Tag Archives: Cycle Degree

Gold Weekly Chart, 200-Day Moving Average Update!

 

I realize that my bearish precious metals outlook does not sit well with many of the gold bulls still around today. The gold bulls that only see or want to see a bullish gold wave count will not find it on this blog just yet! The people that like to shred my work are the bullish investors. There are thousands of sites out today that will cater to your gold related bullish needs, and they may even be telling us about a $5000 gold price coming soon!  They always use the fiat money printing fundamentals as a reason to hedge, or stay invested in gold!  This time I included the 50-200-day MA and we can see that gold is hitting the 200-day MA line. Gold would have to rise sharply to get above and stay above, this 200-day MA. Since gold is still in the glow of the “Golden Gross”, then the 50-day MA must not fall into the 200-day MA, because then we would get a “Death Cross” in this weekly gold chart. I track 3 major gold price support numbers with $1160, $1120 and $1047!

The gold bulls need for gold to break well above $1400, while the gold bears need gold to crash below $1047. The entire gold related analytical world is focused on these two main price levels.

Which price level is going to get hit first?  It might take the rest of this month or even longer before we can become more certain. All my metal COT reports do not support a big bullish surge at this time.

All the wave counting in the world will not help us forecast the gold price if we have no clue what that 2011 peak actually was.

I included the silver, copper and gold COT report again, which I see as very bearish indicators. The herd of metal analysts always recite or use the non-commercial trader’s numbers, but they are always the group that gets into a trap be it a bear or bull. The COT reports get posted on Fridays and investors have the choice to read or ignore.

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DAX 2009-2018 Cycle Degree Review

 

 

https://www.thelocal.de/20170424/germanys-ageing-baby-boomers-to-be-drain-on-economic-growth-report

The DAX has also turned down along with every other major index from around the world.  From the early 2009 bottom, the DAX charged along just like all other indices, but with far more choppy wave structures than others. Grading the quality of waves tells me we are much closer to diagonal wave structures than pure impulse wave structures. Early 2018 was the real top for the DAX, which has never been breached and is holding at 13,500.

The stock mania around the world has ended, as the world dips into a demographic nightmare that investors have little knowledge about. As the DAX crashes along with the rest of the world, I’m sure the mainstream media will have to find reasons why the market is imploding, and the story above is just one. More and more of this demographic risk will start to show up as the media will run out of all other excuses why stocks are crashing.

In the long run, until 2022, we should be in a bear market that is just starting to get going. As long as analysts are saying to “buy on the dips” then these analysts have no clue to the size of this impending bear market!

There are 30-year cycles at work here and this 2018 peak is 89 years after the 1929 stock market peak. We would be off by 1 year in 90, which is just 3, 30-year cycles. I have done thousands of these 30-year cycle calculations between 100’s of different peaks, and yet a one-year error rate seems to stay true.

This is not going to be a simple crash like 1987 was, as this time there should be a huge long bearish move like the 1930-1932 decline gave us. 1987 was a Minor degree crash, and what we are dealing with here is at least 3 degrees higher.

Deflation is the real threat and the first clue that the Fed is going to switch is if they start to use “pause”, in their language!

Where the first major support price level comes is not an exact science but I look for major previous bottoms to give us a clue. Any big previous low can supply support, but support for what?

 

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DJIA Picture Of A Bubble!

 

Once in a while, I like to post the DJIA with a linear chart setting, as that really shows the all-time history extreme stock mania. This mania will end in a major market decline, which could last well into 2022, or after solar cycle #25 starts. If readers think stocks are still going to the moon, or that Facebook is a “buy” then you have little idea about the shit storm that is coming. Investors always forget previous bubbles as it’s, “Always different this time”. They think it can never happen again.

If you take the 30-year cycle serious enough then count backward 89 years from today and we get 1929, off by one year. Cycles repeat and 89 is just one year off a perfect 3 sets of 30-year cycles.

We are definitely not at some imaginary SC, or GSC peak as modern wave analysts seem to be able to time travel into the future with a click of the mouse! If I did that, I sure wouldn’t time travel into the future, I would rather time travel into the past. We can’t flip numbers and letters around like they were hamburgers, you have to treat every position change much like a doctor handles a heart transplant or operation. There are very specific wave counts that must be confirmed if we are in SC degree in 2018.

Some little correction is not going to fix or deleverage the world, as it will take a 70% correction or more. Any stock market crash is deflationary as even in 2008 nothing was spared except for the US dollar. The boomer generation is retiring at a rate of 10,000 perday for the next 19 years! They are going to be busy on cruise lines not beating on their screens or trying to make a “long term” investment.

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Gasoline Cycle Degree Update.

 

This gasoline futures chart is on a different wave pattern as it’s Cycle degree 4th wave bottom was in late 2008 not in 2016.  The British Pound is very much the same so it’s not an isolated rare pattern as the 2016 bottom would be a running type wave.  This doesn’t mean a very deep correction is coming as another leg up may still happen in the next few years. Even Brent hitting the $80 price level, may break-out to the upside again. This has taken far to long for a bear market rally, so that always forces me to look for a better fit. More and more commodities are seeing Cycle degree 4th wave lows,  and that should only increase in the next few years. By about 2022 many other stock indices will join the 4th wave Cycle degree club.

I keep track of all the completed 4th waves under a seperate page heading, so check that page as the Cycle degree 4th wave count is growing slowly!

In this case the huge gap we do have can also act as support, as prices also repell from gaps. I’m sure in the future that this monster gap in gasoline will close off, but that may be a Supercycle degree crash when it happens. Gasoline is just in a huge zigzag bull market and between the two sets of 5 waves virtually any pattern can develop.  I haven’t checked the weekly chart Death Cross but the 200-day MA could be support, as on a daily chart we could hit a Golden Cross. Even now the correction is not as impulsive as you would expect, so this can always crank up and add another leg to this insane bullish move.

We can also see a big H&S pattern, so if gasoline prices are still very bullish, then the right shoulder will not hold and a push higher should happen. In a bearish situation a H&S pattern like this would go to new record lows.

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Crude Oil Weekly Chart 2008-2016, 8 Year Bear Market Review!

 

Last week things changed as there is a 99.999% chance that gold has a bottom at the $1160 price level. This also forces me to make changes to my oil positions as it refuses to die, or correct at this time.  All commodaties are zigzags linked together which follow a completely different idealized wave structure than what stocks do. When we choose to ignore them, then our wave positions will never produce positions we can’t stay in for more than a day.

The biggest clue that crude oil is in a diagonal, are the 7 waves up from 1999 to the 2008 peak. (3 years before the gold peak) All experts call the bull market to 2008 as 5 waves up in Primary degree but I count 7 waves up, which means a diagonal wave structure is in progress.

We can only wait for so long before we have to throw in the towel and succumb to the oil bulls. I moved my oil wave 4 in Cycle degree to the 2016 bottom  and this would technically complete my 4th wave. Oil will enter my Cycle degree 4th wave club, and gasoline should as well once I update it.

If the wave 4 in Cycle degree is in then oil will produce another zigzag looking pattern, but that may not happen until gold hits it’s “B” wave peak. We can’t have a strong gold bullish move to the upside without the Gold/Oil ratio making a big move as well. The ratio stood at 44:1 at the 2016 bottom, and has now hit 17:1. This is an extreme but could also just produce a correction.

Even Brent crude may join my Cycle degree 4th wave club, and I will update the Brent crude wave positions when I can.

I will not trade any oil related asset classes as the gold market and ETFs is my trading world. If gold is going to lift-off then the oil price should react bullish as well. That would be something if gold continued its bullish return, as then the Gold/Oil ratio will not stay the same.

When we count from the crude oil 2008 peak, the 2016 bottom gave crude oil an 8-year bear market, which makes a much better Fibonacci fit.

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SP500 Daily Chart: Death Cross Watch!

This Sp500 rally has now started to fit much better as a newer high has been reached. The last five waves are a diagonal set of 5 waves. Even looks like a triangle pattern.

In the gold market this exact pattern fits into modern wave count as a bullish move not a bear market rally. This  SP500 is on a small bear market rally and it will retrace itself.  All this chart has to do is make a sudden drop and the 50-day MA will slice the 200-day MA and then the market investors are sitting on a Death Cross. Gold is doing the same thing so a huge part of all assets are going to see price crashes along with stocks.

Fundamentals do not work at the extremes and if your not a contrarian in this business then you become the victim. Do you want to be the victim when the stock bulls start falling from the sky?  The EWP is always contrarian and if you have the same wave count as the stock bulls mode suggests then our wave counts are totally wrong. Every wave counter gets caught in a trap this way, and I use their wave counts as something not to do.  When a wave count is wrong you can always bet against it! From a Cycle degree perspective, all internet wave counters are counting all the “bad” wave counts for me. They save me a lot of work, thank god! 🙂

Apple may have topped and the same with Netflix, a few more need to topple as the falling “elephants” will crush any bulls that remains standing.

In Cycle degree the SP500 match gold very well, the only difference is they are a bit out of sync but gold and the SP500 could crash the same by the time the end of  Cycle degree wave 4. Won’t that surprise the gold bulls!

My intraday wave counts are going to suffer, as I’m not a day trader and never will be. I’m sure the stock markets crash will coincide with gold’s $800 bottom so I could even pick up the count when that happens.  It is far more important to watch the gold market and the anticipated swings in gold are going to be wild.

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Are Lumber Prices About To Crash? 1979-2018 Monthly Chart Elliott Wave Count Review

In the last few weeks we could see how bullish the media were towards lumber prices. All sorts of reasons for the price rise have been used.  I have worked on this lumber chart for many years, but due to the choppy wave structure had a hell of a time in making something that fit well. I have worked in the forest industry starting in 1969, so I still remember that crash rather well. Our company behaved differently before the 79 peak, but a year after the crash it was a different ball game.

Before the crash the company never cared about inventory levels that much, as lumber prices were rising as the rough cut lumber sat in the yards. When the crash came and prices started to fall, the whole focus switched to reducing inventory levels, and maintaining strict control. Sawmill production was curtailed many times to keep our inventory levels extremely low.

I never do these difficult wave counts in the computer as I print them out in full 8×10 sized charts.  I stare at the chart for an hour or so before I lay down a single “ink” mark.  Yes, I mean “ink” because each mark makes you think extra hard before you label anything.

One thing is certain and that is that the bull market in lumber is a diagonal in Cycle degree. Most all commodities are in one huge diagonal in Submillennium degree wave 3 starting before wave one back to 1100 CE. After the GSC crash, commodities started to smooth out a bit, but diagoanls will always be around to make counting commodity wave structures a real challenge.

I have labeled it right down to Minute degree levels, which is the bare minimum that needs to be done to come close to confirming a wave count in Primary  degree. The Minor degree would be two degrees below Primary degree.

In the Mid 90’s lumber prices formed a huge quadruple top that eventually got surpassed 13 years later. At this point all things point to the high possibility of a Cycle degree wave 3 peak, and a huge bear market should follow. The wave 3-4 crash in Primary degree was a flat, as I can only count 3-3-5. To me it looks like a classic flat. There is no way of knowing what pattern we are going to get for a lumber Cycle degree bear market, but I’m voting for a zigzag at this time.

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Mini DJIA Intraday High Update: Is The DJIA Tired Of Breaking Records?

My iMac operating system has been upgraded this morning to “High Sierra” Version 10.13.1. So far so good, but my bookmarks were doubled up in the process, forcing me to rebuild them. I even lost one of my fonts that I use, or it’s hiding at this time. 

On November the 7th, 2017, the DJIA saw its last high at 23,557. As much as I would love to start posting a bearish wave count, this market has not declined enough to make the case  for a large bear market just yet.   We just slipped off record highs and I use Submicro and Micro sequences to make sure I start off small. The worst mistake we can make is to start with a much higher degree, which seems to be the popular thing to do. The higher the degree the more they can manipulate us by using fear tactics, with insane forecasts. 

By midweek this rally may top out, if not sooner and another leg down should happen. Worst case scenario is that a triangle is still going to form, which can push this market higher again. 

The majority will be looking for support, but when they do we know they just have a market correction in mind.  The only real support that will mean anything is the one that finishes the anticipated Cycle degree bear market,  as all other price support  levels will just be wishful thinking.

Just to get the bulls scared enough, we need the DJIA to fall below 15,500 which is just the previous 4th wave of Intermediate degree. The intermediate degree doesn’t correct a Cycle degree bear market, as at a minimum, we need the previous 4th wave of Primary degree.  Without a doubt, markets can fall well below the previous 4th wave, which the super bears are already predicting. DOW 5000 seems to be a good number to rant about, but what if it never gets there? 

Many missed the bull market that started in 2009, leaving a gain of 360% on the table. Many are convinced that this market is still going to the moon and have been brainwashed to believe a new era has started.  At the next major market low, you can bet the same setup will happen as what happened in late 2008 and early 2009.  Only a very small minority will see the writing on the wall when money flows start.  When the insiders start buying their own stocks back again., then a few months later, stocks will start to reverse. 

No matter how bearish of a wave count we may have at that time, our bearish wave positions will get trashed and the SC and GSC degree wave followers will be left behind again, or at best have a token position. 

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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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DJIA In Supercycle Degree 1929-2017

It would take an ‘immaculate conception’ to create bear market in stocks right now: analyst – MarketWatch


One analyst believes it will take an act of God for a bear market to materialize anytime soon. What else is new as these bullish remarks always come out at the peaks of stock market formations. Back in 2008 everybody hated stocks and the retail investors were selling out as fast as they could, while insiders were buying their owns stocks. 

Just to give us a bit different perspective, I replaced 2 sets of wave 3-4 peaks by one lower degree. 2007 and now 2017 are Cycle and SC degree respectively.  I also added some trend lines, showing us a potential SC degree 4th wave base at the 2000 price level. The high degree wave counters have tried all this before, several times, and both of them failed, so why should this SC degree work? 

It won’t work as the only previous 4th wave is the bottom of the 1987 stock market crash, about 3 degrees lower. We need the previous 4th wave bottom of one lesser degree, so that would make the 2009 bottom a target, and not the DJIA 2000 price level.

I have repeated it many times that the DJIA will “never” decline that low, and come anywhere near that price range.  Just for the reason, that the solar cycle won’t let it fall that low. Besides that, the DJIA would be massively oversold long before it came anywhere near these bearish price levels.

There is no way that a price forecast can tell the difference between a SC and a Cycle degree bottom. If a Cycle degree bottom came to a rest at 7000, would the 5999 price level suddenly make it a SC degree bottom?  Not on planet earth! Maybe on Kepler 186f, but not on earth.  🙂 

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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 2000-2017 Intermediate and Primary Degree Review

Idealized Cycle, Supercycle And Grand Supercycle Degree Review | Elliott Wave 5.0

The above link was posted late August. It shows three sets of idealized wave counts after Cycle degree wave 3 is completed. In the SP500 chart below, we already have 2 sets of wave 3 tops with the third top in Cycle degree still in progress. 

I look at the markets from a Cycle degree perspective with wave zero of 5 waves in Cycle degree starting in 1932. Cycle degree wave 2 ended in late 1942, while Primary degree wave two ended in 1975.  Intermediate degree wave 2 followed by a bottom in 1983, and then a Minor degree wave 2 ended in 1984.

The 1987 crash was a Minor degree wave 3 crash while most analysts working on SC degree, called it a Primary degree crash. This is a full 2 degree difference from what I have. 

At the 2000 top I was a full 4 degree levels lower than what the majority of wave analysts were using. Between one single degree level, we can be out by 61%, and if we are off by 4 degree levels, we could be out 4.618 times. 

The one big 5 wave sequence that separates Cycle, SC and GSC degree, is 5 waves down in Primary degree. Since the 2000 peak not a single set of 5 waves going down in Primary degree, had developed. In fact the exact opposite happened, when all that developed were just corrections. After each correction the markets soared to new record highs again. This should have been a clue to high degree wave counters that something is wrong, but they refused to change or go back in time and work on a new wave count. 

Since 2000 we have one set of 3-4-5 waves completed, but in Intermediate degree. At the 2007 top wave 5 in Intermediate degree completed with a new wave 3 in Primary degree, on top.  From the 2009 bottom the markets churned up in a wild and choppy fashion, which most of the time would not fit into any great looking impulse. I labeled it as an impulse to keep it simple, but 5th waves can be diagonals which act like a location indicator.  

Since the 2009 bottom wave 1 and wave 3 were the two extended wave’s, so the final 5th wave up must be the shortest wave. Right now it seems the market will never end, but we are being sucked into a bull trap.  The main reason for this market top being much harder to count out is that it is a higher degree than the other two were. Any SC degree wave three top, will be harder yet to find,  because there is a natural tendency to slip into a higher degree before they are actually due.  

The Elliott Wave Principle is not about what the pattern looks like, as those are the easiest wave patterns we think we are seeing. It is the shape of the idealized pattern that tells us what to look for, as those easy waves are just traps.  Sure 5th waves extend, but they don’t extend for several generational seasons. A 5th wave extending through the Boomer, Gen X and now the Millenial generations can’t happen, as 5th waves usually have much weaker fundamentals.

With 2 sets of 4th wave bottoms under our belt a Cycle degree 4th wave bottom should be the next one in the sequence. Just like each wave three top, must increase in sequence by one degree, each 4th wave bottom must also increase by one degree increments.  

In the last 20 years I have counted the markets in GSC degree, then moved down to SC degree. This was still not low enough as I had to drop down to a Cycle degree before it started to make sense.  The lower the degree the more sensitive to the markets we become. Higher degrees do the exact opposite as the 2009 bottom clearly demonstrated. 

Without finding “All” 5 waves in Cycle degree first, it is impossible to move into any SC degree world, and even less possible to be in a GSC degree world. 

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Idealized Cycle, Supercycle And Grand Supercycle Degree Review

All my work is based on the idea that the EWP is nothing but one huge impulse wave with its origins of wave zero starting at the bottom of the last ice age about 20,000 years ago.   About 8000 years ago the earths climate had already significantly warmed up, and commercial farming was picking up dramatically. Commercial farming allowed city states to grow into Empires which history has documented very well. Since then there have been ups and down trends that closely follow global warming and global cooling.

The above chart starts at the top left, with Cycle degree wave 3 followed by a Cycle degree 4th wave correction after which the markets should soar one more time. The key is what the pattern is that we would need to complete the 5th wave in Cycle degree. This would be 5 waves in Primary degree that would also follow solar cycle #25 to its top 5-8 years later.

Many times I include a triangle as my 4th wave, but that is only to show that no wave structures are even like they show us in the Little Blue Book.  Many times we would get a flat in a 4th wave position as triangles are a bit on the rare side.

The idealized chart ended in 2000 with a wave 3 in Intermediate degree followed by another 2007 top of Primary degree and now in 2017 I will be looking for a wave 3 in Cycle degree. Each wave 3 moves up by one degree which could top again closer to 2029 with a SC degree wave 3 at the right hand top of the chart above.

Nothing in the markets or life, travels as even as what they show us in the book.


This chart is the exact same thing as the top chart,  except it starts with SC degree wave 3,  but this time the 5 waves following the 4th wave correction, will be 5 waves up in Cycle degree. This sequence would end at the now famous GSC degree wave 3 top.  How long do you think that 5 waves in Cycle degree will last?  Our present Cycle degree has been running for 85 years and it’s still not finished, so any Cycle degree set of 5 waves could send us to the year 2129 before we ever reach any GSC degree  wave 3 top.

A third set of this idealized chart would get us to Submillennium degree wave 3, 200 years into the future closer to the years 2229. I see the wave 2 bottom of the Submillennium degree as being closer to the bottom of the Little Ice Age which only ended about 1850.  They called it, “1800 And Froze To Death'” and in 1816 they had the famous, “Year Without Summer”.

The LIA was documented very well by all the painters during that time, so pretending that it never happened flies against all evidence.

The two charts above will keep generations of wave analysts busy trying to confirm it. One big confirmation of the entire wave 2 base of counting would be the Cycle degree wave 4 bottom.

The majority of wave analysts is already counting in SC and or GSC degree, because they have never extended any wave 3 in the past.

The Elliott Wave Principle is not about what you see in the real  world, it’s all about what you’re supposed to see if all the 3rd waves are extended.  The DJIA is the very best in displaying the extended wave, but the majority has refused to do the work and go back 80-100 years to start a new count.

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Updated August, 27, 2017

This is the third chart in which I use the exact same template as the other two above, but this one outlines what a wave 3-4-5 in Grand Supercycle degree would count out when the third wave extends.  I will still update the first two charts, with a name change, but you can print out all three of them out and place them side by side in landscape, with our present Cycle degree on your left, SC degree in the middle followed by a GSC degree on your right.  If we are lucky Submillennium degree wave 3 may come to fruition closer to the year 2229, which is also the 300 year anniversary date of the 1929 stock market peak. Wave 1 in Submillennium degree, took about 300 years to peak out in the Midieval Warm period, followed by about a 4oo-600 year wave 2 bear market otherwise known as the Little Ice Age.

I could make a 4th chart in Millennium degree, but that would not finish until mankind is past the Age Of Aquarius!

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DJIA 2000-2017 Review

The above chart is a simpler version of what I see as 3 sets of wave 3 tops. Every 4th wave correction is followed by a 5th wave, with the 2009 to present fitting better as a diagonal than an impulse. Any diagonal bull market should tell us that we are in a 5th wave, as the huge bearish rally concept will not fit. I have never run into a big 8 year bear market rally and we can go back a hundred years or more.  Long term readers know this old pattern, but new readers may not have had a chance to see it. 

The majority of expert wave analysts today, are still counting in SC degree, or they think we’re in GSC degree. The reason so many are in this high degree count in the first place, is because they are all working from a 4th wave base, thinking that a 5th wave can extend several generations. Hey, I followed the same wave count as well, but realized something was very wrong with their counts. 

We will never find any SC degree if the entire set of 5 waves in Cycle degree, is not found first. From my Cycle degree perspective, which I switched to in 2013, has not forced me to move any peak or gully since the 2009 bottom. This can provide a strong confirmation that we are close to a real wave count that we may be able to forecast with.

I think counting out the DOW is very important, as you have to understand the extended wave 3 principle, but if we don’t get that 1970-1980 wave count right, then all the little numbers and letters in the world will mean nothing! My Submillenium wave 2 ended with the Little Ice Age, so at a minimum, we can expect an extended wave 3 terminating some time into the 21st century. 

All the different wave 3 peaks have an increasing count by one degree higher each time, so I’m very confident that the next major wave 3 peak will be SC degree. This may not happen until 2029 or a bit later as 20 and 30 year cycles are also involved. 

We have a very good chance of heading into a Cycle degree 4th wave correction, followed by another 5 wave impulse type of a market.  This 5 or 8 year  bull market, must be 5 waves in Primary degree, which would terminate at my 5th wave in Cycle degree and wave 3 in SC degree.

I may not know exactly what wave count we may be at, at any given moment, but I sure do have the confidence in knowing what will never fit, once I figure out their degree list. 

I’m pretty sure that these high degree fear mongers would be expecting a decline well below the 2009 crash bottom, but the markets have a nasty habit of always doing something else. Just to prove these mega bears wrong, it would be great if any Cycle degree crash never ended past 2009 lows, but that the markets stop well short, leaving everybody wondering what happened again.  

If we look back (hindsight) to the 2008-2009 bottom, and still not be convinced that it was the place to be with a major long position, then the next time this happens we will still be too scared to take any strong position.

I’m not the type of a person that sees a depression, boogie man, or the end of the world around every corner, because If the climate or a comet is going to exterminate humankind, we will never know what hit us before it happens. 

 

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The Mythical Supercycle Degree Reviewed

The ELLIOTT WAVE lives on – Anthony Caldaro – Public Chart List – StockCharts.com

Before you read the posting below, please follow the link above and look at the Caldaro DJIA wave count, for the 2007-2009 crash. He labels the 2009 bottom as a Supercycle degree wave 2, (SC2) but in doing so he has destroyed every wave count since the 1929-1932 crash.  In order for SC degree wave 2 to be real, a very precise sequence has to unfold to confirm it. 

I am commenting on this because he has also altered the degree list, inserting an extra degree (Major Degree) and renaming a few of the smallest degree levels with Nano and Pico degrees. 

When it’s convenient all the wave analysts ignore their own time span claims. They brag about these SC and GSC degree bear markets lasting 100 years or more, while they count SC degree patterns lasting only 3 years.  This is all very hypocritical work!   Now we have another SC degree wave 2 crash and they are trying to tell us that it lasted even less than 3 years. WOW! SC degree wave patterns are getting shorter and shorter.  It must have something to do with man-made climate change, bending time as well. 

Making cosmetic changes will never work, as any single change also cascades backwards in time, much like a set of falling dominoes.  The entire SC degree wave count going back 100’s of years has to be recalculated. I have recreated the wave 1-2 in SC degree below, and from my perspective, a very specific 5 waves in Cycle degree “must” follow. 

The wave count below is so large that they can claim to be right with any move the markets might take.  The next correction must not fall below 2009 levels, otherwise the entire wave count “must” be thrown out. It may take many years before this can get confirmed, and that’s far too long to carry a worthless wave count for.  Any lower degree changes all that, as lower degrees are far more sensitive. It only takes less than a Minor or Minute degree move, to find out that we are wrong.  

 

I have mentioned it many times, in saying that any SC or GSC degree wave count has never been confirmed by anyone. Since 2000,  the EWP has turned into a short term trade setup tool, and nobody makes the effort to go back in history, and recount everything.  I take a 100 year perspective where you have to mentally transport yourself back 100 years, (1917) and then look forward and up, to see what can continue to happen. 

Yes, my wave counts do have a SC degree in our future, but that can take until 2029 before we even get close. It sure will not be any wave 1-2 in SC degree, but it will be wave 3 in SC degree.  I will reduce or drop any GSC degree comments in the future, as we will not even get close to any GSC wave 3 until 2129. Of course by that time, the end of the world will have arrived as mankind will be buried under a mile of ice!  😯 

The majority of charts produced by wave analysts, bog their chart’s down with every conceivable tool and prices. This is so bad   that we not longer can see any waves that need to be counted. Baffle us with bullshit and fear, is the name of the game, as the expert wave counting wizards continuously create smoke and mirror side shows. 

Sure, I may not always know exactly where we may be, at any given time in the big scope of things, but I sure do know when any Elliott Wave count will never fit into the idealized sequence. 

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DOW E-Mini 30 Intraday Rocket Ride Review

 

This Mini DOW chart still has not broken any new record highs. Since the early March top we had what sure could pass as an impulse decline except that the 4th wave dipped into the wave 2 price territory. This alone kills any idea of an impulse, but it sure would work as a diagonal decline. The DOW would have to make some impressive moves to catch up to what the Nasdaq has been doing, but this is nothing new as the Nasdaq seems to march to a different drummer which it has done many times before.

It should be very obvious to any observer is that this DOW rally has opened up two extremely large gaps, which I think this market will have no problem in filling again. It may take more time, but the odds of filling  any gaps are always 90%.  There are more open gaps far below so all these will eventually all get filed as well. 

The Nasdaq pushing hard to new record highs can brainwash into thinking the same thing is going to happen to the DOW.   The DOW needs to keep on this decline if it is over the, hump of Cycle degree wave 3.  Only time will give us more answers as price has very little to do with it. Any prize can be obliterated,  if the pattern is there, so we are just witnessing this at a smaller scale. 

Many Wave counter now thing they are at a SC degree top with still many others working this as a GSC degree top.  Good luck with that, folks, as you must have the 5th wave in Cycle degree down pat in order for a SC degree correction to occur. Many have tried to count out from the 2000 peak, a double expanded flat, but double flats anywhere do not happen. 

I can just see it happening again, when the markets are in another oversold position. The big degree wave counting experts will miss that bottom as well as they are hell bent on forcing us to believe that the markets are going to 1000! Folks, there is nothing down at DOW 1000, 3000 or even 5000, that fits a previous 4t wave of one lesser degree. 

The big question is what pattern  may develop once the Cycle degree wave 3 top holds. Our EWP book tells us we can have 3 simple corrective outcomes, with the triangle being very low on my list.  The SC degree crash from 1929 to 1932 only took 3 years, so there is not going to be a 100 year SC degree correction, or some mythical 600 year GSC degree correction.

Even Steven Jon Kaplan does not anticipate a complete meltdown below any 2009 prices, which he has hinted to me already in an email. 

The entire problem with the EWP is that the majority  seem to love the higher degree wave counts, as it can make them sound very impressive, which sells more subscriptions and books.  Big and tall moves have no correlation to big degree patterns, because when markets extend it is the small degrees that come out from hiding. 

This market has to give us much more of an idea if we are to get a zigzag or a flat for a Cycle degree correction. Either way somewhere we should get an “A” wave bottom, followed by a “B” wave counter rally.  We are still far away from that, before it becomes more clear what the corrective pattern will be. 

 

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E-Mini DJIA Record High Gyrations Review

 

 

This morning the DJIA flirted with another major top, but it depends on what contract we may be using as some say we were 20 points away.  There is a very good chance that for this December run, we are fighting through an ending diagonal, in a 5th wave position.  It sure is not your impulse wave and this time I took the time to show a bit more detail.  I always count with my finger and my eyes when these small wave patterns occur, as it is silly to count them out if we don’t know where.  Sure, I can label many more points, but will not help in recognizing we we may have. 

The only thing that matters is if we do get this extra little leg up, otherwise the party could be over. When this may happen, is always unsure, but we will hear about it when the markets slump. The markets would need to decline well below my Minuette degree 4th wave bottom.  This would also give us a final high for the DJIA in 2016 and the DJIA would have a difficult time of breaking a new record high again. 

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E-Mini DJIA Intraday Trump Bump Review!

 

 

It’s a do or die situation, with the DJIA spiking to new record highs. Another nice spike was just created, which could create another top of a counter rally!   All trends must come to an end, but exactly the exact time is never certain.  If the markets resume their declines, then the USD should do the same thing, while gold starts to come alive again.  Not much we can add to all this at this time, but that I’m bearish towards stocks for the next 4 years.  Of course a good counter rally will get in our way. 

I can not give you an “A” wave bottom price, but shorts should be closed off  before the high degree “A” wave is reached.  If we reach a new record high this week, then my Cycle degree top will also get moved to the new location. 

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E-Mini SP500 Intraday Bull Trap Review

 

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How do you like this “Great Rotation” so far? Even after good fundamental reports came out, this market just yawned and started to decline.  So far another major peak could have completed on November 30th at a price peak in 2213!  It would not surprise me that this peak could also be the peak high of 2016.  Since the November low this market shot up and then abruptly changed pace and its direction.  This is not an impulse, but it will work great as a zigzag in a diagonal 5th wave.   Even the last little wave was a zigzag to new record highs. 

Now we have to have patience to see what dominate pattern is going to develop.  Inverted zigzags have a nasty habit of completely retracing themselves, and this would happen below the  2030 price level.  I calculated the Gold/SP500 ratio, and you would have to come up with 1.87 ounces of gold to buy one unit of the SP500. 

I scanned the COT report and the commercials are in a net short position on most of the indexes I have wave counts on.  That tells me they don’t believe a word of the Wall Street invented, “Stock Rotation”  myth. Of course the non-commercial trend chasers have done the exact opposite and increased their net long positions. One day all those positions will be reversed to some degree. When they do then the decline in the markets will take a rest and the bulls will come back and shred all those complacent bears so fast it will make our heads spin! In short, things could get very violent in the markets, and this VIX just finished a massive spike to the downside. Commercial traders are also net long T-Bonds, so that would fit well if they run to safety in T-Bonds. 

All we need is the USD bull market to fail, and we have a recipe for gold to make new gains.  I still have, gold, oil and the USD  to post, but that may not get done until the weekend.

What we have witnessed since the election was the biggest endorsement of  “Stock Mania”  that we have seen in a very long time. The greatest fool has bought his long position on November the 30th but they don’t realize that every sell order has congregated below this peak price level, so once they get triggered we can kiss this bull market goodbye. 

 

 

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Mirror, Mirror On The Wall, Who’s The Greatest Fool Of Us All?

 

 I thought I would review the big DJIA wave count first, so we have a good idea where we may be, and then we can figure out where the markets may be heading to next. Again, Wall Street claimed that the DOW broke a new record high today, and this may be the case, but the Nasdaq and the Russell 2000 sure don’t care, as they have seen their peaks some time ago. Many have claimed that we are in some type of huge stock rotation that some are calling the, “Trump Rotation” or the “Great Rotation”. Folks, this wording is nothing but a pure display of “Stock Mania”. Just as good of a stock mania, like we had in 2000! The, “Great stock rotation” started in 2011, just about 5 years ago, and the herd just figured it out that another leg is coming. Investors have been jumping on this bandwagon for a few weeks, all in the hopes of finding another sucker or fool to buy an asset class that is extremely expensive already?  Who is the lucky group that still finds value to keep buying this insane market. Sooner or later the “Greatest Fool” shows up, and I sure hope it is not any one of my readers. 

Not a single sane contrarian would be caught dead, jumping on this bull market wagon ride, as they have heard this bull shit many times before. Of course if you believe in the sort of wave count that tries to impress us, by forecasting a trip to the moon, then I’m sure the markets will head the opposite way. Year end profit taking can start at any time, as bull market tops are the breeding grounds for bear markets. 

You can have the most pristine economic fundamental news come out, but if that news does not propel the markets higher and higher, then this is a sign that a bull market is coming to an end. 

 

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Either way, this market is due to end, or it must give us another correction! The problem is, how deep of a correction can we expect?  I can only look up and down the core 5 waves and three of them are corrections. 2015 was already a correction, which is a warning sign that the markets do give us, at times.  For this to all continue, then the markets cannot dip below 2015 price levels. 

I’m looking for a Cycle degree correction that may take the next 3-4 years to play out. A Primary degree may be the most likely pattern at this time, with a high chance that we may even get a zigzag bear market. We already had an expanded top in 2015, so another one back to back, may be low down the list.  A triangle would take far to long to play out, as this has to finish around the time solar cycle #25 starts? 

I hope to review as many wave counts as I can, but it will still take me some time to get done. My late 2008 iMac is toast, so I had to lease a newer model to get posting again. I still need work to get a better feel of my new system, but I love it. 

November 2016 saw a real explosion of pages being read, which was a very pleasant surprise. A record 19,500 pages were read, which is the highest since this blog was started about May 2016.   Thanks again to all the readers that made it happen. 🙂

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DJIA 3000 Not Until The Next Ice Age

 

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Last night the DJIA started to top out, and then started a bit of a decline. It is a very small move, and may not be a major top, but it is time to see how it all fits together.  We’ve had some wild forecasts, made by some very good professional wave analysts.  Yet these same forecasters, missed an entire bull market, that contrarians with no wave counting experience, had no problem in identifying, as potential major bottom. At that time these wave counting experts were calling for DOW 1000, and I knew that this was impossible, as in order for the full 5 waves down to play out, the DJIA would have to go well below zero.  

I thought at least that we should get an 80% bearish rally, but Mr. Kaplan was far more bullish than that. In late 2008 insiders went on a shopping spree, and they are the unknown contrarians that you don’t read much about. 

When the insiders buy, they rarely ever sell a few weeks later, as they have a much further time horizon that the average Joe cannot visualize. In 2009 there were many indicators that suggested that the end of the stock bear market was nearing. One big indicator was the start of solar cycle #24, which destroys any bearish wave count we could have dreamed up at that time.

I’m sure the 3000 forecast will become popular again as the 1000 price forecast never materialized, so the forecasters had to come up with a new price bottom. Of course to get that they would have to be in SC or even GSC degree.

The problem is that there is absolutely no other support range down there, to justify any 3000 price forecast, never mind the 1000 DOW forecast.  From my perspective, these two numbers were just picked out of a magician’s black hat, as there are no grounds to use these numbers for any degree level.

The chart above, is in a linear style, which gives us more of a dramatic effect.  Since all my work is Cycle degree based, then how deep can this next big bear market take us?  It can go deep, but it may also do the unexpected and stop well short of the 2009 (6500) lows, before stocks mount another unexpected super bull market. It will never go down in a straight line, so we have to expect a potential flat like pattern, that must be in Primary degree.  

Sure the bottom trend line can get hit, but if insider buying becomes rampant and gold has soared then the Gold/Dow ratio will tell us that the DJIA is extremely cheap, when we use gold as money.

Right now, and since it is calculated at an extreme, it takes 15 gold ounces to buy the DOW. In 2009 it only took between 7-8 ounces to buy the DOW.  Not until the DOW is back down to these ratio numbers, will the markets be ready for a real bottom, and the end of Cycle degree wave 4.   

In the longer run I favor the 7000-8000 price level as a potential major bottom, but I stress that a few other indicators,  must also come in about the same time. 

We will not know if this top will hold, but sooner or later we have to establish the last high for 2016.

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Russell 2000, 2008-2016 Bull Market Review:

 

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When there is a potential time for a major turning then, I try to look at the daily charts, and the weekly charts in rapid succession. I do this because this is when the wave count is supposed to be the clearest, and I make sure I review the wave count from my previous bottom, to see if it all still fits.  Of course, if we have no clue from where we are counting from any major peak will mean nothing.

I try not to use too many trend lines, but when I do I keep them as parallel as I can. In this case I use three lines as the center line can identify one degree lower. The 2009-2016 line is my base and the other two matches this angle as well.  Many analysts overwhelm us with trend lines and wedges, which in the end, meaning nothing. Any kid can draw pretty trend lines, once I show them how. Parallel lines work well for impulse runs, as well as three wave runs, so parallel lines have more power into giving us feedback.

The 2009 to 2016 is one wild bull market that we all counted as a big bear market rally for many years. Of course they were all failures, as the markets refused to act according to a bear market rally script. In 2013 I realized that these patterns belong to the diagonal world, and should be counted differently than all the impulse waves we think we see. 

The short version is that these diagonal waves are everywhere and they are found most frequently in any 5th wave and in any “C” wave, up or down, at all degree levels.  I call them “Enhanced Diagonal Waves” and should be labeled ABC1, ABC2, ABC3, ABC4, and ABC5 to clearly identify them as diagonals. 

I believe the 2009 -2016 bull market was a diagonal 5th wave in Primary degree, which has subdivided into 5 waves in Intermediate degree.

If Cycle degree wave III has a new home, then what is the corrective pattern we need to confirm this top?  There are always 5 choices of the simple patterns, but we can eliminate a few of them right away. This leaves us with three core choices at this time. A zigzag, triangle or a flat must always be on the list for any correction, and at this time I favor the flat or zigzag, as the triangle would take far too long to play out by 2021, another 89 year record low.  In the next year or so we should find an “A” crash bottom in Primary degree and It will be a challenge to get it as there is always a degree of uncertainty, at least in the short term.

I like to see those spikes at the tips of weekly charts, which the direction can never be maintained, so a big correction or the end of the bull market is near.      

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DJIA Daily Chart Review: Another Top?

 

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 I had talked about an expanded flat many times, but I think that this expanded flat still belongs to the bull market, but for the waves 3-4 with intermediate degree.  The entire 2016 stock rally can fit into a zigzag, or even an ending diagonal. 

In a few months, I bet that nobody will be able to pinpoint the single wave that was created by the fundamental news of the Donald Trump election results. They keep telling us the fundamentals make the markets go up, but what consistent fundamental news created the 2016 bullish phase. The majority, though the DJIA was doomed in early 2016, but look what happened.  

This last November 2016 rally is about as vertical as we can get, and because it is vertical it runs up at maximum speed. These kinds of moves can never be maintained so usally one of two things can happen. First, a bull market correction can take place, or the other unthinkable can happen if stocks start another true bear market.  The 2016 rally was about a 1000 points so if the Cycle degree 4th wave kicks in then, a 1000 point drop would be child’s play.

What it all means is that Cycle degree wave III may find a home. Even if we are early and this drags out until spring, I always keep idealized wave patterns active and hopefully we will catch an (A) wave bottom in Primary degree.

The “B” wave rally top can expand to a new record high again, but this may not happen.   

Many times the start of a week can be very bullish but then the last day or so it can all reverse.  I’m not bullish by any means, even though a real top may still elude us, for the time being. 

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DJIA Daily Chart Review

 

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Are the markets just a voting machine that can forecast a winner? Sometimes they do, but when we are at an extreme already, can this extreme be broken one more time?  We had a very clean vertical move that must either end or at the least give us a good strong correction.  Somebody is going to scream, “Take profit”, and all  those sell orders below, will be a target.  They fall like dominoes once they get going. 

Any protective sell stops are moving up higher during this spike, so it will not take much to get all the bulls to switch to becoming bears very quickly. The bears attack from above, so it is only a matter of time, before all those boasting stock bulls, turn into instant bears again.  

The market rarely behaves in such a manner that will give the majority a chance to sell out and profit, as only a very small percentage can trade successfully.  Investors have a mentality that they are always thinking long. Investors don’t short markets, but traders sure do.

All this DJIA has to do, is fall below 17,900 again and all this election squabble will have meant nothing. The open gaps below are harder to see with this daily cash chart, but we have one big open gap below that will take until the 17,800 price level to close. 

 

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E-Mini DJIA Daily Chart Review

 

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The market action may look scary, but with such a choppy pattern, this market could reverse dramatically, when the bear traders get into a trap.  We may have to put up with this for another full week, so don’t get completely wrapped up in the bearish mood.  In reality the DJIA just came off record highs in August, which is the top that the majority will use for the rest of their life.  In EWP terms, a secondary high can be just another expanded top.

Most wave counters never see these patterns, and they start to make claims that the market is going down big time. Of course, as soon as it has gone down, then this is when a bear trap can slam shut, reverse, and then soar. 

The market could then fly just by hitting the stops that are always present above any price level. I keep the room open, for Cycle degree wave III at the 2015 peak, but this may not work just yet.  It is more important to eventually identify what we do have, and then it may be easier to put the puzzle together on a later date. 

My present wave count, if it holds true, should then crash well below all of the 2015 lows, by a wide margin.  Until the mainstream is bearish again, no major trend reversal of any major size, will happen. 

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Russell 2000: 2000-2015 Review

 

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This is the Russell 2000 index, and since 2000 all major tops, show wave three peaks with increments of 1 degree higher each time.  All major peaks in the future will be wave three peaks until we reach SC degree wave 3. This may still be a decade or so away so don’t get wrapped up in the idea that we are going down in SC degree.  The fact that none of the wave experts called a major bottom in 2009, except for a wave 1 in Primary degree, nobody that follows the EWP had time to accumulate shares like all the insiders were doing.

Company insiders are also the real contrarians that we hear very little about, but what they do sets everything up for a major bottom. Insiders do not buy on a whim or even buy with stops, so it would be unreasonable to expect the markets to keep heading to DOW 1000.

Since the 1998 bottom the RUT has produced a very nice base which will prove hard to crack and even when it does, it is impossible for it to go very far. It can’t go to zero folks, no matter what the extreme bearish wave counts may say at that time.  Having a bearish wave count when everybody is also bearish, is the same as being in sympathy with the crowd. 

This will never work, and investors will always miss the following bull market, if they don’t incorporate contrarian thinking with the EWP.   In this case I have a Cycle degree up, but could not show it due to space. The RUT did not break to new record highs, so this makes it a truncated move or  just another “B” wave top.  I try never to use truncated tops as an excuse for a wave count, as most of the time we can fit them into a real wave count,  if we looked hard enough. 

Until this can be confirmed in a more meaningful way, other patterns can turn up that will derail any longer term wave count. 

Gold could be inverse to all what is going to happen in stocks, as gold is on a potential “B” wave bull market in Primary degree.

The next stage is to break the 2016 support level, so it is obvious to all participants and analysts. This would happen below the 950 price level.  Any “C” wave decline even in Intermediate degree, should travel well past that price level.  

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DJIA 2000-2015 Review

 

The wave count below has its origins back in 1932, which was about 84 years ago. Those analysts that forget the past or have never even gone back to look for their own mistakes, will always get caught in some sort of a trap.  The 2009 crash bottom was one of the biggest Elliott Wave analyst traps I have ever witnessed.  Of course that 2002 bottom was another bearish bottom, which was also an Elliott Wave Analyst trap.  When wave analysts thought that 2009 was just a corrective bottom was a huge failure, as for many years after 2009, they were still looking for a bear rally top.

Of course, all the wave followers were also left in the dust, as the wave counts never got anybody ready to switch directions, leaving no time for investors to accumulate  ETFs at a major bottom.  At that bottom so many contrarians were screaming to buy stocks, yet the wave analysts ignored all this, as they were positive that the DOW was going to 1000!

That failure has nothing to do with the EWP, but it has everything thing to do with human emotions. Most wave counters at that time had wave positions, that were in sympathy with the herd. That alone was a clue that their wave counts were off this planet. Simple and easy to see wave counts rule the markets, but the thing is, simple wave counts are a trap. The markets are too smart, to allow a herd of wave analysts to be right,  and when we are wrong most existing wave positions just get a cosmetic makeover. They are then ready for another few months or years, baffling is with more mindless numbers and letters bull shit.

Everybody is killing each other trying to “beat the market”, but in reality the “market will beat them”  as the majority can never win playing this game.

Now we have another problem, where we are in or have already completed a major top. Nobody will sell as it is impossible to trust bearish wave positions.  Only when any panic starts will they get serious and start to sell out. The rest will all go down with the SS DJIA Titanic, or they will be running around trying to find a safe cabin to hide in. Good luck with that!

 

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For now I will work the wave patterns as if the wave 3 in Cycle degree has finished in 2015, and what has followed can be part of the first stage of an expanded flat.  From my perspective, if there is any doubt that an expanded pattern is in progress, then it must be explored until they are confirmed or trashed. I’m sure other analysts will be happy to give you support price levels, but support for what?  Since 2009 we have had at least a dozen major support bottoms. Will any one of them work this time around? When analysts give us support numbers, this instantly tells us that they think they are still in a bull market.

A 20% correction will do nothing, as that would amount to getting stung by a honey bee. Only multiple stings from killer bees, will get things warmed up.  I use no real Fiboncci retracement levels, except a few standard numbers as there are millions of combinations in progress at all times.  In the book we have about 5 retracement levels, but how high they can rally all depends on which wave pattern any rally is in.  When was the last time that we knew exactly what wave count we were in?  If we are looking at a potential Cycle degree crash, then this is when I call on the idealized wave patterns, and determine what I need from them.  At any turning I always ask myself, where am I?, What do I need to fill specific wave requirements and then determine roughly where we can bottom at. If I see an early start with an expanded pattern, then the choices are cut down to size, as flats are one of the main  patterns that can take an expanded pattern.

This pattern I do have must land at an “A” wave bottom in Primary degree, unless I’m still too early. This rules out a Cycle degree zigzag, and sure would put a Cycle degree triangle choice, last on my list. We would be looking at about a 4-5 year bear market ending closer to the 2021 time period. When a big bear market becomes more obvious to the majority and negativity rules, then a bottom should be getting close. Just after the solar cycle hits its bottom and the world is very bearish, then the majority will be in yet another major bear trap.  Every bearish Elliott Wave count at that time will get “terminated” or trashed again.  Having a wave count that is in sympathy with the crowd will never work, as the EWP is contrarian in nature, and should confirm the contrarian view of the world.  All the indicators that seasoned contrarians use, should be incorporated into the EWP as the little blue book does nothing to help us with that. 

I bet I can find more rich contrarians that never take or will never take EWP seriously, but  I sure cannot say that about any wave trading investor.

I will keep talking about contrarian thinking and below I inserted, a small but extremely important description of what contrarians are all about. 

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Buy Low, Sell High. These four simple words summarize millennia of financial truth. They are the pinnacle of wisdom of virtually infinite amounts of data and knowledge collectively gleaned on markets by humankind all throughout our history. They are the great “secret” of multiplying the assets to which we have been entrusted in the global marketplace. They impart a timeless truth so simple and profound that a child can understand it, yet from many sad historical episodes we know that most adults forget these words every few generations and get ensnared in a supercycle speculative mania.

In contrast to the legions of conventional investors galloping through the world markets, there is a relatively small group of investors known as contrarians. Contrarians are the black sheep who move “contrary” to the crowd and conventional market fashions. Contrarians seek to really literally implement the “buy low, sell high” market wisdom. Contrarians want to buy when investments are cheap from a fundamental perspective. Of course, usually the only time investments are fundamentally cheap is when most investors have totally deserted and rejected a fire- bombed sector of the market. It takes a great deal of courage to be buying when “conventional wisdom” says a particular sector or market is doomed.

Contrarians seek to sell when markets reach mania proportions. When the general investing public grows really excited and frenzied about a particular sector or market, chances are it is near its top and the contrarians have already sold, realizing massive profits.

Contrarians are often dedicated students of financial market history. They realize that “new eras” happen over and over and over again, seducing the naive to their doom. Contrarians also believe that markets are cyclical and no trend runs forever. Markets become loved and wanted, and they get overvalued. When fundamentals reach mania extreme levels, the markets are sold hard and they collapse. After the collapse, valuations are lower than normal as no one wants to jump back into the market in which many were just burned. Contrarians believe that the accumulated wisdom of all human, financial market experience in history is more relevant than the lofty claims and hype of any one particular era.

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DJIA 1929-2016 Review With Cycle, SC and GSC Degree Commentary

 

djy00-oct-17-2016

 

Looking back in chart history is the only way to find better fitting wave counts,  as we will never find them looking into the future or by only making cosmetic changes. This is also an exercise in figuring out what type of corrections we may expect for a Cycle degree correction, followed by a Supercycle degree correction, which SC degree wave (III) may not complete until 2029 or so.  The 1929 to 1932 correction was not a wave (III)-(IV) in Supercycle degree, but was a wave 1-2 in SC degree. This makes the 1932 bottom the start of wave zero in Cycle degree which may just be coming to an end in 2016.

If 1929 ended with a zigzag, then SC degree wave (IV)  has a slim chance of being a zigzag as well.  It could develop a flat or a triangle.  Cycle degree wave II could work as a type of running zigzag, making our Cycle degree wave IV a potential flat. As long as they alternate,  is the most important thing to look for.  All this makes Cycle degree wave three as the extended wave, which at the same time makes SC degree wave (III) and Grand Supercycle degree wave ((III)) also extended. In the stock market any wave three should be the extended wave and the wave count above does exactly that. 

From the 60’s to the early 80’s we had a 1-2, 1-2, and another 1-2 wave structure, and it was the last Minor degree wave that did all the heavy lifting as it became the extended wave at that time. The 1987 crash was a Minor degree crash, not a Primary degree crash, that  I saw many wave analysts use.  

I deliberately did not fill in anything from 1942 to 2016 so somebody can use it and fill in all the blanks for practice. There are only two wave structures where Minor degree is needed to be counted, but all the rest will be Primary and Intermediate degree runs.

I use the EWP as one giant Impulse which started around 8000 BC or 10,000 years ago, as that was the start of the early spread of agriculture. Until farming became more commercial city states could not grow, but after that time period they sure started to grow in size. 

 

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This is a chart I made where it shows the spread of agriculture products to different parts of the world, which coincided with the end of the last ice age.  There is no need for any wave patterns during any ice age, as any tribes were in caves trying to stay warm. The last thing on their minds was commerce!  Global warming is what advances mankind and the ability to feed billions of people, is because of the higher CO2 content in our atmosphere.  

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E-Mini Nasdaq 2015-2016 Review

 

nqy00-oct-14-2016

 

The Nasdaq is the rebel as it just recently hit a world record high, so if another leg is going to happen it better do it soon. My homeless Cycle degree wave III needs a permanent home, that can last until the end of my days or until the next ice age.  So if this top is not a good fit, moving will not be a problem.

I show an expanded flat, but there can be a running triangle in there as well. Yes, we developed a nice little spike to the downside, and then another spike to the upside. If we end up with another newer low in the next few weeks, then this party may be over already.  I would rather see a last gasp spike to the upside, but markets do and can roll over with little fanfare.

The wild bearish screaming, is yet to come as we have had many times already since 2015.

Any Cycle degree bear market in stocks could only last 5 years as that would get us to the 2021 bottom and the end of an 89 year cycle from the 1932 bottom. We are only at 84 years right now, so we have a long haul ahead of us at this time.  

The last pattern I want to see is another freaking triangle, as that would throw my time scenario into disarray.  Any flat or any zigzag would be great as this anticipated bear market has to finish when solar cycle #24 has finished.  I cannot be any more blunt about it, but if we are bearish when the solar cycle hits bottom we will lose, nobody wins playing against the sun. Bearish wave positions at that time will get terminated with extreme prejudice, just like what happened in early 2009.  

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E-Mini SP500 Crash Review

 

esz16-oct-13-2016

 

This is a line type chart as the bar chart trashed my ending diagonal wave count, by the slimmest of margins. By switching it to line mode, we always get a different perspective, as this ending diagonal, held on by the width of a hair.  Any more and it would be game over,  for this potential ending diagonal. 

From the September peak the decline looks like a big fat zigzag and that means that this stock crash can be completely retraced and then add some more for good luck. I’m sure some will say, “oh this is not an even zigzag” it has to be a 1-2 wave. Well, very few zigzags are ever even and when they are, chances are they are fooling us. If any pattern shows up in one degree, then I allow that in all degree levels. If you doubt stretched zigzags, then just look at the 1929-1932 SC degree crash.  

Shaking out the early bears in the process is the name of the game and any more of a rally will certainly do that. Remember, there are always buy orders above all bearish prices, so those that think they are bears turn into instant bulls, as the stops all get triggered.  I would have to expect another zigzag on the way up, but the “B” wave correction can hide itself easily, much like the first wave up. 

The VIX has also spiked close to the $18 price level, but there still may be a bit left to go. 

At this time all indices are very closely synchronized, which I like to see near the end days of a major bull market.

Also, all 4th waves start getting smaller and smaller degree wise, and when I run out of degrees then this party is over.  From what I have now, I still have 4 degree levels that can show in 4th wave positions.  A few degree levels I will never even see, as they will be so small that I can’t even label them.  Fourth waves are more important to me than any other wave pattern as they have huge technical forecasting qualities about them. 

In reality every wave has forecasting abilities, but if we don’t know how to use them, or we don’t know where we are, then we are running on only one or two cylinders on a 13 piston engine.  

 

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