Elliott Wave 5.0 "Reboot"

Saturday, March 2, 2013

Nasdaq Monthly Chart Supercycle Review!

The patterns in the Nasdaq are very different than the patterns in the DJIA and the SP500. There is no way we can apply a GSC degree wave count to it. First the initial crash from 2000 to late 2002 traveled much deeper, then on the second big crash in 2007-2009, the Nasdaq refused to follow the DJIA and the SP500. This 2009 bottom produced a higher low, and nowhere was there any room for the Nasdaq to develop a full 5 waves in Primary degree. Without developing a single set of 5 waves in Primary degree, we have no GSC degree bear market in the Nasdaq. For my 2007 top I am calling it a Truncated 5th and terminating my wave three in SC degree. 

Since this 2009 bottom the Nasdaq charged ahead which has all the markings of a Impulse and I will continue to explore this wave count for the time being.  The difference between a "D, B" or wave 1 top is huge, in how far down any crash will travel. I use my standard .618 of the net traveled distance, which gives us a potential target of around 1750. 

One crash in the Nasdaq was about 32 months long and the 2007-2009 crash lasted about 18 months.  I very much doubt if the next correction will take much longer to play out than what we have already had, as corrections are shorter in time than bull markets are. Fear is the greatest motivator, and it trumps hope and greed in the markets any time. 

Exactly where any correction will stop is irrelevant because we all use different measuring techniques, but when the public is starting to get super bearish and all contrarian indicators start to show themselves around a .618 correction, then the Nasdaq will turn and head north for another 2-3 year bullish phase. 

For the Nasdaq to follow the DOW or the SP500 down into a GSC degree pit of hell, it would have to go well below 200, and it still would not get close to any previous 4th wave of one lesser degree.

Between the solar cycle top expected sometime in 2013, and the next solar cycle bottom, the markets can go through a complete bullish cycle.  A crash just before the completion of the next solar cycle bottom, and then  another 4-5 year bull market as we start up solar cycle #25.