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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