S&P Midcap 400 Review

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

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

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

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

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

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

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

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

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

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S&P Midcap Death Cross Update

Investors already got a good taste of what a Death Crossing can bring. The 50-day MA has crossed the 200-day MA in this daily chart, which they call a “Death Cross”. Many have no clue how damaging a death cross can be, but we have plenty of examples of real-world bear markets imploding after the death cross. If the wave 2 in Minor degree has completed then the wave 1 price support at 1769, will definitely not hold.

Looking for 5 waves down is my first choice but we are still a long way off, before wave 3-4 in Minor degree arrives.

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S&P Midcap Daily Chart Crash Update

 

My wave 3 in Cycle degree peaked back in January of 2018, not August of 2018 like the herd of analysts are telling us.  When the media is calling for a potential buy on the “dip”, then they have no clue how big this impending bear market is going to get! The stock mania has already ended folks, as it ended in January 2018. This secondary peak the markets struggled with, belongs to the bear market, as it is an expanded type of a top. Expanded tops are not strange or rare as they can happen in other wave positions as well, like in a wave 3-4 correction.  I could type until my fingers are “raw” explaining the expanded pattern, yet very few wave analysts can even see them.

5 waves down in Minor degree, is what I’m after, and I don’t think we are even close to any potential wave 1-2 position in Minor degree.  We can see how emotional traders really are as all those bulls are now being slaughtered by the stock bulls. If we hear the words “Support”, then ask yourself, “Support for what”?  Some flimsy price level created from a shape-shifting top will throw all wave counts off, and that is only if wave analysts are even close in their wave counting positions!  This is not a GSC, nor SC degree peak, as SC degree is still decades away, in your future. The impending bottom could be closer to 2022, so we have lots of time for this bear market to shred all bullish investments.

The 2008 crash was just a small example of what can happen, and if investors think, it can’t happen again, then they will be wrong and pay dearly for it!  Many experts are telling us to invest for the long-term, and stay the course!  How did that work for stock investors in 1929, 2002 or 2008?  From the 2009 bottom to our present peaks, MidCap investors would have gained 500% in 9 years.

Now they are trying to beat the market, but as usual, the markets will “beat” investors to a pulp.  Are you ready for a 70%-80% correction? The trick of buying on the dips will not work if we don’t know that we are staring into the Grand Canyon. There is a generational shift in effect which will cause the price “deflation” of assets, but the media calls “price deflation a market correction”.

Sooner or later they will start the “blame game”  as they always have to find a scapegoat for investors troubles! If you want reasons for the markets decline then just do a little research in what the “Boomers” are doing. Since 2011, 10,000 “Boomers” have been retiring every day and do you think they will leave their money at risk if they knew about the generational shift?

All those boomers retiring, do you think they can brag about selling at the top? Nobody I know of can tell me that they have retired with all their mutual funds intact paying them during retirement.

seen some “Unusally” high amount of visits, to the point I registered over 7000 hits in 24 hours.

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S&P E-Mini Midcap Stocks Update

All the January 2018 gains this market has made, have now been wiped out,  joining all the other electronic bits and bytes in the great digital graveyard 6 feet under.  Of course, many Bitcoin remnants are down there as well. What the majority once thought was real money,  has now started to evaporate.

You can bet that a big cluster of sell stop orders are congregating,  just below present prices and they will get triggered on the next leg down. Buying on the dips is a one way trip if the little expected dip turns into the, “Big Dip”, like 2002 or 2008.

This market has broken many records on the way up, and I’m sure it will break many records on the way down. One record saw the biggest one day point drop in history.

At the very minimum this Midcap chart should fall below 1200 which will take out my entire 5th wave which Trump takes credit for. He will also get the blame for any stock market crash that will come down the pike in the next few years.

If this is to come true, then my bottom trend line will get sliced in two, sooner than later.  It’s not rocket science to draw trend lines that everybody can clearly already see, because if you don’t see 2 or 3 points to connect, you are in the wrong world. Trend lines are so abused by the majority, that they look like a bunch of kids playing with rulers. Trend lines sure did not help in seeing the biggest bull market in history coming, so it sure will not help now in seeing the biggest bear market since the depression.

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Midcap 400, ETF Review

 

Fools rush in where wise men fear to tread, means nothing to the emotional investor. News of funds pouring into the stock markets is also a contrarian bearish signal. Markets seem to crash after buyers take a break.  I thought I would add this ETF, as it will be useful at the next bear market bottom.

The bull market from the 2009 bottom has gained 500%. Investors left those gains on the table before they decided it was a good time to jump in. They love stocks when they are pointing up, but will come to hate them once Cycle degree wave 4 arrives, and stocks are pointing down again.  Most bullish phases will be 5 or 8 years long where 300-400% gains are pretty normal. The 5th wave gain from 2002 to 2007 was only a 236% gain with 5 waves in Minor degree. 2009-2018 was a 500% gain and this was 5 waves in Intermediate degree.   In the future we will get 5 waves up in Primary degree so I’m sure we will get 500% or more gains at that time as well.

Around the $40 price level a second bottom was created in 2008 which has become a very powerful base to build from.  The EWP is not all about counting waves, but it also has to include counting our idealized waves for each successive 5th wave bull market. We had a 5 wave run in Minor degree and then a 5 wave run in Intermediate degree, with the next single 5th wave run being in Primary degree. (2021-2029) After 2032 we should run into 5 waves in Cycle degree.

My Cycle degree wave counting method came about because the majority of expert SC and GSC degree wave counts come from 4th wave bases.

This can’t happen folks, because there is no such thing as a multi generational 5th wave extension. Maybe when we get into the 5 waves in Cycle degree, we could see that it might be two seasons long. One season can be as long as it takes the solar cycle to flip completely from a top to bottom, and then back up to the top and then down again. (2000-2021)

Of course, all those forecast into the future will be beyond my time, and for it to get confirmed others would have to carry on the work.

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

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

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

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

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

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

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

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

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

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

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

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

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

Investors are pouring record amounts of money into stocks

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

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

 

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E-Mini S&P MidCap 400 Index Bull Market Review

This is the cash, futures price chart, expanded to a weekly chart with 1500 bars. I kept the wave count fairly simple, but the most important question is, “what degree and pattern is our present bull market”?  Starting back at the peak of 2000, we had a sideways, and then a fast down move which is a flat. From late 2002 to 2007, the markets gave us another bullish phase lasting close to 5 years.

By mid 2007 this market was ready to implode, and sure enough the world was embroiled in a financial crisis, which it’s still trying to recover from today. I have the early 2009-2018 bullish phase as 5 waves up in Intermediate degree, terminating at a 5th wave in Primary degree.

If this 2009-2018 rally suddenly becomes a 5 wave set in Primary degree, then anyone with this wave count has transported themselves into the future a long time ago. One simple large degree being in the wrong place, can move us around in time by 100-200 years.

Moving wave positions around with no respect for the sequential math involved, is the fault of consensus analytics, it’s not the failure of the EWP.

If our wave counts cause us to miss complete bull markets, then it’s “high time” to throw out our original premises and start again.  The general guideline I use is, “if a Primary degree 5 wave set fails in any direction, then at a very minimum, you have to completely recount all wave structures going back two higher degree levels”.

A Primary degree failure must force us to review all past SC, and Cycle degree positions. Any kid with a hacked EWP book can baffle us with the mindless use of numbers and letters. What good does trying to count all the mini, mini, micro mini wave structures, if we end up missing an entire 8 year bull market? Sure, I count the small intraday wave structures, but I do that with my finger pointed at the screen or from a printout.

In the next 2-3 years, it will be important to recognize a large “ABC” pattern when it starts to finish, as after this “ABC” pattern has completed, another 8 year bull market would be ready to rise from the ashes again. Below the 2011 low of 400, is the minimum retracement that we would need. More downside than that is not a problem for any impending bear market. I like to be specific in what I must have or must get, so it becomes easier to notice early when we are wrong.

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S&P Midcap E-Mini Record High Review

Since the mid August bottom this mid cap cash, futures chart shows a bullish leg that moved vertical in the last few days. A vertical move and new record highs, is a clue that, at a minimum,  a correction is coming.  The million dollar question is how big of a correction, we should expect.  A Cycle degree crash is still a correction, even if it loses 80% of its value.  

It is the majority of analysts that will call it a huge bear market, but they will not find out until everybody parrots the same consensus opinion over and over. Until this chart takes out or slices the bottom trend line we will not know for sure that a big bearish phase is already in progress. 

Every decline I start with, I look for a set of 5 waves, because they are pointers to a new direction. I already have the idealized wave count up for a Cycle degree correction, and most markets may stop well before any 2009 lows. If you are still super bearish by that time, then markets will leave you in the dust, as the solar cycle #25 bull market starts. 

Nothing that hasn’t happened before, as 2009 is a perfect example what the upswing of solar cycles can do. 1932 was also the bottom of a solar cycle, so it has happened many times before.  

We can still have a full 3 years for this mythical correction to play out, and investors will be fleeing the markets in fear. I’m sure the markets will be in an over-sold condition long before any major correction finishes. 

When the conditions are right then insiders and the seasoned contrarians will be the main buyers. Insider buying of public companies must be reported, so this is not some secret information available to just a few people. 

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E-Mini S&P MidCap 400 Index Intraday Record High Update.

Since mid August 2017 this Midcap 400 index soared to new record highs once again.  So far the tops between all the other indices are fairly well synchronized. That also means then can crash together when the time is right.    A steep run like this is not normal as bull riders just want to pile on because it is going up. Most of these moves have little to do with fundamentals, but have more to do with chasing a bull market. Retail investors just love to buy high and ride the extremes, but as history has shown us, no trend ever lasts.

Single vertical moves always run out of steam and the very least we should get another strong correction. We have many open gaps below so all these gaps make for a great target price. I would love to see 100% retracement of the entire 5th wave rally, but that would act just like a bee sting. We need a big correction that will cause the majority of analysts to wonder what is happening.

How deep can a Cycle degree 4th wave go? I will be surprised if the Midcaps don’t fall lower than 800. This would take the next 2-3 years to play out and the markets have to give us a clear sign that they are ready to do so.

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E-Mini S&P MidCap 400 Index (EMD)

This S&P Midcap 400 has also pushed to newer highs but is still far away from breaking any new world records. We were about 44 points away from an upside breakout, but in the process a few critical waves overlap that makes them next to impossible to fit into an impulse wave count. By early next week we should know more if the Midcaps breakout.

I’m staying with my starting degree level, but a new breakout would definitely change that. If this is part of a counter rally, then without a doubt the Midcap 400 must still crash below that 1685 price level. This week should be the end of the September contracts, but the December contract looks ugly at this time. I will see how December looks, in the chart detail it gives me, but I may have to stop the wave counts on this Midcap for awhile. 

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