Any rally we have had in the last 3-4 trading days sure doesn’t fit into any impulse as it is just too choppy to justify counting it out as an impulse. I would love to see this chart go a bit higher as that would completely retrace a small zigzag that hasn’t been completely retraced yet. Many times they can turn into running zigzags as well, but it will be a tough call either way. We should find out in a few more days or closer to midweek what is going to happen. The experts have just noticed that no new record highs have formed in 50 days as they seemed to be paralyzed in making a bigger bearish call.
They also have been bitching about the extreme volatility in the markets, which they think is not normal. It’s normal in a bear market, but bull markets tend to flow much smoother. All I can say is, “Take A Pill”, volatility is just getting started.
If we’re lucky the January 2018 peak of 2880 will be the high for the 2018 year and even hold for the next 3 years. Many bear markets in the past have ended with years ending with a 2, like 1932, 1942, 1842, 2002. My GSC degree wave 2 ended in 1842 but it took 8 years to decline. SC degree wave 2 only took 3 years to decline, so any Cycle degree decline will be about the same or even a bit shorter.
Bare minimum the SP500 has to retrace the 1800 price level, but that could be just a temporary resting spot in a long bearish decline. Many are using the trade wars as an excuse for the markets decline, but trade wars act to slow in a digital world. The Cyber warfare going on is attacking the US infrastructure on a regular basis as hacker groups and unfriendly governments attack the US. There is far more power to destroy from the Internet as groups can go viral virtually overnight. Chinese net users call for US boycott over trade clash – Nikkei Asian Review.
Trump may think he has the power to wage economic war with other countries like China and Russia, but all they have to do is devalue their currency and the trade war would be neutralized. We can have crashes without any bear markets (1987), but we can also have initial crashes which are then followed by a long grinding bear market.
The 1842 GSC degree wave 2 decline and bottom, were just grinding declines acting more like a set of 5 waves than a zigzag. I already have produced the template for such a decline as I explore a few of the options for a Cycle degree corrective pattern.
Bear markets have a nasty habit of retracing back down to the previous 4th wave of one lesser degree, but if the degree is wrong, then how do we know where the previous 4th wave of one lesser degree even is? Most of the time bull markets will retrace deep into the previous 4th wave, and sometimes even push a bit lower. Something that may seem normal in the Elliott Wave world, would be considered insane by the majority, until it happens.
The SP500 previous 4th wave low has a gully around the 666 price level, but it may stop well short of that at around 700 or even 750!
Most of the world indices like the Nikkei, Shanghai, Nifty, and the DAX are all in the same fleet of boats, that are already sinking. Like Steven Jon Kaplan said, “The object is not to find a safe cabin on a sinking ship, but the priority should be to get the f$#k off the ship”!