Elliott Wave 5.0 "Reboot"

Sunday, April 17, 2016

Russell 2000 RUT 2002-2016 Cycle Degree Review

Back in 2002 the RUT hit a bottom from which a very good impulse was born, followed by a diagonal 5th wave, ending near mid 2007, with a wave 3 in Primary degree. Then the 2007-2009 crash happened, which many have forced into a five wave impulse. I refuse to force a wave count like that anymore,  as it gives us a false and very subjective picture, and besides, if it was a 5 wave decline, chances are good the markets would never have gone this high again.

I take it as a 3 wave crash with an ending diagonal stuck on the end of it. This leaves us with another move that, I fully understand is a very ugly impulse wave, but which can be a diagonal 5th wave, soaring up to the 2015 top as my Cycle degree wave 3 top.  I could not label that Cycle degree as there is no room with this chart.  I don't think 5th waves are pretty impulse waves, but more the ugly kind as the 4th wave crash usually destroys the best fundamentals and the 5th wave struggles.  You have to be a good stock picker in the 5th wave.

The next part sure looks like I can fit it into an impulse so we will try it to see if another 5 waves down in Intermediate degree will happen. If we get a Cycle degree 4th wave correction with a zigzag or a flat is still up for debate, but we could get a leading zigzag all the same.  Even now we could still see an "ABC" before a wave 2 ends so we have to be open to the variables that can still happen. 

Can we crash with a 5 wave decline in Intermediate degree? Sure, I am open to that, but then we are in an expanded top for 2015 and expanded declines are very bullish, in the longer term. Besides that we would end up with a triple bottom with only 350 points to go before we hit zero. 
SC and GSC degree wave counters are working double expanded patterns which I think are impossible for them to happen as they never line up like that.  

I think it will be the Russell 2000 that will point to a bottom long before the DJIA and SP500 will, as the RUT does not have all that much room to fall. In other words the RUT will never get anywhere near the 1970s peaks, but you can bet all SC and GSC degree wave counters will be pushing for it. 

Also by the time that happens, we will be up against another solar cycle, which are Elliott Wave Count Terminators! The next solar cycle (#25, 2020-2021) will completely destroy any foolish SC and GSC degree bearish wave count they can dream up, just like it did in 2008-2009.