S&P Midcap 400 Review

The markets have been bullish but any rally will still be a bear market rally. This S&P Midcap 400 index is important to keep as it could be acting a bit like a leading indicator. The 2015-2016 bearish phase had the world in a mini panic. Not much has changed as fears have returned with a temporary breach in the bearish action.   I have mentioned it many times how deep any market can fall and it all depends on what degree the bear market is supposed to be.  The 2015-2016 is not the previous 4th wave one lesser degree if we are looking at a Cycle degree bear market.

2015-2016 is only an Intermediate degree 4th wave. If the “C” wave ends towards the bottom range, it would only match Intermediate degree to another Intermediate degree bottom. This is a good thing as once this bottoms we are forced into a higher degree. The SP500 and the DJIA are still a long way away from doing the same thing. Comparing one Intermediate degree with another helps to keep us from bouncing into a higher degree before its time.  Many wave analysts are at a “B” wave cycle degree top so they require 5 waves down in Primary degree.

They will never find those mythical 5 waves in Primary degree even though this is the third time they will be trying since the 2000 peak. Some of the wave counting experts have already reached GSC status in 2000 which throws time into disarray.  The majority of “All” wave analysts have time-warped into the future by 50 years or more. Change a few more degree levels and we could time-warp for 90 years.  This may be hard to understand for readers, but flipping numbers and letters around with no respect for the time-warping that happens each time, has never worked.

The short version is that wave analysts working in higher degree levels are feeding us a mythical world that may still be 50-100 years away. GSC degree wave three might get close by 2071, not 2000!

The majority of wave analysts are showing you a mythical world which means nothing. My world is all in Cycle degree which every person on this planet will experience at least once maybe twice, in their entire lifetime.

Minor degree runs happen more frequently, with 5 waves in Intermediate degree, also being part of the landscape. I believe the markets are in a Cycle degree bear market which could take until after the 2020 elections are finished, with Solar Cycle #25 slated to start by then as well. If a market creates its 20% decline is that the top of a bear market, or is it the bottom?

Once this Cycle degree 4th wave bottom arrives, then we can dust-off the idealized 5 wave sequence in Primary degree.

If we go back to 1932 or 1974 and you see a 4th wave bottom in SC or Cycle degree then these analysts are telling us that 5th waves can extend 50-90 years or even longer. Nowhere in market history has this ever happen, as it is impossible for any 5th wave to last the time span of multiple generations.  The EWP is never about what you think we are seeing, but it’s all about how well we visualize what the real idealized impulse is supposed to look like.  The idealized pattern is the blueprint for market action and when we are wrong, we shouldn’t throw out the blueprints because we are too lazy to find our own mistakes.  I spent over a decade chasing GSC and SC degree wave positions and for 5 years have been working the markets from a Cycle degree perspective.

Every big bear market investors will ever face, can give us 3 simple corrections. Eliminating the least likely patterns first reduces our choices and what is left may be the right one.

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