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What is that theory? It is, "That Elliott's Guideline of Parallels has not yet been tested at the SuperCycle degree, and it should be."
You will note that if you draw a line from the 1929 Peak labeled SuperCycle 1, through Primary 3 of Cycle 5 (C5), and place a parallel copy on the low of SuperCycle 2, there has never been a wave that retraces down to the lower parallel Elliott Trend channel to Indicate a SuperCycle 4. Some day there will be.
For now, though, we are satisfied with the prediction of the higher highs. And while some analysts did not even predict these higher highs, even predicting bear-markets instead, 'now' they are showing some 'Super Bullish' counts based on - well on the kinds of mistakes they have made before. They did not take the risk of saying, "we are likely going up in Primary 5 based on their count from the February 2016, low", but now, they want you believe that they really have a handle on equity prices with their new super-bullish alternatives.
For our part, we are just trying to complete the count on a Primary 5th wave in satisfactory fashion. As we have said before, there needs to be five waves up in a diagonal or in an impulse. We have no preference as to which forms but will try to alert our readers when it becomes more clear.
Why are we clear that the up move from the 1929 low is SuperCycle three? That is because of two of Elliott's guidelines:
- The longest and strongest wave is usually the third wave, and,
- The third wave shows the greatest volume
Short & simple! And, both of those are true of SuperCycle 3, although a well-recognized concern for Primary 5 was that volume was tapering off badly. To us, it is exactly that decreasing volume which indicates the characteristic of a fifth wave.
No, as much as some central banks and some analysts apparently want you to believe now, we do not subscribe to "The Perpetual Money Machine" philosophy. It is "NOW" that interest rates are near zero or even negative for some instruments. It is "NOW" that new all-time highs are just being seen in many equity indexes. It is "NOW" that demographics will play increasing havoc with demand. It is "NOW" that politics is more split than ever. It is these types of conditions that will prevail more as the "rot beneath the surface" at a stock market top, than they did when Wall Street was gripped by financial fear at the 2009 stock market bottom.
We think at some point in the near future, the "Magic Money Machine" will slam squarely in the face of another economic law: the Law of Diminishing Returns. The more the Central Banks try to pump, the more they will be met with a desire to be free of them. Just consider Brexit - what is the message? We don't want to be part of centralize economic planning! Backfire # 1. There is more to come.
For the present, we will count the up wave covered in our past posts - until we can count "five up". This wave already has some worrisome signs. We will cover those on a post on Monday. But after that a likely correction will begin - and the only question is the degree.
P.S. After seeing how the authors of certain website handled their recent incorrect views, and the sudden reversal in their current "world view", I will not be 'applying' to any web-sites for permission to post anything. It is too hard to try to counteract their constant and consistent negativity and apparent need to be correct - even though my viewpoint offered their readers the best view of the May 2015 top, the February 2016 bottom, and the recent higher highs in the market.