Daily Archives: December 2, 2018

DOW 30 Index 2018 Review, And The Impending Death Cross!

 

 

This is the index which does not move during the nighttime trading sessions. They also produce far better wave patterns than what individual futures contracts do which have contracts space 3 months apart.  This a standard daily chart and is the first place to look for an impending death cross. So far no Death Cross has formed but by the time the next leg down is in progress then we should expect the Death Cross to happen. My 5 waves up, ended with the late January 2018 peak and what followed fits best as part of an expanded pattern that produced the secondary top on October 3rd, 2018. What followed after the October peak was a set of 5 waves in Minute degree which ended on my wave 1 in Minor degree with a double bottom like pattern.

It has now surged further than I would like so, this calls for an instant review for an alternate short-term wave count. The big wave count has not changed at all.

Last week the Fed gave the green light based on the rate increases taking a break. I mentioned this could happen as the Fed has done this at every major peak since 2000.

Investors are not looking at technical indicators, as the Fed decisions are based strictly based on Fundamentals. Fundamentals will “always” tell you the wrong things at the extremes.

When was the last time the Fed mention that a potential Death Cross is coming? That was a trick question as they never mention technical indicators and they never will. The DOW index is getting close to the 50-day MA and may even go above it for a little while. In order for this market to soar, the 200-day MA must become support again, but once this Santa rally runs out of steam then a new record low will drive that 50-day MA into the 200-day MA line, then instantly a Death Cross on this daily chart has occurred. Death Crosses forecast the most bearish long-term moves that you can expect and the Fed has put all those fundamental worshipers into a bull trap. A  Cycle degree bull Trap!

Many good mainstream analysts also have mentioned Death Crosses so warnings have been issued.

Since 2000 each bear market that has developed got worse and lasted a bit longer than the previous bear market. Since we are heading into a Cycle degree bear market, then this decline should also last much longer than the 2001 and 2008 declines. It may not go as deep as the 2009 bottom,  but even if the DOW crashed below 2009 bottoms, it will have no impact on my present-day wave counts. Solar Cycle #25 will kill the big bear just like in 2009, but Solar cycle #25 might not arrive until 2022, some say 2019 could be the end of Solar Cycle #24 but this is far too early.

I have created a free hand idealized poster of the wave count above and I pin it on my office cork wall and take an iPhone picture of it.

 

This idealized chart starts from the 2009 bottom and will last until the 2022 bottom 3-4 years from now. Can you tell which wave 2 in Minor degree, where we could be?  This is another trick question as there is only “one” wave 2 rally labeled in Minor degree on this entire idealized chart. If the market veers dramatically from this, then a new idealized chart has to be made as well. The Elliott Wave Principle is far easier to understand if we have a clear vision of what the basic structure is supposed to look like.

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IWM, Russell 2000 ETF 2018 Review

 

IWM is the ETF for the Russell 2000 in the last 10-11 months. I’m sure many wave analysts do not count this as an expanded pattern because they are counting from the late August 2018 peak, not from the late January peak of 2018. I’m sure we can argue for years about expanded patterns, but if we ignore them then I know that any wave count in the future will never make any sense. I can take the Russell 1000 ETF (IWD) and do a comparison wave count, and IWD will confirm an expanded pattern much better.

The January 2018 peak is the most important peak, as the late August peak is just the “B” wave peak in Intermediate degree. In the long run, this would be part of a bigger flat in Cycle degree. Again, I stress Cycle degree wave 3-4 and not SC, GSC or even Submillennium degree!  Those degree levels are all in the future!

Recently, due to the Feds dovish report,  gave investors the green light to get into this market with billions of dollars in inflows. They are all following the Fed waiting for good fundamental news which is where all fundamental information comes from. They sure don’t get technical information from the news, as they are ignoring any “Death Crosses” that are forming in most markets. We’re not even that much lower than the January 2018 peak, so in reality, investors are jumping in at world record highs again. Powell is leading investors into a bull trap, as I’m sure investors cannot maintain these inflows for very long.

I guess the Millennial crowd hasn’t learned anything from the 2008 crash, and investors never will, when FOMO is their main method of investing. Those Gen X investors that are going to start retiring in the next 10 years, may never have the time to recoup losses. We could see a 70-80% crash in the markets in the next few years, yet the world is oblivious to the potential size and duration of this impending bear market. 2018 is a very important year as it is 89 years from the 1929 stock market peak. 89 is also a Fibonacci number or 3-30 year cycles back to back.  Not until Solar Cycle #25 appears or lots of news about its arrival will I turn super bullish again. Those smart investors that follow the sun cycles will be the real winners as Solar Cycle #25 could produce another 8-13 year bull market.

 

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