Nasdaq 100 2007-2016 Review

NQY00-Aug-13-2016

 

It took me a long time to understand the 2007 peak, as my Primary degree wave 3 location.   Once I accepted the fact that 2003 was actually an expanded “ABC” wave bottom, than the 2007 is no longer the shorter peak. It makes a much better sequential fit this way. Many times it only takes 2-3 months for us to find out our wave counts are wrong. I assure you that the markets will force me to change that 2007 peak if I am completely wrong. The fact that the Nasdaq had such a strong showing, was sending a clear message that the other 3 indices, were also in a bullish phase, and not just a big bear market rally.  

Taking 8 years to figure out that a specific wave count is wrong, is a huge under utilization of the power of the EWP. 

Of course, many will think this is 2007 peak is crazy, but it is one wave count that explains the huge bull market from the 2009 bottom.  There are no places I have ever counted a bear market rally that was longer than 7 years long, within the last 100 years.

This makes this bull market a much easier target as a potential diagonal 5th wave.  Many are very bullish on stocks as they say, “Technical analyst: Stocks have come through an ‘internal bear market’”. What is an “internal bear market”?  Something that they have no knowledge about or something not caused by outside bearish news sources. In the end it is just another way of saying, “I have no clue why the markets went up and down in the last year or so.”

If we went back to the 2009 bottom, there would be nobody that can give you the real reasons why the market went up and down for those years. We have had far bigger corrections and they all came back stronger than before.

From my EW perspective crashes and declines are just corrections in a bigger bull market, or the finishing of an old  bull market. Cycle Degree wave 3 should be still ahead of us, which will produce and entirely different bear market pattern, and with it bring entirely different bottom support prices. My favorite 2 patterns for Cycle degree wave 4 would be a flat or I will even take a zigzag. The last thing I want is a triangle!