The DJIA and this SPX index look very much the same and are on the same path to wave 3 in Minor degree. The story remains the same as Cycle degree wave 3 ended with the January 2018 peak, not at the September 2018 peak. It’s not an extended top, but an expanded top, which is completely different wave patterns. I’ve searched for months and you will not find a single wave analyst anywhere on the internet, that sees an expanded top! Counting is a secondary act of trying to confirm what you think we are seeing.
This fast counter rally sent shock waves around the world as it seemed to have broken a few records. I was impressed that a Minute degree rally can cause such emotions around the world. A new low is coming if you like it or not, as the 5 wave sequence in Minute degree is far from finished. High-speed algorithms were blamed for the move but this has been going on since 2000 already. I’m sure we will see more, but fast moves like this don’t last very long as the algorithms can panic on the way down as well. The problem with any computer trading program is that the can’t judge human emotions. They don’t use COT reports or any sentiment reports like the Market Vane report I have used.
It might take a few more months for the 5 waves down in Minor degree to complete after which I expect a rally from another huge bear trap. There are no Primary degree sets of 5 waves down coming, as a run of 5 in Primary degree all come from much higher degree levels that I work with. You can bet that the Primary degree “A” wave will be wave 1 in Primary degree, which has “never” work in 18 years. If a set of 5 waves down in Primary degree has never been confirmed, then we must throw out at least 3 higher degree levels.
That means we have to check all the wave counts starting with the 1929 peak and look for all wave 3 extensions. You can’t have a 44-year 5th wave extension (1974-2018). If 1974 was the 4th wave bottom in Cycle degree, then the two bear markets we have had since 2000, should have entered its price territory a long time ago.
2019 is a new year and I expect more bearish action but it will come to an end sooner or later. Keeping our minds open for another month or so could show us a different picture that few expect.
Have a safe and happy New Year!
The Fed is draining the life-blood out of this stock market and economy. It still amazes me when the herds decisions are based on words from the Fed. The talking heads just declared that a bottom was in a few days ago, but the markets didn’t care once Powell made his speech! Today all support failed and the SPX plunged to new 2018 lows. What I’m showing with the above wave count is a 1-2, 1-2, 1-2, wave count. I still have 5 degree levels left before I run out, but there is also a physical point where the smaller degree levels get harder so.
Sorry, I don’t have an electron scanning microscope at my disposal! 🙂 Lets say I can see one more set of 5 waves completed in Subminuette degree, then after that my entire wave counts will start to switch where we could get nothing but ending 3 waves. This is telling me that a wave 3 extension is a very high probability. I don’t like to change the settings on these charts but I can get more detail from the intraday futures charts. Even the Gold/SPX ratio is still extreme and only 49-50% bulls were present in the MV report. That’s a boring number, as at 50/50 you may as well just flip a coin.
When Minute degree wave 3-4-5 complete and wave 3 in Minor degree is due, then this will coincide well for closing of shorts. A 4th wave counter rally in Minor degree could shred gains and it is better to play with light positions. If wave 3 in Minor degree appears this year, then January could see positive inflows. The whole idea in trying to be more accurate with the degrees and patterns is so, we can catch a huge error as soon as we can. On any 5th wave, we could also start seeing really choppy waves, as Diagonals just love to make wave counting a challenge.
This SP500 index gives a much better wave count as the futures specific month can give wild and erroneous spikes most of the time. The herd of analysts has just figured out that the markets are in a bear market. This is not rocket science if every conventional analyst on the planet uses the same set of numbers. The majority will take much longer to figure this bear market out because we really don’t know what the bubble degree top really is. My bet is that most wave analysts will be looking for wave 1-2 in Primary Degree! They tried that trick in 2009 and it didn’t work then and it sure in the hell is not going to work this time.
My wave count also has to end on a Primary degree which will produce a dramatic reversal that could be longer and much bigger than what any wave 2 in Primary degree will produce. Besides that point, 5 waves in Primary degree will never complete before solar cycle #25 starts to wake up! New solar cycles are bear market “Terminators” and we still need to see a recession arrive.
Solar Cycle #25 has not started yet as the new solar cycle starts in the northern part of the sun.
The gray bars represent the recessions we’ve had since 1950. It sure looks like another recession is due and the only difference will be the severity of it all. It may take until 2020 or longer before the entire devastating picture can be seen, but I’m sure another gray bar is going to get added to this graph in due time.
Trillions of investor dollars and your pension dollars are going up in E-Smoke as they call it “Lost Money”. There is no lost and found place to reclaim this lost money, as it is all built on debt. Debt is leverage and some of the worst leverage is in the real estate world. Until most of this leverage world is unwound no true bull market will emerge. The worlds problems are not going to get fixed in a 2 or 3 month bear market! One of the worst bear markets from 1929 to 1932 only took three years, so we can expect about the same with speed being the defining factor.
I like this SPX index as an alternative to my futures charts as it might clear up some wave patterns I’m working. Any specific single month in futures can be so wild that wave positions do get very muddled. I’m not going to spend a lot of time on this chart as I just finished the DJIA which is very close to the same wave count..
They both have the same wave patterns that are very similar, with a few small differences. A run of 5 waves in Minor degree is what I’m after but at this time that could take into 2019 to finish. Any month in the first quarter will do!
I normally try to avoid inserting wave counts from other wave analysts but the above wave count has been completely blown already before the digital ink had dried. The wave 2 top did not work, and he has no clue what happened in 2018 as he left an Intermediate degree 5th wave top uncapped! About the only thing that is the same as my wave counts, is the 2018 peak. He still has 2-degree levels missing.
Elliott wave patterns are not what we think we are seeing as they are what our best visual Idealized chart is. If we don’t follow our vision of an Idealized impulse then how do we know when we are wrong? I have two big Idealized patterns posted and the diagonal one is used for all my commodity wave counts.
This morning the markets have resumed their bearish mood, which is far from finished or even getting close to being oversold at this time. That day will come when all those Apple stock investors have sold out, or when the majority think there is no “Hope”! It was the late January peak that was the real peak as I have to keep the expanded pattern alive. Missing or ignoring any potential expanded top anywhere will screw up any wave count. Any large degree expanded top has huge forecasting qualities built in, as I already know that by 2029-2041 all markets will exceed the September peaks by a wide margin. This will not happen until after Cycle degree wave 4 has completed with stock prices crushed down to the 700-800 price level.
When everyone is screaming for lower and lower SPX prices then I would be confident in calling for the SPX to hit 3400-4000. This will not happen until solar cycle #24 has ended and all the science blogs have declared the start of Solar Cycle #25! Those investors that see it coming and can wait for the next 3-4 years will have the power of solar cycle #25 working for them.
The exact same thing happened in 2008-2009 and that produced a 10-year bullish phase. What do you call the solar cycles? Fundamental or Technical indicators? Solar cycles will demolish any bearish wave counts at that time, and if the majority of wave analysts do not realize this, their bearish moods will get terminated and they will miss another super bull market.
The 2530 price level may give temporary support for the SPX, but you can never rely on prices to make long-term investment decisions. We are living in a “Hyped Up and Inflated World”, and no little correction is going to address those issues in a short time. It took 3 years from the 1929 peak to the 1932 bottom and that was a Supercycle degree crash so a 3-4 year bear market is not unrealistic at this time. This bear market should also be longer than the 2001 and 2008 declines, as they were all lower degree level bear markets.
This SPX chart is flying high but it also left 2 gaps in its wake. I’m sure those two gaps will get filled, but I can’t give a time frame when they will get closed. Even the futures charts have gaps, so those two gaps will keep me in a long-term bearish mood. I made some position changes with the DJIA, but left them off the September peak, due to space limitations.
The Market Vane Report on the SP500 was pretty boring as they ranged between 53% and 55% bulls present. That is not even enough to get out of bed in the mornings for, as those readings are just middle of the road. If the big bearish picture is still in effect, then no new record highs should happen. The VIX has crashed acting inversely to the SPX, so in this case, the VIX is acting correctly.
Some of these waves in the SPX sure look better from Bigcharts than they do with any of the futures contracts I cover. We had a nice spike to the downside just yesterday and now the second day, the SPX made a wild rocket move to the upside. Before noon our time, the SPX made a huge spike to the upside, with a huge open gap as well. That makes for a deadly combination, and I see it as a fake start to any mythical bull market we may still be in! If all the futures-related commercial positions were all net long, then it would be a different story.
Any rally like this starts out, by hitting all the “Buy” orders first. Now sell orders will be piling up below present prices, and the bulls will turn to instant bears once their stop-loss orders start getting hit. This can go on and on, and once the SPX support prices get close to that February low, then you will see investors really freak out! There are crashes,and then there are crashes and bear markets. Crashes happen at smaller degree levels. On large degree corrections you often get a bear market rally before the long bearish decline.
This is a Cycle degree bear market and it looks like we are going to get a bear market rally and then the longer drawn out decline. With the major indices it looks like we will get a Cycle degree flat, but, in the end, it might look like a zigzag! I might be posting more SPX charts in the future, as these charts are smoothed out a bit more.
SPX is another SP500 type index. IVV is also a Sp500 related ETF. It was the January 2018 peak where my Cycle degree wave 3 resides. What followed was an expanded type top, which most USA indices displayed as well. The last 8 months were very bullish with record new highs, which has now reversed. “C” wave crashes have a tendency to do exactly that, so this bearish move is not a surprise at all. Any company inside the SPX will also get trashed, as all the high fliers have crashed as well. I don’t think we are at wave 1 in Minor degree just yet, but it can easily be adjusted at later date. The choppy 5 waves you see ending in October, are diagonal waves which are also an indicator that the SPX ran against the larger trend.
There are forecasts being made to stay in for the “long” haul! Investors will suffer huge losses and could end up waiting 3-4 years just before we hit a major bottom. Can investors handle a 70-75% stock market crash? Every major top, since 2000 had the experts telling us to stay in for the long run. The only reason we get told this is because the experts have no clue how deep any correction can go. The stock bubble mania has ended folks, and from here on, the younger Millennial crowd of investors are going to take some serious hits if they are still invested.
The function of stock markets declining is deflationary, just like in 1929-1932 and in 2007-2008. If any boomers are still invested then, they will get wiped out as boomers are retiring at a rate of 10,000 per day!
We are looking at a potential Cycle degree decline in the next few years, and it will not stop with a simple 10% correction. A 40% correction will not do it as well, even though 40% is my standard wave 4 correction depth.