Tag Archives: Cycle Degree Wave III

SP500 1980-2018 Bull Market Review

 

The 1980-1981 time period was a pivotal year of some major turnings. In 1980 the gold price peaked and then crashed, while stocks were ready to soar. Stocks soared for a 20-year run until the dot-com bust in 2000!  The year 2000 was just an Intermediate degree wave 3 peak and followed by the 4th wave bottom in Intermediate degree. The 2007 peak was weak, and just barely fit into wave 3 in Primary degree. During the 2008 crash, nothing was left unscathed, as all asset classes took a beating, except for the US dollar, as it exploded in price during that time. 2008 was only a Primary Degree deflationary crash, but since the January 2018 peak, we are facing a Cycle degree wave 4 crash that will make 2008 look like a garden party!

Any crash will not happen in one move but it will take 3 moves to complete and should be a longer decline than in 2002. It should also take longer for the Cycle degree crash to play out. This will be my third bear market crash I will be counting out, which looks like it contains an expanded pattern, that most wave analysts, ignore or they are not watching for any of these expanded flat patterns to occur.  The Intermediate degree “C” wave decline should stop at the “A” wave in Primary degree, which could see a move down to the previous 4th wave. This still could take the rest of the year to play out.

2022 will be the expected bottom, which could end up well short of breaking new record lows. Megaphone and single trend lines are pretty useless in forecasting a bottom, as the markets will always try to fool us, doing something nobody expects. 2008 was also a solar cycle #23 bottom which was the main power that sent the markets soaring again.  Most big market crashes happen 1-2 years before a solar cycle bottom, and the exact same situation will be setting up by 2022 when solar cycle #25 starts to crank up. If you don’t think that the sun affects the markets on earth then, I suggest you do a few hundred years of research as it has happened many times before.

1932 was another one of those times, which makes 2022 a 90-year bottom. (3, 30-year cycles) 30-year cycles dominate the commodities world, and to some extent, the stock markets also have this 30-year cycle. The world has been building into the most inflated world in financial history, much like the 1929 time period.

The demographic shift of the aging boomers is going to be the main reason why deflation, and not inflation will be the real threat. Since 2011, 10,000 boomers are retiring every day, which should continue until about 2030. It’s not rocket science, what these boomers have to do as they will not leave their money tied into stocks, and they will have to start selling off their investments. Boomers already took a beating in 2008 but were told to stay in it for the long term. Yah, Right! Who in their right mind can handle a 70% or 80% stock market crash?  Nobody can build a “bullet proof” investment portfolio, unless you can jump into cash, in a very short period of time. F.O.M.O keeps investors in the markets until they are so scared and ready to throw in the “white towel”, when the crash starts to get serious.

When that happens then chances are very good that the markets will turn and soar in another 8-13 year bull market, with 2029 being a potential Primary degree wave 3-4 correction.

 

 

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Russell 2000 Weekly Chart Update!

 

The Russell 2000 may have hit a peak as well, but this is not the top I count from! Cycle degree wave 3 ended in January 2018, not in September of 2018.  What we have is a potential expanded pattern that very few if any can spot, before they happen.  This is just the lead-in for the “A” wave in Primary degree, and there is no way of knowing exactly where the “A” wave will stop. It may rest at 2016 lows and even go sideways before it turns and starts to head south again.

Since the 2000 peak, every bull market correction has taken a little longer than the previous bear market. This is because of the sequence of 1 higher degree each time.

Any Cycle degree bear market would take longer, which may take until 2022 to finally hit a bottom. Solar Cycle #25 will have the final word, as the starts of new solar cycles are bear-killers! Most of all, the start-up of a solar cycle will kill every professional bearish wave count, just like it did in 2008-2009.

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DJIA 2018 Cycle Degree Wave 3 Update

 

This is the CBOT Dow index which only updates during the day. The DJIA just recently broke out to new record highs, but only by the slimmest of margins. This fits the expanded top very well so until this market proves otherwise, I will remain as bearish as I ever have.  Sure it is next to impossiable to know exactly what day this may happen, but when it does it could be a very sharp decline initially.

This may not be obvious until the DOW crashes below the bottom wedge line, after which the bottom support prices at the 23,500 price level would be next to get hit. The 23,500 bottom my supply short-term support but jumping in on that dip will prove costly.  Lucky for wave analsyts that see this coming, but the majority of investors have no clue in what is going to hit them in the next 3 years!

We have a full moon today and only 5 trading days left in this third quarter, so shit can hit the fan when investors least expect it.

The entire 4th wave correction could take until 2022 to finish, which would be a deflationary crash. All the crashes since 2000 have taken a bit longer than the previous bear market, so a Cycle degree crash should be the longest in time.  Any “C” wave bottom that ends would get us to the stock market  Primary degree “A” wave, which should produce a Primary degree counter rally bullish phase! First the DJIA has to display 5 waves down in Minor degree, as gold should go up with 5 waves in Minor degree.

The DOW now shows 2 peaks which are very obviuous, but one peak belongs to the bullish side while the other already belongs to the bearish side!

Just like big bear market rallies, small counter rallies act the same way. Every bearish rally will completley retrace itself, so not until the impending decline starts to exhaust itself will it be safe to take a small bullish position.

The VIX is also getting excited as the COT commercial traders are clearly bullish in the VIX! On any of the US indices, the commercials are net short, so a big leg up in stocks is not what I see that is about to happen.

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Nasdaq 100 Daily Chart Cycle Degree Wave 3 Review

 

Since my last update I had to move my “C” wave in Minor degree up as I was still early by a week or so. The last peak was September, 3, 2018 at the 7720 price level. The real peak where I have to count from, was way back in January of 2018.  I’m sure we can hear the crying how I can’t count this way, but I see so many of these that ignoring them is not an option.  It is the “C” wave that gives it away, and we have to wait until the end of the month to see if the Nasdaq 7720 price level holds.

In a fit of madness stops or options get triggered which still could spike the Nasdaq higher, but I think the markets are running on fumes. Just scanning all the commercial COT report positions, there are vertualy no net long positions anywhere. Painting a bullish picture in stocks, will show you how the majority of wave analsyts can fall into the “mood trap” just like any other human does.

See all that empty space below our present high? What do you think is down there? Nothing but PUT options and protective sell stop orders, and when they get hit, all those bulls will turn into instant bears.

Stocks also follow the 30 year cycles but they sure can crash together like they did in 2008!

The “C” wave decline in Intermediate degree could be fairly steep but will only be obvious after it has formed.  The Nasdaq is the odd ball here as it seems to have pushed this “C” wave further than all the others. This will be last of the Internet bubbles in a long time, as the internet has matured and we don’t need to invent a new smart phone.

Readers have to make up their own minds if things are, “Different This Time”. Sure it’s different, but so was 1929, 1987, 2ooo, and 2007! Take our 2018 peak and count back 89 years and we get 1929! Ignoring the 30 year inflationary and deflationary cycles is not an option. T-Bonds have a 120-year cycle that started in 1981. (two 60-year Cycles).

We also have a rising wedge which every technical analsyt knows about, but only a few have the confidence to read them.

Once this turns then things can speed up, as panic will take control of the crowd, and no more record highs are produced. Add 3 years to our January peak and we coud see a bottom by 2022, so buckle up and watch all the bullish investment prices evaporate and disappear.

Gold, silver are pushing higher so money leaving stocks can flow into gold stocks in a flash, if the GDX holds it’s price level.

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Mini SP500 Daily September Futures Update

 

This will be the last of the September index as all of them will be moved to the December 2018 contracts.  The markets are doing a good job of killing any bearish wave positions as they ride the choppy move to the upside. I will stick to my guns, and look at  this as the start of an expanded pattern. The stock bubble ended in January and I have that peak as a Cycle degree wave 3 peak.

There is no way of hitting the exact wave, but a fast retreat would be sign that this bull market has had enough. Investing at world record highs seems to be the popular thing to do. I see it as just plain greed when putting money at risk like this.  Over a 400% gain in a 9 year run is still not enough for investors, as I see nothing but a stock market bull trap being set-up.

Nothing new here as I am tracking another mania for the third time. Patterns like this can create very steep drops, as the investing crowd is going to panic once a few support prices get breached.

I filled in wave positions down to the Minuette degree level, as the “C” wave is a diagonal wave structure and is going against the bigger trend.

My wave position is only a Cycle degree top, as the majority are in SC and GSC degree wave counts already. 2018 is 89 years from the 1929 peak, but this time it’s just one degree lower than the 1929 crash was so it will be like 1929 and 2008 which should take 2-3 years to fully play out. 2022 is my target year, as years ending in 2 seem to have major reversals connected to them.

Massive deflation is the true threat, and we may see that by the FED, “resting” on rate hikes. Even when they drop rates again inflation will not be the driving factor, as printing money is not inflation. If the velocity of money picks up then gold will benifit by going up in price. Gold has already turned the corner last week with a low spike of about $1160.

All my work is from a Cycle degree perspective so all SC and GSC degree wave counts will not happen for decades far beyond my years, but which the new Generation-Z will live work and invest in.

The first of the Generation-Z was born in 2008, but I am checking that, as it would also cut off all kids born to the Millennial generation.

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DJIA 1980-2018 Review

 

I made this chart up yesterday and started the count from 1980. From a Cycle degree perspective I need to see or use three degrees below any Cycle degree, otherwise I break the sequential chain. The EWP is not what we see, but is what we are supposed to see if we followed the blue prints or our perception of one. I know there are wave analysts out there that have detailed wave positions, but they have no real money behind their convictions. I can see the most elaborate work but if they miss a stock market crash, or worse yet miss an entire 10 year bull market.

If you see any expert wave counts that do not have every single set of 5 waves capped at all times, then that analysts is spelling it out clearly that he has no clue where he is! If you see a question mark or some “X” wave,  then they also don’t know where they are.

I’m sure not a single wave analysts can draw the simple 5 waves and an extended wave 3 if they were to be tested. (With no Book) If we can’t draw our 5 simple corrections and how they fit together, then how in the world do we know what we are supposed to be looking for.

Intraday wave counting is required for the day traders as I only need to know 3 degree levels below Cycle degree and three degree levels above Cycle degree.  SC, GSC, and Subillennium wave 3 are all ahead of us still many decades away.  There are 30 year cycles always in affect and we can count backwards from our present 2018 top. 89 years, 1 year less than three, 30-year cycles, is also a Fibonacci number. 2018 minus 89 years, gets us back to the 1929 stock market peak, and we all know what followed.

From 1929-1932 it was a three year crash and bear market, that contained a zigzag that stretched much longer than any zigzag ever shown in the EWP book.  If it happens once, it can happen again so now I count with super long “C” waves at the smallest degree level.

This chart is still well below the January peak so a potential expanded pattern is taking place. Even the SP500 which has traveled to new record highs is still part of the single expanded flat I’m tracking.  When it pops is never an exact science, but it sure will surprise all the investors when it does. There is a huge deflationary crash coming just like 1929 and 2007, and no asset class will go unscathed.  A market crash sending the DJIA back to 15,000 for starters would fit very well from my perspective.

I think late 2022 will be a major bottom, but after solar cycle #25 starts to crank up! It’s solar cycle #25 that will save the stock market, so if you have any bearish thoughts and bearish positions at that time your bearish view of the future will be destroyed.

Investing at a record bubble high has trapped the majority all the time. They always tell you to stay invested for the long term, just before markets crash 70-89%!

Needless to say, I’m very bearish on stocks but I also know that a huge bear market rally is going to kill the bears off again.

I will not be investing or trading in the general markets, as the gold sector is my speciality where I have enough experience with.

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Mini SP500 2000-2018 Review.

 

This market is still trying to break to new record highs, as this SP500 chart is just a few points away from establishing a new record high. All this has taken to long already so I have to explore the idea that an expanded pattern is forming in Intermediate degree. Once the main markets start to show a more ovious crash, then I expect gold to do much of the same. Gold finished a 30 year mania peak in 2011 that will not get repeated until 2041 when SC wave three should arrive.  The advantage of working in Cycle degree is that SC,GSC and Submillennium degree wave 3 are all ahead of us, as all others think we are in a GSC degree already. Flipping wave counts around like they are hamburgers  on a grill, is not what the EWP is all about. I don’t move any of my big wave positions around anymore, as from my perspective it’s more like a surgical procedure transplanting a heart!  Each move has output ramifications, attached to them, so we should be far more senstive when we flip Elliott Wave numbers around.

I don’t like the expression “wave counting” as from my perspective they are all “positions” of captured human emotions. Being out by just “ONE”  degree, will put us out by a mile or 61% or more.  An example would be 377 years, with one higher degree this would turn into 610 years long. One degree would throw us off a minimum of 144 years. My target for Submillennium degree wave 3 peak would be the year 2101!  That’s just for gold as the stock markets can be offset by many years.

WD Gann used the 60 year cycle a lot, but this 60 years, is just two 30 year cycles connected together. 3-30 year cycles is only 1 year off from the Fibonacci number 89, and I treat them as being the same.

The Death Cross, or the 200-day MA is at SP500 2300, but it will take more than that for the markets to complete any impending Death Cross. The world is siting on the most inflated markets in world history, and when they correct it will not be pretty.

At this time I’m just taking a best guess approach to the depth of an “A” wave in Primary degree, as it is still to early to make any better call.

 

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NASDAQ Mini Rally Update

The Nasdaq will always give us the gears as it seems to walk to a different drummer at times. The potential Cycle degree wave 3 peak did not peak until early March.  The recent pattern suggests another correction is in effect with a little 4th wave in Minuette degree just completing this morning. The markets could implode as well as it seems to be a Gold/Oil/ USD/stock connection running. In the 2008 crash everthing joined in the bearish decline, so there is nothing to stop it from happening again this year.

Buying on the dips will just get you killed, as the majority have no clue in how big this impending bear market will get. All price support to 6200 must get retraced and that is just to get us warmed up for the bigger bearish phase that still needs to follow. The majority are all in the bullish trap as they practice, “no sell high” strategy. Only a very small percentage of contrarians have this skill and experience of buying low and they need lots of time to put their capital to work. Until insiders show a clear track record of them buying their own shares back, this market will go down sooner than it shoots to new record highs again.  When companies practice a, “buy back” program then this is usally a bad sign as it throws away cash at extreme tops, and it’s a desperate attempt to keep their stock prices high. Buying their own shares back with company profits is also a clear sign they know not what to do with their company cash pile.  The same happens when they start paying dividends, paying dividends is also a sure sign that the company has no ideas or projects, and when the do pay dividends that company also starts to decline.  Only the rich can play this game, as they are the only ones that can afford these prices in the first place.  Any average Joe or Jane will get wipped out if they follow the herd and try and beat the markets.

If you play the same game as the majority do, then our end results will also be what the majority get.  The last greatest fool will be left holding paper that is falling in price, with many buyers nowhere near to be seen. Only the emotional traders are left playing this game, and they are the first to bail out when they start to see red in their invesment accounts.

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Mini Sp500 Intraday Update

The markets took a dip this morning but that does not insure anything at this time. I have different wave positions in most of the big indices I cover, so I have to practice a bit of cosmetic wave counting for the short term. I only have to keep going back to the January 2018 peak as at this time it could be pretty secure with a Cycle degree wave 3 peak. The patterns are ugly by any streach of the imagination, but they also have a tendency to smooth out over time.  We still need for this market to retrace “All” 2018 bottom support prices as that is what it will take to help us to decide if we are over into the bigger correction.

A simple little 20% correction will not do it folks. At a minimum the 1800 price level must get retraced, wiping out the entire 5th wave bullish phase in Intermedetae degree. Even then 1800 may only give us temporary support, so buying on the dips will still be far too early. Not until we reach any Primary degree “A” wave can we play a bullish phase, and even then you don’t want to make any big aggressive bullish moves at that time.

As long as the mass media talks about, “buying” the dips it tells me that they have no clue, to the size of this bear market to come.

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GBP, British Pound 1980-2018 Cycle Degree Review

I have a large following from Britain, so this wave count is just for you. With it comes a warning, as I had little time to really work on the big picture. 1980 is as far back as I could go. I had to manipulate this June contract to keep that 1980 peak in view. It takes a very long time to build a good wave count as you have to go over it hundreds of times before you might see a pattern that is recognizable. Then you have to count it all out to try and confirm what you think you are seeing.

Wave counting is a secondary act, as we have to see the pattern first, before you can count it.  If this wave count doesn’t work, but the Pound keeps soaring much higher then this wave count must be trashed and the entire thing has to be counted again.

One wrong move in Minor degree is enough to instantly start a review going back as far as we have to. In this case the 1980 peak could be the location for a Cycle degree wave 3 top and what followed was an implosion where you can only see very small wave patterns. We are looking at a potential zigzag bear market in a Cycle degree 4th wave correction, that is still far away from completing. Mind you the speed at which the Pound has crashed in the past, sure can speed up the final move. The British Pound also made a strong peak in 2008, but that only matches up a Primary Degree “B” wave top. The little move in Minute degree can be removed as it can be part of the diagonal bullish cycle leading up to it.

Between 1992 and the 2008 peak we had another huge H&S which end up being a very bearish H&S. Since the 1985 bottom the Pound would be in the mother of all Head and Shoulder patterns that would be extremely bullish, even if the Pound crashes below that 1985 bottom again.

A big zigzag crash can have a very steep “A5” wave, but then the declining “C5” wave turns into a wild 5 wave run including a triangle in the 4th wave position. In flats this is usually reversed where the “C5” wave crashes dramatically.

The commercials are short the British Pound so that just adds to the bearish outlook. There are many asset classes with this type of a 4th wave, so something rather big is going to happen during the rest of this year, which will force a major reversal onto all the investors that are leveraged in the wrong direction.

So far I have a rough list of about 16 asset classes that can have Cycle degree peaks already completed or still in progress.

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Another Idealized Cycle Degree Bear Market Chart.

 

This is a third alternate for a Cycle degree bear market where the “A B” wave in Intermediate degree rides very high near the top, followed by 5 waves down in Minor degree, not Intermediate degree. The intermediate degree 5 waves down must only happen after the “B” wave top in Primary degree. In the end, a 3-3-5 pattern should emerge. This is a bit more complex than the other two corrections that I have posted, but I assure you other even more complex patterns might show themselves as well. Elliott Wave is what you perceive the idealized pattern should be, not what you see in the markets, specifically the DJIA. The EWP originates from the DOW so the best way to understand the EWP, tracking the DJIA is critical.

I visualize the idealized EWP as being one big impulse wave where wave 3 in Submillennium degree starts about 1500 CE (Common Era) Otherwise know as the Little Ice Age. The low social mo0d at that time coincided with the witch burnings and the plagues that swept Europe. There are market records going back that far once British markets are spliced it. I have a big commodity chart that goes back to 1100 CE so the wave 2 base in Submillennium degree is in 1500 CE. From this base all wave two bases must be found first.

About 1843 the wave 2 of GSC degree completed and from that point on, any wave two bases must be in declining order, where the 1932 bottom is my wave 2 bottom in Supercycle degree. When counting from a wave 2 base, we are always making sure that wave 3 is going to be the longest. From the 1932 base, we have modern day records that really show how the wave 3 took off. The next lower degree wave two would be in Cycle degree with the 1942 bottom.

There seems to be a real theme of wave 2 bottoms coinciding with years ending in 2. The next wave 1-2 must be in Primary degree, followed by 3 more sets of 1-2 waves at sequentially lower degree levels. From the last wave 2 in Minute degree, we need wave 3-4-5 to finish wave 3 in Minor degree at the 1987 peak.

From 1987 all future waves must end with wave 3 peaks, and they must all end with a wave three top. From 1987 and into the future all wave three peaks must be in ascending order, where the count would be 3-4-5 in Intermediate degree than wave 3-4-5 in Primary degree, and in 2018 we should look for wave 3-4-5 in Cycle degree. I have more than enough idealized charts up that show 5 waves up in a Primary degree which we will need once Cycle degree wave 4 has hit rock bottom!

Markets do not make patterns that are simple for us to follow, if they did every wave counter would be a billionaire. The market follows the idealized pattern  and it is our perception of this idealized pattern that needs a critical look. I’m dedicated to locating and tracking all 5 waves in Cycle degree first, as without all 5 waves in Cycle degree having secure tops, there cannot be any SC or GSC degree wave counts anywhere! At least not on this planet!

Think of it in visual form, where Cycle degree wave 3 is Mount Everest, SC degree wave three being the Moon and GSC degree being Mars! 😯

I count from a wave 2 base first, before I look for all wave 3s to peak. After 1987 and far into the future all peaks will end with ascending higher wave 3 degree levels.

The sad fact is that our modern day EWP is a biased description of GSC degree and many are growing up in this belief of a GSC degree super crash. Needless to say we will end up with an extreme forecast that will make no sense.

I can only forecast anything from a Cycle degree perspective and any SC or GSC degree commentary I make, is about the future not the present.

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E-Mini SP500 Intraday Catching A Falling Knife?

The markets had an exciting afternoon, as it seems the bottom fell out! Don’t let that fool you because that drop has all the markings of a zigzag correction. I deliberately left all other wave counts bare until after this wave count fails. Folks, I’m showing what could be a diagonal 4th wave zigzag crash, and we could see a rocking bullish phase return.  It is clearly an ending diagonal at this time because wave 4 is well inside wave two parameters. Wave 2 and wave 4 zigzags look identical, but they are still very different as wave 4 subdivides much better.

With a potential rising wedge which is mostly used for bull markets. If we look to the start of the top wedge line, what the hell do we see?  Another H&S that helped to determine a top. If the market is still bullish then this top trend line could get lifted. Exceeding March highs would be nice, but the SP500 should not push to new record highs.

This diagonal which is in Minute degree also changes the entire degree I have been using since the wave 3 top. I mentioned that this market was in a pattern with not very smooth flowing moves. Plus, it was taking  too long to resume the bigger decline, so this impending little bear trap will answer more of my questions. I have run into many of these types of diagonals and they sure will not be the last that we will run into.

The more this market gyrates the more conflicting fundamentals we will read about. This will confuse the majority and we end up having no clue which direction this market is going.  This could all happen in a very short time ending close to the end of the month or early May.

If this decline clears below my wave 2, then this wave count is instantly trashed

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Mini DJIA Intraday Crash Review

The DJIA has finally succumbed to bearish pressure, but we could still see a violent counter rally at any time. The DJIA must trash all support price levels that you see on the chart above, if the decline is more serious than what the investing bulls thinks it is. This DJIA chart I am cheating a bit in that I’m also working it as a potential diagonal decline. This may smooth out once any decline starts to get recognized, but this is still too early to tell.

In the afternoon the DJIA dropped close to 700 points which is a pretty good vertical drop. Sure, we can draw a wedge from the bottom up and if this is as bearish as I think it will be that bottom invisible wedge line will not hold.  We do have 3 lower high peaks in this developing trend, and that indicates a bearish phase in progress.  I don’t want to abuse wedges and trend lines as they can be extremely biased most of the time. The DJIA saw its peak way back in January of 2o18 which may be the top for 2018 as well. Sooner or later investors will lose patience and when a group sees the same thing at the same time we get mini panic sell offs, like today.

At the top I have 3 sets of 5 waves that have terminated which “must” be stacked from the smallest to the largest, which in this case is Cycle degree wave 3.

My strict rule is that no 5th wave peak should be left uncapped, “EVER” because an uncapped 5th wave clearly tells me an analyst is just guessing or bluffing.

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Mini SP500 2000-2018 Review: Buying The Dips?

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.

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Mini Nasdaq Intraday Bullish Phase update.

The Nasdaq has been marching to a different drummer again,  and in the last 5-6 trading days the Nasdaq has been in a bullish phase. I would love to see the Nasdaq break out a bit higher and as I post it seems to be doing that. Any of these inverted zigzags can turn into a running pattern, which many may call a “Truncation”. There are lots of examples out where zigzags are cut short, but I will call them a running pattern before I call any “Truncation”. There will be constant adjusting that I will be doing until the bigger trend becomes more clear. The Nasdaq peaked last month and if the bigger trend is in place, then that peak of the Nasdaq will be the high price point of 2018.(7200) No more record highs for a very long time.

In a bull market, we get consistently higher lows which are Elliott Wave, 3 wave patterns. This process works in reverse as well as a bear market will produce consistent lower lows and lower highs.  Since the March peak that is exactly what the Nasdaq and others have been doing. Jawboning a bear market back into a bull market will not work, except on a short term basis. Once this present rally starts to wear thin, then we should see all the markets make new lows again.

Many are complaining about how volatile the markets have been, as they have never seen so much volatility! All I can say is “get used to it” as that is what happens when markets start to make a big trend change. Those that are already out can sit back and watch this market crash, until it becomes over sold again.

Any big forecast how deep a bear market can go is depended on what degree of a peak the markets are all at. So far they expected just a 10% correction, but now this number is changing as well. Some are now calling for a 40% correction, but a 60% correction number has also been used. All the forecasts in the world for a bear market bottom will mean nothing, if we don’t know what’s going to happen after the bear market finishes.

At a minimum the Nasdaq has to retrace the 4000 price level first, and this may only be a temporary resting spot until another leg down starts.

Bull markets end when nobody expects them to end just like bear markets will end when nobody expects them to end. This has happened so many times in financial history that it will not be any different this time. When it comes to the stock markets human emotions never change as fear, joy and greed  has been around since the caveman days.  A new generation of investors do not do any homework in studying financial history, and many of them didn’t even experience the bear market of 2008, so those investors are in for a big surprise.

Mark Zukerberg’s testimony increased his net worth by 3 billion dollars during the time he sat in his chair, while social media supported Zukerberg!  In the long run Facebook is still besieged with problems like the majority of tech companies are having at this time.

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Mini DJIA Intraday Update: Bears Still In Control?

In the future, I will try and restrict my trend lines to only use  two or three lines, but they must be parallel in nature. The other set up lines I use you can call a  “Wedge” or Scalene or Megaphone.   Trend lines can be very subjective because I can paint you a different picture if I changed the angle of the bottom trend line.  At times trend lines are helpful so we can see the lower highs that are being formed. Right now the DJIA is stuck in the middle of the two trend lines and I would eventually love to see the bottom trend line get sliced in two.

I find it hard to call the March peak a running flat or even a running zigzag, so for now I will see how long this wave count will last. At this intraday scale, it’s not hard for the markets to soar well outside the trend lines, and when they do it usually calls for another degree change as well.

If you haven’t noticed yet, bearish news has attacked many of the big tech names which is a classic sign that we are in a bear market and it is also telling us that this bearish phase is going to take a lot longer to play out before a complete bullish reversal is being setup.  No, 10%, 20%, 30% or even a 40% correction, will clean up the mis-allocation of funds present in the markets. (Leveraged to the Upside) Different charts will give us different DJIA peak numbers with 26,700 being one of them.

Many are hoping for a return of the bull, but what if that January peak is the very last high of 2018? I don’t think investors are ready for a 2-3 year decline and sinking markets, watching their capital base erode as it evaporates into thin air. Sounds like Bitcoin to me! Anybody that has been fully invested at this extreme top will see their accounts get shredded and the majority of their paper gains will disappear.

The majority of wave analysts believe we are living in the age of SC and GSC degree and they will show you all sorts of SC or GSC degree bearish wave counting gymnastics. If the majority of wave analysts have finished this bull market with a wave 5 in Cycle degree, then they are in the GSC degree world already. Forecasting in a GSC degree world means nothing if GSC or even SC degree has “never” been confirmed.

I have already created a different bearish template decline which looks more like a 5 wave decline than the flat or a zigzag that I have been using. It hasn’t been posted yet, but I will post the template and Idealzed wave count at a later date.

The GSC degree wave 1-2 crash from 1834 to 1842 only took 8 years with a zigzag decline, the 1929-1932 SC degree zigzag wave 2  crash only took 3 years. The next wave 2 crash from 1937-1942 took five years.  They were all zigzags but they also differ in shape and degree. A zigzag in a wave 2 position usually spawns a flat or triangle in the wave 4 position as alternation between the two sets of waves is the rule not the exception. It still doesn’t completely rule out another zigzag, but the zigzag must be more complex than the 1942 zigzag wave was.

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Nasdaq Weekly Chart 2000-2018 Review

One of the most powerful patterns that we can find is what they call a “Wedge” in conventional technical analysis. A wedge can have a rising bottom and a falling top which eventually compresses the chart after which it has no choice but to explode and then soar.  The earliest we may have spotted this wedge , and take advantage of it, is in late 2008.  Sure, it’s all in hindsight, but unless we know what a wedge is we will never look for them in the first place.

For many years I have grappled with the 2000-2002 decline as it looked so much like an impulse, but this impulse did not fit anywhere. Maybe because it was not an impulse, but part of a triangle decline, ending with a running “E” wave. Running flats are common, and even zigzags do contain shortened “C” wave. I don’t like to call waves “truncated” as that is an excuse to not count anything. From my perspective the DJIA from 1937 to 1942, contained a wedge that forecast the huge Cycle degree wave 3 which may have ended March, 13, 2018.  I also have several large scale wedges that all indicate a huge bull market will come in the future.  Sure, I can change the wave count, but in the end this wedge will remain for all of financial history.

I only use parallel lines and I use the top rising trend as my base, then I create the same angle from the record bottom of early 2009.  The top trend line contains 5 waves up in Intermediate degree, so when the Nasdaq crashes and takes out the bottom trend line I also will be moving by a minimum of one degree. Cutting the bottom trend line I would also be finishing a potential Intermediate degree correction.  The 4000 price level  is not deep enough, if we need a 3 wave, Primary degree correction.

The gullible are brainwashed to buy on the dips and last month saw another huge one week share buying madness!

Investors just pumped the most money ever into stock funds for 1 week

You have to ask, “Buying on the dips for what?” Once a new low has been established, then all those “Dip” buyers will start to lose their capital base. All present dip buyers clearly tell us that they think that they are in a bull market. They think that another huge bear market will never come as that is old ancient history. The majority of investors never take the time to do historical research and most of them believe the brainwashing going on at market peaks.

The majority of all wave analysts have been brainwashed into believing this SC and GSC myth, but since the 2000 peaks this has never been confirmed by anyone. Since the dotcom bust in 2000, there  has “Never”  been a set of 5 declining waves in Primary degree. Only the Nasdaq looks like it has a set, and it doesn’t fit into any zigzag.

The Nasdaq hit a 2018 high of about 7200, and this is also the time I look for the highest peak of the year. The short version is that investors will not benefit from buying on the dips this year, and it may take over ten years before they ever break even again. They may have to wait until the “Roaring 2020s” arrive.

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DJIA Record High Review And the Fast Tumble

Some have no clue why the markets are crashing when all the fundamentals are running on all cylinders. Sort of. Besides the fact that the DJIA has made a near vertical move on weekly and monthly charts, this market is running out of steam. It could still take weeks before the herd has a slogan it can use.

The DJIA sliced right through the bottom trend line and it was exactly what I hoped would happen. If our wave counts start off too big then eventually we become too insensitive to major turnings. This happened in late 2008 with expert wave analysts calling for a DJIA crash down to 1000.  The expert wave analysts missed the biggest bull market since the depression and they have done nothing to fix that problem. Making cosmetic adjustments are easy, but if we don’t know the idealized wave structure we can flip numbers and letters around like a guy flipping hamburgers and they will have little meaning.

I would love to give this move more time for further downside.  We don’t have a double top to contend with, so our bear market starting point is clear “At this time” I never said the wave count is “clear” only the peak is clear!   😉

It will be tricky to catch any intraday counter rallies, especially this early in the game.

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S&P Midcap E-Mini 2000-2018 Cycle Degree Review

I spent several hours looking at 3-4 very popular wave analysts, to see what their largest degree is that they are working.  This is always a very painful experience for me because they practice, “Cosmetic Elliott Wave Counting methods”.  They smear the charts with all sorts of price and wave positions to a point it seems like they are conducting a Smoke and Mirrors operation.

They can make a few cosmetic changes and they will always come out being right. Sure, I don’t always know what positions we may be at any one time, but I sure do know what doesn’t fit. Without a doubt they are very bullish with one wave count showing Cycle degree wave 1-2 for the 2015 correction.

One wave analysts have the 2009 bottom, as a wave 2 in SC degree???  Not on your life,  as there was a SC degree wave 1-2 crash and bear market in 1929-1932 already.

Just because it’s a big and tall bull market, does not mean we should jack up the degree levels. We have to do the exact opposite.

When markets extend either in the wave 3 or wave 5 positions, it’s always the smaller degree levels that come out of hiding, not the big degree levels.

All the wave counting with mini or micro mini degree levels, is useless if we miss the biggest bull market since the depression. Any wave count that is in sympathy with the bullish herd at these extremes will never work.

This Midcap chart has a very good wave formation, producing a tall 2007 peak. Also the 2009 bottom never went as deep as the SP500 and the DJIA did. At the 400 price level, we have what would be a massive base, that could last one hundred years into the future. Markets love to fool analysts so just to prove me wrong, the Midcaps will go lower than 400.

Everybody on this planet already knows that stocks are at record highs, what they don’t know is how big and long the impending bear market in stocks can be.

One of the worst SC degree declines in stock market history only took 3 years to play out, so it sure is not going to take sum mythical 600 years this time. The start of solar cycle #25 will make sure another bull market will come. Betting against the power of the sun, or creating super bearish wave counts with the start of any Solar cycle will never work.

Wave counts from the past have all started from a 4th wave base which can’t really happen, as a multi generational 5th wave will never exist for that long.  Any 5th wave is always fundamentally much weaker than any wave 3 of the same 5 wave sets.

I’m anticipating a Cycle degree bear market which will unfold in stages. For starters, this Midcap chart will decline/crash to the 1200 price range first. After that, the 700 price level would be the next price target for the impending Cycle degree 4th wave.

The Gold/Midcap ratio is sitting at 1.48:1 which is on the extreme side of things already.

Investors are pouring record amounts of money into stocks

Average investors are pouring money into record high stock markets, which is actually a contrarian bearish signal. Investors love to buy “High” because they sure weren’t  buying low in 2009. They were selling low in a panic to get out, which I’m very sure will happen over and over at every major low we will ever run across.

Investors pouring into stocks is not smart money moving in, as smart money has already moved out with insider selling.  Fool’s rushing in where wise men fear to tread is very normal. Buying on the 5% dips will not work if we get a 70% correction. We could end up with the mother of all dips, yet very few will ever take advantage of a crash bottom.

 

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DJIA Monster 5th Wave Extension And Impending Bear Market.

 One of the main reasons I always review the big picture, is to check if the wave counts still fit in the big sequence I think I’m working in. From the 2009 bottom to our present top we have what I call “One move”, but it is subdivided into 5 waves in Intermediate degree.  The 2000 peak also ended with a wave 3 in Intermediate degree, but it was the 5th wave in Minor degree that extended at that time. 2002 ended with a wave 4 in Intermediate degree just like a 4th wave in Intermediate degree ended in early 2016.

Folks, it’s the last 5th wave that has dramatically extended, and to be honest, I have never counted or seen such a 5th wave extension anywhere in stock market history. It is a near vertical move that even the 5th wave from 1921-1929 couldn’t match. Due to the fact that our present 5th wave is vertical on weekly and monthly charts means that this rally cannot continue.

Investors are pouring record amounts of money into stocks

The bulls are enticing many to invest at record highs, and some of the recent money flows suggests huge inflows. Buying high and then selling low in a crash is what the general public loves to do, as investors have done this on every major peak since 2000. They call them investors, but investors should not be confused with “Smart Money”.

It’s all emotional money as investors chase a bull market. As long as it keeps going up, everybody is happy, but as soon as these buyers start to take a rest, this market could start on the “Big Dip”.  Besides the potential for a Cycle degree decline that can fall below 2011 lows, this present 5th wave will get completely retraced.  It’s all about smoke and mirrors as the consensus paints us a rosy picture of the future.

Every major peak in history, the talking heads painted us a rosy picture, but what followed had no rosy ending. In late 2008 investors were fleeing the stock market in record numbers, yet the market did the exact opposite thing as the biggest bull market since the depression unfolded. The bull market in 2009 unfolded with a very “big” push from the sun, as solar cycle #24 started.

No little 20% correction will do it, as it might be a 70% correction instead, depending where we count from and if we use a gross or net calculation.

In the bigger scope of things this is not going to end well, as the markets will put those emotional investors through a meat grinder.  Slice, Dice, Hack and Slash will chop all the stock bulls up and get them ready for the fridge.

There is no chance in hell that I will turn into a super stock bull, just because it hasn’t started its bear market yet. If the DOW reaches 7000 or so and the talking heads tell us the DOW is falling to 5000 or even 1000, then I will make a call for the DJIA to roar to 34,000 + by 2029.

From 2009 to present,  we’ve had a 400% run in the DJIA  chart,  so I’m pretty sure the DJIA could make a 500% run up into the  2029 time period.

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SP500 2009-2017 Bull Trap Review

This is the March 2018 contract extended to see it as a weekly type chart. I did not include any Minor degree wave positions because I want to look at it from a bigger scale. At this record top the SP500 is working towards a small double top, which may still take the rest of this week to clear up.

Like Rick Rule says, ” you’re either a contrarian, or you become a victim”. The Elliott Wave principle is a contrarian system, because if we have a bullish wave count, in sympathy when the bullish majority, then our wave counts will be wrong. 

The 2009 bottom is a prime example where wave counts were as bearish as the herd was, so the expert wave analysts never saw the “Biggest bull market since the depression coming”. Steven Jon Kaplan sure did, as this quote is credited to him. 

At that time I was still brainwashed with SC and GSC degree delusional thinking, and I thought about an 80% retracement would happen. Of course, all those wave counts were trashed. What the wave position is at the 2009 bottom must be clear, as all it takes is one wave position to be wrong, then all our future forecasts will never work. 

I show three important levels in this SP500 chart, which will help to paint the impending bear market.  Think about our present top for a minute and ask yourself, “who is left to come”? What tribe is coming out of the jungle, and says, “Yes, it’s a good time to buy high to invest for the long term”?

We are in what I described as a Cycle degree wave 3 bull trap in stocks, and what’s coming will surprise the majority. No arbitrary 20% dip in the markets will do it, as 20% will just start to get the bulls angry. 

At a minimum the 2015 lows must get retraced, and then eventually the 2011 lows should get retraced as well. This leaves us with  the 666 price level that the markets would have to beat. What if the SP500 never gets close to that 2009 bottom, but stops around the 700-800 price range?  Ok, maybe I’ll be wrong when the SP500 stops at 699 instead. 🙄  We are looking about 3 years ahead so exact price levels will be hard to measure.

At this time my bet is still a 3 wave Primary degree correction, with the “B” being anything. It could move fast or slow, or be so well disguised we wouldn’t know where the Primary degree “B” wave ended. 

For those who are just starting to read my blog, I would like to stress that my wave counts are “never” higher than Cycle degree.

It’s mathematically impossible for us to be in “any” higher degree, until the 5th wave in Cycle degree is found. All SC or GSC degree comments and future fundamental forecasts mean “nothing” in a Cycle degree world. Not a single part of  SC or GSC degree wave counts have ever been confirmed by anyone, since the 2000 peaks. 

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Mini Nasdaq Weekly Chart 2009-2017 Bull Market Review

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. 

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Mini DJIA Intraday New Record High Update

I’m not happy with this DJIA intraday wave count as I’m using cosmetic wave counting methods. Either way we are looking at diagonal waves where critical wave structures constantly overlap. So far the entire month of October has been this way, but not nearly as flat as what the SP500 is developing. It all fits into the diagonal wave structure bordering on being an ending diagonal as well. 

Today the DJIA created another little spike to the upside pushing to the 22,946 price level. How many times this has happened, I’m not sure, but we know that’s also breaking records. In the long run, we are headed for a Cycle degree wave 3 top, and to correct a Cycle degree bull market we have a choice of 3 simple patterns, and these patterns must have a specific wave count based on an idealized pattern. 

Of course, if our perception of an idealized pattern is not clear we can create any wave counts we think that we see. Expert wave analysts thought they saw a wave 1 in Primary degree back in 2009, but were proven to be completely wrong.  Can this happen again at the next market crash bottom? It sure can as many think we are in SC degree or even GSC degree.  

It is medically impossible for markets to be in SC degree, without finding “ALL” the 5 waves in Cycle degree first. It may take 2-3 years or so, but when the big bearish bottom arrives, nobody will be ready for it. Only the seasoned contrarians will be ready and that only makes up 3-4% of the investors. 

As I post the markets are charging higher once more so I expect a new set of record highs will be created again. 

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DJIA 1929-2017 Linear Chart Cycle Degree Review

I love to show the DJIA in a linear chart as it shows the last year or so as a near vertical move. This move was what they called the Trump Bump and a few other names. The majority, though the bull market was over as the markets plunged in reaction to Donald Trump being elected as president. I was one of the few that didn’t fall for that and sure enough the stock market reversed its losses and proceeded to soar.

It soared higher with a constant barrage of new record highs being broken, and it still may not be finished as I post. 22,773 seems to be the present record high.

1929 to 1932 was a major bear market, producing a depression during that time. From some of the worst fundamentals in stock market history, the markets turned and charged up for many decades with many crashes and corrections along the way. Crashes, corrections and bear markets are going to continue to happen if my single idealized wave pattern is true. These bull market phases since the 2000 peak  are the results of extended wave 3s that have been happening since the 1932 bottom. If our wave count is wrong for 1929-1932 then all the cosmetic wave counting in the world will not find us a better fit.

Yes 5th waves extend, but 5th waves also tend to be the shortest waves most of the time.   Since the 1932 bottom I use no 4th waves in SC degree or 4th waves in Cycle degree in the 70s bear market. The EWP clearly says that wave 3s are never the shortest wave, yet the majority of all expert wave analysts in the world, are based on 5th wave extensions.  Extending 5th waves and never looking for the alternative wave 3 extensions will always force the wave counts into a much higher degree. The next thing we know is that 2000 becomes a SC or even GSC  wave 3. Any wave 4 in any degree has a very specific simple idealized wave structure, that must get confirmed.

Of course I followed along and used to count everything in GSC and then in SC degree, yet none of the waves required never materialized. When that fails, it’s not a failure of the EWP, but it is a failure of humans to think objectively and sequentially. Most people are biased in some shape or form and wave analysts are no different. It took me until 2013 before I dumped all SC and GCS degree thinking. I use an idealized wave structure to tell me what I’m supposed to be looking for, and try not to practice cosmetic wave counting.

Markets never make it that easy where the wave count is so clear. If they were, we would have many wave counting billionaires in the world today. Yet when you look at the contrarians today most of them will never be caught dead drawing out a bunch of numbers and letters.

I’m anticipating a Cycle degree stock market correction, which the majority will call a bear market by the time it shows itself. A big bear market is just a correction in an ongoing bigger bull market, which from my perspective, is the SC and GSC degree levels. Both degree levels are already in extended waves.

There are three main price hurdles that this impending wave 4 needs to retrace in the next 3-4 years. One of them is the complete retracement of the Trump Rally, and then as a bare minimum, the markets must dip well into the 2007 peaks in all indices, not just the DOW.

With the DJIA this would be well below the 14,000 price level. The last hurdle to cross would be a complete retracement of the stock mania that started in 2011. That would take us below the DJIA 10,000 price level. Once the Trump Rally is completely retraced, then we will be left with a single long spike to the upside for many years to come.

Our present tall skinny looking 5th wave is the opposite of the long skinny spike to the downside that ended in early 2009. From a bear spike in 2009 to a bull spike in 8 years or so, is a nice Fibonacci round number. Many markets move in Fibonacci years, but the underlining driving force of the markets is the solar cycle.

At this time, many experts are still expecting for stock prices to “melt-up” so to speak. This is very standard bullish talk at the peak of any bull market. At the extreme, wave positions cannot be in sympathy with the bullish herd, as the waves always act the opposite of popular opinion.  Investors love to buy high as they feel safe amongst millions of others doing the same thing.

In reality insiders have sold in May 2017, and in the long run retail investors will be left holding a portfolio of worthless paper, again.

What amazes me many times, is how short of a memory investors really have, as they have learned nothing in the last 17 years. It is mathematically impossible for the majority to win at this investing game, as they are always too early or too late when making a decision. Seasoned contrarians know this very well, and have perfected the art of buying low and selling high to the emotional investors.

As scary as it sounds, I watched more 1929 documentaries and there is not much difference as investors were extremely bullish in 1928 as well.

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SP500 Supercycle Review

I spent more than 10  years, counting wave structures in Grand Supercycle degree (GSC), then I moved down the degree stack and counted everything in Supercycle (SC) degree for a few years. I even started another blog just dedicated to SC degree wave counts. When I saw that the majority of expert wave analysts missed an 8 year bull market, I knew that SC and GSC degree wave counting had major flaws in it and that it must be thrown out. 

This flaw is the lack of understanding that wave 3 is always the longest wave in the general stock markets. 5th waves do extend, but they are rare and usually involve the last degree before a top. In the 1900’s I believe that the markets developed a Cycle degree diagonal 5th wave, ending with the peak in 1929. 

I don’t think a multi generational 5th wave extension can even happen, as 5th waves are generally the weakest as well. Yet every expert wave analyst counts with extended 5th waves. Those that count from a 4th wave base, will always move into a higher degree level long before it is supposed to arrive.

I will be talking about Supercycle degree (SC) from time to time, as technically the general stock markets, are still in an extended wave three in SC, and GSC degree. SC degree wave 3 has not completed anywhere, and it may not arrive until the 2029 time period. The Elliott Wave Principle is not about flipping pretty numbers and letters around, as any kid can do that. It’s all about how we visualize the idealized wave structure. Each time we label a position on paper or in our computers, we are also technically travelling in time. To time travel, I like to go back 100 years, and then look forward 100 years. Four generational seasons make up a 100 year cycle, and most economic cycles repeat themselves in 100 years. 

The short story is by “Ignoring history, we are doomed to repeat it” which is especially true in the financial markets.

Below is a chart of the SP500, which does not update that frequently, but it gives us a good long term picture from the 1929 top.


All the super bearish forecasts that will be mentioned in the future are irrelevant, if we think we are in some mythical SC or GSC degree world already. From my perspective, we are a minimum of 2 degrees lower due to the fact that wave 3s have never been extended. At times at the 2000 peak, my wave counts were about 4 degree levels lower. 

Readers must understand that I see the EWP as just one big ” Idealized impulse” wave structure, and that these wave structures are extended wave 3s not extended 5th waves. The peak in 1929 and the 1932 bottom is my wave 1-2  in SC degree, and not a wave 3-4!  Just being out by 1 degree can throw any forecast off by a minimum of 60%. (1.618) 

The same problem shows up in the 1960-1975 bear market, which the majority assumes is the location of Cycle degree wave 3 and 4.  To recap, the majority use a 4th wave base from the 1932 bottom and then another Cycle degree 4th wave base in 1975.

Labeling 1932 and 1975 as 4th wave bases would give us about an 85 year long SC degree 5th wave extension so far. That’s almost three generational seasons long, for a 5th wave extension?  Technically, this cannot happen, yet the majority of wave analysts all count from a wave 4 base.

 It’s also the main reason why experts missed the biggest bull market since the depression. (2009 -2017). How many expert wave analysts posted any wave count that was extremely bullish in 2009? No wave analysts that I was reading at that time could say with great confidence, that a multi year bull market in stocks was coming.

As long as the wave analysts believe that SC and GSC degree, are here already, then wave followers will continually  miss major bull markets. This happens because they have never gone back in history and looked for alternatives.  Going back 100 years and starting fresh, is too much like work, so until they want to do the work, the same setup that happened at the 2008-2009 bottom will happen again at the 2020-2021 time period.

The start of any new solar cycles are bear market terminators, as they will trash all bearish wave counts and related moods. The studies of the sun and the real impact on the stock market is not rocket science folks, as many have made the same connections.  

‎www.ez3dbiz.com/2016_stock_market.pdf

The link above is just one link to a solar cycle study.

 

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Mini SP500 Intraday Record High Review

The markets have seen another impressive run for most of July, with the SP500 topping to another record high. Early yesterday the Mini SP500 reached 2476 before it turned down again for the rest of the day. One move has ended and another move looks like it has started. Two main things can happen next, one is that another correction of the ongoing bull market has started, or that a big bullish phase has ended. 

Now if this start of the decline survives the day, then this would be a good thing. In the end, for a bigger bearish move to have started, we need to see these markets head much lower. I’m not going to go wild in calling this an expanded top due to the fact, that there are  just too many zigzags. Besides, not until any “C” wave decline has nearly finished will we know.  

A potential Cycle degree wave 3 is still my favorite choice, but only time will help to confirm that. It’s also time to take another Gold/SP500 ratio calculation, and as of this morning it takes 1.98 gold ounces to buy one unit of the SP500. When the SP500 becomes cheap again, this ratio could be closer to  .75 of a Troy ounce. Not until the entire planet is bearish on US stocks, will this ratio give us better readings. 

As I post, the SP500 is heading up again, but we want to see the top price of today hold.

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Mini DJIA Intraday Crash Review

The DJIA stopped this morning and then started to soar again. How high this counter rally will go all depends if a real top has already completed well over 5 days ago. One thing is certain and that is we have overlapping waves that are not allowed to happen in an impulse. Any starting set of 5 waves can be a diagonal, and that’s what I look for, in the immediate future.

The DJIA has roared back so fast that it was approaching the top trend line already, while I post. Violent moves to the downside and then reverse violent moves to the upside, is the pattern we have to put up now and for the foreseeable future.

We need the markets to hold that bullish top on the 19th to help confirm and potential Cycle degree top we may have. So far it looks good, but in the markets, looks are always deceiving. It’s one of the reasons to be a bit more cautious before I plunk down a Cycle degree wave 3.   I doubt a new price low will have time to play out by the end of today, but by month’s end, with some big holidays in July in Canada and the USA, anything can still happen.

Eventually the summer could end up being pretty slow, so it is a good idea to keep the wave counting options open, at least for the short term. Long term this market is going down, and the only real question is which one of the three bear market patterns,  will we get?

We will hear horror stories about some DJIA 5000 price forecast, which they are playing the Doom and Gloom fear card. The more fear they can spread, the more money they can suck out of our pockets.  I’m pretty sure that future price forecasts of 3000, and 1000 will also hit the media, but those 3 price forecasts will never happen if a SC degree wave 3 is still well over a decade away. SC degree wave 3 is an extended wave as well, which may not finish until 2029, it surely did not end in 1929.

Where is GSC degree in all of this? Well, GSC degree wave 3 is still going strong, but we may not see any GSC  wave 3 peak until 2129. Any GSC degree wave count or forecast you may hear is based on 5th wave extensions not on wave 3 extensions. If someone comes along and can’t believe that wave 3’s are extended, then all we have to do is point to 1929 and remind them that 1929-1932 was a SC degree wave 1-2.  There was no Cycle degree wave 3-4 in the 70s, and until those two main patterns are wiped out and recounted, the debate of degree levels will rage on.

Those SC and GSC degree wave forecasters, have never confirmed any SC or GSC degree waves anywhere, and as a wave analyst, we need very specific wave counts to confirm any higher degree.

In the last 7 years not a single wave counting reader has come forward and told me they want to switch and help confirm any Cycle degree pattern. The EWP today is used as a short term trade setup, and therefore never saw the biggest bull market coming since the depression. This is pretty sad indeed, as missing a huge bull market should never have happened.

Contrarians do a much better job of reading tops and bottoms, and they are some of the wealthiest people in the world.

Insiders have sold out in May, which is not a good foundation for another major leg up.

Due to holidays and long weekends, I try to reduce any wave analysts, on our holidays. 

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DJIA 2009-2017 Bull Market Review

When the big markets are pointing up and the talking heads are also pointing the markets in the same direction, then this is when I’m already building the next pattern heading down. I’m not that concerned in how much higher this market can go, as I’m building a potential picture in how low it can go.

How low this market can go, all depends on where our original wave two starting point was, and how popular 5th wave extensions really are. With stocks 5th waves do extend, but many times it will be one of the last 5th waves in a run. It is wave 3 that has to be the longest wave.

The last 5th wave extension happen from the 1987 crash bottom to the 2000 peak. From the 1987 crash bottom, the markets exploded with a wild sequence of 5 waves in Minute degree, which translates into just one move in Minor degree.

It took me until about 2013 to finally look at the bull market from a 5th wave perspective. Not as an impulse, but as a diagonal wave structure.  Diagonals, are just zigzags connected together with flats or triangles in a 4th wave position, which the EWP does not explain very well.  In the book they label an ending diagonal like an impulse, but in reality they are zigzags linked together. To separate the normal impulse waves from diagonal impulse waves, I use a specific wave counting method that is also shown in the book, which most experts seemed to ignore.

When I see analysts turning diagonal wave patterns into impulse wave patterns, then they are ignoring all the zigzags that are linked together in waves 1, 3, and 5. 

On the chart above, I show 4 horizontal lines, that had significant meaning on the way up, which on the flip side can provide some major turning price levels on the way down.

We have been told over and over about markets, retracing back to the previous 4th wave of one lesser degree. When all wave analysts are walking to a different drummer, then who had late 2002 as a previous 4th wave?  The 2009 bottom 4th wave went much deeper than the late 2002 bottom, so the previous 4th wave is more of a guideline, than any strict rule. In short, I never use the previous 4th wave bottom like a rule, but I use it as a very strong guideline. 

 Now we are faced with a potential move that is two degrees higher than anything that the late 2002 bottom produced,  and one degree higher than the 2009 bottom. Many experts will look for new record lows, with DJIA forecasts to 5000, 3000 or even 1000, becoming very popular  again.

One thing is certain, by the time the markets get to the next major low, fear mongering by the experts and the mainstream will be front page news. When that day arrives, fear will keep investors out of the markets and at best you will be holding a token position just before the Roaring 2020’s get started again.  

 

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Russell 2000 2015-2017 Daily Chart Review

The Russell 2000 has given us one wild ride which most analysts ignore most of the time. Recently the Russell 2000 has led in the downhill race, but quickly turned and played catch up, soaring to new record highs again. What is different with this top is that the pattern is very choppy, followed by another very choppy run, which sure can count out as an ending diagonal. 

The 4th wave in Intermediate degree sure can work as a zigzag which was then followed by what looks like a set of 5 bullish waves. Well, these can also work as one single zigzag, with a stretched “C” wave in Minor degree.  This has been pretty normal on most indices, except for the Nasdaq, which has been closer to an impulse pattern, than all the other major stock markets. 

The Russell 2000 also has several major bottoms that could provide us with an early warning wave count, for a future Cycle degree 4th wave bottom.  No! We are not some super duper mega crazy SC or even GSC degree wave top as those wave counts are all based on 5th wave extensions, and not wave 3 extensions. Wave 3 extensions come from a wave 2 base which I started to switch to in 2013. 

There is no way of knowing for sure,  if this top will hold.  The prospect of an ending diagonal sure can change things in a hurry. 

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E-Mini DOW 30 Intraday New Record High Review

From the May, 18th DJIA bottom, the markets have charged back, in what looks like a strong move. In reality they show the desperation of participants to ride this bullish phase.  They only ask, How much higher can it go”? 

They should be asking how deep can the markets crash down to?  Every bull market has a start and an end, but knowing the exact wave that it will end on, is always a crap shoot in the short term. One good thing about any new record high is that we don’t have to fight with multiple tops. Double tops or what some call, “truncated tops”, makes it more difficult to figure out where to count from, which so far is not an issue. 

In the long run, we are heading up to a Cycle degree wave 3, which is now off by a Minute degree, from my previous Cycle degree top. 

All my work starts from a wave 2 base as the majority of expert wave analysts have been working from a 4th wave base since 1932.  5th waves never extend this much as they usually are the weakest waves. They can also contain diagonals which further amplify any weaknesses.  The only time that any 5th wave really extended, started just after the 1987 stock market crash. 

Since the 2000 top, not a single wave analyst has confirmed any part of any SC degree, let alone GSC degree. We need very specific patterns to confirm any potential SC degree, that we may think we are in. This wave structure is 5 waves in Primary degree.  

Any wave analyst that is presently working 5 waves up in Primary degree, in any asset class is already in SC degree, and if they are looking for 5 waves down in Primary degree, at a minimum they are also in SC degree.  GSC degree would need many 5 wave trips in Primary degree, up an down. 

From the 2009 bottom we have a diagonal 5th wave, not some 8 year bear market rally that has never happened in market history anywhere. 

As I post the markets have pushed higher, which makes my wave count still a bit too early.   Any new record high can be the last record high, and sooner or later the greatest fool rushing in, will have bought his DOW long position.

Insiders have long left this market, and only the retail, and speculator  trend chasers are left playing this game.

The VIX has also hit new record lows, so it can make a nice bounce when fear strikes again.   

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