Tag Archives: Cycle Degree Wave IV

DJIA Record High Review And the Fast Tumble

Some have no clue why the markets are crashing when all the fundamentals are running on all cylinders. Sort of. Besides the fact that the DJIA has made a near vertical move on weekly and monthly charts, this market is running out of steam. It could still take weeks before the herd has a slogan it can use.

The DJIA sliced right through the bottom trend line and it was exactly what I hoped would happen. If our wave counts start off too big then eventually we become too insensitive to major turnings. This happened in late 2008 with expert wave analysts calling for a DJIA crash down to 1000.  The expert wave analysts missed the biggest bull market since the depression and they have done nothing to fix that problem. Making cosmetic adjustments are easy, but if we don’t know the idealized wave structure we can flip numbers and letters around like a guy flipping hamburgers and they will have little meaning.

I would love to give this move more time for further downside.  We don’t have a double top to contend with, so our bear market starting point is clear “At this time” I never said the wave count is “clear” only the peak is clear!   😉

It will be tricky to catch any intraday counter rallies, especially this early in the game.

S&P Midcap E-Mini 2000-2018 Cycle Degree Review

I spent several hours looking at 3-4 very popular wave analysts, to see what their largest degree is that they are working.  This is always a very painful experience for me because they practice, “Cosmetic Elliott Wave Counting methods”.  They smear the charts with all sorts of price and wave positions to a point it seems like they are conducting a Smoke and Mirrors operation.

They can make a few cosmetic changes and they will always come out being right. Sure, I don’t always know what positions we may be at any one time, but I sure do know what doesn’t fit. Without a doubt they are very bullish with one wave count showing Cycle degree wave 1-2 for the 2015 correction.

One wave analysts have the 2009 bottom, as a wave 2 in SC degree???  Not on your life,  as there was a SC degree wave 1-2 crash and bear market in 1929-1932 already.

Just because it’s a big and tall bull market, does not mean we should jack up the degree levels. We have to do the exact opposite.

When markets extend either in the wave 3 or wave 5 positions, it’s always the smaller degree levels that come out of hiding, not the big degree levels.

All the wave counting with mini or micro mini degree levels, is useless if we miss the biggest bull market since the depression. Any wave count that is in sympathy with the bullish herd at these extremes will never work.

This Midcap chart has a very good wave formation, producing a tall 2007 peak. Also the 2009 bottom never went as deep as the SP500 and the DJIA did. At the 400 price level, we have what would be a massive base, that could last one hundred years into the future. Markets love to fool analysts so just to prove me wrong, the Midcaps will go lower than 400.

Everybody on this planet already knows that stocks are at record highs, what they don’t know is how big and long the impending bear market in stocks can be.

One of the worst SC degree declines in stock market history only took 3 years to play out, so it sure is not going to take sum mythical 600 years this time. The start of solar cycle #25 will make sure another bull market will come. Betting against the power of the sun, or creating super bearish wave counts with the start of any Solar cycle will never work.

Wave counts from the past have all started from a 4th wave base which can’t really happen, as a multi generational 5th wave will never exist for that long.  Any 5th wave is always fundamentally much weaker than any wave 3 of the same 5 wave sets.

I’m anticipating a Cycle degree bear market which will unfold in stages. For starters, this Midcap chart will decline/crash to the 1200 price range first. After that, the 700 price level would be the next price target for the impending Cycle degree 4th wave.

The Gold/Midcap ratio is sitting at 1.48:1 which is on the extreme side of things already.

Investors are pouring record amounts of money into stocks

Average investors are pouring money into record high stock markets, which is actually a contrarian bearish signal. Investors love to buy “High” because they sure weren’t  buying low in 2009. They were selling low in a panic to get out, which I’m very sure will happen over and over at every major low we will ever run across.

Investors pouring into stocks is not smart money moving in, as smart money has already moved out with insider selling.  Fool’s rushing in where wise men fear to tread is very normal. Buying on the 5% dips will not work if we get a 70% correction. We could end up with the mother of all dips, yet very few will ever take advantage of a crash bottom.


Mini Nasdaq Weekly Chart 2009-2017 Bull Market Review

This morning the Nasdaq hit another record high of 6334 but may still add on more points before another correction is due. One trend line is all we need as two of them will not fit well.  Look at the angle of the bull market, and how it cuts very close to a 45 degree angle, or corner to corner.  How long this market can keep gyrating without a major correction is uncertain at this time, but markets do have a knack of fooling us with surprise moves.  I like to catch as many of the surprise moves that I can but it doesn’t always work that way. 

From my perspective, I have a clear vision of a single idealized wave count, and I use this idealized picture as my reference point, for all the different simple corrections that we may find. Most of all it is important to eliminate 2 of the corrective waves, but also to get the highest degree of this correction.  This helps in keeping all wave positions within Cycle degree, so we don’t  end up with the  SC or GSC degree forecast. Unless all Cycle degree peaks are found we can’t move forward into the next highest degree. 

The Nasdaq is about the best forming impulse wave, when compared to the others, but any 5th wave can be very choppy due to diagonal wave structures.  In 2016 we did have an expanded “B” wave top pattern, and it did not let us down as another leg up materialized.

Then from 2016,  the bull market started to go crazy which works best with extending the last 5th wave in Minor degree. It makes wave 1 and wave 5 about even, with wave 3 still being the longest and the extended wave. 

Harry Dent, who is just a book writer says the DOW will fall to 5000. When we actually go look we can see there is nothing down there, but it would take us back to 1996 price levels.  1996 coincides with the end of solar cycle#22 and the start of solar cycle #23, which just kept the bull market going. 

Now if the Nasdaq were to fall along with the DJIA then the Nasdaq could fall to 600-700. Again, there is nothing down at the 1996 price level to support anything,  so I know those numbers are arbitrary numbers,  picked out of thin air. Manipulating the masses with fear is very normal as it sells books. 

All this can take the next 3-4 years to play out and to surprise us again, the Nasdaq could stop well short of the 2009 bottom, before a brand new bull market starts with the start of solar cycle #25. 

I checked the Gold/Nasdaq ratio and it was 4.94. It took 4.94 gold ounces to buy one unit of the DOW, which is the most expensive ratio I have recorded in the last few years. The record expensive Gold/Nasdaq ratio I have,  is about 4.  To get real cheap this ratio would have to get closer to 1.18 again. 

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.

Russell 2000 2015-2017 Daily Chart Review

The Russell 2000 has given us one wild ride which most analysts ignore most of the time. Recently the Russell 2000 has led in the downhill race, but quickly turned and played catch up, soaring to new record highs again. What is different with this top is that the pattern is very choppy, followed by another very choppy run, which sure can count out as an ending diagonal. 

The 4th wave in Intermediate degree sure can work as a zigzag which was then followed by what looks like a set of 5 bullish waves. Well, these can also work as one single zigzag, with a stretched “C” wave in Minor degree.  This has been pretty normal on most indices, except for the Nasdaq, which has been closer to an impulse pattern, than all the other major stock markets. 

The Russell 2000 also has several major bottoms that could provide us with an early warning wave count, for a future Cycle degree 4th wave bottom.  No! We are not some super duper mega crazy SC or even GSC degree wave top as those wave counts are all based on 5th wave extensions, and not wave 3 extensions. Wave 3 extensions come from a wave 2 base which I started to switch to in 2013. 

There is no way of knowing for sure,  if this top will hold.  The prospect of an ending diagonal sure can change things in a hurry. 

E-Mni SP500 Intraday Crash And Rally Review

In the last couple of days the markets perform a swan dive, (not a Black Swan), followed by a fast rally right back up again. The present rally looks like an impulse, but the last wave crossed to new highs as a 3 wave pattern,  which was part of a diagonal “C” wave.  In order for this starting decline to be in a bigger bearish trend, then all the markets need to push much lower, this summer.  Just in case todays rally has been just a single diagonal, then all we would get is a deeper correction followed by the real “C” wave. 

If the markets are over the hump,  then after any bullish news comes out it will ignore this news and eventually push lower. This is the exact opposite of what happens in a bull market.  Depending on what Cycle degree 4th wave pattern we get and all the bearish news  doesn’t push the markets any lower, then this could be time for a big reversal. This may happen when  a  “B” wave in Primary degree  gets close to starting. For now I will be looking for the first 3 waves  in Intermediate degree,  leading to the “A” wave in Primary degree. 

 The VIX sure performed as hoped for, but the gap it left on the way up, may stay open for a very long time. That is fine from my perspective, as I know far in the future the VIX will crash again and crash right back down and close that open gap.

Anything can still throw a monkey wrench into any wave count, so hopefully we can catch any errant wave counts early enough to adjust. This is where constant reviewing on the intraday scale needs to be done. 

The SP500 had a 24 month Market Vane report of 70%.  Last week this number hit 69% for 5 solid trading days in a row. That sure spells out a major bullish top to me. 

Again, I would like to stress that there is a very good chance that the markets will never go below 2009 lows this time, as Steven Jon Kaplan has already mentioned that as well.  Even if it did go lower,  then this is not a big deal, as all that would have happened is an extension we missed. Price does not change a Cycle degree crash to a SC or GSC degree crash.   Prices will be massively oversold far before it ever gets to a real bottom, so any bearish wave counts will eventually get trashed leaving you no time to accumulate large bullish positions.    

Idealized Cycle And Supercycle Degree Wave Counts For The Next 100 Years.

These charts look like they are very steep, which is the only way to squeeze them onto a single 8X10 chart.  Many templates I print out in 22×28 format as I post them on my wall in my small home based office.  The first chart below will give you an idealized wave count from the 1932 bottom, to a Grand Supercycle degree wave 3 top, sometime in the next century.  The 1932 bottom is my wave Zero to the start of  5 waves in Cycle degree. 

This may not make sense, but it would make sense if we visualize the Elliott Wave principle as one single impulse wave, which started after our planet started to climb out of the last ice age. Wave Zero in Supermillennium degree started about 11,000 BC, when farming began to spread. Commercial farming produced enough food to allow cities to grow into city states and empires.

Here is a good link that talks about starting to grow food 13,000 years ago when the CO2 content started to go above 240 PPM.

Of course the reverse happens when our earth dips into a mini ice age condition. We had many deep cold spells in the last 10,000 years, and expecting no more cold spells in our future, is just wishful thinking. 

In one single impulse for the general stock markets,  we get an idealized count of 1-2, 1-2, 1-2  waves,  where wave 1 is always the shortest and wave 3 is always the extended wave. Three sets of 1-2 waves will extend wave 3. This makes the 5th wave one of the shorter waves, and most of the time fundamentally the weakest as well. It is a 4th wave crash that crushes the fundamentals, making the 5th wave very weak.

The majority of new wave analyst, joined in after 2000 as it seems the EWP book spread far and wide with the Internet at that point in time.

The idealized chart or script above starts back with the 1932 bottom showing some dates. This gives us a potential 2017 Cycle degree wave 3 top, with a bottom by 2021 or so.  From any 4th wave bottom, we always must get a 5 wave bullish run that must also be a specific wave count. In this case, and from the Cycle degree 4th wave bottom, the EWP shows us we are supposed to get 5 waves up, in Primary degree. From 2009 to 2017 we already have 5 waves up in Intermediate degree, but the next bull market has to be one degree higher. 5 waves in Primary degree would finish Cycle degree wave 5 and terminating at a SC degree wave 3 in green, on your top right. 

Some of the last 4th waves I show with a triangle, but I think big triangles are very rare, so the chart above I turned it into a flat.


The chart above is presently our current picture with Cycle degree wave 3 on your top left, followed by a flat to a Cycle degree 4th wave bottom, which can also turn into a zigzag. After the Cycle degree 4th wave crash, we get a roaring bull market that could last for another 8 years, to the 2029 time period.  This is also when SC degree wave 3 will end, and another SC degree bear market will start.

We are already reading reports how the super bearish expert wave analysts are expecting a depression. Just like no depression happened in 2009, I’m sure we will not get one even with a SC degree crash after 2029.   Sure we will get recessions over and over again, but the solar cycles have trashed depressions in the past.  To get a full fledge depression, the majority of us will have no money and no job, and there would be no inflation. There would also be a big reduction in Millionaires and Billionaires in the world, as their wealth goes up in electronic smoke.

Besides that, we are not in the1930s anymore, where they had no general support. In todays world, we can send money to anybody in an instant,  via auto debt. How many pensioners get their checks as auto deposits? Our Canadian government loves to see all of us on auto deposit, as tax refunds can happen at lightning speed.

The next chart below starts where the chart above finishes.

Again,  up on your left is a green wave 3 which is Supercycle degree.  I use the same template as the only thing that changes are the degree levels. We would also be well past the 2030s going into another huge crash, as a potential flat.  SC degree Wave 1-2 from 1929-1932 sure looks like a zigzag, so SC degree wave 4 has a very good chance of being the opposite.   I think any SC or even GSC degree triangle will not happen as they seemed to be rare indeed. Besides, every 4th wave correction, we have had,  is a different degree level, so flat corrections can repeat themselves many times. I don’t mean double flats as they are extremely rare, to the point they don’t exist. 

If we don’t understand how the 5 simple charts fit together, how do we know what we are supposed to look for?  The three charts above will give you an idea what to look for, as the EWP is far easier to understand from an idealized chart perspective.  Ignoring extensions and forcing these extensions in a 5th wave will always push us into a higher degree, where we should not be.

I spent many years, counting in GSC degree and then switched down to counting in SC degree. Finally, I switched into Cycle degree in 2013.  All Cycle degree wave positions must be found first, before we will ever see any SC or GSC degree wave patterns.  This blog is dedicated in doing just that, as the EWP is far more valuable than just using it for short term trade setups.

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. 

Mini DJIA Intraday Bearish Review


The markets gave us a rally alright, but now has started to roll over. There still may be a surprise bullish move left, but if we still have a Minute degree wave 4 and 5 ahead of us, then we should see new record lows again. I want to stress that all the wave patterns we have seen starting from the Cycle degree top have been diagonally wave structures. Diagonals are connected together with zigzags and the only true impulse waves are rather small and very rare.  I think diagonals should be identified as such, because they help to confirm location. Location!, Location!, Location!, is the name of the game with the EWP, and diagonals are one of the best in helping to figure out where in the hell we are in the bigger sequence. 

You have to have a sense of humor when looking for waves, as it is so easy to get distracted and find ourselves in a higher degree, that we shouldn’t be in. The one place that diagonals appear most frequently is in any 5th wave position, and at any degree level. I always try to label any diagonal as, (ABC1, ABC2, ABC3, ABC4, and ABC5). This cannot always be done, as room to show them is not always available, so I mention it as much as possible.

Right now the Minute degree diagonal is still a good choice for the start to Cycle degree wave IV, and sooner or later we could run into wave 1 in Minor degree.  Markets are making a comeback as I post, so another high can also happen. In the long run this bearish phase is alive and well, and Cycle degree wave 3 should hold. 

To give us a better understanding how powerful diagonals can be in helping to determine location, we have and look at the bull market from March 2009 to March 2017.  This great bull market was so choppy that virtually every expert wave analysts, counted out corrective waves. They got fooled not  just for a few months, but for many years. I was also a sucker for a few years, until I realized that bear market rallies are far more violent and choppier than what the markets were giving us.  Once we accept this,  then we know we have a very high chance that a 5th wave was in progress.

 Of course, if we don’t have the degree right of what the 2009-2017 bull market was, makes what I post pretty irrelevant.  Technically speaking, the bull market from the March 2009 bottom to the March 2017 top, is one move. One move divided into 5 diagonal waves in Intermediate degree.  This gives us a very good idea for a base, to figure out where we are. I use the idealized visual drawings to help with this, as it is all a constant process of elimination.  

Mindlessly counting away,  just making electron sized wave counts, is not my idea of having fun. Especially if we keep missing the big bull markets.  

Mini SP500 Intraday Bear Market Review



So far the markets have made a rally before they started to turn down again last night. I know it is real easy just to turn everything into impulse waves, but as the book shows the markets also contain diagonal waves. The majority of waves, are the diagonal types, not the perfect impulse waves, that the majority wave analysts use. There is a good chance that starting out we have 5 diagonal waves heading down, and we still have wave 3-4 to contend with. They are all connected with zigzags and have a nasty habit of fooling us when a zigzag does not follow through to a new high.  Five waves down in Minute degree could lead us to wave 1 in Minor degree, which sure would make an Intermediate degree zigzag a high probability. 

The March rally could be another “AB” count, which would then connect to wave 4. In other words, we have to expect another leg down, which can extend dramatically.  The end of the month is approaching fast, and anything can happen as traders get out of positions that are going nowhere.   We need another new low to confirm the short term bearish outlook, and we may get it by the end of the week. 

Wave 4 in Cycle degree seems to be active, and it may take 2-3 years to finish. 

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. 

Mini SP500 Intraday Crash Review



The crash today should start to wake some of the permabulls up, and give them pause as they fret about how deep this bear market can go.  I will work it as a bad impulse for now, as the last rally peak is now confirmed as being a bearish rally. Complete retracement helps to confirm the inverted pattern.  A very steep drop can happen in a bull market as well, but in potentially diagonal declines waves they can do the same thing. 

Otherwise, this can be mistaken for one single zigzag crash. I don’t think this is the case but, I like to keep my options open.

Mr Steven Jon Kaplan has already Tweeted, in what he expects from the impending bear market, and we are not that far apart, in price or time. At this time the markets are still heading down, so any wave three type bottom, may still be some time away.  

It may take until the counter waves are much bigger before, I can where the zigzags are connected, but ultimately we want to catch the “A” wave bottom in Primary degree. It may take an Intermediate degree zigzag to get there.  

On the bearish side, we could see huge drops that defy logic, but confirm that gravity is a real science.  Somewhere down the line the public may scream “Black Monday” or any day of the week, which may actually be the end of  the “A” wave bear market. 

We still have a long way to go, so surprises can jump out at us at any time.   All the traders betting this market to go down, will be leaving “buy” stops above all present prices. We can see many of the sell stops got hit in a domino fashion, producing the straight down move we had today. 

Mini SP500 St Patrick’s Day Review


I have changed my degree levels where Minute degree will be the largest the level right now. The DJIA has also made the move up in the last couple of days, but had a “B” wave bottom much deeper.  What matters now is that the markets don’t charge up to a new record high again, but starts to make another leg down. This leg should retrace all March lows by a wide margin. 

Yes, I talk about price many times, but from my perspective, the price is never the main factor in determining a wave count. The majority uses price action, exclusively and even EWI has said that, “the only thing that can confirm a wave count is price”. I believe it is the patterns that dominates, and if we don’t get the pattern right then all the price forecasts in the world will not do us any good.

In the short term, I would like to see the SP500 retrace its tiny rally as soon as possible, which will give us the extra bearish push,  to start confirming that a bigger bear market is coming.

In a recent posting by Steven Jon Kaplan  , he talks about the impending SP500 bear market with some price targets. The description he uses fits into my Cycle degree bear market with amazing accuracy, and I would not change a thing except for a bit of time and price adjustments. 

If the SP500 eventually crashed to 800 then that would fall far short of the 2009 bottom. I have mentioned that this could happen many times before, even in Cycle degree.  For a non wave counting contrarian Mr. Kaplan has already described the next bear market, before anyone even knows what’s going on. 

If you think this is luck, then think again, as I have witnessed him forecasting like this many times before. Mr Kaplan had the 2009 bottom figured out while wave analysts were still wasting their time making numbers and letters.  My bet is that the next major bottom the wave experts will be wrong again, as they seemed to love pushing those high degree wave counts at us.

Any, time projections I used,  can be adjusted for the late 2020 time period, and price action can be, SP500 799,  instead of 800!  It is irrelevant if the SP500 stops at 800 or 599, as a lower price does not trash a wave count.  By the time that happens there will be so many contrarian indicators flashing, “Buy”, signals that you will go blind from all the bright lights. 😎

E-Mini SP500 Intraday Review



It is nice to see a plunge in the markets if you are in a bearish mood as well. I also know how insane this market can be, and that it can come back with a vengeance at anytime.  I moved my degree levels up to Minuette degree, but still working a potential single zigzag. Of course it would be nice if we end up at a potential wave 2 top or better yet, if the markets just keep heading south and break lower.  The more distance we put between us and the Cycle degree peak, the longer it will survive in that location. 

We are also building a pretty good H&S right now, which can be very bearish when we are just off a major peak. I recognize these patterns because the peak looks like the market gremlin is giving us the middle finger. Only the long term readers of this site, know what the market gremlin looks like.  😉 

Please do not get into a panic because I change my degree levels, or that I don’t fill out each little wave in great detail.  When this single wave does not turn out, then all the little micro mini or electron sized wave counting is a complete waste of time.  At most any  Cycle degree 4th wave correction may need 3-4 degree levels in total to confirm. With a minimum of a Minor degree, in extensions.  All other wave counting is just window dressing, or wave counting gymnastics. Counting all the extreme small degree waves means nothing, if we are using the same degree that everybody used,  back at the 2009 bottom. Right now the markets are heading back up, but it could be a short lived rally, for the next day or so. 

E-Mini SP500 Intraday Review: Another Top?



The Sp500 created another record high this morning at the 3626 price level.  Any new record high can also be the last record high for the year. To confirm this then the SP500 should make another new low soon.  Every call like this is a bit tricky, because we can always have missed a patten in the past, producing another extension.

This is the nature of the beast, but when we look at this same wave count on the weekly charts, we have a massive spike which is the opposite of the massive spike low, we had in early 2009. This is when the wave counts should be the clearest and should be double and triple checked, depending on where we are counting from. 

A big bear market will come as we must get another strong correction or the end of a major bull  market phase. The end of a diagonal 5th wave in Primary degree is what I’m looking for.  It sure has been elusive to this point, but it will be worse if our degree level is out by one degree.   I have mentioned it many times, that without all Cycle degree positions confirmed, we will never pass the gates into a SC degree world. Those  wave analysts that are  ending in a Cycle degree 5th wave, already think that they are in SC degree. I spent most of my life chasing these high degree mythical wave counts, and found out that Elliott waves never act like the pretty impulse waves they show us in the EWP book. Real world waves are never that even as they always have extended waves somewhere.  

We have 3-4 years to go for solar cycle #24 to end,  after which solar cycle #25 will start. When this happens you no longer want  to remain bearish as the next solar cycle #25 will produce another major bull market. I have posted this idealize chart many times already, and have it tacked up on my wall where we will get the best idealized simple wave count that we can get. 

One thing I’m very confident in saying is that, “Solar Cycle bottoms crush all bearish wave counts we can dream up”.  


Russell 2000 2011-2016 Review




This Russell 2000 cash chart did not travel to new record highs like many of the other indices. This puts it on a different path or ahead of the rest of the group. If this is happening, then we should also see its bottom a bit earlier than all the rest.  With the 2015 peak possibly being the Cycle degree wave III top, then we should be looking for a Cycle degree 4th wave correction. 

As much as many would like to see this implosion, the level of optimism has still been at an extreme in the last few weeks. 

With 70 trillion in cash they say the markets can only go up. Many other mainstream analysts have also been very bullish, but who says that the mainstream is right? It is next to impossible for a market that is extremely bullish to add on another huge leg to the upside without a correction.  At every major peak when the majority were bullish, these markets would turn and crash. 

Is it going to be different this time?  The only difference is that the 2015 peak  is 8 years into the future from the 2007 peak.  The advancement of time always makes it different, but what never changes are the human emotions that swing from extreme optimism back to an extreme pessimistic mood.  Every major contrarian knows this instinctively and getting caught up in the mood is the worst thing any wave analyst can also make.  

This market is not going to go straight down as we have at least 3 simple core patterns, that can happen. A Cycle degree zigzag and a Cycle degree triangle are not an option at this time. The triangle would take far too long, to play out by 2021, and the zigzag does not alternate enough, from the 1937-1942 bear market. 

Gold Intraday Review: Market Crash Humbug!




Gold seems to be oblivious to the carnage in the stock market as it has barely moved up at all. This does not surprise me as deflation may be a bigger issue at stake than we can imagine at this time.

Besides gold is potentially in a Cycle degree correction, not some Intermediate degree I was working with.  Cycle degree corrections are not over in 5 years as it can take 13 years to correct. Yes, I said 13 years as that is exactly what happened from 1919 to 1932, it also happened to silver from 1980 to 1993.  This time oil peaked first in 2008 (8 year bull market) then Gold followed 3 years later in 2011. The markets are full of Fibonacci turning years, which most people ignore, I don’t! 2008+13 will get us to that 2021 bottom. Which puts gold at 10 years to cover the same time period. 2021 also marks the 89 year cycle from a major bottom to another potential major bottom. 

Sure, we are going to get a monster “B” wave, but they are the biggest bull traps ever. This time it will be a “B” wave top in Primary degree, but that may not start to happen until the USD hit another record high. 

Gold Stocks, GDXJ 2011-2016 Cycle Degree Bear Market Review




Up  on the left side of this chart I show the Cycle degree wave III position. On previous wave counts I was two degree levels too low, which can make us look for all sorts of patterns, that may end this bear market early. All of them will be wrong, but when we change something, a new Cycle degree world order comes into focus. Or parts of it. I always have 3 simple corrections to choose from, and for now we have to figure out where we are in this pattern. 

Cycle degree corrections are not going to take just 5 years to play out, we could be looking at another 5 years or until 2021. At this time I’m looking at a possible Primary degree correction, which the “B” wave part can contain a triangle. I don’t expect a triangle in the entire 4th wave just yet, and this doesn’t have the start of a flat. So that leaves a zigzag at this time, or a 5-3-5 pattern. It is the Primary degree “B” wave that could be big and tall. So this will be a wild swing to say the least. This “B” wave should not be another zigzag, as zigzags correcting inside another zigzag I frown on.  They are a dead giveaway,  that we can’t be in a zigzag, or it determines we are in a triangle.  Crude oil had this type of a move so I had to eliminate it as a flat. 

The run up from the bottom looks like 5 waves up! If we were in a true blue bull market, then it has to find another button, and then soar, but if those same 5 waves are attached to an expanded bottom pattern, then gold stock investors are going to be in for a shock! This GDXJ can then crash well below new record lows. 

Now that we have a very strong top completed, my parallel lines may have some use. They give us a basic trend line, and a rough target for a new low. I did not mention any price at this time, because in my world, pattern supersedes price, any day of the year!  Besides, nothing in the EWP first chapter, talks about prices.

 At the peak in August 2016 the gold/Gdxj ratio was just a bit above 26:1 and today it was 33.42:1, this is getting a little cheaper, but not cheap enough at this time. 62:1 was very cheap and about 11:1 was very expensive, so I see the risk still being very high in buying any gold stock ETF at this time. 

WTI Crude Oil Daily Chart Rocket Ride Review




Everything so far looks impressive if we get caught up in this crude oil bullish cycle. As with gold, I’n not completely convinced that an Intermediate degree correction over and a completed done deal. Crude oil could turn and head due south again, back to the $42 or even $40 base. 

Even a “D” wave top could be in play, which would end up giving us a triangle, and we know what triangles can eventually do.  A triangle inside a “B” wave correction would be fantastic as triangles are one of the best forecasting waves around.

Compared to my last gold/oil ratio reading, oil has become a bit more expensive at just a bit under 25:1 which is still fairly cheap when using gold as a measuring tool. 

The British Pound Gets Shredded!




The single little down spike we had in the last few days, is enough to force an entire wave count review, as far as I can go back in chart history. Wild, huge and overlapping waves do not make a good bull market, and the physical size of these waves sure can fit into a Cycle degree triangle. We could be crashing down into an “E” wave in Primary degree after which the GBP could go on rocking bull market, that nobody would be expecting at this time. Looking up or down any idealized wave count, gives wave counters the edge, but if we have no clue how to draw even the basic patterns from memory, the forecasting power of the EWP is moot at best. 

I believe that the US dollar has already begun its Cycle degree trip north and the GBP will follow. This may still take the rest of the year or more, and when we are getting close to the end, the GBP bears will dominate the news headlines. Do not let that fool you when the time does come, as it will be a classic bear trap of humungous proportions.  

Take any Cycle Degree IV wave bottom and we should get five waves up in Primary degree. Of course our visions of 5 waves in Primary degree all differ between analysts. I always use the wave 3 extended version first. Being prepared far ahead of the crowd is what the EWP is all about.  I have to do a bit of hunting for a good idealized triangle chart, but many, if not all of them are online already.  

Euro: 1985-2016 Cycle Degree Wave III-IV Review.




This week I have started to look and recount many of the commodities that I analyze. I realized that Cycle degree wave III may have been in our past for some time already, but now we have to find the best location for it. Most of the problems we had in doing this, is because the lack of charts that go deep enough in history to find a more detailed chart. We have to get the old Deutche Mark chart, and it will splice into the Euro chart above. 

It is this Euro chart where I have to inverse the EWP, and not the USD. It is the USD that refuses to implode because it still is in a huge bull market, and the inverse is still true with the Euro. I saw a 1-2, 1-2, and a third 1-2, which is exactly the type of count we would get in an impulse. This can happen going up or down, but with the Euro we are eventually heading down big time. Not until another bullish rally has been completed. The Euro is still resting, but don’t let any counter rally make you think that the Euro is going to the moon. It’s going to go the opposite way and get flushed down the toilet as the bearish mood at that time will be at an extreme. 

In the long run the Euro will get crushed and if it survives after the Cycle degree wave 5 bottom, then we should see an all new bull market in Super Cycle degree. Moving Cycle degree wave 3 into the past, pushes us closer and closer, to all the Supercycle degree wave positions as well. 

If the Euro does “not” hit .55 on the chart above, I will be surprised.  The next new decline should give us one more set of 1-2 waves in Minute degree, but many times they may not peak through. At this level they may be hard to see.  Once this next set of 1-2  waves completes, then the Euro will be about half of the way to its conclusion.

After any Minor degree 5th wave is finished, then only the 3-4-5 wave sequences will show themselves.  I have talked about the 1-2 punch many times, but devoted wave counters are the only ones that will understand these sequences.