Jim Rogers comes from Market Wizard fame. When he speaks it is a good thing to read what he has to say about the coming bear market in the next few years.
This VIX index has been heading down and is approaching the start of a very violent spike. The spikes show up worse in this index than the actual June contract. The top parallel lines roughly show where the Intermediate degree stock market bottoms finished at. We still have a potential $9-$10 price range where the VIX can turn. Sooner as bottoms tend to come in with a “Flash”. I would hate to see the VIX index hit another new record low, but I still look for a potential reversal as when it happens it can happen rather quickly.
As the VIX implodes stocks start a bullish phase, which I think is coming close to an end as the VIX can’t go to “zero”. I will be doing some “Cosmetic” wave counting. Eventually all trends end so it will erase all those patched up wave counts in a flash. We have different wave patterns between stock markets and this is just one of them. Eventually, when any new trend is more obvious, as waves may even smooth out a bit. We would have to get a very obvious 4th wave to show up before this run is finished, so many things can go wrong.
This bear market is going to be “More Extreme” which stands to reason, if we look at it from a Cycle degree perspective. 2002 was an Intermediate degree bottom with a small recession. The 2008 bottom was much worse than 2002, recession as it was one degree deeper. The next bigger degree bottom will be a Cycle degree bottom so it should be worse that than what it was in 2008-2009. The markets love to fool the majority all the time and the markets may not even go lower than that 2009 bottom. Even if they did go lower, all it would mean is we have a missed extension somewhere in our wave positions.
Contrarians will be buying long before the real bottom arrives as stocks will already be oversold before the real bottom even arrives. Of course the real bottom at the end the next bear market will arrive when all the experts have declared that a recession is here and it’s going to get much worse. All bearish consensus will be in agreement with the parrots all singing the same tune. At his time the market will refuse to cooperate and start on a bullish phase that will not stop for another 8 years! It all may take until 2021 as we need the power of solar cycle #25 to push markets up and away.
Commercial traders are very bearish by any stretch of the imagination, which can act like a brick wall stopping the markets march to higher highs.
Overall, I remain bearish on the stock markets until such a time we clearly see that a good correction has taken place.