I spent many years learning how to count by following all the other wave analysts who were counting wave structures in Grand Supercycle degree (GSC) and in Supercycle degree. (SC) SC degree always comes before GSC degree, and Cycle degree comes before SC degree. The waves we see in the real world are the simple, easy waves that any wave analyst can count and label with little trouble.
The EWP is a very subjective look at the markets from a GSC degree perspective, and all the practitioners that bought the EWP book have been taught to look at the markets much the same way. After many market failures, and missed bull markets, I decided to knock down all the degree levels by one degree, which at that time moved everything into the SC degree world.
Things started to make more sense but still it was not good enough, because I always had too many degrees left. It also never matched anything that the contrarians were already doing. This became very obvious after the 2002 and 2009 bottoms, as the experts still had very bearish wave counts at that time, while all the contrarian indicators were telling us otherwise. In hindsight, most wave counters were working 5 waves down in Primary degree in 2002 and 2008, yet both of these wave counts failed dramatically.
The EWP is not about what you see and what we think we can see in the markets, the EWP is all about how we visualize and draw out the 5 simple patterns, and knowing how they fit together sequentially.
To understand the EWP from my perspective, I see the EWP as one big impulse wave, with all wave three positions being the longest waves. This one big wave structure started with a wave zero, after the ice age was ending, about 13,000 years ago or about 11,000 BC.
This is a pretty specific time period, and it is when the CO2 content in the earths atmosphere, crossed above 240 parts per million. It is when plant life started to grow dramatically and agriculture started to spread around the world. Better farming methods, warmer climates and higher CO2 content in our atmosphere help support commercial farming, which was the only way that city states or empires could grow.
All the big civilizations grew during a high degree wave one position, with periods of (Global warming). Civilizations, then died or were cut down during the big wave 2 declines, which coincided with periods of (Global cooling) Submillennium wave two can fit into the Dark Ages very well after which GSC degree wave one also formed in the 1800’s This massive singe impulse wave structure is based all on the waves starting with a 1-2 count.
In other words, Elliott Wave 5.0 is based on all waves coming from a wave 2 base with extended wave 3s, and is “NEVER” based on the 5th wave as being the longest. Yet, when we look at all the expert wave counts out today, most of them are based on the 5th wave as being the longest wave. The worst of these came after the 1929 peak, as they were all convinced that the 1929 peak was in fact a wave 3 in SC degree.
I fell into the same trap and it took me a long time before I changed 1929 to a wave 1 position in SC degree, which made 1932 a wave 2 bottom. 1932 is the start of wave zero in Cycle degree, from which another 1-2, 1-2, and 1-2 base started from. In the 1950’s it was wave 3 in Intermediate degree that was extended, pushing wave 1 in Primary degree to the 1960’s and 70s. It is also one main reason why the 2007-2009 decline contained no expanded pattern.
One huge single impulse wave structure eventually gets to the half way point, which is when it hits a Minor degree wave one in a Primary degree wave 3 impulse. If the 2000 peak is too high of a degree, then we know that the past wave 3 has not been extended. I can dream up virtually any wave count you would like, and the higher the degree the more impressive it may sound. The sad fact is, that what you see are actually much smaller degree levels. Big and tall, does not make them higher degree levels, as it is the smaller degrees that become visible when markets extend.
With wave two bases, eventually only the waves 3-4-5 are left to play out which is the situation in the DOW chart above. Intermediate degree wave 3 in red peaked in 2000, followed with the wave 4 bottom, and the wave 5 peak in 2007. The 5th wave subdivided into 5 waves as it should, and in this case must be 5 waves up in Minor degree. This theme will repeat itself over and over again growing by one degree each time. This will be important to understand as any 5 waves after the Cycle degree 4th wave bottom, must follow in sequence as well. In other words, we must get 5 waves up in Primary degree, to keep everything in sequence, which will eventually terminate at wave 3 in SC degree.
SC degree wave 3 may take until 2029, before it gets close to finishing. After the SC degree wave 3 tops, and then the SC degree 4th wave bottoms, what is the wave pattern we must have, before we reach any GSC degree position? We must get another 5 wave sequence, which must be 5 waves up in Cycle degree. At this rate any GSC degree top may still be a 100 years away.
As I have mentioned many times, I hunt and track the 5 waves in Cycle degree, as it precedes all SC and GSC degree wave patterns. Without all the Cycle degree peaks being found, no SC or GSC degree can have a base to build from. All SC or GSC degree price forecasts mean “nothing” in a Cycle degree world, so the next time you hear DOW 5000 or DOW 3000 being mentioned, chances are good you will be left out of the markets holding a bag of wooden nickels.
That 2009 failure to forecast a super bull market should never have happened, as any failure of this type of wave counting is not an EWP problem, but it’s a human problem. The failure to go back in time and fix any non extended wave structures, must be initiated as soon as any large degree wave structure fails.
Of course, that’s too much like work, as it is easier to cosmetically change any wave position, rather than going back a 100 years, and change the basic structure.
The above template is specifically meant for a Cycle degree flat correction, followed by 5 waves up, with an extended wave three. 2017 may give us the Cycle degree wave three top, so the readers to this blog will need this template for the next few decades. With a few changes like a potential zigzag, this same template can work for the Intermediate degree wave 3 peak in 2000. Change it again to Primary degree, and this template will work for wave 3-4-5 from the 2007 peak as well. The corrections will be alternated and may be a very fast moving zigzag and not a flat. The idea with any template is to build, and get all the degree levels and their wave counts memorized, so we never have to look into the book again.
The EWP book only shows us nice pretty waves all the same size, which never happens in the real world. Waves are never even and they are never always impulse waves. Diagonal waves are a big part of any wave structure, but most wave analysts just ignore them and turn everything into impulse waves.
If I dig pretty deep into my inventory of templates and idealized patterns, I’m sure I have a SC degree wave 3 all drawn out already. Of course, all the wave counts will end, or even disappear once we enter another ice age.