Elliott Wave 5.0 "Reboot"

Sunday, December 27, 2015

SP500 Cycle Degree 1929-2015 Important Review!

I have posted my Cycle degree wave count for the DJIA but for the SP500 I created one by drawing out the wave positions by hand. My degree labeling is still the old style, but I have pasted the idealized charts on top of the real world chart. These scans can produce very large files and take much more time to produce if I do not post them. Just about all difficult reviews I do with pen and paper first before I create one in the computer.  

The most important thing to be aware of is that for the 1929-1932 crash and bear market, it is now labeled as a Cycle degree wave 1 and 2. This change alone, will have a huge impact on what happens now and going forward in time. SC degree is still many years if not a decade or so away. The bare minimum I would say the top of solar cycle #25 may get us close to a SC degree wave count! 

Notice I have no throw-over trend line and It should not produce any throw-under as well. Both lines will always be drawn parallel to each other, and I will keep this method of drawing trend lines going forward. I used this method for the 2007-2009 crash, and it was obvious that the trend line was breached early in the crash. 

The top line now connects Cycle degree wave 1 with Cycle degree wave 3, with wave 4 not being completed. This may still take to the bottom of solar cycle #24 in 2021 for Cycle degree wave 4 to complete. 

Having a wave count that is the same mood as the markets tell us, is a futile wave count, and especially when that bearish wave count matches a solar cycle bottom. Solar cycle bottoms are bear market terminators, and it is the biggest reason why the SC or GSC degree 5 wave, wave count failed in 2009.  Elliott Wave followers were left holding the bag of wooden nickels again. 
      

If we look down to 1932 which is my wave 2 in Cycle degree, we can see that the next bull market is now a "Primary" degree wave 1-2, with about a 5 year bullish phase for wave 1. Physical size wise, this matches our present triangle much better as the degrees would be the same. This would give us a Primary degree wave 1-2 count and then an Intermediate degree wave 1-2 count and a Minor degree wave 1-2 count, which I have not labeled in. 

The mid 70s crash and the rally following was a transition to wave 3-4 in Primary degree which contained a running flat. This kicked in one of the biggest and longest running stock mania bull markets in history.  Of course gold paid the price as gold succumbed to a bear market that took about 19 years to complete.  

From the 1932 bottom to the peak in 2000 is now a completed 5 waves up in a Primary degree, which definitely extends wave three. The new era in 2000 crashed and now has become the old era replaced by another dotcom bubble called Apple mania or App mania. Everybody has gone App crazy and next thing you know we will have an App to flush the public toilets in the malls. 

A major bear market is needed just to wash out all those crazy ideas that should have never seen any funding in the first place. 

The SP500 fits into a triangle as well, so this could put us closer to  the "D" wave top. I'm not completely convinced that the "D" wave top is in, and this will be the job going into 2016.  Either way the last part of this triangle would need a very specific "ABC" crash in Intermediate  degree looking much like a zigzag. It could look like 5 waves down with only a very small "B" wave bump. We have to be prepared for several different varieties as zigzags never form perfectly like the idealized waves we draw. The entire move would be one move in Primary degree.

This gives us lots of time to understand what is supposed to happen and hopefully we will wake up fast, if the pattern does not fit very well. At this time I can see my wave 3 in Cycle degree is holding as this could take until 2021 to play out. This would give us a sideways triangular bear market lasting 20-21 years.   

All this would finish at my Cycle degree wave 4 before SC and GSC degree wave counters,  have ever confirmed any part of their wave counts.  The high priests of high degree wave counting desperately need the markets to deal them 5 waves down in Primary degree, yet none have ever formed at any time since the 2000 bubble peak.  My bet is that they will never see 5 waves down in Primary degree and that they will see 5 waves up in Primary degree long before they see a Primary degree 5 wave set going down.  Many high degree wave counters have already tried 5 waves in Minor degree and I think this is wrong as that would extend the Primary degree wave 1 already. First waves in a required set are never the longest. In any part of a triangle there should be no need to use any WXY wave structures as the triangle has clear cut idealized wave counts already. 

The next thing you know they would have a Primary degree wave 1 at the 2009 price levels and wave 5 would end up below zero again.  Remember, this all has to happen before the end of solar cycle #24 or about 2021.   

I gave up on SC and GSC degree wave counting when I switched to this blog and I have no plans in ever going back.