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To: heehee1 who wrote (57811)	10/26/2002 10:15:56 AM
From: Moominoid	Read Replies (1) \| Respond to of 209892

The 5th wave should certainly feel less certain and triumphalist than wave 3. So that is one reason to think that 2000 represented the top of a wave three. When the 1987 crash happened everyone was immediately talking about the repeat of 1929 and the Great Depression returning. When the 2000 bubble burst there was that kind of talk from bears but little in the general media. Prechter says we should see a "surprising disappointment" in wave 4. I also see triangle type waves in the non-tech stock indices both here and in other countries which is typical of wave 4. I'm not a big believer of the "baby-boomer theory of finance". But the first of those guys is 65 in 2010 - so now we are seeing early retirements of some of the younger ones. But that will be the peak period of those guys retiring. Before that a lot of people try to top up their savings. Seems to me the critical point coming out of the 1970s was the 1987 crash followed by the 1990 recession and a secondary bottom - that is a running correction. Of course others will argue that wave 1 ends around the 1980-1982 recession and that is a fine argument too. Then 2000 is the top of the next wave 3 or 5 by the alternate count with 1994 and 1998 as waves 2 and 4 within that period. So I am open to the 2000 top being the end of a larger degree wave... but really need someone to convince me. If we look at this diagram and assume that IV ends where it is said to end then I only see 3 waves. Of course 1 and 2 can be the move up from the low in the earlier 1970s, which actually makes more sense to me. users.rcn.com The US and World economy is very resilient to shocks - as the economy gets larger its resiliency seems to be increasing compared to the 1930s or before. And even compared to the 1980s. Well this is the economist in me talking rather than the technical analyst. I also disagree with others on where we seem to be in the Kondratieff Cycle. It seems to me that the early 1980s marked the end of the previous cycle and the 1930s the previous trough. So 54 years out of 1932 was 1986. We are now still in the early phases of a new Kondratieff Wave. If anything I would assume that these waves which are driven by technological innovation are getting shorter. But people want to extend out the previous wave. It doesn't make sense to me. ___________________________________________ 5) Fifth waves — Fifth waves in stocks are always less dynamic than third waves in terms of breadth. They usually display a slower maximum speed of price change as well, although if a fifth wave is an extension, speed of price change in the third of the fifth can exceed that of the third wave. Similarly, while it is common for volume to increase through successive impulse waves at Cycle degree or larger, it usually happens below Primary degree only if the fifth wave extends. Otherwise, look for lesser volume as a rule in a fifth wave as opposed to the third. Market dabblers sometimes call for "blowoffs" at the end of long trends, but the stock market has no history of reaching maximum acceleration at a peak. Even if a fifth wave extends, the fifth of the fifth will lack the dynamism of what preceded it. During fifth advancing waves, optimism runs extremely high, despite a narrowing of breadth. Nevertheless, market action does improve relative to prior corrective wave rallies. For example, the year-end rally in 1976 was unexciting in the Dow, but it was nevertheless a motive wave as opposed to the preceding corrective wave advances in April, July and September, which, by contrast, had even less influence on the secondary indexes and the cumulative advance-decline line. As a monument to the optimism that fifth waves can produce, the market forecasting services polled two weeks after the conclusion of that rally turned in the lowest percentage of "bears," 4.5%, in the history of the recorded figures despite that fifth wave's failure to make a new high!