Important DJIA 1929-2017 Review

 

It is always a good idea to review the entire  bull market at critical turning points.  In this case it is the DJIA, which has a good long history we can see. I have made it pretty clear that I follow the Cycle degree wave counts, which without them, we can never move into any SC degree or GSC degree positions. The chart above is in Logarithmic  or “Log” scale which shows some beautiful patterns.  The big problem is the degree we should be in, and that wave 3 is always the extended wave, with a 5th wave extension as  being more rare than a common occurrence.

I show three places,  where the wave 3 is extended, and one where the 5th wave extended dramatically. In the 1950’s it was wave 3 in Intermediate degree that was extended pushing wave 1-2 in Primary degree into the 1970’s. The majority of expert wave analysts do not extend wave 3,  as they called the 1929 peak  a wave 3 in SC degree.  1929-1932 fits far better as a wave 1-2 in SC degree. Right in the middle of a depression the historic bull market began. This ended up with the markets basically ignoring all fundamentals and proceeded to soar into a super bull market.  The crash from 2007 to the 2009 bottom looks identical to the 1932 decline, but it was 2  degrees lower.  Many have the 1970’s as a sideways Cycle degree wave 4 which basically extends all 5th wave in the process.

Sure the 70’s looked like a sideways pattern, but looks are deceiving. There is no rule that says we can’t have an expanded flat in a wave 1-2 position,  as I see them on a smaller scale many times. Wave 2 in Primary degree ended in early December 1974, which was followed by another 1-2 wave in Intermediate degree which contained a running flat. (Red). Then again, after wave 1-2  with Intermediate degree, we had the third 1-2 wave but in Minor degree.  It was the 5th wave in Minor degree (blue)  that extended dramatically after the 1987 stock market crash.  The only time since the 1932 bottom that a 5th wave extended.

Sure, I was in the same trap  as I counted everything just like the majority have been doing. This will never work as the majority can never be right!  If we look back, we can see that 1977 contained a corrective move, followed by another 1987 corrective move. The years ending in 7  and corrective moves are still not finished as 2007  was followed by a crash as well.  Now we are in 2017, so if the theme stays true, we could see another corrective move but in Cycle degree.

 

This chart is in linear scale which displays the stock mania very well. Since 2013 I have abandoned the idea that we were on a big bearish “B” wave, until I realized I can’t have the same wave count as the majority had at the time.  Any 5th wave can contain an ending diagonal, but that is not the case this time.

A choppy bull market acts  like a diagonal which can happen in “Any” 5th wave. They are zigzags joined together with flats or any complex correction in the “B” wave positions which on the chart above,  I did label it the way it should be labeled.   When we look at the charts in this bigger scale, we can see the  wild spikes to the downside in early 2009, now followed in early 2017 with  a massive spike to the upside which also contained another zigzag.  Vertical moves like this can never be maintained, so it is just a matter of time before it reverses.

The majority of wave analysts that are already in SC or GSC degree, will never agree that we may be at a Cycle degree top, but that no longer surprises me anymore. I’m sure the 2002 bottom and the 2009 bottom is pointing a Megaphone pattern to 5000. The problem with that is, there is nothing down at DJIA 5000, nor is there any previous support at 3000 or even at 1000.  These numbers are all pulled out of a magician’s hat,  as they have no logical reason to exist.

I think in the bigger picture, this impending Cycle degree 4th wave will fool us by falling short of any 2009 bottom (6500)and roar up again in another 5-8 year bull market.  This will leave all wave counters empty handed again waiting for that horrible depression we have been hearing about.  I doubt very much that any 4th wave correction in Cycle degree,  will bring any depression at all. These major ugly forecasts are based on wave counts that have never been confirmed by anyone. From the idealized charts we can figure out exactly what degree positions we need to confirm any wave count.

Elliott wave has nothing to do with what we see in the real world charts, but it has to do with well drawn out idealized charts. In any impending correction, we always can have a choice of three simple patterns, with the triangle being very low on my list. Matter of fact, there were no triangles in the entire 1932-2017 bull markets, so I doubt very much that we are going to face some mega years in a SC or GSC degree.

These super long time periods they use,  are pretty useless as they are more like scare tactics to sell more subscriptions and books.  If a wave 4 in SC degree can only take 3 years, we sure are not going to get 600 year bear market in stocks.  Hell,  the next ice age will come before the next GSC degree bear market arrives.

Since the 1987 crash we had 5 waves up in Minute degree, then from about 2002 to 2007, we had 5 waves up in Minor degree followed from the 2009 bottom with 5 diagonal waves up in Intermediate degree. Each 5 wave sequence jumps by one degree, so we know what 5 wave sequence we should get in the next bullish phase, during the rise of solar cycle #25.  None of my readers have figured this out yet,  even though I have talked about it many times.

 

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