time periods they use,  are pretty useless as they are more like scare tactics to sell more subscriptions and books.  If a wave 4 in SC degree can only take 3 years, we sure are not going to get 600 year bear market in stocks.  Hell,  the next ice age will come before the next GSC degree bear market arrives.

Since the 1987 crash we had 5 waves up in Minute degree, then from about 2002 to 2007, we had 5 waves up in Minor degree followed from the 2009 bottom with 5 diagonal waves up in Intermediate degree. Each 5 wave sequence jumps by one degree, so we know what 5 wave sequence we should get in the next bullish phase, during the rise of solar cycle #25.  None of my readers have figured this out yet,  even though I have talked about it many times.

 

DJIA Intraday Bull Rally Review: Going To The Moon!

 

Any vertical move like this can get the stock bulls all excited again. If you look closely we can see another huge gap has opened in this big DJIA move up.  Two huge open gaps do not give this chart a very stable base. It looks more like prices, are floating in space, than any legitimate start to a new leg up.  Those 2 big gaps combined with 4 other smaller gaps, gives this market lots of room to head south again. 

Until this market clearly breaks to new record highs, the bearish wave count is still alive.  The new moon is today, so this can always provide a possible turning point.  The Cycle degree top is holding on for dear life, as any fit of stock buying panic could push this move over the top.  It is the last thing I want to see happen, but we have to keep an open mind in the short term.  I’m sure the majority will be preaching the up and coming depression in GSC degree, but they have been doing that for decades already which has never materialized. Sure, recessions will always happen, and I’m sure we can’t sidestep the next one as well.

Basing fundamental outcomes on a wave count that has never been confirmed by any expert wave analyst, is not something I can support or accept any more.   Of course SC and GSC degree wave counting abilities sell fear, which in turn keeps the majority out of the markets as they wait for things to get better. 

From a potential Cycle degree perspective, we are not going to get a 4th wave bottom depression, as past depressions came from large degree, wave 2 bottoms.

I think the markets will have a big trick up their sleeves when a major bottom appears, because it may not go below “any” 2009 bottom at all. Imagine being at DOW 8000 or even DOW 7000 with all indicators showing a screaming buy. Are you going to get fooled by any DOW 5000, 3000 or even DOW 1000 depression forecasts? The majority will get sucked into this fundamental bullshit again, and you will be left in the dust as the market soars once again. 

Solar cycle #25 will have started, by the 2021 time period. The up cycle of a solar cycle has a great built in bear terminator, just like it happened in 1923.  

 

DJIA 2000-2017 Cycle Degree Review: With Supercycle And Grand Supercycle Degree Commentary!

I spent many years learning how to count by following all the other wave analysts who were counting wave structures in Grand Supercycle degree (GSC) and in Supercycle degree. (SC) SC degree always comes before GSC degree, and Cycle degree comes before SC degree.  The waves we see in the real world are the simple, easy waves that any wave analyst can count and label with little trouble.

The EWP is a very subjective look at the markets from a GSC degree perspective, and all the practitioners that bought the EWP book have been taught to look at the markets much the same way. After many market failures, and missed bull markets,  I decided to knock down all the degree levels by one degree, which at that time moved everything into the SC degree world.

Things started to make more sense but still it was not good enough, because I always had too many degrees left. It also never matched anything that the contrarians were already doing.  This became very obvious after the 2002 and 2009 bottoms, as the experts still had very bearish wave counts at that time, while all the contrarian indicators were telling us otherwise.  In hindsight, most wave counters were working 5 waves down in Primary degree in 2002 and 2008, yet both of these wave counts failed dramatically.

The EWP is not about what you see and what we think we can see in the markets, the EWP is all about how we visualize and draw out the 5 simple patterns, and knowing how they fit together sequentially.

To understand the EWP from my perspective, I see the EWP as one big impulse wave, with all wave three positions being the longest waves. This one big wave structure started with a wave zero, after the ice age was ending, about 13,000 years ago or about 11,000 BC.

This is a pretty specific time period, and it is when the CO2 content in the earths atmosphere, crossed above 240 parts per million.  It is when plant life started to grow dramatically and agriculture started to spread around the world. Better farming methods, warmer climates and higher CO2 content in our atmosphere help support commercial farming, which was the only way that city states or empires could grow.  

All the big civilizations grew during a high degree wave one position, with periods of  (Global warming). Civilizations, then died or were cut down during the big wave 2 declines, which coincided with periods of  (Global cooling)  Submillennium wave two can fit into the Dark Ages very well after which GSC degree wave one also formed in the 1800’s  This massive singe impulse wave structure is based all on the waves starting with a 1-2 count.

In other words, Elliott Wave 5.0 is based on all waves coming from a wave 2 base with extended wave 3s, and is “NEVER” based on the 5th wave as being the longest.  Yet, when we look at all the expert wave counts out today, most of them are based on the 5th wave as being the longest wave.  The worst of these came after the 1929 peak,  as they were all convinced that the 1929 peak was in fact a wave 3 in SC degree.

I fell into the same trap and it took me a long time before I changed 1929 to a wave 1 position in SC degree, which made 1932 a wave 2 bottom. 1932 is the start of wave zero in Cycle degree, from which another 1-2, 1-2, and 1-2 base started from. In the 1950’s it was wave 3 in Intermediate degree that was extended, pushing wave 1 in Primary degree to the 1960’s and 70s. It is also one main reason why the 2007-2009 decline contained no expanded pattern.

 

 

One huge single impulse wave structure eventually gets to the half way point,  which is when it hits a Minor degree wave one in a Primary degree wave 3 impulse.  If the 2000 peak is too high of a degree, then we know that the past wave 3 has not been extended.  I can dream up virtually any wave count you would like, and the higher the degree the more impressive it may sound. The sad fact is, that what you see are actually much smaller degree levels.  Big and tall,  does not make them higher degree levels, as it is the smaller degrees that become visible when markets extend. 

With wave two bases, eventually only the waves 3-4-5 are left to play out which is the situation in the DOW chart above.  Intermediate degree wave 3 in red peaked in 2000, followed with the wave 4 bottom, and the wave 5 peak in 2007.  The 5th wave subdivided into 5 waves as it should, and in this case must be 5 waves up in Minor degree.  This theme will repeat itself over and over again growing by one degree each time.  This will be important to understand as any 5 waves after the Cycle degree 4th wave bottom, must follow in sequence as well. In other words, we must get 5 waves up in Primary degree, to keep everything in sequence, which will eventually terminate at wave 3 in SC degree.

SC degree wave 3 may take until 2029, before it gets close to finishing.  After the SC degree wave 3 tops, and then the SC degree 4th wave bottoms, what is the wave pattern we must have, before we reach any GSC degree position?  We must get another 5 wave sequence, which must be 5 waves up in Cycle degree.  At this rate any GSC degree top may still be a 100 years away.

As I have mentioned many times,  I hunt and track the 5 waves in Cycle degree, as it precedes all SC and GSC degree wave patterns. Without all the Cycle degree peaks being found, no SC or GSC degree can have a base to build from.  All SC or GSC degree price forecasts mean “nothing” in a Cycle degree world, so the next time you hear DOW 5000 or DOW 3000 being mentioned, chances are good you will be left out of the markets holding a bag of wooden nickels. 

 That 2009 failure to forecast a super bull market should never have happened, as any failure of this type of wave counting is not an EWP problem, but it’s a human problem.  The failure to go back in time and fix any non extended wave structures, must be initiated as soon as any large degree wave structure fails.

Of course, that’s too much like work, as it is easier to cosmetically change any wave position, rather than going back a 100 years, and change the basic structure. 

 

The above template is specifically meant for a Cycle degree flat correction,  followed by 5 waves up, with an extended wave three.  2017 may give us the Cycle degree wave three top, so the readers to this blog will need this template for the next few decades. With a few changes like a potential zigzag, this same template can work for the Intermediate degree wave 3 peak in 2000. Change it again to Primary degree, and this template will work for wave 3-4-5 from the 2007 peak as well.  The corrections will be alternated and may be a very fast moving zigzag and not a flat. The idea with any template is to build, and get all the degree levels and their wave counts memorized,  so we never have to look into the book again.

The EWP book only shows us nice pretty waves all the same size, which never happens in the real world. Waves are never even and they are never always impulse waves.  Diagonal waves are a big part of any wave structure, but most wave analysts just ignore them and turn everything into impulse waves. 

If I dig pretty deep into my inventory of templates and idealized patterns, I’m sure I have a SC degree wave 3 all drawn out already. Of course, all the wave counts will end, or even disappear once we enter another ice age. 

E-Min DJIA Intraday Gyrations.

 

In the last few days the DOW took a big swan dive followed by another wild ride up, which may have completed this morning.  Now we have to see it the recent peak will hold  and then push lower and make a downside breakout. The majority are working on what the call key support price levels to be broken, but the price does not determine support. It is the pattern that supports a price, and the problem with that is the pattern is really ever that clear. 

We have already been over on the bearish side for most of the month of March, and they will not declare a bear market until it retraces about 20%.

Little do they know that the this market could ultimately drop by 70 or even 80% in the next 2-3 years, so support price levels will have little meaning in the log run.  Even when we get to an “A” wave bottom,  support will only be a short term bet at best.   The best turnings are always the turnings that force the majority betting in one direction, and then forcing them to bail out, and go the opposite direction. 

Very few traders have the drawdown capability to stay in a huge “B” wave rally, so most of these turnings I like to see will contain lots of fear. 

The VIX would be in a vertical move and gold stocks may be overbought by a large degree. We still have lots of time before we even get close to this “A” wave in Primary degree, so anything can still happen.  I still favor a flat in Cycle degree as wave 2 in Cycle degree looked more like a zigzag. 

DJIA Special 1970-2017 Linear Chart Review: The Spike To Die For!

 

Every once in awhile, or close to any major top, I like to look at the charts with a linear chart setting. Doing this can give us a much different perspective.  We can see the major spike that has formed during 2016-2017, which looks about as vertical as we can get.  A spike this straight and this long is not going to last, no matter what the fundamental hype is that they are throwing at us in February 2017.

The warning that I always pay attention to is, “fundamentals will always tell you the wrong things at the extremes”, which is a quote from EWI.  Any extreme can still push for even more of an extreme, but sooner or later this huge market spike will implode, as this momentum will never last. Stock bulls dominate the markets, as they have shredded the stock bears, which are now sitting in the freezer waiting for barbecue days!  🙂 

This chart also shows how the majority is happy buying at extremely high prices, which goes against all contrarian principles.

At the 2009 bottom the majority of wave experts did not see the bull market coming, as they were still waiting for DOW 1000. Over and over I have witnessed expert wave analysts miss one bull market after another, and I blame this all on being trapped in a much too high of a degree.  I know, as I spent well over a decade chasing SC and GSC degree wave counts and high degrees are far too insensitive to the bearish mood of the investors.  

As I have mentioned, I look at the markets from a Cycle degree perspective, and until all 5 Cycle degree positions are found, we can never hope to enter any SC degree world. 

This bull market is getting far too old, and when it blows we should expect a Cycle degree correction, subdivided by three waves in Primary degree.  

Mini DJIA Intraday Record Bull Market Review

 

 

This is a yearly chart which I made up because I moved my “A” wave in Minor degree up a bit. This makes the zigzag a bit more even and gives us an extra degree to work with.  It still is a 5th wave, of a 5th wave,  when we start our count from the 2009 bottom.  The two 5 wave sequences alternate perfectly, with the “A” wave being big and fat, and the trailing “C” wave being tall and skinny.   This is a very common combination and they also reverse this pattern constantly to always try and fool the very best wave analysts.  My largest degree would end at a Cycle degree wave III, which means I’m nowhere near, or in any SC or GSC degree positions.

 

 

My Minute degree is now down at the January bottom, which gives us one more degree level to work with.  We are in another 5th wave, but in Minute degree and sooner or later we would run out of degrees again. Again, I would like to stress that all the visible waves are diagonal wave structures, which happen most frequently in 5th waves, at all degree levels.  The markets are still pushing higher as I post, so when it’s going to stop, is still a crap shoot.  

This peak has been much harder to get right than all other peaks since 2000, but if it were easy to do then all wave analysts would be super rich!   Today is also the full moon, so that can provide a turning time period, which may not happen until closer to the end of the day. 

DJIA Index 1982-2017 Review

 

 

Looking back in chart history is where we will always find the best fitting wave positions. You will never find them by drawing  pretty wave structures pointing into the future.  If the past wave degree is still out of wack, then we will still miss every bull market that will ever come down the pike. 

Back in the 70’s they all though they were in a huge Cycle degree bear market and there was no hope for a bull market to materialize. Yet a bull market took off and hardly looked back charging up to the 2000 peak. All the wave experts started their GSC degree wave count heading down, which failed miserably just a few years later.  It failed so bad that they missed an entire 5 year bull market, waiting for wave 2 in Primary degree to finish.   Did they conduct a complete review of GSC degree?

No, they just tried the same old wave count again from 2007 to 2009.  During the 2008-2009 decline insiders were buying their own companies, and all the major contrarians were bullish towards the stock markets.  Yet the wave analysts missed all this as they were still chasing that illusive wave 2 top in Primary degree. In other words, in 2009 they believed the worst was still to come.

The market proved them wrong again, leaving them unprepared for a bull market, that many new would come.  Will this happen again?   I’m sure it will, as it will happen over and over again at every major turning you can imagine. 

The critical wave structure that is the most important one is 5 waves in Primary degree.  If you think you have 5 waves in Primary degree pointing down, then, you have already been in SC or GSC degree already for years, but if 5 waves in Primary degree run up, then you are only finishing a Cycle degree move, and you are nowhere near any SC or GSC degree wave position.  

From my Cycle degree perspective, we could still be a decade or more away from and SC degree peak, never mind any GSC degree peak.  If we are lucky we may hit SC degree wave 3 peak sometime in 2029.  We are getting close or soon could be at a Cycle degree wave 3 top, and sure am not looking for another silly 5 waves down in Primary degree. Any bear market in stocks has to finish by 2021 or so because we will then be faced with a new solar cycle #25.  The exact same setup as what happened in 2008-2009, which can produce yet another 5 or 8 year bull market. We may get a zigzag or a flat, as a triangle would not have enough time to finish by the time SC#24 hits bottom.  

Finding where the Primary degree “A” wave may turn at will be the tricky part, which can be somewhere around the 10,000-12,000 price levels.  Cycle degree wave 4 should take the entire Donald Trump 4 year term to play out, so we should be in for one wild ride.

All stock indices I cover should also terminate at a cycle degree top this year, so it’s not just about one index. 

Longer term I’m very bearish and until the market starts to confirm this, anything can still happen on a short term basis.