12 replies to this topic

[Douglas]

K Wave, thanks for the comments. Yes, the "B" wave size and structure is very much up in the air at this point and depends a great deal on what the Fed does in reaction if the nasty drop that I expect in the next month or so develops.  In the past the Fed has been quick to step in and pump if the markets swooned.  That's why I showed a big "B" wave. 

 

Instead of big, maybe the "B" will just be complex.  The small "B" that you show would indeed be very bearish and would make the "4" of previous degree 2020 bear market low target for the next wave down very viable, but again this much market devastation would surely bring out the money pumping Fed to stem the tide.  I just don't trust anyone with that much green ink, fine paper, a turbo-charged printer, hubris and a complete disregard for the intrinsic value of money to sit idly by while their secret third mandate gets hammered.

 

Regards,

Douglas

[beta]

Another possible e-wave count to consider:

 

The entire sequence starting from the Dec 21 top = the start of a primary wave I.   Following the 1-2 pattern from the June low to the Aug peak, this would put the markets in a "3" wave down.  This is more evident on the COMPQ chart than SPX or INDU.  Esp. in frontrunner tech stocks like META.

 

The question of what happens when a Grand Supercycle finally peaks/ends is fascinating.  After all, Elliott wave posits that markets are simply the manifestation of a collective dynamic with organic qualities. 

 

IF the Dec 21 peak represents an e-wave inversion (a rare but theoretically acknowledged occurrence in Elliott circles), the consequences would be momentous --at least for US equity markets.

 

So long as SPX remains under 3900, I believe the wave 3 count cannot be ruled out.

Edited by beta, 26 September 2022 - 04:46 PM.

[Douglas]

beta, one of the E-Wave guru web sites that I visit has the "we're in the big 3rd wave down" as its primary count.  My argument against it is that, please not while I'm still on the green side of the grass, and last time I checked, I could still fog a mirror.  That count assumes we are on the cusp of, as you say, a "momentous" disaster of some sort.  This whole eve of catastrophe vibe has been made even more popular by the Howe and Strauss book The Fourth Turning which posits that the current generation in charge basically will run the bus off the cliff and always has.  I hope we'll only have to muddle through just a garden variety bear market, not Armageddon comes to Wall Street.

 

Regards,

Douglas