Kip,
Some interesting stuff there, but I don't buy it. This person labels the action up to '29's peak as Large degree wave 1, with the resulting decline as wave 2 into 1932. Wave 3 is apparently what this analyst has us in now, with wave 1 of 3 into '72's peak, wave 2 of 3 into '74's low, then wave 3 of 3 into '87's high, wave 4 of 3 into '87's low, then 5 of 3 is what we're in now.
Ewave rules state that wave 3 cannot be more than 7 times wave 1 in size.
This wave 3 from '32's low could then travel no higher than 2674 before it exceeded its limit and disqualified and voided the count. Thus, the count was disqualified in '87, which probably caused the crash!! <g> (Excessive optimism).
My long term count, on the other hand, has wave 1 finishing up at early 73's peak (around 1077), wave 2 ending at 4/80's trough (around 770), wave 3 ending at 10/97's peak (8184), wave 4 ending at 10/98's trough, and we're in wave 5 now for another 2 to 8 years of strong bull market.
Notice how the wave 3 in this count does not violate the 7X wave 1 rule, as 7 X 1077=7539 + wave 3's 770 beginning allowed for 8309 as the high for the rally into the summer/fall of '97.
Now you should understand why the 10/97-10/98 correction ravaged the world's markets the way it did (especially the lesser developed ones). Because it was only the second largest degree possible correction in financial markets the world has ever witnessed (1973-1980 the first). And one should also now understand why the subsequent rally after this enormous correction was so strong...indeed the strongest rally in a 6 month time period the world has ever witnessed, if one considers raw net addition to worldwide market cap as well.
Regards,
David |
