Russell 2000 Mini Daily Chart Review

It looks like this Russell 2000 has peaked a full month ago as it has not been able to break higher since then. If this is supposed to be a 5th wave in intermediate degree, then we have a choppy pattern that pushes all the buttons. Any set of trend lines I can show you, are pretty useless as the bottom trend line will only catch two bottoms.  The best way I can describe this, is that it is a diagonal 5th wave.  Diagonals are connected by zigzags, but one more push to the upside could happen. 

I’m looking for a place to hang a Cycle degree wave 3 and if that is correct then I have the choice of three types of simple corrections. Zigzags, flats or triangles. This corrective stage, which many will call a, “Bear Market or if your a Harry Dent follower,  “The end of the world”. The Russell 2000 will have the last laugh as chances are good it will end on a base of 3 sets of 4th wave bottoms.  Yes, it may still take years before we see what any bear market is going to do, but I’m sure solar cycle #25 will have something to say about it!  The sun cycles are what some people would call a, “Game Changer”, but I like to call them a, “Bear Market Terminators”. 

It may take until 2021 before Cycle degree wave 4 ends, but when it does, we could get what will be yet another 8 year bull market. A 5 year bull market is too short for a Primary degree set of 5 waves, even though one set of Primary degree 5 waves, (1932, 1937) only lasted 5 years. 2021 will give us 89 years from a major bottom to another potential major bottom. I love to use even Fibonacci numbers for large cycles, but we can also get the 10 year cycles thrown in to confuse us. 

In the impending bearish phase in stocks, this entire 5th wave in intermediate degree will get retraced by 100% or more, and even then that would only be an Intermediate degree correction.  The markets will eventually have to dip into the previous 4th wave in Primary degree, which would be closer to the 2009 lows.

Stories of fund flows and insider buying will be key to helping us to see a bottom at that time.  Steven Jon Kaplan is very good at reporting these contrarian indicators. 

When insiders buy as a group, they do not buy on a “whim” and they sure don’t sell based on emotion. They will hold for many years, so no amount of bearish Elliott Wave counts will work.  Getting caught in another huge bear trap, is the name of the game. 

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