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Category Archives: DJIA

1987+31 Years = 2018! DJIA Impending Crash Update

 

This is the DJIA index chart and I have been doing some basic calculations, counting forwards and backwards using the 30 year cycle. This 30 year cycle has a plus or minus error of 1 year. When I first checked this by counting 100 years backwards to 1918 and then to 2101 I found this frequency to be so consistent that nothing on this planet can match this forecasting indicator. If you are ready or not, there is a huge market crash coming 30 years after the 1987 crash, and 89 years from the 1929 peak.

This 89-year Fibonacci number is only off 1 year and we have 3, 30 year cycles completed. There are many other dates that all fit very well including the 100 year cycle, like 1918 + 100  years!  Cycle degree wave 3 has already ended in most part, while gold has also ended its Cycle degree mania peak in 2011. You can’t fight cycles escpecially this 30 year cycle. Throw in the solar cycles as well, and this 2021 time period is going to get interesting to say the least. You can’t beat solar cycles, so counting waves with the solar cycles in mind should never be forgotten.

The Death Cross in the DJIA is still going to happen on the daily charts, so longer term stocks are going to get hit with huge price declines. (Deflation) This fall will tell us more, which should be followed by a massive gold and stock market rally lasting into the mid-2019 time period. Deflation is the real threat as the USD will remain strong during the entire time, except by the end of this year. The USD can crash and burn sending gold and stocks back up, in a wild bear market rally that will shock stock and gold investors alike.

Since all my wave analysis is dedicate to Cycle degree, it makes it easy to forecast any SC and GSC degree future peaks. This 30 year cycle is not going away folks as the next 3 cycle peaks would be 2041, 2071 and 2101. How these 30 year cycles form is my speciality which only my paid one on one clients get to see in detail. Of course all this imformation is all out there for free, but only a few will do the work required to confirm these cycles. Many of my indicators have been developed in-house as I do not need any expert to tell me when the markets and gold are going to crash.

We are heading into a deflationary crash folks, where all static investors will get slaughtered as they all become trapped. Being invested at the top of a Death Cross is financial suicide, yet most people are oblivious to what’s going to happen.

The EWP is what you design it to be. If you just want mindless day trading setups, while missing every major move, then that is what you will get. We get from the markets what we want, and if you don’t have a clear goal of what you want planned out, then your hopes and dreams will not get realized.

In well over 2 years 3 months, not a single person has suggested that they are switching over to Cycle degree wave analysis as it requires real money trading to confirm it all. 99.999% of all wave analysts have no skin in the game so it would take someone special to keep Cycle degree analysis going into the future. This blog may only run until Cycle degree wave IV has completed, after which Elliott Wave 5.0 could go dark permanently.

I will never waste my time and money shorting popular companies and indices, as all the short players on this planet are trying to do the same thing. Betting the markets when they are going down is not a game for sissies, as you have to have impeccable timing to make them work well.

 

 

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DJIA 2000-2018 Review

I like to use liear charts once in a while to so the dramatic move the markets have made.  I have it as a Cycle degree wave three top just like gold. The biggest stock market bubble in history does not end with a simple correction.  Bare minimum it needs to go back down and retrace this 5th wave we have finished. I’m sure that stocks and the gold market are going to sync up as they all crash together. There is a time to invest and a time to sell. This is not the time to invest from my perspective. Every stock market and gold markets are sitting on Death Crosses, and investors are oblivious to it. I’m glad I’m only a trader because investors are the ones that get hurt the most.

It might even look like that the DJIA may also grow a zigzag which I will start to keep an eye on.  A deflationary crash is coming that nobody is expecting but only a few.

I have moved all my CAD money to US funds and plan on staying there forever. When I need CAD funds I still have a small long account to work with.

As a trader I need not fear of a meltdown as my home turf or safe-haven is always cash. Go to cash, when things don’t go well and then, “take a knee”  for a few minutes, and start again.  This is not going to end well folks as bubbles bursting never does. This time it’s much worse as gold and oil is also going for a wild ride.

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Dow Index Daily Chart: Hunt For The Death Cross Continues!

If you want to see trillions go up in smoke then just what what happens after the DOW slice through the 200-day MA.  This 50-day, 200-day MA fits into my wave counting style extremely well as the Death Cross (DC) is a powerfull signal that shit is going to hit the fan. All those camplacant stock bulls  have an ugly trip ahead of them because the bears are coming to shred every bull they can catch.  A big bear in a pit of bulls, who do think will win? All the bear has to do is growl like crazy and you will see the stock bulls flee like a bunch of scared rabbits.  All it takes is one bull group to bolt for the exits and you have an instant mini crash.

If there is one warning I can give in all the time I’ve been wave counting,  you don’t want to be bullish in front of a potential Death Cross to come.  We need a very small down plunge and the Death Cross is history.  All that funny money they base their world on will come crashing down. Are you having fun yet, because for the short seller he will have a field day as he rides down the next leg of a bear market.

There is no support for anything in a Cycle degree crash, so let it fall. A world built on phony money and extreme debt does not get cleaned up with a simple correction it could take three years before the final bottom.  Besides, maybe in the fall President Trump will order the trade wars over and and scream. “No More Taxes”  The stock markets would turn and soar for huge gains.

In this crazy world anything is possible, but nothing will stop a decline once it starts rolling down hill.  Gold has already had it’s daily chart Death Cross so everything is going to take a big hit in asset prices.  I have only been using the 50-day 200-day MA a few months but it all depends how you use it that is more important.  Needless to say it fits very well with Cycle degree wave counting, and I incorporated it into the Cycle degree wave counting method.  The next many weeks is going to be critical as we should witness the DOW slow down and refuse to go higher.

 

 

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Dow Index Daily Chart: Hunt For The Death Cross!

  I have increased my chart sizes so they print out in more detail on 8×10 or larger formats. Hopefully, readers will like the higher quality charts for the extra detail.

This is a daily chart and does not move during the night so I can make these charts at any time. The 50-200 day SMA is great, but it all depends on what we want to use it for. I use it to figure out in advance when a Death Cross (DC) or a Golden Cross (GC) is going to happen next. From what I have seen a Death Cross means excatly what it says as the Death Cross can forecast huge swings and bear markets.  Most of this stuff is not rocket science, but many have never heard about crossings as they know no Technical Analysis of any type.

Back around 2011 the last Golden Cross had formed but always lagging to any wave count. Because they are lagging signals, we know a future crossing will happen and they will show up first on the daily charts.  When they are this close together it could just take 10 weeks or so when the 50 day crosses from the top down, and slices through the 200 day line. It’s always the 50 day line that does the slicing as the 200 day SMA line is the slow turtle, so to speak.

Next thing you know the stock market plunges to 20,000 where the 200-day line meets on the weekly charts. No analysts on Wall Street are screaming about an impending Death Cross. At best a few may call the Death Cross after it happens. They’re all asleep at the switch. There is a lot of backchecking I would want to do before using them in the stock markets. Due to the wild swings in commadaties, they work well with my Cycle degree wave counts.

Right now, the markets are always waiting for someone or some report to come out before it decides if the DJIA wants to implode. I believe a serious recession is in the wind, bordering on a depression and this so-called “correction” is just the start of a much bigger crash than anyone suspects. We are dealing with a Cycle degree bear market where a huge counter rally (bear market rally) will try and fool all of us again.  The markets will have little problem in sucking back investors, when they think the worst is over.  Any “B” wave in Primary degree will get completely retraced. I treat the total retracement of a bear market rally, as something chiseled in stone, as it’s not something I invented. The EWP book is full of the words, “always and never”, so I use always or equivalent expressions.

Any low targets are usually close to the September October time periods and we might get to the Primary degree “A” wave by that time. This could also sync up with the potential of gold’s “A” wave bottom of Primary degree as well. That would be a good trick even if it’s close. In good times the majority is never prepared for bad times, and this time it shouldn’t be any different! The stock market party has ended folks, and Elvis has left the building. No amount of cheering will bring him back.  🙄

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DJIA Intraday Gyrations Update!

The DJIA keeps heading south, which the Global DOW is also confirming.  It’s sad to say, but stock investors have no clue in what is going to hit them, as trade wars may be the least of their worries. The majority of it is all about the currencies inverse to the US dollar that are imploding!  This means deflation is in our future not inflation.  Stocks and gold “deflated” in the 2008 crash, so to think that it can’t happen again is very short term thinking.  We are going into a huge bear market that still may last three years before a brand new bullish phase can even start.  March is always a good time for major tops and October and November are always good months for bottoms.

It will be futile to think some new bullish super phase is coming. That dream is fading fast and you will see analysts scrambling to come up with all the bearish reasons why the markets are heading down. In bear markets a 70-80% decline is not unusual from an EWP perspective. The majority will think this is a crazy notion, but its very normal from a Cycle degree perspective.

I expect this bearish trend to continue, with a few surprises thrown in to keep us from falling asleep at the switch. Any market action is “always right”. It is our subjective opinions at the extremes that’s always wrong. Cash is “King” when world investments meltdown. $100 trillion could disappear in electronic smoke, which means “money” destruction will happen. $100 trillion is about 1/3 of total world US dollar asset values.

I wish for a Great July 4th in the USA, as I will take a bit of downtime this week as well.

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Quick Intraday DJIA Update

This is the September contract and in it we see far more violent moves than what the standard DJIA index will give us. By the looks of what I see is that the DJIA is still heading south, but it will also get closer to some key previous support price levels.  If there is more to this decline than meets the eye, then any support price has no hope of holding. The majority love to analyze everything using “Price”. Pattern pulls far more weight than any price forecast will do as the markets are controlled by the wave structure not by the price structure.

One example of this is, did the “price” of the bear market low in 2009 gave you a clear signal that a huge bull market was coming? Not a fricken chance folks. Even all the expert wave counters that always deal in the price of an asset class, didn’t see the big bull market coming.  So, are all the wave analysts going to see this next bear market coming? Sure a few will, but many still have super bullish wave counts. They will constantly flip numbers and letters around, add a bunch of question marks to the charts, and then they can always claim to be right. The Nasdaq has squeezed out another new record high while the DJIA is heading south. Talk about marching to a different drummer or what! It will clear up, but that still may take some time.

Buying on any “Dip” is going to be financial suicide if we don’t understand the size of the “Big Dip” that is coming.  Any market can correct back down to the previous 4th wave of one lesser degree, and can even go lower like the DJIA did in 2009.  The only so called safe trade would be if we catch wave “A” in Primary degree. By that time the DJIA bears will be in a trap and any rally will force them to change directions. There is nothing as powerful as when the entire herd has to change directions, as they scramble to get out of their short positions.

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DJIA Daily Chart Update: Are The Bears Back In Control?

This DJIA chart has not produced any new record highs in well over 4 months and it even has a lower wave 2 then the SP500 has. I treat this low as a running zigzag as they do happen. I stay away from calling anything “truncated” but a low wave 2 means that the market is more bearish than the majority think. The big clue that the last few months is a bearish rally, is the very fact that the rally produced an extremely choppy pattern. This tells me the rally is going against a larger trend, which would be down.

The Cycle degree wave 3 peak is still holding and hopefully it will not be knocked off, as I want my Cycle degree sequences to last for the rest of stock market history.  Eventually, we will get a major stock market bottom that will be another fantastic buying opportunity. Of course the majority will never get it, as they will be ill prepared in what to do when it does hit a major low again.  Wave 3 can produce declines that will stun the majority like dear caught in the headlights. In this case its more like the “bulls” are caught in the headlights as the bears return to shred this bull market psychology once more.

Recently one of my DJIA posts has been published in Market Forum and this is the link to it. This is all very good exposure and I thank the author for posting it.

When this market goes down, many other asset classes will also get dragged down,  just like what happen in 2008. Needless to say I’m bearish until such a time a counter rally is going to be big enough, to force players to reverse their positions.  I’m sure that in the future we will get price forecasts claiming that the DJIA  is going to 5000, 3000 or even 1000.

When all the analysts are in concensus, then this is when the markets will turn and go in the opposite direction. When the DJIA 5000 price forecasts are broadcast far and wide, then it’s a pretty safe bet to call for DJIA to hit 45,000. Mind you it may take until 2029 to play out.

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DJIA 1977-2018 Review

Chances are very good that you could search the entire Internet for a wave count that dosen’t have a bunch of indicators on it. Wave analysts use smoke and mirror to baffle us with bullshit.  The problem with modern high degree wave counting is that they miss too many bull markets.  The main reason that the majority of wave counting experts are in SC or GSC degree is because they do not look for wave extensions. If we go back to 1977 I show three sets of wave 2 bottoms each one, being one degree lower in sequence. This produced a massive extension until the 2000 peak.

I was still a GSC degree wave counter in 2000 which forced me to flip numbers and letters around like I flip hamburgers on a grill. Every time we lay down a number or letter we are also moving forwards or backwards in time.  Imagine how much time difference there is between an Intermediate degree wave 3 in 2000 and a GSC degree wave 3 for the same peak. With a difference of 4 degree levels we could be early by 100 years or more.

They are calling the 2009 bear market the,”Great Recession”, This is milder sounding than the “Great Depression”. Depressions happen in large degree wave 2 crashes, but most of them happened in times where there were no safety nets. Today the government can just auto deposit funds to the poor and negate or buffer any depression. When we look at the DOW at the 1932 low, you would never know that a depression existed at all. Markets crashed into the 1932 bottom after which the stock market produced a 5 year bull market.  At that time it was the Smoot-Hawley Tariff Act of March, 13, 1930 that killed the markets. Does this sound familiar with the trade wars going on in 2018? We might get the “Great Recession 2.0” but we should not get a depression, at the next Cycle degree wave 4 bottom. By the time they do call it a “Depression” it will be over, and Cycle degree wave 5 will be underway. This is when 5 waves up in Primary degree will be very important to understand, and what that 5 wave sequence will terminate at.

We are still years away from any major corrective bottom as solar cycle #24 has to end first. Many of market crashes have happened just a year or so before the next solar cycle started, so this could take us until 2021 to realize.

Every bull market comes to an end so if they think markets can stay  in a permanent high they we are making a big mistake. Investors just love to buy high, as they sure hate stocks when they are at major lows. This will never change as human emotions take over and all logic reasoning is thrown out the window.

The Gold/Dow ratio is at 19.5:1 with 17:1 already being expensive.  In May 2018 this ratio was 18.63:1 so the DOW got a bit more expensive since then.

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DJIA “Big Dip” Update!

So far the DJIA has procrastinated in following through with any decline, and the fact I have an extra lower high also makes me suspicious as where the market is going in the short term. Long term I remain bearish as, “The Big Dip” I talk about is yet to come. Reading about how some investors are buying on the ‘Dips”, I start to shake my head and say, “What Dip”?   Buying on the dips in the worlds biggest financial stock market bubble in history would be a mistake if we have no clue as to the size of the real dip to come.  A Minor degree dip in a Cycle degree world is nothing if the DOW still has to fall below 16,000 or 8000!

I have mentioned that when you see “any” wave count where an expert or hobby wave analysts leaves the 5th wave peak without a “Cap”, then any wave count following this 5th wave, is just guess work.

This “Cap” must always be one degree higher, and leaving off this cap, sends a clear signal to me, that the wave analysts have broken the Elliott Wave sequence, and therefore they are making shit up. (Cosmetic Wave Counting)

Not capping a 5th wave break’s every rule in Elliott Wave counting, because once you see an uncapped 5th wave, then any wave count that follows is worthless information for us. If there was a bounty on any uncapped 5th wave you can find anywhere on the Internet, then  you would become a very rich bounty hunter!

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DJIA Bullish Rally Update.

During the end of last month we can see that the DJIA pattern started to bunch up. That broke any rhythm the DOW had as this correction sure looks like a triangle. Yes, I do have some overlapping waves, but they can disappear and even smooth out some, once the bearish phase kicks in again. With this DJIA we have a secondary peak, which I will keep working as a wave 1-2 In Minute degree. It may look short but we know that 5th waves can extend dramatically and in a very short time period as well.

If you see another wave count, anywhere that has wave 5 in Cycle degree at the 2018 top, then this cannot happen, you need one higher degree stuck on the end of a 5th wave. A Cycle degree wave 5 peak, instantly puts the wave counter into the SC degree world and all the labeling must change as well. SC degree wave 3 for a peak will not fit as well because all the experts counted that back in the 1929-1932 bear market. Two SC degree peaks within 89 years is far too short of a time period to be real, but it sure fits better into my Cycle degree set of 5 waves, with wave 4 and 5 still far from being completed.

Give it three years before the end is near and then solar cycle #25 will shred any bearish algorithms that are still stomping around in the markets, at that time. Even algorithms will not stand up to the power of the sun!

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Mini DJIA Intraday Update: Bears Still In Control?

In the future, I will try and restrict my trend lines to only use  two or three lines, but they must be parallel in nature. The other set up lines I use you can call a  “Wedge” or Scalene or Megaphone.   Trend lines can be very subjective because I can paint you a different picture if I changed the angle of the bottom trend line.  At times trend lines are helpful so we can see the lower highs that are being formed. Right now the DJIA is stuck in the middle of the two trend lines and I would eventually love to see the bottom trend line get sliced in two.

I find it hard to call the March peak a running flat or even a running zigzag, so for now I will see how long this wave count will last. At this intraday scale, it’s not hard for the markets to soar well outside the trend lines, and when they do it usually calls for another degree change as well.

If you haven’t noticed yet, bearish news has attacked many of the big tech names which is a classic sign that we are in a bear market and it is also telling us that this bearish phase is going to take a lot longer to play out before a complete bullish reversal is being setup.  No, 10%, 20%, 30% or even a 40% correction, will clean up the mis-allocation of funds present in the markets. (Leveraged to the Upside) Different charts will give us different DJIA peak numbers with 26,700 being one of them.

Many are hoping for a return of the bull, but what if that January peak is the very last high of 2018? I don’t think investors are ready for a 2-3 year decline and sinking markets, watching their capital base erode as it evaporates into thin air. Sounds like Bitcoin to me! Anybody that has been fully invested at this extreme top will see their accounts get shredded and the majority of their paper gains will disappear.

The majority of wave analysts believe we are living in the age of SC and GSC degree and they will show you all sorts of SC or GSC degree bearish wave counting gymnastics. If the majority of wave analysts have finished this bull market with a wave 5 in Cycle degree, then they are in the GSC degree world already. Forecasting in a GSC degree world means nothing if GSC or even SC degree has “never” been confirmed.

I have already created a different bearish template decline which looks more like a 5 wave decline than the flat or a zigzag that I have been using. It hasn’t been posted yet, but I will post the template and Idealzed wave count at a later date.

The GSC degree wave 1-2 crash from 1834 to 1842 only took 8 years with a zigzag decline, the 1929-1932 SC degree zigzag wave 2  crash only took 3 years. The next wave 2 crash from 1937-1942 took five years.  They were all zigzags but they also differ in shape and degree. A zigzag in a wave 2 position usually spawns a flat or triangle in the wave 4 position as alternation between the two sets of waves is the rule not the exception. It still doesn’t completely rule out another zigzag, but the zigzag must be more complex than the 1942 zigzag wave was.

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DJIA Index Bullish Rally: Just Keeps On Trucking!

Each one of the 5 indices I cover, has slightly different wave patterns for this bullish run.  From the bottom, this rally can now fit into an impulse, (slightly Truncated).  One more wild spike to the upside and this market could break yet another new record high. One other little thing I haven’t mentioned, is that at the top we have a big open gap that one day will still get close off.

Any sudden move to the downside may produce another double bottom type of a move, which would be followed with a potential bullish “C” wave.  Yes, the decline looks like a set of 5 waves, but these 5 waves could be part of an expanded correction still linked to the bull market.

The Nasdaq is the one index that is closer to new record highs than all the others, and the other 4 would have to play a bit of catch-up!  We know that has happened before, so anything that has happened once in any degree level, can happen again.  One minute a SC correction can take 3 years, (1929-1932) and then 5 years later a Cycle degree correction takes 5 years. (1937-1942).  How long something can take to correct is influenced by the solar cycles. The 2008 bottom is a clear example of how our sun can dramatically change the direction of the stock markets.

Betting on bearish cycles to continue after any new solar cycle starts is doomed to fail. All the bearish wave counts of 2009 failed due to solar cycle #24 turning up!  The last thing I want to see is that we learn nothing from the late 2008 solar cycle turning, but I’m very confident that investors will be oblivious to this fact, and stock market history will repeat itself.  Any person that has an interest in the solar cycles should be watching the progression on a weekly basis. Once solar cycle #25 arrives, you will witness a profound change from a bear market to a bull market.

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DJIA Index Update

This is the DJIA index, which does not move during the night sessions, but only moves during the day. Todays decline does not match the Mini DJIA, but it sure is forming waves that are  better to count out.  The commercial traders are net short the DJIA but not to anything I would consider extreme.  If commercials are net short the DJIA then this does not give us confidence in thinking that some super bull market is about to take off!

Ultimately, this February rally should get completely retraced, then we may have more analysts turn bearish.  Sure, we may not hear about the fundamentals that are causing this decline, but I’m sure the media will find the reasons and then they will all sound like parrots  regurgitating the fundamentals why this market has trashed.  Any, 10%, 20%, 30%, 40%, 50% or even a 60% correction may not complete a Cycle degree correction.  Price is sure not going to help, as we would need to see a very big corrective wave structure completing first. In my world, pattern dominates price any day of the year.

Death Cross

With this particular chart and settings, the “Death Cross” happened at the 25,500 price level, which is far too late to do much with it. I looked for other potential “Death Crosses” in other indices, but was hard pressed to find any that would show up reliably.  Any “Golden Cross” is very bullish but it too happens on the late side.

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DJIA Intraday Bullish Phase Update.

These futures charts do not produce the same wave structures as most of the ETF’s do, as there are far more intraday spikes created in futures than any other asset class. Many of these spikes happen so fast that I know or suspect many of them are computer generated spikes. In line type many spikes disappear, and when they do, I count the bar charts bypassing the spikes.

We had a truncated 5th wave just before the DJIA charged back up again, even leaving the previous 4th wave peak in the dust. I cover 5 indices and only the DJIA and the SP500 have made shortened 5th waves.

The rally since the 9th fits into a zigzag so if this market were to charge much higher, I would need 2 more full zigzag patterns for wave 3 and then wave 5. Waves 2 and 4 can just about be anything.

We’ll see if this rally lasts to the end of the day, but my take on this at this time, is that a new record high will not happen. Besides the wave count being false, the Gold/DJIA ratio had been bouncing off the 21:1 range many times. In order for this super bull to actually continue this 21:1 ratio would have to keep on expanding. It will take more and more gold ounces to buy one unit of the DJIA.

Recent reports mention that  Warren Buffet has been buying into Apple stock at record highs! Wow, even Warren Buffet is buying into this historic stock market peak. This is not what a true contrarian would ever do, but they will wait until the insiders start to buy again.


I thought I would add the DJIA big picture showing that Warren Buffett has been buying into the tops of  this historic bull market.

Warren Buffett more than doubled his holdings in Apple in 2017

Apple board members receive $262K in restricted stock


Buying into anything following Warren Buffet has produced serious downside moves in the past. Warren Buffet has lots of cash sitting around so he can buy something just because he likes it. Every major investor loves Apple stock, as it is one of the most widely held stock by institutions. Apple is in the DJIA and it will suffer in price once the “Big Dip” reveals itself again. Think that it’s a good time to invest as the DJIA records a record spike to the upside?

From the 2009 bottom the markets create 5 waves up in Intermediate degree. Not 5 waves in Minor degree and not 5 waves in Primary degree. If this record bull market has another super leg to go, then at a very minimum, the DJIA would still have to correct down to 15,000.  5th waves are never fundamentally strong like 3d waves are, so we will not get multi generations of 5th wave extensions. This has never happened in the past and it sure is not going to happen this time.

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DJIA Weekly Chart Melt-Up

The stories are rampant that experts agree about a potential stampeded into stocks, which some are calling for a 20% meltup! Hate to bring you the bad news, but the meltup has “already happened”. For the last two years, since my 4th wave bottom we’ve had a consistent meltup unparalleled in financial history. This is nothing really new as the herd of analysts always seemed to be late in recognizing major turnings as well. In this case it took them a full two years before they saw it as a meltup situation.

One day 2-3 years in the future, we could see the entire situation reverse when the market has already completed a meltdown. Our present market meltdown, is already 5 days old, but the entire 5th wave meltup will get retraced as the 5th wave meltup turns into a Cycle degree 4th wave meltdown. I’m sure that towards the end, we will see vertical moves to the downside which helps to confirm a “C” wave crash.

I drew out another Cycle degree flat and counted how may 5 wave sets and 3 wave sets I need in order to qualify a flat correction. My smallest degree level I will use is in Minor degree, and I would need 6 sets of 5 waves in Minor degree, with 5 sets of “A, B, Cs” in Minor degree. We only need one set of 5 waves in Intermediate degree, which will play out before the Cycle degree crash comes to an end.

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DJIA Intraday Decline Update

This decline, we are now in should not be a surprise to anyone that takes this market seriously. Why? Because it always seems to happen during the last ditch effort to max out  RRSP’s for the 2017 season.  It has happened so many times before, that it’s become old news. You can’t blame this decline on profit taking as the smart money has left a long time ago.

It goes to show that investors care less about buying low and selling high, but they worry more about topping their RRSPs. We are about half way down and then the entire January bull move will be erased. Billions have gone up in smoke already, and there is much more carnage to come. Longer term the entire Trump rally will also go up in smoke, as everyone is underestimating the degree level of this decline.

Any Cycle degree correction has three simple possible outcomes, flat, zigzag or triangle and in that order that I expect. I favor a flat because wave 2 in Cycle degree looks more like a running zigzag.

By the time the Trump rally has gone up in smoke, we are looking at trillions of dollars that will disappear. If you think you can buy on the dip, then your thinking is still over on the bullish side. Not on the bearish side, that we need to focus on.

I had to move my degree level up by one degree because I was using the bottom of my list already. My cutoff is always Miniscule degree so I can better gauge where I am, plus we damn near need an electron scanning microscope to see anything smaller.

I will try and cover the gold and oil markets by Monday, but I have been fighting this flu bug for a week or so already.

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Record ETF Demand In Januaray From A DJIA perspective

Record ETF Demand In January | ETF.com

It just amazes me how the herd keeps jumping into markets at record highs.  They have done this at every record high since 2000 so it does not surprise me that they are doing it again. Due to the fact that since the 2009 bottom we had a “Big and Tall” bull market, many wave analysts have increased their wave degree accordingly. One analyst has the 2009 bottom as a SC degree wave 2 bottom.

Other popular wave analysts still have the potential for a wave 3-4 in Primary degree. Sorry folks, but 5th waves are always fundamental the weakest in the links, and they never last multiple generations. The majority of wave analysts are  still pushing, an 89 year old 5th wave extension.  From the last 2016 4th wave bottom this market shot straight up, with hardly any clear subdivisions. Vertical moves like this is a sign of an ending wave pattern,  not the start of something better to come.

Everything tells me we could be in a wave 3 in Cycle degree and that we are going to get a Cycle degree correction, with 3 waves in Primary degree. I’m going to keep my updates brief,  as I fight through this flue.

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DOW 30 1984-2018 Review

Since early 2016 we had a massive move to the upside where we can hardly make out any wave corrections. This is a classic 5th wave extension, which we’ve had before. From late 1987 to 2000 was nearly a 13 year Minor degree 5th wave extension which makes our present two year run look kind of mundane.

What is dramatically different between the two sets of 5th wave extensions is our present 5th wave in Intermediate degree is in a near vertical position which I have never counted out before even when we go back 200 years or so.  The difference in angles is dramatic, but wave analysts are ignoring this fact as many of them keep adding higher and higher degree levels.

From my 4th wave Intermediate degree bottom, we would still have 7 smaller degree levels that can come out of  hiding. After the wave 4 bottom in Minor degree, (2017) we still would have 6 hidden degree levels, that could come out. I had  to use the remaining 6 hidden degree levels, and during the last degree, we run out of visible 4th waves.

Elliott wave is much more than making simple mindless trade setups, as it is our perception what the Idealized pattern looks like that is the problem. Those pretty impulse waves they show us in the EWP don’t exist. You can search for them all your life and you will not find them. Why? Because all waves are never even.  Until we go back to 1929 and start a fresh wave count will we ever fix this problem of missing bull markets or even bear markets using the EWP.

Missing a bull market should never happen, and frankly the contrarians do a much better job of reading tops and bottoms. The short version is, when our wave counts, are still bearish after reports of insider buying are all over the news, (like 2008), then our wave counts will get trashed. This happened at ever major bottom of 2002 and 2008 leaving the wave counter with nothing but token positions, if that.

In the next few years, chances are good we could hear about DOW 5000, 3000 or even 1000, but don’t believe that as solar cycle #25 will certainly destroy those price forecasts.

I gave up on all high degree wave counting when I saw EWI still being bearish on gold when gold was at $1000.

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DJIA Monster 5th Wave Extension And Impending Bear Market.

 One of the main reasons I always review the big picture, is to check if the wave counts still fit in the big sequence I think I’m working in. From the 2009 bottom to our present top we have what I call “One move”, but it is subdivided into 5 waves in Intermediate degree.  The 2000 peak also ended with a wave 3 in Intermediate degree, but it was the 5th wave in Minor degree that extended at that time. 2002 ended with a wave 4 in Intermediate degree just like a 4th wave in Intermediate degree ended in early 2016.

Folks, it’s the last 5th wave that has dramatically extended, and to be honest, I have never counted or seen such a 5th wave extension anywhere in stock market history. It is a near vertical move that even the 5th wave from 1921-1929 couldn’t match. Due to the fact that our present 5th wave is vertical on weekly and monthly charts means that this rally cannot continue.

Investors are pouring record amounts of money into stocks

The bulls are enticing many to invest at record highs, and some of the recent money flows suggests huge inflows. Buying high and then selling low in a crash is what the general public loves to do, as investors have done this on every major peak since 2000. They call them investors, but investors should not be confused with “Smart Money”.

It’s all emotional money as investors chase a bull market. As long as it keeps going up, everybody is happy, but as soon as these buyers start to take a rest, this market could start on the “Big Dip”.  Besides the potential for a Cycle degree decline that can fall below 2011 lows, this present 5th wave will get completely retraced.  It’s all about smoke and mirrors as the consensus paints us a rosy picture of the future.

Every major peak in history, the talking heads painted us a rosy picture, but what followed had no rosy ending. In late 2008 investors were fleeing the stock market in record numbers, yet the market did the exact opposite thing as the biggest bull market since the depression unfolded. The bull market in 2009 unfolded with a very “big” push from the sun, as solar cycle #24 started.

No little 20% correction will do it, as it might be a 70% correction instead, depending where we count from and if we use a gross or net calculation.

In the bigger scope of things this is not going to end well, as the markets will put those emotional investors through a meat grinder.  Slice, Dice, Hack and Slash will chop all the stock bulls up and get them ready for the fridge.

There is no chance in hell that I will turn into a super stock bull, just because it hasn’t started its bear market yet. If the DOW reaches 7000 or so and the talking heads tell us the DOW is falling to 5000 or even 1000, then I will make a call for the DJIA to roar to 34,000 + by 2029.

From 2009 to present,  we’ve had a 400% run in the DJIA  chart,  so I’m pretty sure the DJIA could make a 500% run up into the  2029 time period.

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DJIA 2000-2017 Elliott Wave Bull Bear Market Reviews


The chart above is a stretched weekly chart which shows any vertical moves in a more dramatic fashion. The Elliott Wave Principle was observed using the DJIA charts and coincidentally the DJIA and the other indices all have similar patterns and wave counts. Always reviewing the largest degree levels is very important, as we have to make sure that it still fits into the larger picture that we think we are in. The reason why all these 3-4 sets of waves appear, is because we always have to look for wave 3 to be the longest or extended wave. Since 1932 any wave 3 has never been extended, but it’s always been the 5th wave that the experts extended. 5th wave extensions “never” travel across multiple generations as 5th waves are fundamentally very weak.

When the majority of expert wave analysts didn’t see the bull markets coming both times in 2002 and 2009, I knew this SC and GSC degree hype had “MAJOR” flaws in it.  As soon as any part of the largest degree level has failed, then the entire 5 wave sequence from its start, “MUST” be thrown out. Of course, this is too much like work, so the majority of wave analysts just makes a few cosmetic changes, and “bingo”, they end up with a new and improved,  wave pattern. Cosmetic wave counting doesn’t work, and if we just keep making pretty changes, we will miss every major bull market that will ever come in our future.

Just by not being prepared before any high degree bull market starts, makes the Elliott Wave Principle very inefficient and pretty useless. I was brainwashed with this GSC degree mania myself, and once I realized that the DJIA would not implode in 2011, I knew a major flaw was still present in all our wave counts. It’s pretty sad when expert wave analysts miss a bull market and leave 300% gains on the table.

Any person with a very healthy investing account can not afford to miss any bull market in their lives. It takes time to make the mental switch from a long bearish phase and then back to an impending long bullish phase. It takes time to accumulate strong ETF positions so we need lots of early warnings. Even Warren Buffet screamed how bullish he was back in 2008, and my favorite contrarian was turning very bullish as well. It wasn’t until March 2009 that any wave counts were ending, so wave analysts were close to 6 months out, in recognizing that a major bottom has arrived.

In late 2008 conventional conditions were already showing us that the 2008 financial crisis was coming to an end. Insiders buying their own shares back, is a clear sign that the bull market was coming to an end. Insiders don’t buy if the 2009 bottom was just a wave 1 in Primary degree. They already knew that the markets were  oversold on a massive scale, so it was a no-brainer for them to buy stocks. Even the VIX started peaking out in late 2008, which all helped to seal the coffin containing all the stock bears.

My top in 2000 was wave 3 in Intermediate degree with its start in 1982. Once the markets crashed in 2002, it was followed by a 5 year bull market that most wave analysts also missed. From this 1982 bottom it was exactly 20 years to the 2002 bottom, which is part of the 20 year cycle so prevalent in the markets.

Each peak progressively gets higher in degrees, but Supercycle wave 3 is still far away in time and price. SC degree wave 3, never mind GSC degree wave 3, may not end until the 2029 time period.  Not until “All” 5 waves in Cycle degree are found and confirmed, can we progress into any SC degree world.

The 2009-2017 bull market was a very choppy bull market, further confusing us into believing it was just another bearish rally. It wasn’t until the DJIA was past the 2007 peak did wave experts look for alternates.

Hindsight has to be turned into foresight, and I have been very specific with the wave counts that we need to confirm a Cycle degree bear market. This is so we can catch any major errors as soon as possible. When I’m wrong, I’ll be wrong in spectacular fashion.  Short term, wave counts are always foggy to say the least, but we want to get the biggest degree as close as we can, well before any real bottom is in.

When the markets are pointing up, and the majority are all guessing how far that this bull market still has to go, I have already painted the picture for when the markets point down again. Bull market tops are the breeding grounds for bear markets, and the reason this is so, is because there’s “nobody” left to get in.

The bullish preachers are preaching to the crowd that has been converted for months already. All we need is for the, “Greatest Fool” to  crawl out of his cave and he will be left holding the bag of falling asset prices.

Buy Low, Sell High  is a very important PDF to understand, which combined with the beautiful color PDF chart below, makes a powerful case for contrarian thinking.  ‎www.longwavegroup.com/market/charts/_pdf/Anatomy_of_A_BullandBear_Market_with_Money_Flow_0930.pdf

Like Rick Rule says, ” you’re either a contrarian, or you become a victim”.

If you have progressed, or lucky to have a strong net worth and you would like to enhance the contrarian point of view, then I strongly suggest that you subscribe to  Steven Jon Kaplans True Contrarian Newsletter.  

 

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DJIA 2000-2017 Review

I review the past more than other wave analysts do because we always have to check that everything remains in sequence to the largest degree. All the idealized charts are posted and online. The professional wave analysts do not do this so everybody thinks we are in extended 5th waves. This creates bearish fundamental forecasts of doom and gloom that will never happen. One such bear market forecast is that the DJIA will hit the 5000 price level.

There is nothing at this 5000 price level to offer support, so that number is just a number picked out of thin air. In the case of this DOW chart, wave 3 and wave 5 were the two extended wave’s, while wave one was a bit smaller.  I used the simplified version of 5 waves up in Intermediate degree, except for the last 5th wave which I turned into an ending diagonal.  

These vertical runs never last, especially if we get a Cycle degree 4th wave bear market.  Just a simple Intermediate degree correction would take the DOW below 16,000. We could see another big rally at that time, but eventually the DJIA will fall below the 2011 lows, of 10,000.

Can the entire sequence be wrong? Sure, it can but how wrong were they in 2009 when they said DOW 1000 was coming! Many believe that fundamentals drive stock prices, but that has never been true. At the 2009 bottom, where did it show, that fundamentals drive stock prices.  Even during the great depression the DOW created a “V” like bottom totally ignoring fundamentals as stocks started on a 5 year bull market. In 1975 stocks imploded as well, with investors being very bearish, yet the market turned and soared until 2000. 

Since 2000, we have been looking at 3 peaks, all containing wave 3 tops. These wave 3 tops must all be in sequence in a Cycle degree  extended wave three.  Since the 2002 bottom each 5 wave bull market has increased by one degree, so the next big bull market must have 5 waves up in Primary degree.   When the DOW is at 24,000 it is an easy call for DOW 30,000, but when the DOW is sitting at 7000 or 8000, then DOW 34,000 will be my call. 

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DOW 23,000 You Got To Be Kidding!

I never thought that the DJIA could hit the top of the trend line for the third time, but sure enough it is close to doing just that. Three trend lines can give us a price level where we cross over to a higher degree than what the 5 diagonal waves were. Any decline below the middle trend line would push this market into the Primary degree world. 

Most trends like this also produce about the same angle, from the bottom left corner, to the top right corner. Any market that has a sustained bullish phase, can switch into a blow-off situation. Long tall skinny wave structures can do the trick, but this has been going on for some time already and it seems it’s not ready to die just yet. Of course, when the bearish crowd throws in the white towel and gives up, it turns and crashes. 

When the intraday charts are fuzzy then it is best to review the daily charts. In February of 2018 Donald Trump may bring in a new fed chief as Janet Yellen could be leaving her post. If and when it happens, this can bring turmoil into the markets and hasten any Cycle degree 4th wave decline. 

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DJIA In Supercycle Degree 1929-2017

It would take an ‘immaculate conception’ to create bear market in stocks right now: analyst – MarketWatch


One analyst believes it will take an act of God for a bear market to materialize anytime soon. What else is new as these bullish remarks always come out at the peaks of stock market formations. Back in 2008 everybody hated stocks and the retail investors were selling out as fast as they could, while insiders were buying their owns stocks. 

Just to give us a bit different perspective, I replaced 2 sets of wave 3-4 peaks by one lower degree. 2007 and now 2017 are Cycle and SC degree respectively.  I also added some trend lines, showing us a potential SC degree 4th wave base at the 2000 price level. The high degree wave counters have tried all this before, several times, and both of them failed, so why should this SC degree work? 

It won’t work as the only previous 4th wave is the bottom of the 1987 stock market crash, about 3 degrees lower. We need the previous 4th wave bottom of one lesser degree, so that would make the 2009 bottom a target, and not the DJIA 2000 price level.

I have repeated it many times that the DJIA will “never” decline that low, and come anywhere near that price range.  Just for the reason, that the solar cycle won’t let it fall that low. Besides that, the DJIA would be massively oversold long before it came anywhere near these bearish price levels.

There is no way that a price forecast can tell the difference between a SC and a Cycle degree bottom. If a Cycle degree bottom came to a rest at 7000, would the 5999 price level suddenly make it a SC degree bottom?  Not on planet earth! Maybe on Kepler 186f, but not on earth.  🙂 

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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.

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DJIA Weekly Chart 2009-2017 Review: Time To Get Into The Stock Market?

A third of millennials think now is the time to jump into the market – MarketWatch

Since the 2009 bottom as the majority were exiting from stocks as fast as they could, insider buying reports were flooding the internet. Insider buying was a very important key contrarian indicator that the market crash was coming to an end. Insiders don’t buy their own stocks on a whim, and they never buy as a short term trade. Once they buy, they can hold onto them for many years before they think their company’s share price is out of line with reality. In late 2008 and early 2009, the majority of all experts were still looking, for the markets to go much lower.

Many expert Elliott Wave analyst, were still calling for DOW 1000 as the majority all had the 2009 bottom as a wave 1 in Primary degree. What this meant was that all wave counting experts were in sympathy with the majority of investors.

In hindsight, the wave 1 in Primary degree failed, as the market charged higher. Nobody was screaming in late 2008 and 2009, that a major bull market was on the way. My favorite contrarian sure called it correctly in late 2008, as Steven Jon Kpalan coined the phrase, “Biggest stock market rally since the depression” was on its way.  This was in direct contradiction to all the bearish wave counts produced by expert wave analysts of the day.

The 2009 bottom was not a failure of the Elliott Wave Principle, it was the failure of analyst not going back in history to double check our work.

When we use too high of a degree we become very insensitive to the markets, as we are always waiting for the next big move lower.

This morning the DOW peaked at about 22,055 but it does not mean it can’t still go a bit higher. We will have to wait until next week before we can become more certain. One thing we do have at this record top is a wild and choppy pattern, that works best as a diagonal wave structure. In 5th waves is where we find the diagonal waves, but we need to know what freaking degree this entire movie has been. Five waves up in Intermediate degree would finish off this bull market, and we should expect a Cycle degree wave 4, bear market.

At this time I’m looking for a Cycle degree flat that must divide into 3 sets of waves. (3-3-5)

I made this chart a day ago to show readers where we are after an 8 year bull market. I kept the wave count as a simple impulse, but in reality it is a diagonal 5th wave. From the 2016 bottom stocks charged up in a near vertical move that can never be maintained, yet many think this is a good time to get into the stock market. What? You got to be kidding, after an 8 year run, and leaving a 338% gain on the table many see it as the place to be?

I cannot stress it enough that when we ignore past history, we are doomed to repeat it. Since when does buying in at the peak of a major bull market, sound like a good investment strategy?  That may work if you live on Mars, but it will not work on earth. I use 3 simple corrective patterns from an idealized wave count to figure out how deep a Cycle degree 4th wave could go. I’m pretty sure we will hear about DOW 5000, 3000 and even DOW 1000 forecasts in a few years time, but is this reality? 

The 2007-2009 crash was reality and it retraced the entire previous 4th wave of one lesser degree. The same move now would put the DOW right back down to 6500, and even a bit more if it wants to. Markets have a bad habit of always making moves that the majority do not expect. The markets could fall just short of the 2009 lows in a Cycle degree crash. 

The first thing that has to happen is the 4th wave in Intermediate degree must get retraced at the 15,000 price level. 15,000 would just barely get the bears warmed up as it would be just like a bee sting in the big scope of things. There may be temporary support at 15,000, but ultimately the markets will have to fall below any 2011 lows at the 10,000 price level. This would retrace the entire “Stock Maina”  bullish phase, which I have talked many times.

When this starts to get close in a few years time, the markets will already be in a massive oversold condition, but the real bottom would still be 2000-3000 points away.

A massive bubble can only be seen with long term charts and I like to display them in linear style to show how insane this market really is. Markets may look insane to the season contrarian, but to the majority buying high is normal behavior. 

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DJIA Intraday New Record High Review

 

This morning the DJIA is recording another new record high breaking the 21,869 price level.  More upside can still happen, but the DJIA should also be ready to give us another correction at the end of this month. It is next to impossible to count any clean impulse sets of waves as we fight through these choppy wave structures.  Any new record high can also be the last record high, but that sure hasn’t happened at this time. 

It may look like it is a strong move, but the choppy patterns of these waves tell us otherwise.  They are unstable waves which can make dramatic moves in the opposite direction when we least expect it. How long can this still drag out, is very uncertain at this time, but any new record high can always give us a surprise correction. 

Eventually, my Cycle degree wave 3 will find a home, but at this slow rate it could take another 100 years. 😉 You have to have a sense of humor counting waves, as this market just keeps on extending at least in the short term. I think the expanded flat scenario is best pushed back to the bottom of my list of choices, as that may be a better fit at a Primary degree “B” wave top.

Any of these extensions are the smaller degree levels that come out of hiding, as big and tall waves, does not mean that higher degree levels have miraculously arrived. Just because it has gone much higher in the last year or so, it will not turn into a Supercycle degree wave 3.  SC degree wave 3 may not happen until the 2029 time period. Add another 100 years to 2029,  and it could take until 2129 before we see a Grand Supercycle degree wave 3 top in any asset class.

Add yet another 100 years, from 2129  and we may be lucky to reach Submillennium degree wave 3 by 2229.  As close as I can count the years, I think Submillennium degree waves travel in 400-500 year lengths.  Of course, all the climate change expert scientists forecast the end of the world, long before 2229. They claim that the world will end in a, ” Runaway burn your face CO2 global warming”.  When the experts predict the end of the world, then they are also predicting the end of the Elliott Wave Principle. 

I have always been fascinated with the Medieval Warm Period and the following Little Ice Age, as this fits Submillennium wave 1 and 2 extremely well. People that lived in those time periods, adapted to climate change otherwise they died. Is modern man still that stupid that he cannot adapt to climate change? 

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DJIA, 1970-2017 Primary Degree Elliott Wave Count Review

I started with a bigger time chart of the VIX and have arrows pointing to many of the peaks where important turnings have occurred. Many times, turnings start to show well before the crowd realizes it, especially when solar cycle #23 ended in late 2008.  When one solar cycle ends the next one starts, so by early 2009, solar cycle #24 had already turned the corner.

 All stock markets that I cover, also found their bottoms in early 2009, after which they started a massive bull market. This was inversely reflected in the VIX as it started to crash.

I couldn’t resist drawing in the wedge as they can forecast a potential reversal that will surprise many. Also, the stock  market bull run would keep right on going, if the VIX is not at record lows. 

The last weeks COT report also confirmed, that the commercial traders are net long with their VIX bullish positions by a margin well over 2-1. Commercials added 9,930 long contracts, but at the same time they removed, 17,305 short contracts. This is a huge swing, which I expect to see happen when a reversal is getting closer.    

When we look at the wave patterns in the VIX we can’t see those pretty impulse waves that Elliott Wave analysts love to make. From my perspective the VIX wave structure is all about diagonal waves, which can produce any of the overlapping, choppy waves that it can throw at us. 

Without first looking at the VIX, the DOW chart below will make little sense. There is an inverse relationship that the contrarians understand, but the majority ignored the VIX just like all the expert wave analysts did. 

Starting back in 1970 was not a Cycle degree 4th wave triangle, as 5th waves do not extend like this.  With stocks, we should always look for wave 3 to extend and occasionally the 5th wave extends, but in the case of the DOW, it extended in Minor degree.  When something extends, it is the smaller degrees that come out of hiding, and just because they look big and tall, does not mean they are huge degree levels as well. 

The two parallel lines show that the 5th wave never even came close to touching the top trend line again, as the DOW  started to roll over and away during the 2002-2007 bull market.  It’s just another example how trend lines can screw us up before they ever help us.  Besides, it’s not rocket science as even just a quick glance we can see the bullish trend.  It still may take the rest of this month to get a better picture if a major top is starting to hold, as this market sure wants to move in knee-jerk violent moves. 

When we look at many of the expert wave analysts, stock market charts, we see that the majority believe that we are in a SC or GSC degree type of a market. This can only happen when we count everything from the 1932 bottom as a 4th wave base in SC degree. I believe that a multi generational 5th wave can never extend like this, and through multiple solar cycles as well.

From the 2009 bottom to our present top is  just “One” move, but it subdivides into a sequence of 5 waves. I don’t ever recall counting out any 8 year bear market rally before, besides a real bear market rally would’ve produced far more extreme swings than what we actually observed happening in the real world. 

Insiders or smart money has left this market back in May 2017, so the only people remaining in this game are the emotional traders, investors and cheerleaders.  I’m sure you have heard the expression, ” Elvis Has Left The Building”, well this is a shining example, when smart money has already, “Left The Market”.  Only the fans remain, cheering for another encore!  

The odds are still extremely high that a Cycle degree wave 3 may still be in the process of completing, after which we should see a big correction that the majority will call a stock bear market. This entire process can still take years, but the start of solar cycle #25 will kill any bear market already in progress.

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Mini Dow 30 Important Cycle Degree 2009-2017 Review

When I post a potential Cycle degree wave 3 top, it is always important to review the wave count and see if everything still fits.  We need a specific point to count from, otherwise we can create wave counts that send us chasing mythical fire breathing dragons, that forecast nothing but doom, gloom, economic depressions, and or the end of the world. I know because I chased those same mythical dragons for  many years, and it wasn’t until about 2013 that I realized that there is a degree issue that needed to be addressed.  I started by slowly decreasing all my wave counts from GSC degree, then down to SC degree and by 2013, I was thinking in Cycle degree. 

   When we look at the chart above, we can see that the DJIA has already rolled “away” from the top trend line. It would still need to soar dramatically, if the DJIA is to ever hit that top trend line again. When I see this, then I always ask, “Which lines will get hit first”?  I would bet that the markets will hit one of the bottom two lines, before it ever meets the top line again. 

This DOW chart is now what could be an expanded top, giving us the false believe that a diagonal wave  5 in Intermediate degree is still completing.

I love these expanded patterns, but seeing them before they happen is a constant challenge. In the end, it’s never a good thing to completely throw out any wave count until it is either confirmed or trashed.  Most of the time any trashed wave count is put back into my inventory of simple patterns, but an expanded pattern is not a simple pattern anymore.  It would now be classified as a complex pattern. In reality, I’m back to using two potential Cycle degree corrections, for the foreseeable future.

The bottom trend line may now have some use, as it could point to another price level for a potential turning. Usually these “C” wave drops can show a very steep angle of decline, even to the point where very few counter waves can be seen.

Without a doubt the “C” wave would have to travel well below the 15,000 price level, but a deeper decline would not be a problem as well. The end of the “C” wave would now come to a halt at an “A” wave in Primary degree, after which we should experience another strong counter rally.

We can have a big bearish phase until solar cycle #24 has completed, by the time the 2021 time period rolls around.  After that,  you don’t want to think bearish thoughts anymore, as solar cycle #25 will certainly destroy them for us. In 2009 the start of  solar cycle #24 destroyed all the bearish market forecasts, and I fully expect that the same thing will happen again, again and again. 

When we constantly focus on new record highs while everybody is bullish, then it’s always time to look in the exact opposite direction, staying busy figuring out the potential idealized bearish patterns yet to come. 

Some may think we are going into a 4th wave triangle, but triangles are not that plentiful. Any Cycle degree triangle would have 5 massive swings, 3 swings down and 2 swings up. These would be monster swings with about 14,000 points for each swing. 

 I’m sure the idea of long term investing would be seriously tested if this scenario were to happen. I don’t think a Cycle degree triangle can happen and still finish by 2021. 2021 is the end of a 100 year time period, if we count from the 1921 low, and 2021 would also be the 89 year time period from the 1932 low. 

I have not defined the 2009-2015 wave count just yet, as this potential expanded top may be short lived. I will work the same expanded top with the SP500, but others may not even have this expanded pattern.

The only way to see if a wave count is real, is by constantly throwing your best wave count in front of a bus, or a stampeding gang of bison, and take the wave counts that survive the best. 

Knowing that an expanded flat top may be taking place is a big deal, as these waves have extreme forecasting powers built in.  In other words, when the wave counting gang is screaming DOW 5000, 3000 or even 1000, then I will be screaming DOW 24,000-34,000 for the next SC degree wave 3 top. That may not happen until after the 2029 time period is reached.

What will be certain is that these markets will become massively oversold long before they will ever hit their real bottoms,  but the majority will never even look at that, as they will be busy selling out in despair.    

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DJIA 2000-2017 Review

The above chart is a simpler version of what I see as 3 sets of wave 3 tops. Every 4th wave correction is followed by a 5th wave, with the 2009 to present fitting better as a diagonal than an impulse. Any diagonal bull market should tell us that we are in a 5th wave, as the huge bearish rally concept will not fit. I have never run into a big 8 year bear market rally and we can go back a hundred years or more.  Long term readers know this old pattern, but new readers may not have had a chance to see it. 

The majority of expert wave analysts today, are still counting in SC degree, or they think we’re in GSC degree. The reason so many are in this high degree count in the first place, is because they are all working from a 4th wave base, thinking that a 5th wave can extend several generations. Hey, I followed the same wave count as well, but realized something was very wrong with their counts. 

We will never find any SC degree if the entire set of 5 waves in Cycle degree, is not found first. From my Cycle degree perspective, which I switched to in 2013, has not forced me to move any peak or gully since the 2009 bottom. This can provide a strong confirmation that we are close to a real wave count that we may be able to forecast with.

I think counting out the DOW is very important, as you have to understand the extended wave 3 principle, but if we don’t get that 1970-1980 wave count right, then all the little numbers and letters in the world will mean nothing! My Submillenium wave 2 ended with the Little Ice Age, so at a minimum, we can expect an extended wave 3 terminating some time into the 21st century. 

All the different wave 3 peaks have an increasing count by one degree higher each time, so I’m very confident that the next major wave 3 peak will be SC degree. This may not happen until 2029 or a bit later as 20 and 30 year cycles are also involved. 

We have a very good chance of heading into a Cycle degree 4th wave correction, followed by another 5 wave impulse type of a market.  This 5 or 8 year  bull market, must be 5 waves in Primary degree, which would terminate at my 5th wave in Cycle degree and wave 3 in SC degree.

I may not know exactly what wave count we may be at, at any given moment, but I sure do have the confidence in knowing what will never fit, once I figure out their degree list. 

I’m pretty sure that these high degree fear mongers would be expecting a decline well below the 2009 crash bottom, but the markets have a nasty habit of always doing something else. Just to prove these mega bears wrong, it would be great if any Cycle degree crash never ended past 2009 lows, but that the markets stop well short, leaving everybody wondering what happened again.  

If we look back (hindsight) to the 2008-2009 bottom, and still not be convinced that it was the place to be with a major long position, then the next time this happens we will still be too scared to take any strong position.

I’m not the type of a person that sees a depression, boogie man, or the end of the world around every corner, because If the climate or a comet is going to exterminate humankind, we will never know what hit us before it happens. 

 

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Mini DJIA Intraday New World Record High!

Since the first top in June, the DJIA has created another two peaks, with each being a bit higher than the previous peaks. This can be called a triple top, and this recent record high has only made minimal gains.   When those emotional bullish investors realize that their gains are mediocre, then they can decide to sell or, new greater fools refuse to show up!

Mirror, Mirror on the wall who is the greatest fool of us all?  Who is that last guy thinking that stocks are still going to go to the moon?  We just finished another world record high this morning, so we will get another chance for a different type of a decline in the next bearish cycle.

On a bigger scale Cycle degree wave 3 will have to be moved to a new home. The majority of wave analysts are working on SC degree, but in reality not a single wave pattern has been confirmed even remotely close to any SC degree.  SC degree wave 3 may not come until the 2029 time period and GSC degree wave 3 could still be a 100 years away.

Of course the man-made global warming crowd is predicting the end of the world due to runaway CO2 in our atmosphere? This is the biggest line of crap we have ever seen, because if something is human caused, it will show in the Elliott Wave patterns.

The EWP is very good at picking out wild claims as every bubble has ignored doom and gloom predictions many times. Y2K, Peak Oil, Tulip Mania and the Civil War gold hoax, are all just a few of the fake myths people believed in at one time or another.  Oh yeah, we can’t forget the Tooth Fairy and Santa Clause!

Man-made global warming by CO2 emissions is a scam, developed by corrupt, climate science officials and governments that want to tax your carbon emissions.  It has been proven that the temperature charts have been manipulated with the Climategate revelations.

So if the world is going to end, what will happen to the wave count of the DOW?  What these alarmists are not telling us, is at what level of CO2 we can’t go under?  Under 150 parts per million “all” plant life begins to starve and die. By forcing the majority to reduce the CO2 content in our air, those man-made climate change artists, are creating a death sentence for all life on earth.  CO2 is the food source for plants which all life depends on and I will not be part of any action that condemns the world to death.

Al Gore is coming out with a new sequel, So if you want to keep being brainwashed, by a non scientist, then watch the sequel when it comes out.  Of course, if you never heard about the Medieval Warm period in school,  or the little Ice Age that followed, then any large degree wave count I am working will not mean very much.  Any warm period in the past correlated well with the expansion of civilization, but it was global cooling that crushed all advancements.

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