When intraday gyrations seem a bit foggy, then it is always a good time to review the big picture, looking at where we came from, and then where we are heading to. Analysts are becoming frothy again as they say this market has turned and all new record highs are coming. The crashing of the VIX confirms it as they say that bigger bullish moves are ahead of us.
We can go back a relatively short time period to the 2000 peak where the majority were also very bullish but yet the markets imploded, just like they did again in the 2008 crash. Now those crashes were dips as well, but the majority were sellers, not buyers at the previous two lowest dips.
The majority of experts have no clue how deep the next bottom will dip down to, so those investors and their clients are going to go down with the ship because they refuse to ignore financial history.
I show two stages for the next decline with the SP500 1800 price level being a potential resting spot before a downside breakout happens. The general guideline for the depths of bear market retracements is near the bottom of the previous 4th wave of one lesser degree. If we have no clue what our 2018 peak actually is, then any previous 4th wave forecast is pretty meaningless. I have mentioned it a few times already, and that is “NO” 5th wave peak must be left “uncapped”, otherwise they have broken the wave sequence and we might as well be playing Snakes & Ladders! BTW, in January, 2018 we have 2 ending 5th waves yet I left one uncapped. After a Primary degree 5th wave has peaked, then a Cycle degree number must find a permanent home.
The SP500 won’t even get close to the top of the previous 4th wave until it crashes through the 1600 price level, while SP500 700-800 would get us near the lows of the previous 4th wave of one lesser degree. The 4th wave crash in Cycle degree is the real important dip as that is the only dip that will send the markets into another major bull market. Flipping big wave counts around like a person flips burgers, is not my style as counted like that for over 15 years.
If you are looking for some SC or GSC degree wave count your not going to get it at Elliott Wave 5.0 as from my perspective, both of those degree levels are still 11-12 years in the future. Don’t get me wrong, as we are still in SC degree wave 3, and still on GSC degree wave 3 as well. Both will never arrive if all 5 waves in Cycle degree are not found and confirmed.