If a tree falls in the forest and nobody is around to hear it, does it make a sound? Of course it does, but hear this:
The weekly chart I posted in my last blog [linked] remains intact, but I have a new chart for you. Reminds me of the rally we saw after the flash crash, and the same fear remains. Fear of Primary wave 3, in a multi-decade correction.
Can wave "E", throw-over in a false breakout? Yes. Is it worth risking 1 red cent, betting on that breakout. No, because of the risk to the downside in a possible primary wave (3). We aren't gamblers, we look to reduce risk. We don't base our trades on the hope that every snap-back rally is a "recovery", as the mainstream media would have you believe. Who do you think owns the media? The same sharks who own Wall Street.
There has been a lot of trash talking, between Elliotticians' over the rally of the past 4+ years, but the fact remains, Primary Wave (2) is not ruled out, and even those who are hanging their hats on a primary wave 3 are probably underestimating the possible outcome.
In P-3 we can expect many funds to go to 0 (zero). Of course most money managers scoff at this prospect, because a 70 year bull market - in what was most likely a supercycle wave 3 - is all we have ever known, but those who ignore the history of booms and busts, do so at their own peril. One thing I think all Elliotticians can agree on is that we will see a primary wave 3 in our lifetimes.
Bullish impulses are typically followed by equal periods of consolidation. In this case 39 years (equal to wave V of 3 between 1974 and 2014). Assuming this correction started in 2000, and If my math is correct, I'll be a ripe 77 years old, when wave IV concludes. Think Japan. Think real estate, which cycles every 25 years. The housing recovery I called for in MP-I is over.
For the time being, until I see a breakout to all time new highs, we remain cautious, and even then, I see wave "d" theory coming into play, in a reverse symmetrical triangle. Not much is known about these climatic patterns, and triangles in general are tricky.
In March of 2011: I hypothesized in my memoir part 1 (MP-I [linked] , , and others seem to agree; wave d may end in a new market high. What comes next would be a catastrophic wave "e".
This chart borrowed from: http://elliottwave5pointzeroreboot.blogspot.com
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