Daily Archives: April 2, 2018

Mini DJIA Intarday Update: How’s Buying On The Dips Working For You?

Investors just pumped the most money ever into stock funds for 1 week

Investors have been brainwashed to buy on the dips, and last month’s surge of funds clearly demonstrated this. All those that believe in buying the dips are convinced that this bull market is far away from ending. I’ve seen it all before as this will be my third bear market I will be tracking since the 2000 peaks.

These investors that are jumping in at the top of the biggest bubble in market history, will find out the hard way not to believe in the crap that analysts spew out on a 24/7 basis. When the media paints us a rosy picture for an extended period of time, then everybody in the world is already invested, and no one is left to get in, except for the stragglers. This bear market is going to be bigger and last longer than anyone suspects. At a bare minimum the DJIA 15,000 price level must get breached. That may only be stage one as even 15,000 is not deep enough for a Cycle degree wave 4, bear market.  The support we are going to get will only last for a short time. When we see choppy rallies, we know they are just bearish rallies and the trend will resume on its crash course heading south.  I have created a new template for this Cycle degree decline, but they have not been posted. In a big bearish phase, we will constantly see lower highs and lower lows which is the opposite of what happens in the bull market phase.

I’m counting from the secondary peak as it could fit into a running pattern, but will adjust later when need be. When the masses are pushing the stocks up, then I use one of my templates and have the bearish side all drawn. What I call “templates”  have no Elliott Wave numbers or letters on them, as it can be used for any wave degree that we need. Once I print out the template I count out all the waves with pen and paper to make sure the sequence looks good. Then I scan this 8×10 into my computer.

The bear market (big bull market correction) from 1937 to 1942 best works as a zigzag with a short “C” wave. This also created one wicked looking wedge.  All this  keeps my flat at the top of my list of corrective waves to come, and the only question is, how big any counter rally will be?

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Nasdaq Weekly Chart 2000-2018 Review

One of the most powerful patterns that we can find is what they call a “Wedge” in conventional technical analysis. A wedge can have a rising bottom and a falling top which eventually compresses the chart after which it has no choice but to explode and then soar.  The earliest we may have spotted this wedge , and take advantage of it, is in late 2008.  Sure, it’s all in hindsight, but unless we know what a wedge is we will never look for them in the first place.

For many years I have grappled with the 2000-2002 decline as it looked so much like an impulse, but this impulse did not fit anywhere. Maybe because it was not an impulse, but part of a triangle decline, ending with a running “E” wave. Running flats are common, and even zigzags do contain shortened “C” wave. I don’t like to call waves “truncated” as that is an excuse to not count anything. From my perspective the DJIA from 1937 to 1942, contained a wedge that forecast the huge Cycle degree wave 3 which may have ended March, 13, 2018.  I also have several large scale wedges that all indicate a huge bull market will come in the future.  Sure, I can change the wave count, but in the end this wedge will remain for all of financial history.

I only use parallel lines and I use the top rising trend as my base, then I create the same angle from the record bottom of early 2009.  The top trend line contains 5 waves up in Intermediate degree, so when the Nasdaq crashes and takes out the bottom trend line I also will be moving by a minimum of one degree. Cutting the bottom trend line I would also be finishing a potential Intermediate degree correction.  The 4000 price level  is not deep enough, if we need a 3 wave, Primary degree correction.

The gullible are brainwashed to buy on the dips and last month saw another huge one week share buying madness!

Investors just pumped the most money ever into stock funds for 1 week

You have to ask, “Buying on the dips for what?” Once a new low has been established, then all those “Dip” buyers will start to lose their capital base. All present dip buyers clearly tell us that they think that they are in a bull market. They think that another huge bear market will never come as that is old ancient history. The majority of investors never take the time to do historical research and most of them believe the brainwashing going on at market peaks.

The majority of all wave analysts have been brainwashed into believing this SC and GSC myth, but since the 2000 peaks this has never been confirmed by anyone. Since the dotcom bust in 2000, there  has “Never”  been a set of 5 declining waves in Primary degree. Only the Nasdaq looks like it has a set, and it doesn’t fit into any zigzag.

The Nasdaq hit a 2018 high of about 7200, and this is also the time I look for the highest peak of the year. The short version is that investors will not benefit from buying on the dips this year, and it may take over ten years before they ever break even again. They may have to wait until the “Roaring 2020s” arrive.

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