potential long term alternate count -- MrSwing

You Are Here: Home > Articles > Economy > potential long term alternate count

potential long term alternate count
Oct 07, 2008

Tony

ELLIOTT WAVE LIVES ON
More articles

Font Size:

Due to several requests, and the break below SPX 1061 intraday yesterday. Last night I examined the stock market, in terms of the DOW, from 1929 to the present. Reviewed the 1929-1932 Supercycle bear market and still found it to be a large ABC. Also reviewed all the bull/bear markets from 1932 in terms of percentage of retracement in multi-year bull markets. I used the intraday highs and lows, and made the following observation.

Since 1932 the maximum percentage of retracement, after a multi-year bull market was 68%, unless the bull market was ending a larger wave structure. This happened twice: during 1942, and during the crash of 1987. What this implies is that the recent five year bull market should not retrace more than 68% of its gain if it is to remain the start of a supercycle bull market. If it does, it is likely an indication that 2007 was the end of a larger structure. And the super bears might then be correct.
Reviewing the bull/bear markets from 1932, the only structure that might be questionable is the triangle from 1974-1982. Maybe it wasn't a triangle as many believe. Since we are dealing with probabilites, we need to address another possibility, if the market breaks down below the 68% retracement level. If we count the 1974 low as the end of Cycle wave 4. Then the rest of the triangle as Primary waves 1 and 2. We could then count the 2000 top as Primary wave 3, 2002 low as Primary 4, and 2007 high as Primary wave 5, ending a supercycle. Cycle wave 4 alternates with Cycle wave 2. And Primary waves 2 and 4 alternate as well. This is an alternate long term count. The important consideration at this point is the depth of the retracement of the recent bull market. Based upon this historical 68% threshold, the DOW should drop much below 9,438. If it does, the super bears may be right. The low yesterday was 9525. Posting a chart of this alternate long term wave count on page 1 in stockcharts, after the DOW weekly chart. Hope this helps, tony