This morning the Nasdaq hit another record high of 6334 but may still add on more points before another correction is due. One trend line is all we need as two of them will not fit well. Look at the angle of the bull market, and how it cuts very close to a 45 degree angle, or corner to corner. How long this market can keep gyrating without a major correction is uncertain at this time, but markets do have a knack of fooling us with surprise moves. I like to catch as many of the surprise moves that I can but it doesn’t always work that way.
From my perspective, I have a clear vision of a single idealized wave count, and I use this idealized picture as my reference point, for all the different simple corrections that we may find. Most of all it is important to eliminate 2 of the corrective waves, but also to get the highest degree of this correction. This helps in keeping all wave positions within Cycle degree, so we don’t end up with the SC or GSC degree forecast. Unless all Cycle degree peaks are found we can’t move forward into the next highest degree.
The Nasdaq is about the best forming impulse wave, when compared to the others, but any 5th wave can be very choppy due to diagonal wave structures. In 2016 we did have an expanded “B” wave top pattern, and it did not let us down as another leg up materialized.
Then from 2016, the bull market started to go crazy which works best with extending the last 5th wave in Minor degree. It makes wave 1 and wave 5 about even, with wave 3 still being the longest and the extended wave.
Harry Dent, who is just a book writer says the DOW will fall to 5000. When we actually go look we can see there is nothing down there, but it would take us back to 1996 price levels. 1996 coincides with the end of solar cycle#22 and the start of solar cycle #23, which just kept the bull market going.
Now if the Nasdaq were to fall along with the DJIA then the Nasdaq could fall to 600-700. Again, there is nothing down at the 1996 price level to support anything, so I know those numbers are arbitrary numbers, picked out of thin air. Manipulating the masses with fear is very normal as it sells books.
All this can take the next 3-4 years to play out and to surprise us again, the Nasdaq could stop well short of the 2009 bottom, before a brand new bull market starts with the start of solar cycle #25.
I checked the Gold/Nasdaq ratio and it was 4.94. It took 4.94 gold ounces to buy one unit of the DOW, which is the most expensive ratio I have recorded in the last few years. The record expensive Gold/Nasdaq ratio I have, is about 4. To get real cheap this ratio would have to get closer to 1.18 again.