Elliott Wave 5.0 "Reboot" notice!
I am going to make changes at Elliott Wave 5.0 "Reboot", with a two week slow period between Dec 22, 2013 and Jan, 3, 2014
I will be reducing all my postings during that time, but only post some year end, and other long term reviews in Cycle degree.
I will also be reducing or even dropping all Elliott Wave analysis in the SP500, Russell 2000, Mini Nasdaq, and most single issue stock analysis. I will keep Elliott Wave analysis with the Mini DJIA and my regular commodity and currency updates.
One main reason I will be dropping the general market analysis is; There is a unique difference in the Elliott Waves that form in the general markets, to the waves that form in commodities. There is no comparison between the two as Elliott Wave rules and guidelines, get pushed to the extremes in commodities.
I have always worked my wave analysis in commodities, and will shift my focus effective immediately, to making Cycle degree wave III as my cornerstone. Cycle degree wave IV in commodities is a "Myth", as well as all other wave counts associated with it.
Gold is the "only" renegade asset that does not conform to the pack, but I believe it will in the next 1-3 years.
Sunday, February 24, 2013
Tales From The Script, Preview Of 5 Waves In Cycle Degree.
Every great bear market is always the corrective phase of a even bigger bull market.
A preview allows us to look ahead and to start thinking with a different mental outlook. As of 2013 we are getting close to a potential Cycle degree top and the big question is what type of top are we at? At any time we can have 3 or more choices.
We want to compare apples to apples so all the choices will be in Cycle degree. All the Cycle degree locations are also the main wave positions I need to find, to confirm any SC degree pattern as well.
Anything in Grand Supercycle degree is so far out of this picture, that the real GSC degree top is still a decade or more away.. If we are at a "B" wave in Cycle degree, or a potential "D" wave top in Cycle degree, both would require a Primary degree crash. Both a "B" wave top and a "D" wave top dictate that the bear market is not completed, and many further corrections and crashes are due. Both "B and D" waves in Cycle degree are bull traps as well as any Cycle degree wave one.
Either way all three wave counts need corrections to be confirmed, but with a big difference in the crash for the Impulse wave in Cycle degree. The corrective crash for Cycle degree wave one, also needs a "ABC" crash in Primary degree, but it will stop far short or it will travel less deep than the other two wave patterns. A Cycle degree wave two bottom will also be another one of the biggest bear traps in stock market history. It will be a bear trap for the majority and my bet it will also be a bear trap for all the super bears counting in GSC degree.
When all the super bearish wave counts prove worthless, then the Impulse wave starting from the 2009 bottom, slides right to the top of the list of potential wave counts for the next few years. The idea is to generally preview this wave count as if it is my preferred count already, so when we do get better confirmation we are all set and ready to go.
It may take until June 2013, but once the Cycle degree top is completed we should see a correction that may only retrace 61 percent (.618) of the entire 2009-2013 bull market. The script above is also drawn out with wave three as the extended wave, and wave 4 supports a triangle. Up on the very right hand side top, we see where GSC degree wave 3 really ends. It is far ahead of us in time or above us well in the future.
We have a long way to go, with the biggest hurdle being faced in the next three years or 18 months. I fully understand that it is crazy to count out a Impulse with so many over lapping waves, but it is only the SP500 that is the most difficult index to count as a Impulse.
This is the monthly chart for the Mini-Dow and at present we are hovering around 14,000. The markets just love even numbers but further upside is still possible. GSC degree wave counting wants us to believe that the DOW will still crash well below the lowest point on this chart and much further. I could end up being proven wrong but most all super bearish wave counts have been proven wrong for the last 4 years and now we are in the position where the DOW can breakout to all time new record highs, which will trash every conceivable GSC degree wave count invented so far.
The big test will come once a big correction kicks in. I always use a .618 correction as my standard, but we could have a high 50% or low 80% correction for a wave 2 bottom.
The .618 correction would put us between the DOW 9000 and 10,000. The markets love even numbers so DOW 10,000 would be my first choice. The two lines would cover this range. The 2002 bottom would be the previous 4th wave for a SC degree wave count, and now 2009 would be the previous 4th wave for the worst of any GSC degree crash yet to come.
This idealized script is now on my wall, with dates temporarily marked in. Besides building a wave count that looks into the future it is also there to eliminate it, if it is wrong. This wave count will fool everybody as it is not a kickoff to a new bull market, but rather the last 5 waves to complete my SC degree wave 5. The entire 5 waves in Cycle degree can slant sideways between a 63 and 45 degree angle so don't expect the perfect 5th wave that you have been seeing in the books.
As you can see the divergence between GSC degree and SC degree wave counts will be dramatic, as SC degree may be heading north to the arctic circle while GSC degree constantly wants to go due south.
The argument that debt will kill the USA has been the source of fear mongering even by the Austrian Economists like Peter Schiff and Ron Paul, but they are betting that a major divergence is here now. They want the USD to implode which of course will drive gold and silver to the moon crashing the stock market again. If we go into a major crash scenario it will drive the value of the US dollar up not down! It will be a mad dash for cash not a mad dash for gold. Gold does nothing except sit there buried in vaults, just like a house sits on concrete. They both do nothing and when a liquidity crunch happens they both will suffer in price.