S&P Midcap E-Mini Bearish Decline Review

The S&P Midcap is another index that seems to have started its decline a bit earlier.  I try to isolate the single most important wave at any top, so we can have a clear wave to count from. Yes, I started with a small impulse, but that will be adjusted once this decline lasts longer or becomes bigger in the next few months. 

The last peak was about 1794 in July, yet the mainstream media was hyping the record highs that the DJIA and SP500 provided. This is an old magician’s trick to keep us fooled,  thinking that the stock market is still in some big bull market. 

At any time we could switch into diagonal waves as the first 5 can look like innocent impulse waves, but the next five could get real ugly. Waves may get physically bigger and start to overlap dramatically if the wave 1-2 I show, is a flat in a “B”wave connecting a zigzag.

In the bigger scope of things we want to see this trend continue putting a lid on that July peak. That July top would eventually be the Cycle degree wave three top, and to correct this Cycle degree wave 3 top, we need a 3 wave correction. They will call it a bear market once it gets going. 

Yes the label “Bear Market” sounds impressive and scary, but in reality, it’s just another correction in a bigger bull market yet to come. This bull market may not be ready to start until 2021 or so, so don’t get into a panic by buying on any dip now. 

Many may think it’s a good time to get into the stock market, but record highs can also be a good time to slaughter all the sheep that follow blindly. What possesses investors thinking it’s a good time to get into the markets at record highs,  is a lack of investor willingness to do their homework. Investors just getting in are buying into what could be another 1929, 1987 or 2007 like peak, after which this market could suffer a 70% decline.

Markets are not fond of years ending with a “7”, as 7 seems to be an unlucky number for stock markets. This may take until 2021 to play out, and until that year arrives, this market can make many twists and turns that will boggle our minds.

In the next 4 years or until solar cycle #25 starts to appear in the Northern Hemisphere of our sun, we could be in a giant flat or zigzagI prefer a flat as this would be the opposite of  what happened in wave 1-2 in Cycle degree. We don’t have enough time to complete a high degree triangle, which seem to be very rare as well.