Nasdaq 2000-2017 Elliott Wave Count Review

I’m sure we can find places of contention in the above wave count, especially from the 2000 peak to the 2002 bottom. By all means this decline can be counted out as a fairly good declining impulse.  Easy wave counts are for suckers as the markets will always send us some easy wave counts. The easy wave counts are the traps, making us think we found the next best thing, since sliced bread! 

I have looked at the 2000 peak as an expanded flat, but then the rest of the waves will not fit very well. I can work the decline as a double zigzag, followed by a “D” wave bull market, to the 2007 peak. Another 3 wave crash into the depths of 2009, which did not go to new lows.  What are we going to do with that odd ball 2008-2009 crash?  I use it as a running triangle “E” wave, and from that  2009 bottom, the Nasdaq blasted into an 8 year bull market.

It formed closer to a good impulse than any other market I keep wave positions on, as this wave count is also relatively zigzag free. 

The majority of wave analysts had the most bearish wave counts at the 2009 bottom, but yet the markets soared beyond anything imaginable in  2009. They tried the exact same wave count in 2000-2002 and that bear market also failed. I’m sure nothing will change the next time, when we arrive at another major bearish bottom.

This market is one of the most hyped up markets we have seen in a very long time, and my bet is that it will be a Cycle degree wave 3 top, and not some SC or GSC degree related pattern. 

To stay within a certain degree level you have to count out all the idealized wave structures, as  you would need them to help us to confirm our location. The difference between an Intermediate degree set of 5 waves, and a Primary degree set is huge, (. 618) or 60% as it is the cutoff point between two different worlds.  Being out by 60% between degree levels is not my idea of having fun wave counting. 

The Nasdaq is at record highs, which makes it still vulnerable to a surprise bull attack. It may still take this month before we find out for sure, but the writing is on the wall.

Updated March, 18, 2017

 

 

I thought I would add another version of the Nasdaq in Linear scale. Linear scale shows the stock bubble in a more dramatic fashion. I believe that the 2009 to 2017 stock bull market showed more of a pure impulse than any other wave pattern I have been working. The only way this will work at this time, is that the bear market from 2000 to 2009 ended with  a running triangle.  As of March 2017 we can be very close to another major top  that would give us a Cycle degree bear market.  I looked over the COT reports, and it looks like the commercial traders have net short positions, with most of the indices, I keep wave positions on.  These are bearish indicators, besides the Market Vane Bullish Consensis Report, is coming off fresh record highs as well.

At this time it is far too early to give an accurate, Cycle degree 4th wave bottom price target, as we don’t know if a zigzag or a flat is going to happen. If the early declines look like a set of 5 waves, then this could work as part of the leading zigzag to a flat. 3-3-5. My least favorite bear market pattern would be a triangle, as we would not have enough time, to complete a triangle by 2020, or even in the next 3-4 years.

By that 2020 time frame, solar cycle #25 is going to trash every bearish mood and every bearish fundamentals we can dream up. Especially all high degree bearish wave counts. 

Any Cycle degree 4th wave bottom does “NOT” have to fall below the 2009 lows, but can stop well short of that bottom as well.  I can imagine all the expert wave analysts calling for the markets to go much lower when in fact, they should be accumulating major bullish positions.  Just like the 2009 bottom, the contrarians have figured this out a long time ago, while the wave counters were still dicking around, making a bunch of mindless numbers and letters. 

The EWP is a very powerful analytical tool, but very inefficient if we ignore all the sentiment and ratio readings.