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« Will The Real Market Please Stand Up? | Main | How Low Could It Go »

Sunday, January 11, 2009


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Bill C

This would work out nicely for me. I plan on bidding on a house that is a short sale for $210k, Zestimate = $310k, and sold for $380k in 2004.

I imagine the euphoria during the Obama spring rally will be a wonder to behold. My hope is that his enacting various socialist measures to help the economy and the subsequent continuation of the bear market will be a major blow to collectivism in the US.

But back to the waves. Any targets for next impulse down?


Me thinks "The Begining" will prove to be a no show and a different corrective pattern will unfold.

All the same, am currently short, in the money with some profits locked in.

Would love it if Prechter were right as wave 5 down would be much more profitable than the smaller degree B wave down I see.

Loser Neely

I "spoke" to the waves this weekend while I was in the bathroom.
and they told me that:



I wonder why Yelnick is not talking about me?

Glenn Loser Neely

Mamma Boom Boom

Prechter's forecast is pretty much the way I've been seeing it. That makes me sad, I must be wrong.

Canadian Money

SP500 Jan. 12th

I see a possible end to a Rising Wedge bearish signal pattern...the one that began at the low in November. The index is starting to break below the lower boundary.

Not an ideal RW price pattern but the decreasing volume trend is a good one. In any event, to date it continues to look like a corrective pattern in a continued downtrend.



Hi Duncan;

"Hence, The Beginning (Wave 1)"

what is this wave 1 business??

most of the analysis on this blog refers to w4 of wave A (to be followed by bear rally wave B and final drop in wave C)

Is Prechter so happy that he finally nailed a correction, that he is dreaming of an impulse wave correction???



Closed NDX Short for a nice 3 day gain. Now Long with thight stop.


Wo! that was quick. Sliding stop up to break even.


Steven737- prechter's C wave will break as a 5 down, and we have not even finished wave 1 of C. We likely just ended (4) of 1



I don't buy that count; unless you are referring to minor waves or something else.

We have likely completed w4 of C; the C started Oct 2007. (the A wave started at the 2000 top. This is wave W of of a double three W-X-Y i.e( A-B-C-X-A-B-C ).

A supposed wave 1 of a 5-wave bear impulse that starts at 1575 and completes at 700, implies that the 5 wave sequence will complete at 160 (top minus 1.618 x Length of wave 1 i.e. 1575 - 1.618 x(1575 -700) = 1575 - 1415 = 160.

meaning what?
USA ceases to exist?
the next civil war?
are you planning to move to another country?

it doesn't make sense...
Have you verified these forecast targets and plotted the respective wave structure yourself to see what this means?
it is absurd to me...

your thoughts?



Closed NDX long 15 min after market close.


Yo Loser:

Just curious, how much did the "Neely Experience" cost?


Steven ...

Why should the world perpetuate as is? Is that mathematically plausible considering debt that grew exponentially over decades is defaulting and the only policy response is linear? I am not passing a judgment right, or wrong regarding life as we know it dramatically changing ...I just want to hear why that's not possible.



Yo Loser:

Just curious, how much did the "Neely Experience" cost?


Whatever it cost, I don't understand why we readers of this blog have to share in it.


Wasn't the 1929 crash close to 90% down over 3 years?


Nikkei 225 Index high was 38,915.87 (1989), we just traded down to 6,994.90 - levels that we had not seen in some 25+ years, and representing a loss of some 82%.
S&P 500 life high 1576.06, a similar 82% loss would see us at just under 284, or perhaps a return to levels seen 25 odd years ago could see us under 150.
I am not suggesting a move to any level here, but my point is life in Japan has not ended, Japan did not 'cease to exist' - quite the opposite. So one should be open to moves in US Equities of many magnitudes, and which do not mean the end of a nation.


What??? A five-wave C correction? Why? I mean just why? Why would wave C be three times as long as wave A? For what possible reason?! No, there are two sensible ways of counting the larger picture:
1. Steve_737's count, with a five wave impulse complete at the millenium high with a three wave correction down in A to 03 B up to 07 and a five wave decline down in C to finish shortly.
2. Wave 3 of the larger impulse completed at the millenium top, followed by wave 4 down to 03 and 5 up to 07. In which case this is wave 1 of a new impulse down. This count's a hell of a lot prettier. I also can't believe it though. In any case we'll know by looking at whether once it has finished we get a wave 1 of the next bull market or a wave 2 correction upwards. But Prechter's count is just silly. Entirely unnecessary. My two counts are the same over at wavespeak incidentally. Took some searching but I did eventually find a traditional EW analyst last year who can both see the wood for trees and is a hell of a lot cheaper than EWI too.

Glenn Loser Neely

Disclousure: Glenn Loser Neely owns the company NEO GARBAGE WAVE. I currently make my money from my subscribers not from my trading.

For a free trial please dial 1-800-I-AM-A-LOSER.

and remember....A CRASH IS IMMINENT!!




Steven737 et al. - let me put this in a higher level post. Good question - how low can it go.


enfinity (TIA), thanks for your point

I will not say that it is not possible; I am just thinking that it is a very low probability scenario. I stated that I don't buy that scenario; in other words I find it unlikely.

puravida, thanks for your reminder

The question is:
is this the same economy as in 1930?
is this the same world / global economy as in 1930?
do we have the same technology, knowledge and industries as in 1930?
history may "repeat itself" but I think in a different way the second time;



TIA = This is africa or Thanks in advance...whichever you think is more appropriate for the situation. haha

The economy is different and technology/knowledge has advanced but the problem is one of mathematics, no? We engineered a way to place more debt and drew a lot more people into the game. Technology is not undiscovered if the financial system were to implode due to debt deflation. This situation is actually worse than Japan's, but I do expect life to continue...just differently. It already is different, but not everyone appreciates or understands how it has fundamentally changed yet. I think the difference will become much more apparent a year from now.




point well taken;

I think that there are quite a few differences between the US and Japanese economy. It is a Manufacturing and Exports Oriented economy, to name two.

These differences along with cultural differences (savings rate for instance)may have contributed in keeping Japan in a good shape.

Additionally, the US was doing ok and Japanese manufacturing had enough customers to keep alive.

I would appreciate your point of view on the factors that can keep the US doing ok when the stock market i.e. spx 160 implies that corporate profits are for all practical purposes non-existent and company book values have gone to 40% of the current levels (assuming a 50% drop in price/book ratios).

"Life in Japan has not ended",indeed.
Life in the US will continue, it will not "cease to exist".
The quality of life and the American standard of living will cease to exist.

Living in the US or for that matter in Europe, Canada, Australia will not be the same with respect to employment, purchasing power, retirement, quality of life and personal security.

Unless of course the USD quadruples its value wrt foreign currency and spx 160 is equivalent to 640 in today's units.
Now, this is a topic to discuss!!

Forkoholic Serge

We're all waiting for an impulse down, right?
I was thinking maybe this wave down will be the same as Nov4th-Nov21st Wave
and take us to say 700ish low? That was also an ABC down


>is this the same economy as in 1930?
>is this the same world / global economy as in 1930?

Dude, just ask dinosaurs
thriving market economy - eat what you want, travel around the world.
low unemployment numbers
and just one freaking asteroid and you get your Grand Supercycle ABC down!
Go figure ;-)


"Steven737 et al. - let me put this in a higher level post. Good question - how low can it go. "


I guess the underlying question is:
is the correction of a Grand supercycle
a 5 wave structure (impulse bear wave)
or is it
a 3 wave structure.

I have not seen any clear statements on this issue. Additionally I believe that nobody can answer this question (one can only guess or speculate) because such an event has not been witnessed so far.

In EWP, Prechter states: “A grand supercycle bear market would then 'correct' all the progress dating from the late 1700s (Appendix Long Term Forecast Update, p239, Elliott Wave Principle).


he speculates “If ..... then the 1000-year Millenium wave, unless it is extending, has almost run its full course and stands to be corrected by three Grand Supercycles, two down and one up, which could extend over the next five hundred years”. (Chapter "The Millennium wave from the Dark Ages", p 160, Elliott Wave Principle).

come on you guys; where do you draw the line?
back to the levels of the 30s or have we had most of the correction price-wise completed and the price action will evolve as a multi-year trading range? (ok with a possibility of SPX bottoming at 600 in wave 5 of Z of a W-X-Z.)



Kiwi, good point and well made. Enfinity you say we're worse than Japan in the 90s but western stocks are in far better shape than their's were, with a p/e multiple of 78 at the peak, and that wasn't taking into account the fact that a large part of the companies earnings were really profits from speculation - like Porsche now incidentally. To this day Japanese stocks are a massive rip off at double western prices despite being very poorly run from a shareholder perspective. Where I definitely would agree is in relation to the 3rd world. That's reeked of Nikkeimania for years. At last Russia's down 80%, but they've all barely started. So much for Prechter's prescience.


Forkoholic, I've been banging on about a truncated fifth wave forever and a day, unless this really is just an x-wave a la Neely. We haven't spoken for ages! How's your fourth wave been?


Another way of putting the question is whether we are deep in the Kondratieff cycle- from
*The following lays out the sequence of the events following the 1929 stock market crash.
1. Flight from questionable securities into strong securities – 1929-1930
2. Intense liquidation of inventories and commodities – 1930-1933
3. Liquidation of commercial real estate, houses and farms both through foreclosures and sacrifice sales at a fraction of prior values – 1930-1936
4. Flight from banks into cash and gold which caused collapse of entire US banking system – 1930-1933
5. Flight from the dollar to gold. During this phase, capital (money) flowed almost exclusively to the gold industry – late 1931-1936
* D. Hoppe, The Kondratieff Wave Analyst, 1985
Are we past the point of no return (for several more years) or can the new Recession Protection Team - Team Obama Recession Protection (TORP) reverse the tide and catch the wave in mid-motion. Not easy, but
In the Dec. 19 EW Theorist, Prechter references a speech to the Georgia legislature Dec. 10 - and one of his points is that of the Fed Reserve, the Treasury, the FDIC, The FHA and "other" has spent nearly 3 billion and have a total 9 billion to spend - not counting the Obama Economy Stimulus of $800 - that is a lot of dough they can throw at this depression.
In the past, the theory is that all this money thrown at recessions just postpones the inevitable (crash!). They will be trying to change history.


Wavist, time will settle all arguments. We stand on different sides of the fence buddy.


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