Tag Archives: Elliott Wave DJIA

DJIA Intraday Bullish Phase Update

The secondary bottom on the 9th of February is a bit truncated or short of breaking new lows while all other indices I cover did travel to a new low. I’m allowing the 4th wave to dip into my wave 1 in Minute degree at this time, but may have to change that at a later date.

Right now we have a small correction in progress, so it sure looks like another leg up can still happen during the rest of this month. The DJIA is about 1200 points away from hitting another world record high, which can be easily achieved once the DJIA moves “vertical” again.

On the first Friday of every month, the employment reports come out which can bring bearish news or very bullish news. Any bullish news that does not push the DJIA much higher would be a bearish indicator, as this bullish phase could run out of steam in the next week or so.

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DJIA Index Bullish Rally: Just Keeps On Trucking!

Each one of the 5 indices I cover, has slightly different wave patterns for this bullish run.  From the bottom, this rally can now fit into an impulse, (slightly Truncated).  One more wild spike to the upside and this market could break yet another new record high. One other little thing I haven’t mentioned, is that at the top we have a big open gap that one day will still get close off.

Any sudden move to the downside may produce another double bottom type of a move, which would be followed with a potential bullish “C” wave.  Yes, the decline looks like a set of 5 waves, but these 5 waves could be part of an expanded correction still linked to the bull market.

The Nasdaq is the one index that is closer to new record highs than all the others, and the other 4 would have to play a bit of catch-up!  We know that has happened before, so anything that has happened once in any degree level, can happen again.  One minute a SC correction can take 3 years, (1929-1932) and then 5 years later a Cycle degree correction takes 5 years. (1937-1942).  How long something can take to correct is influenced by the solar cycles. The 2008 bottom is a clear example of how our sun can dramatically change the direction of the stock markets.

Betting on bearish cycles to continue after any new solar cycle starts is doomed to fail. All the bearish wave counts of 2009 failed due to solar cycle #24 turning up!  The last thing I want to see is that we learn nothing from the late 2008 solar cycle turning, but I’m very confident that investors will be oblivious to this fact, and stock market history will repeat itself.  Any person that has an interest in the solar cycles should be watching the progression on a weekly basis. Once solar cycle #25 arrives, you will witness a profound change from a bear market to a bull market.

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DJIA Index Update

This is the DJIA index, which does not move during the night sessions, but only moves during the day. Todays decline does not match the Mini DJIA, but it sure is forming waves that are  better to count out.  The commercial traders are net short the DJIA but not to anything I would consider extreme.  If commercials are net short the DJIA then this does not give us confidence in thinking that some super bull market is about to take off!

Ultimately, this February rally should get completely retraced, then we may have more analysts turn bearish.  Sure, we may not hear about the fundamentals that are causing this decline, but I’m sure the media will find the reasons and then they will all sound like parrots  regurgitating the fundamentals why this market has trashed.  Any, 10%, 20%, 30%, 40%, 50% or even a 60% correction may not complete a Cycle degree correction.  Price is sure not going to help, as we would need to see a very big corrective wave structure completing first. In my world, pattern dominates price any day of the year.

Death Cross

With this particular chart and settings, the “Death Cross” happened at the 25,500 price level, which is far too late to do much with it. I looked for other potential “Death Crosses” in other indices, but was hard pressed to find any that would show up reliably.  Any “Golden Cross” is very bullish but it too happens on the late side.

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Mini DJIA 30 Intraday Bull Rally Update

The counter rally has now already played out and is now resuming its decline. There is always the potential for this market to turn, but this correction should still go deeper before it is ready to do so.  Not until, this bullish counter rally is completely retraced will I be satisfied that the bigger bearish phase is in progress.  Hopefully we will know by next week sometime as a wave 3 decline can be pretty devastating.

The entire January bullish phase has been wiped out already devastating  those investors that thought they were “safe” investing at an extreme high.  What very few investors understand is that “Bull” markets, are the breeding grounds for bear markets and they only money flowing into this market is the dumb money.  Not a single contrarian, I respect would buy into this peak as they are too busy setting up their short positions. At the extremes, fundamentals will always tell you the wrong things and this time it’s no different.

Close to a 9 year bull market, many wave analysts keep raising their degree levels as they falsely think that the bigger the bull market the higher the degree levels should become. It works exactly the opposite way as the higher the market goes, it’s the smaller degree levels that are extending, which you would never see in the weekly and monthly charts.

From 1929 to 1932 was a SC degree correction so our present Cycle degree correction should not last much longer, There is no 600 year bear market coming so you can put those bearish thoughts out of your mind.  Sure, chances are very high that a recession is also going to arrive, and when the mass media recognize that fact, then the recession will be over, and a huge new bullish phase will develop.

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DJIA Weekly Chart Melt-Up

The stories are rampant that experts agree about a potential stampeded into stocks, which some are calling for a 20% meltup! Hate to bring you the bad news, but the meltup has “already happened”. For the last two years, since my 4th wave bottom we’ve had a consistent meltup unparalleled in financial history. This is nothing really new as the herd of analysts always seemed to be late in recognizing major turnings as well. In this case it took them a full two years before they saw it as a meltup situation.

One day 2-3 years in the future, we could see the entire situation reverse when the market has already completed a meltdown. Our present market meltdown, is already 5 days old, but the entire 5th wave meltup will get retraced as the 5th wave meltup turns into a Cycle degree 4th wave meltdown. I’m sure that towards the end, we will see vertical moves to the downside which helps to confirm a “C” wave crash.

I drew out another Cycle degree flat and counted how may 5 wave sets and 3 wave sets I need in order to qualify a flat correction. My smallest degree level I will use is in Minor degree, and I would need 6 sets of 5 waves in Minor degree, with 5 sets of “A, B, Cs” in Minor degree. We only need one set of 5 waves in Intermediate degree, which will play out before the Cycle degree crash comes to an end.

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DJIA Potential Counter Rally

As much as this decline was a surprise to most, we could be setting up for a wild counter rally that can take us right back to the 26,300 price levels. I may be wrong, but the bears could be in a mini bear trap as I post. Either way the start of this decline has the makings of a diagonal decline and if it is real, then it must “NOT” charge to a new record high again.

Investors and most experts have no clue how big this next bear market is going to be as they keep talking about, “Buying the Dips”. No worries as many experts say a simple 8% correction will happen and then off to new soaring highs. Good luck with that as the contrarians, I trust, look at a 70% correction.

Even the expert wave counters have very bullish wave counts and they see no 70% decline at all.  At a bare minimum, we should see the DOW drop below 15,000 which is just one previous 4th wave bottom.

In order to really qualify this Cycle degree decline, the DJIA must fall anywhere between 14,000 and 6500 to be considered the previous 4th wave of one lesser degree.

The VIX has also made a very violent move just short of the $18 price level ending with a very vertical spike, so the VIX could also be telling us about an impending counter rally.

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Record ETF Demand In Januaray From A DJIA perspective

Record ETF Demand In January | ETF.com

It just amazes me how the herd keeps jumping into markets at record highs.  They have done this at every record high since 2000 so it does not surprise me that they are doing it again. Due to the fact that since the 2009 bottom we had a “Big and Tall” bull market, many wave analysts have increased their wave degree accordingly. One analyst has the 2009 bottom as a SC degree wave 2 bottom.

Other popular wave analysts still have the potential for a wave 3-4 in Primary degree. Sorry folks, but 5th waves are always fundamental the weakest in the links, and they never last multiple generations. The majority of wave analysts are  still pushing, an 89 year old 5th wave extension.  From the last 2016 4th wave bottom this market shot straight up, with hardly any clear subdivisions. Vertical moves like this is a sign of an ending wave pattern,  not the start of something better to come.

Everything tells me we could be in a wave 3 in Cycle degree and that we are going to get a Cycle degree correction, with 3 waves in Primary degree. I’m going to keep my updates brief,  as I fight through this flue.

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DOW 30 1984-2018 Review

Since early 2016 we had a massive move to the upside where we can hardly make out any wave corrections. This is a classic 5th wave extension, which we’ve had before. From late 1987 to 2000 was nearly a 13 year Minor degree 5th wave extension which makes our present two year run look kind of mundane.

What is dramatically different between the two sets of 5th wave extensions is our present 5th wave in Intermediate degree is in a near vertical position which I have never counted out before even when we go back 200 years or so.  The difference in angles is dramatic, but wave analysts are ignoring this fact as many of them keep adding higher and higher degree levels.

From my 4th wave Intermediate degree bottom, we would still have 7 smaller degree levels that can come out of  hiding. After the wave 4 bottom in Minor degree, (2017) we still would have 6 hidden degree levels, that could come out. I had  to use the remaining 6 hidden degree levels, and during the last degree, we run out of visible 4th waves.

Elliott wave is much more than making simple mindless trade setups, as it is our perception what the Idealized pattern looks like that is the problem. Those pretty impulse waves they show us in the EWP don’t exist. You can search for them all your life and you will not find them. Why? Because all waves are never even.  Until we go back to 1929 and start a fresh wave count will we ever fix this problem of missing bull markets or even bear markets using the EWP.

Missing a bull market should never happen, and frankly the contrarians do a much better job of reading tops and bottoms. The short version is, when our wave counts, are still bearish after reports of insider buying are all over the news, (like 2008), then our wave counts will get trashed. This happened at ever major bottom of 2002 and 2008 leaving the wave counter with nothing but token positions, if that.

In the next few years, chances are good we could hear about DOW 5000, 3000 or even 1000, but don’t believe that as solar cycle #25 will certainly destroy those price forecasts.

I gave up on all high degree wave counting when I saw EWI still being bearish on gold when gold was at $1000.

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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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Mini DJIA Record High Update

In the last day the DJIA charged up and then instantly reversed heading south. So far we have another world record peak at 26,061 but we have to be aware that it also can still make another mad dash to the upside. In order for the markets being over on the bearish side already, we can keep on getting new record highs. Every new record high can be the last record high, which could mean that the 26,061 price level will end up being the last high of 2018. The VIX has also spiked to newer highs with many gaps opening as well.

Fear is starting to reverberate through the bullish ranks, but this must continue once the markets hit a brick wall.  We need some good looking 5 wave declines  to form,  as 5 wave sequences are the pointers to a new bigger and longer trend.

In the bigger scope of things I’m very bearish even if we get another record high. Not until the majority, (more than 80%), of my contrarian indicators show up, will I turn bullish.

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Solar Cycle #24 And DJIA 1975-2018 Elliott Wave Review

The sunspot number has now been updated to the December end of 2017. The majority couldn’t care less about any influences our sun has on the stock markets back here on earth. Many have researched this connection, as I have done for the last 20 years. Each black dot is a month end calculation of sunspot activity.

We had two major peaks in sunspot activity, one correlated well with the 2011 gold peak and the January 2014 peak coincided before my wave 3  in Intermediate degree ended.  The 2002-2008 sunspot count starting to decline, but the markets loved it at least until 2007.

It may still take a full 3 years until sc#24 ends, and when sc#25 starts from this 2021 time frame, then the markets should follow suite.  Many times the markets experience great upheaval just a year or so before the solar cycle hits a bottom. With the Fed change coming this February, there is usually some upheaval in the markets as well, especially if the markets have already crossed over to the bearish side.  In the end sc#24 produced the biggest bull market since the depression, lasting well over 8 years now.

In the next 2-3 years the stock bears can do a lot of damage, but once 2021 rolls around and the sunspot polarity has started to flip, then we had better look for a brand new bull market to start. If you think investors are any smarter today than what they were with the 2000 or 2007 peaks, then you are sadly mistaken. The average majority will never learn that the “majority” can’t win at this game of accumulating wealth.

The sad part about the solar cycles is that even the wave analysts ignore them, as in March of 2009 they still had very bearish wave counts still to be completed.  Yet the markets turned up in 2009 and never looked back as the bearish wave counting herd were caught in a bear trap. When we are caught in any type of a trap we are ill prepared for what comes next. The markets were already showing signs of an impending reversal in late 2008.

 

I just love to show readers the linear version of the DOW as the bullish phase from the 2016 bottom to our present top is one of the most vertical moves I have ever  tried to count. I show 2 sets of 5 wave sequences in Intermediate degree, with no other degree levels labeled. I use no other indicators or prices, and I spew out little or no fundamental reasoning when markets go up or down. Markets will always act in such a fashion to never let the majority win. Sure, during any bull market it is perceived that the majority are winning, but that is only wealth on paper. During a big bear market, all this paper wealth starts to disappear and years of bullish progress go up in smoke.

The first set of 5 waves in Intermediate degree,  are much bigger physical moves. The 2015-2016 bearish phase contained a much smaller intermediate degree 4th wave. There is nothing wrong with that as there is a one degree difference between the two 5 wave sets. There are 2 sets of wave 3 positions not labeled which is deliberate, so it will force any wave analysts to scratch this time, wondering what is supposed to be between the 2 sets of 5 waves.

This market has soared since the 2016 bottom, but it also shows next to no corrections from a monthly chart perspective.  This is a bad omen in the bigger scope of things, as the markets do correct back down to the previous 4th wave of one lesser degree.  The DOW 15,000 price level is a previous 4th wave alright, but it’s the previous 4th wave of a Primary degree that a Cycle degree has to correct down to.

In 2009 the markets went a bit lower than the previous 4th wave of one lesser degree, which has no real meaning or future implications at this time. Many 4th waves travel below previous 4th waves of one lesser degree. Besides the markets have a tendency to fool the majority of participants and so to piss off all the mega bears, the markets will “not”  go below the 2009 lows again.  They could  turn earlier than expected, and start to soar. You can thank solar cycle #25 for the next big bull market, as those investors that follow or believe in the “grand” or “super” theory will be left empty handed again.

I see this as a massive missed opportunity, which makes the Elliott Wave Principle very inefficient,  if we keep on missing major bull markets. As long as wave analysts are happy painting mindless numbers and letters on the charts, then they will never enjoy catching a 5 or 8 year bull moves when they do come.

Every failed wave count must be followed by a serious look at the “entire” wave structure. A minimum of two higher degree levels than the failed wave degree must be initiated instantly.  In 2009 Primary degree wave 1 failed so the “ENTIRE” 5 wave sequence in Supercycle degree must be counted again. Modern wave analysts have refused to do this as it’s just too much like work. If you spend your time looking at many other wave counts, virtually every wave position today is still spewing out SC and GSC degree wave counts.

For the last 5 years I have shifted to Cycle degree wave analysis. Until all 5 waves in Cycle degree are found and confirmed, “NO” SC or GSC degree wave counts can find a base.

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Mini DJIA Record High Bull Trap Update

This Mini DJIA contract reached a peak of 25,414 yesterday, followed by a wild counter rally that also looks like a counter rally. It may take the rest of the week to clear up, but if this counter rally is over on the bearish side already, then no new record highs should happen.  One main reason is due to the many extensions we have had, but also another main reason is that we are in a much higher degree level than the 2000 and 2007 peaks were. Even a normal correction would retrace this entire small degree 5th wave before the next leg up can occur.

Any bigger correction will have no problem in trashing the 24,650 price level. Any previous bull market low can provide limited support, but eventually we need to end up with a 3 wave Primary degree correction that would send the markets into a very deep bear market. Markets always tend to head back down to the previous 4th wave of one lesser degree, and sometimes they even go “under” the previous 4th wave. In this case the previous 4th wave bottom would be the 6500 price level. That 2009 crash bottom went well below the previous 4th wave in Intermediate degree, so technically the markets could do the same thing again.

Markets do have a twisted knack of fooling all the players and non players alike, so just to frustrate us this time around,  the 4th wave will “not” dip below 2009 levels. 😉 Even if it does, it will mean nothing in the big scope of things.

The Gold/DJIA ratio is just a bit above 19:1 where it’s been for over a month already. It takes 19 Troy ounces to buy one unit of the DJIA, and it’s  the highest expensive ratio I have on record.

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DJIA 2000-2017 Elliott Wave Bull Bear Market Reviews


The chart above is a stretched weekly chart which shows any vertical moves in a more dramatic fashion. The Elliott Wave Principle was observed using the DJIA charts and coincidentally the DJIA and the other indices all have similar patterns and wave counts. Always reviewing the largest degree levels is very important, as we have to make sure that it still fits into the larger picture that we think we are in. The reason why all these 3-4 sets of waves appear, is because we always have to look for wave 3 to be the longest or extended wave. Since 1932 any wave 3 has never been extended, but it’s always been the 5th wave that the experts extended. 5th wave extensions “never” travel across multiple generations as 5th waves are fundamentally very weak.

When the majority of expert wave analysts didn’t see the bull markets coming both times in 2002 and 2009, I knew this SC and GSC degree hype had “MAJOR” flaws in it.  As soon as any part of the largest degree level has failed, then the entire 5 wave sequence from its start, “MUST” be thrown out. Of course, this is too much like work, so the majority of wave analysts just makes a few cosmetic changes, and “bingo”, they end up with a new and improved,  wave pattern. Cosmetic wave counting doesn’t work, and if we just keep making pretty changes, we will miss every major bull market that will ever come in our future.

Just by not being prepared before any high degree bull market starts, makes the Elliott Wave Principle very inefficient and pretty useless. I was brainwashed with this GSC degree mania myself, and once I realized that the DJIA would not implode in 2011, I knew a major flaw was still present in all our wave counts. It’s pretty sad when expert wave analysts miss a bull market and leave 300% gains on the table.

Any person with a very healthy investing account can not afford to miss any bull market in their lives. It takes time to make the mental switch from a long bearish phase and then back to an impending long bullish phase. It takes time to accumulate strong ETF positions so we need lots of early warnings. Even Warren Buffet screamed how bullish he was back in 2008, and my favorite contrarian was turning very bullish as well. It wasn’t until March 2009 that any wave counts were ending, so wave analysts were close to 6 months out, in recognizing that a major bottom has arrived.

In late 2008 conventional conditions were already showing us that the 2008 financial crisis was coming to an end. Insiders buying their own shares back, is a clear sign that the bull market was coming to an end. Insiders don’t buy if the 2009 bottom was just a wave 1 in Primary degree. They already knew that the markets were  oversold on a massive scale, so it was a no-brainer for them to buy stocks. Even the VIX started peaking out in late 2008, which all helped to seal the coffin containing all the stock bears.

My top in 2000 was wave 3 in Intermediate degree with its start in 1982. Once the markets crashed in 2002, it was followed by a 5 year bull market that most wave analysts also missed. From this 1982 bottom it was exactly 20 years to the 2002 bottom, which is part of the 20 year cycle so prevalent in the markets.

Each peak progressively gets higher in degrees, but Supercycle wave 3 is still far away in time and price. SC degree wave 3, never mind GSC degree wave 3, may not end until the 2029 time period.  Not until “All” 5 waves in Cycle degree are found and confirmed, can we progress into any SC degree world.

The 2009-2017 bull market was a very choppy bull market, further confusing us into believing it was just another bearish rally. It wasn’t until the DJIA was past the 2007 peak did wave experts look for alternates.

Hindsight has to be turned into foresight, and I have been very specific with the wave counts that we need to confirm a Cycle degree bear market. This is so we can catch any major errors as soon as possible. When I’m wrong, I’ll be wrong in spectacular fashion.  Short term, wave counts are always foggy to say the least, but we want to get the biggest degree as close as we can, well before any real bottom is in.

When the markets are pointing up, and the majority are all guessing how far that this bull market still has to go, I have already painted the picture for when the markets point down again. Bull market tops are the breeding grounds for bear markets, and the reason this is so, is because there’s “nobody” left to get in.

The bullish preachers are preaching to the crowd that has been converted for months already. All we need is for the, “Greatest Fool” to  crawl out of his cave and he will be left holding the bag of falling asset prices.

Buy Low, Sell High  is a very important PDF to understand, which combined with the beautiful color PDF chart below, makes a powerful case for contrarian thinking.  ‎www.longwavegroup.com/market/charts/_pdf/Anatomy_of_A_BullandBear_Market_with_Money_Flow_0930.pdf

Like Rick Rule says, ” you’re either a contrarian, or you become a victim”.

If you have progressed, or lucky to have a strong net worth and you would like to enhance the contrarian point of view, then I strongly suggest that you subscribe to  Steven Jon Kaplans True Contrarian Newsletter.  

 

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DJIA Intraday New Record Top Review

This world has many price bubbles in it, far too many to name from memory. From my perspective, I can name a dozen or so, but that’s about it. In the impending bull market bust, many of these bubbles will pop together, including all those most popular Cryptos coming out. I watched a video of Peter Schiff, and he says there are close to 1000 digital currencies coming out. 

I’m sure Bitcoin and the DJIA will crash together in the next few years, so be smart and stay away from this Crypto madness. 

This market refuses to go down, which could mean it will last into 2018.  I’m sure year end profit taking can still happen, but even then the DJIA has to dip very low, so it can no longer come back this year. 

Somewhere I have to find a home for my Cycle degree wave 3, that will last forever, and never be dethroned!  The impending bear market is not SC degree nor is it anywhere near GSC degree, as these two degree levels have “NEVER” been confirmed by anyone! 

At a very bare minimum, since the 2000 peak, we should have had 5 waves down in Intermediate degree, yet in the last 17 years not a single set of 5 waves has developed, except for the Nasdaq, which  is questionable.  GSC degree needs at least 1, 5 wave run in Primary degree,  yet they have never materialized as well. To put it bluntly, it’s impossible for any SC and GSC degree world to exist, until “all” Cycle degree peaks are found first.  

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Mini DJIA Intraday Record Highs Review.

So far the December, 4th peak of 24,542 has not been retraced just yet.  All futures contracts will be the March 2018 contracts. The DJIA produced a small double bottom and then took off in the northeasterly direction, the second bottom traveled to new lows by the slimmest of margins, so this makes it a potential expanded pattern.  This market can still head to new record highs, but with the same breath another new leg heading south can happen.

We are at very small degree levels so I start with the Micro degrees,  to look for impulse or diagonal waves.  Stocks are in a bubble, and investors love them, but the DJIA is not as crazy like Bitcoin is. Real stock manias happen in wave 3 peaks, and not that much in the 5th waves.  From the 2011 lows to about 2015 was “stock mania” as well, and that was a wave 3 move.

Once it becomes obvious that the markets are heading down, will they run to Bitcoin or gold as a safe-haven? Stocks, US dollar and Bitcoin chart prices are pointing up, as gold is pointing down. This situation has happened throughout market history, so it’s nothing new if we’ve done our market research. Being brainwashed into thinking a “New Era” has arrived or saying, “It’s different this time”  is a myth, as the only thing that is truly different is “Time.”

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DJIA New Record High Update

Early this morning the Mini DJIA created a new record high of 24,531 and has now backed off a little. From the mid November low at my Minuette degree 4th wave bottom, the DJIA exploded. This is not an impulse 5 wave run, but is a diagonal 5 wave run, with a few extensions thrown in to add to this 5th wave extension. 

We also have a huge open gap just below this peak, so it should not take too long for this gap to get closed. The peak number to beat now sits at 24,531. If we add another 1.382 to this peak we get close to 33,901. This is about as close to 34,000 that we get get, but that target will never get hit on this trip, which started in March of 2009. 

From my perspective, it is extremely important to know exactly where we are counting from, otherwise we really can’t figure out where we are. My concern is the entire set of 5 waves in Cycle degree, as without those locations being found, it is impossible for us to be in any higher degree. SC and GSC degree forecasts will mean nothing as  those numbers, is just a number picked out of thin air.  Forecasting doom and gloom is designed to strike fear into investors’ hearts, so they can sell more subscriptions. 

I have seen wave counts in the DOW starting with the peak of 1929 which has about 9 locations with unknown wave positions labeled on it,  yet it is a very popular site.  All it takes is one questionable wave count in our past, but nine?? Give me a break people!!

For those that just love to take the SC and GSC degree punishment, then my site is not for you. I maintain about 10-15 Gold/Ratios which is a big help when we have to judge when some asset class is expensive or cheap.   This morning the DJIA reached another record extreme at 19.27:1, which means it takes 19.27 gold ounces to buy one unit of the DOW, and it is the most extreme expensive ratio that I have calculated out. On the cheap side of the DJIA,  we need to get closer to 7.19:1, which may still take about 3 years. 

 

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DJIA 2000-2017 Review

I review the past more than other wave analysts do because we always have to check that everything remains in sequence to the largest degree. All the idealized charts are posted and online. The professional wave analysts do not do this so everybody thinks we are in extended 5th waves. This creates bearish fundamental forecasts of doom and gloom that will never happen. One such bear market forecast is that the DJIA will hit the 5000 price level.

There is nothing at this 5000 price level to offer support, so that number is just a number picked out of thin air. In the case of this DOW chart, wave 3 and wave 5 were the two extended wave’s, while wave one was a bit smaller.  I used the simplified version of 5 waves up in Intermediate degree, except for the last 5th wave which I turned into an ending diagonal.  

These vertical runs never last, especially if we get a Cycle degree 4th wave bear market.  Just a simple Intermediate degree correction would take the DOW below 16,000. We could see another big rally at that time, but eventually the DJIA will fall below the 2011 lows, of 10,000.

Can the entire sequence be wrong? Sure, it can but how wrong were they in 2009 when they said DOW 1000 was coming! Many believe that fundamentals drive stock prices, but that has never been true. At the 2009 bottom, where did it show, that fundamentals drive stock prices.  Even during the great depression the DOW created a “V” like bottom totally ignoring fundamentals as stocks started on a 5 year bull market. In 1975 stocks imploded as well, with investors being very bearish, yet the market turned and soared until 2000. 

Since 2000, we have been looking at 3 peaks, all containing wave 3 tops. These wave 3 tops must all be in sequence in a Cycle degree  extended wave three.  Since the 2002 bottom each 5 wave bull market has increased by one degree, so the next big bull market must have 5 waves up in Primary degree.   When the DOW is at 24,000 it is an easy call for DOW 30,000, but when the DOW is sitting at 7000 or 8000, then DOW 34,000 will be my call. 

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Mini DJIA Intraday, Crash, Bang, Boom Review

On the exact date of the 30 year 1987 crash, the markets did crash, but then turned around and soared to new record highs again. I’m sure that many market bears were already shorting the markets, but many of their stop loss orders were triggered. It seems pretty ironic that the markets moved the exact opposite way that many 1987 crash watchers were thinking.

I had to move my smallest degree levels up one degree which extends this insane market a bit more. Did we just have a mini violent 87′ crash? Maybe, but many 4th wave crashes also give us a warning, with the only difference being what degree level we think we are working in. Sure the 1987 crash was a big deal at that time, and most wave analysts called it a Primary degree 4th wave crash. If we look back in chart history the 87 crash looks like a little bump compared to what we have had since the peak of 2000.

Once all the markets have been extended, the 1987 crash was a  Minor degree wave 3-4 crash, which is a full 2 degrees lower than any Primary degree crash. A 2 degree difference,  can throw any wave count out by 2.618 times. Worst of all, the wrong count for the 1987 crash pushes us into SC and GSC degree wave counts much sooner than we should be.

After the 1987 crash the markets soared as a 5th wave extention, that turned into another stock market mania. As I post the markets are still pushing higher  so this rally still wants to head up.

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Mini DJIA Intraday World Record High Update!

In the last day or so the futures market was still active. This morning the DJIA made another violent move to the upside and then instantly reversed and started heading back down. This wild swing produced a DJIA high of 22, 799 so far. I like to see reversals like that, but we have seen quite a few other reversals in the last few months, and the markets pushed higher after each reversal.

We need the markets to go down longer and with a lot more conviction before a longer and bigger correction shows itself.   Any previous sideways pattern can become support,  but those are all very small wave degree levels. I like to see the DJIA drop below the 22,680 price level for starters, but ultimately the entire October rally must eventually get retraced.  I show the wave count as an impulse type wave, but skipping one wave is about the same as diagonal wave counting.

Yes, the VIX joined in as fear returned to the market place, but the VIX now has another big gap open below. If this gap in the VIX still needs to get closed off, then only time can answer that question. The 10th of each month can produce turning dates, and the only question is for how long this spike will hold.

Virtually every stock index that I cover, is recording new record highs today.  From my perspective, you can’t get better synchronization than that, at least in the short term.

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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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Mini DJIA Intraday Eclipse Results

From my perspective, it sure looks like the markets just loved the solar eclipse, and it totally ignored the new moon date as well.  The market seems to be on the verge of completing one set of 5 waves, so the next few corrections will be important to see if this bullish phase carries on and breaks a new world record high, with this DJIA. 

It can do this so violently and fast, it will make our heads spin. At 21,808 we are at a bit of a resistance level  of a previous bottom so anything is still possible in the short term. Other indices have been leading the way down and they may not join in with any stock party still going to record highs. The bullish reporting of  the DJIA and the SP500 masks the lethargic performance of the Midcaps. 

At 21,850 the DJIA will run up against another trend line and resistance price level, so there are a few hurdles thrown in the way for a smooth sailing to a new record high. We have about 7 days left to go before the end of the month and the full moon date, so this market should give us a better directional signal in the next week or so. The sooner  the markets do break down to a newer low the better I like it, as we need more evidence that any decline will be maintained. One single wave count will not do it. 

Longer term, this bull market is finished and what we are getting, is just window dressing to keep all the stock bulls trapped.  In 2008 it was the exact opposite as early 2009 was just window dressing to keep all the stock bulls out of the markets. 

Markets can turn on Wednesdays so we have to wait and see if this bullish leg dies this week. 

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Mini DJIA Intraday Crash Update.

So far the August 8th peak has retained its position as the counter rally threatened to push to new record highs. The rally started like a 5 wave sequence, but then the markets proved that it was not.   The DJIA has now completely retraced the August rally and it should continue.   This time I started with a zigzag in Subminuette degree which will get bigger over time. 

When we get closer to any Minor degree wave 1 then it will be important to adjust. We really don’t know what we are going to get but a big flat is at the top of my list. It would be sic if any Cycle degree flat turns into a running flat or even a regular flat. 

An expanded flat is not ruled out, but it should be the “B” wave in Primary degree that can poke its peak to new record highs. 

My Cycle degree wave 1-2 (1938 1942) was a zigzag so I don’t want to see another Cycle degree zigzag. We are going to hear all sorts of bearish news come out as the market keeps declining. We can flip a coin which bearish story may dominate, but the majority will never see it coming. 

The writing has been on the wall for sometime already, and it is only the majority that figure that this market has no end. 

It is still early in the game as weekly and monthly charts have barely moved. Any higher degree correction should get us below the November, 2016 price, after which we may have the formation of a better defined pattern. 

The VIX is also hovering around the $15.50 price level, which closed one of the biggest gaps still open. As usual, new trend swings can raise havoc with extreme swings in both directions, but most of all we want to see the August, 8th hold. 

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Mini DJIA Intraday Rally Update

The DJIA is charging higher to the point that is turning into a potential 5th wave.  The drop from record highs sure can fit into a zigzag, but zigzags are always found in the diagonals  as well.  To help confirm this little potential 5th wave, then we know the DJIA must set a new record high this week, or early next week. 

If this rally falls short of an obvious new high, then a diagonal wave 2 count could form.

 One of the most successful hedge-fund pros says we’re ‘nowhere near an overheated’ stock market – MarketWatch

Who are we to argue the point that this market is not overheated. We have all heard this story, but I place no confidence in a market where insiders have left long ago. The majority of investors just loves to buy high, but they also sell out at the bottom in disgust. Buy, High, Sell Low is what the majority do all the time and the seasoned contrarians know this instinctively. 

Many may think that the 2008 market crash was a one in 100 year event! Don’t believe that crap as the FED  is responsible for the 2008 crash in the first place.

  The real truth about the 2008 financial crisis | Brian S. Wesbury | TEDxCountyLineRoad – YouTube

Here is a good honest look at why markets crash and what saved it at the bottom. 

As I post the markets are still pushing higher so for the rest of the week the markets could remain bullish. 

The VIX is bouncing around, but gaps are opening up in both directions. I don’t remember the last time I had this many gaps all congregate at near record bottoms so it must be a good bullish sign for the VIX.  

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Mini DJIA Intraday Rally Update.

The DOW is in a rally where it too has started to dip into the previous wave two of  the “same” degree. When it does this, then instantly the impulse wave count must be thrown out and diagonal wave counting used in its place.  I get into the habit of always starting with the three smallest degrees, which can easily be adjusted as the sequences get bigger and bigger.

With a potential Cycle degree wave 4 bear market, it will be important to eliminate all the simple corrective patterns as much as we can.   We always have 5 choices we have to make but a bearish correction can know that down to 3 choices.

The odds of some 20 year triangle are the least of our worries, as big triangles are actually pretty rare. Very messy diagonal waves are far more common, which can happen if the first bear market pattern is a zigzag.

Since the DJIA has developed a single zigzag crash, it would be logical to assume that a new record high will happen. Any diagonal start will toss the bullish ideas right out the window.

This potential diagonal wave 2 up can keep right on going just like if it were an impulse wave 2, but it would have to end well short of a new record top. All those pretty retracement ratios are useless if we don’t know from which peak and which degree we are counting from. Retracement levels sure didn’t work in early 2009, as most expert wave counters only saw DOW 1000 on their minds.

I will not be satisfied until that record DOW high we see above, can no longer be exceeded this year.

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Mini DJIA Intraday Crash Review

The DJIA has performed a nice swan dive worthy of an Olympic Gold medal. The only thing wrong with it, is that it’s too small. I started my wave degree with a Micro wave one, but will adjust once we approach any wave 1 in Minor degree. With a Cycle degree decline containing a 3 wave flat, then the first wave could be a zigzag or a single 5-3-5 pattern. The markets will do everything in their power to give as a far more complex wave structure than what is drawn in the EWP book.

Many of the  high degree wave analysts may be starting off with 5 waves in Primary degree. When you do see any wave counts start with  5 waves in Primary degree, then you will instantly know that they think they are in SC, or GSC degree. Since the 2000 top, there was “never” a single wave count, where any 5 waves in Primary degree has ever developed. They tried it from the 2000 peak and then again from the 2007 peak, and in both tries they failed miserably. Nobody will ever convince me that any SC or GSC degree top has ever been reached anywhere after the 2000 peak. 

If we are really lucky, then maybe by 2029, we could see the end of SC degree wave 3 followed 100 years later with the GSC degree wave 3 top!  Of course majority of  the world experts have assured us of unprecedented man made climate change destruction, so if the expert group thinkers are right, then the end of the world will be, at the GSC degree wave three top in 2129.

I will be fertilizing the ground 6 feet below, long before that so only wave analysts that haven’t even be born yet, will experience it. 😯

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Mini DJIA Intraday New Record High Update

The DJIA has been in the business of constantly pushing to new record highs, Some analysts have counted close to 40 new record highs that have been broken. What else is new?  Since the 2009 bottom we have been in a record bullish phase that eventually must fit into the Cycle degree sequence that I have been working on.  Wave zero of this  Cycle degree set of 5 waves started in 1932,  along with many other commodities.  Many analysts are very bearish on stocks, but they are only a small percentage of the opinions. Some are expecting a 1000 point drop, which equates to little more than a honey bee sting. 

This morning the DJIA reach a new record of 22,136 before it turned south again. We now have a single point we can count from, but we have to be aware that there may be another real wild correction. A 1000 point drop will take us well below the chart you see above. 

In a Cycle degree correction 1000 points will just barely wake up the bears, never mind completing a big correction. I’m sure when the DJIA hits 8000 or less, then this will get the full attention of the bears. 

I have no clue what fundamental reasoning that the analysts will brainwash us with, but from my perspective, it is the intensity of the news that is the key for any market bottom to start to form. So far the decline looks impulsive and hopefully it will continue.

One single contrarian indicator that will have the most power, is insider buying. This market will be oversold long before the real bottom hits and insider buying gives us the public information for a big major bottom to form.  Steven Jon Kaplan is very good at tracking insiders and cash flow, so any reports that come from him are extremely valuable. 

Insiders don’t buy on a whim, and they sure don’t sell on a whim. They can hold for many years after they have bought and if wave analysts refuse to look at contrarians indicators, then they will miss another major bull market. Combine insider buying with the start of solar cycle #25, we could get another 8 year bull market. 2029 would get us to a potential SC degree wave 3 top that a much younger crowd of wave analysts would have to confirm. 

Wealthy investors need much more lead time to establish major bullish positions. The EWP  has turned into a short term trade setup tool, which caters to the emotional traders. Getting stuck with only a token position in a major bull market will never work for contrarians. Some contrarians can have several millions that they have to allocate at the next major stock bottom, and this is what takes time to execute. 

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DJIA Weekly Chart 2009-2017 Review: Time To Get Into The Stock Market?

A third of millennials think now is the time to jump into the market – MarketWatch

Since the 2009 bottom as the majority were exiting from stocks as fast as they could, insider buying reports were flooding the internet. Insider buying was a very important key contrarian indicator that the market crash was coming to an end. Insiders don’t buy their own stocks on a whim, and they never buy as a short term trade. Once they buy, they can hold onto them for many years before they think their company’s share price is out of line with reality. In late 2008 and early 2009, the majority of all experts were still looking, for the markets to go much lower.

Many expert Elliott Wave analyst, were still calling for DOW 1000 as the majority all had the 2009 bottom as a wave 1 in Primary degree. What this meant was that all wave counting experts were in sympathy with the majority of investors.

In hindsight, the wave 1 in Primary degree failed, as the market charged higher. Nobody was screaming in late 2008 and 2009, that a major bull market was on the way. My favorite contrarian sure called it correctly in late 2008, as Steven Jon Kpalan coined the phrase, “Biggest stock market rally since the depression” was on its way.  This was in direct contradiction to all the bearish wave counts produced by expert wave analysts of the day.

The 2009 bottom was not a failure of the Elliott Wave Principle, it was the failure of analyst not going back in history to double check our work.

When we use too high of a degree we become very insensitive to the markets, as we are always waiting for the next big move lower.

This morning the DOW peaked at about 22,055 but it does not mean it can’t still go a bit higher. We will have to wait until next week before we can become more certain. One thing we do have at this record top is a wild and choppy pattern, that works best as a diagonal wave structure. In 5th waves is where we find the diagonal waves, but we need to know what freaking degree this entire movie has been. Five waves up in Intermediate degree would finish off this bull market, and we should expect a Cycle degree wave 4, bear market.

At this time I’m looking for a Cycle degree flat that must divide into 3 sets of waves. (3-3-5)

I made this chart a day ago to show readers where we are after an 8 year bull market. I kept the wave count as a simple impulse, but in reality it is a diagonal 5th wave. From the 2016 bottom stocks charged up in a near vertical move that can never be maintained, yet many think this is a good time to get into the stock market. What? You got to be kidding, after an 8 year run, and leaving a 338% gain on the table many see it as the place to be?

I cannot stress it enough that when we ignore past history, we are doomed to repeat it. Since when does buying in at the peak of a major bull market, sound like a good investment strategy?  That may work if you live on Mars, but it will not work on earth. I use 3 simple corrective patterns from an idealized wave count to figure out how deep a Cycle degree 4th wave could go. I’m pretty sure we will hear about DOW 5000, 3000 and even DOW 1000 forecasts in a few years time, but is this reality? 

The 2007-2009 crash was reality and it retraced the entire previous 4th wave of one lesser degree. The same move now would put the DOW right back down to 6500, and even a bit more if it wants to. Markets have a bad habit of always making moves that the majority do not expect. The markets could fall just short of the 2009 lows in a Cycle degree crash. 

The first thing that has to happen is the 4th wave in Intermediate degree must get retraced at the 15,000 price level. 15,000 would just barely get the bears warmed up as it would be just like a bee sting in the big scope of things. There may be temporary support at 15,000, but ultimately the markets will have to fall below any 2011 lows at the 10,000 price level. This would retrace the entire “Stock Maina”  bullish phase, which I have talked many times.

When this starts to get close in a few years time, the markets will already be in a massive oversold condition, but the real bottom would still be 2000-3000 points away.

A massive bubble can only be seen with long term charts and I like to display them in linear style to show how insane this market really is. Markets may look insane to the season contrarian, but to the majority buying high is normal behavior. 

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Mini DJIA Intraday New Record High Review

This morning the Mini DOW broke all records again, as it pushed through to the 21,734 price level. It has backed off a bit already, but we have to keep an open mind, that this market still has some choppy moves left before a bigger correction should take hold.  

There is an ugly wave that just does not fit well, but we know that diagonals are in progress which can contain many inverted zigzags. A few small degree impulse set of waves also shows up from time to time. Some spikes we see do not show up when we switch to a line type chart, and that usually produces different wave counts that are critical. 

Any new record high, can be the last record high and we would need a fairly big correction, before we can kill off any bullish wave count.  Many of the other indices joined in pushing to new record highs, so it was not just one single index.  

I will keep the commentary short as there is nothing earth shattering that has happened. If we had a sudden 1000 point drop in the DOW, now that would get all the bulls really agitated and nervous. The VIX also created new record lows, with another spike and gap, so we have to see if the VIX has a bit more bullish staying power.  All those VIX bears are in a bear trap, which the COT report should show when the report gets published on Friday. 

Until this all clears up, I will remain very bearish, in the short term and longer term as well. From 1929 to 1932 it only took 3 years to complete a SC degree correction, so why should a Cycle degree correction take much longer? 

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Mini DJIA, Another Intraday Record High

This morning the E-Mini DJIA recorded another new record high, topping at 21,640. After the spike, the DJIA started to back off in a violent reversal. This is the type of a violent move I like to see happen when a run ends, but we need the peak to hold before I’m completely convinced, that another major peak has finished. 

This DJIA needs to break below 21,440 to be a bit more convincing, which may take the rest of this week to play out.  Another small wave 2 rally may be in progress, which should not soar to new highs again.   The VIX also declined to another record low, which closed off a very big gap that formed on its last spike up.  The SP500 also followed through establishing another new record high, near the 2478 price level.

The Gold/Dow ratio moved above 17:1 again, which means it takes over 17 ounces of gold to buy just one unit of the DJIA. (Very expensive) The ratio has gone above 17:1 several times before and it seems to have great difficulty getting past this number. This ratio is a big reversal from when it only took a bit more than 7 ounces to buy one unit of the DOW.   

We have about 4 trading days left before the end of the month, so in the short term anything can still happen. Longer term this market is going down, with a Cycle degree correction, which will eventually be called a bear market by the majority.   With a potential correction being a Cycle degree,  I’m sure we will see a recession. How severe this recession will get is unknown at this time, but any recession will end with the start of the next solar cycle. 

I’m a firm believer in cycles as nothing has ever travelled in a straight, long trend line. Even light can bend, and it certainly can travel at different wavelengths.  We are about 3 months away from the 30 year anniversary date of the 1987 stock market crash, and I like to think something obvious will happen close to this time frame.   Of course markets will always disappoint the majority when they least expect it, so the 30 year time period may be a real dud. 

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E-Mini DJIA Intraday Gyrations Review

For the last month or so this September contract has produced some very choppy waves. It is only pure luck that a single true impulse will form, and when it does it is very small in scale.  Even now, this market can still soar to new record highs keeping the majority trapped in their bullish positions. This market would have to show us much more downside before, we can be past the point of no return. In other words I’m looking for the last high that no longer gives us the time to produce another record high this year.

Just  to get started any decline would have to pass the spike we see close to the last days of June.  Eventually this market will take out or retrace the entire Trump rally, but that may not happen until next year. Any 5000 point decline is not going to happen overnight, as they would stop trading first, when daily limit circuit breakers kick in.

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