The majority of the world is convinced that the Sept/Oct 2018 peak was a bull market top. What they don’t realize is that expanded tops are more common than what even the wave counters see. Expanded tops also have extreme forecasting qualities built right in. For the last 3 months or so we had a bearish phase that still has not completed. This bullish rally soared extremely fast which is common in bear market rallies. By the end of January 2019 this bearish phase will be 1 year old already.
What any expanded pattern tells us is if the DJIA eventually crashes to 7000, then we already know that this 2018 peak will get completely retraced. The DJIA will never crash that deep without huge counter rallies slowing it down. Often turnings happen closer to the end of a month like the DJIA is doing now.
Some compare this decline to the 1987 crash which is 31 years old. We are nowhere near those 1987 times as the markets will always do something a bit different to confuse as many investors as it can. The Cycle degree wave 3-4 is still valid and a Primary degree bear market is what is required to complete any 4th wave bearish phase.
The entire universe of wave analysts believes that the markets are in a huge 5th wave extension. One from the 1932 bottom and another 4th wave bottom in 1974. I’m being very direct or blunt about this, as 5th wave extensions, this long has never happened in 500 years of market history, least of all 86 years long which covers about 3-4 generations or seasons. The crowd of wave analysts has been looking for 5 waves down in Primary degree for over 18 years, and not a single set has ever developed or confirmed.
Short term another new low should happen after which another rally could surprise the investors again. Until all 5 waves down are completed I will remain bearish, but I will have no problem at looking for a Primary degree “B” wave rally in 2019. “A” wave bottoms are buy signals but it is important what degree of an “A” wave we are talking about.
All the mini or micro mini wave counting you see is useless work if we keep missing huge bull or bear markets.