The ewavers are still scratching their collective heads (and running their fingernails down their whiteboards) about this persistent wave 2. Time for a broader perspective.
I have mentioned a UCLA physics prof who has tried to curve fit bear markets following manic peaks. His analysis is - as the bear lengthens, so do the length of the waves. Hence he predicts we will not see the 3 of the 3 until late in 2004. We could have a generally corrective or even up market for the balance of 2003 and into the first half of 2004.
Another perspective comes from the well-known four-year cycle, which is explained quite well here. Looking back, it has been surprising consistent. Consider the dates of the lows of the last 30 years: 1970 - 74 - 78 - 82 - 87 (slipped a year!) - 91 - 94 (back on schedule) - 98 - 2002. Driven by US election cycle? Perhaps.
On the way up, the cycle waves have right-hand translation, which means the peak happens late in the cycle - in effect, is stretched to the right; on the way down, left-hand translation, which means the peak happens early in the cycle. In this case, 2004 would be right in the middle, and 2006 the time for the next low. Might the 2004 peak come early? As early as June 2003? Perhaps.
The four-year cycle suggests this scenario: continued positive hump through the summer, beginning of the big wave down in Sep/Oct, typical seasonal rally from Nov03 - Apr04, but at lower highs than this summer, followed by a major downturn in late 2004. Some sort of bounce follows, but the ultimate low is 2006.
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