This market is chock full of uncertainty. I mentioned previously that this did not feel like "the bottom of all bottoms" and yet I have still been posting bullish charts. Too many market pundits called the bottom on March 9th. This makes me worry, rarely does that ever happen. The media in general seemed to have gotten it right as well, which really makes me want to take an extra contrarian view. Granted, this rally may have room to run still.
Unfortunately, due to java tomfoolery, I am unable to post an updated chart at the moment, but feel it necessary to mention an alternative count that is gaining popularity (amongst myself). This alternative is that the 666 bottom was NOT an intermediate wave 5 of primary wave 5 of cycle wave C bottom. If it was, it would suggest we are about to embark on a new bull market of cycle degree (which is of large degree, possibly decades). Even if my original count is true, it does not necessarily mean we are about to embark on new highs in the next few years.
My alternative count, which I am inclined to make my primary count considering media was so quick to call a bottom, is that the 666 low was an intermediate wave 5 of primary wave 3. If this is true, then we are in primary wave 4, which has potential to rise above 1,000. However, the end result would be a new bottom of primary 5 of cycle C below 666 (unless truncated).
I have seen only one other Elliottician out there with this possibility. You can view his charts here. The count is not the prettiest, but I'll see if it will make sense in my own analysis later.
There are numerous reasons why declaring 666 a primary 3 instead of 5 makes sense.
So many believed prices always go up and many a trader and fund have perished for that belief. I contend to not be one of them. Instead I try to remain objective, but even this in such a volatile market is no easy task.
Overall, my investing strategy is to use Austrian economic theory, fundamental, socioeconomic and technical indicators such as Elliott Wave in forming broad opinions about the economy and the market. In terms of individual securities Benjamin Graham's theories remain king in my opinion.
As soon as I get the chance I will update this alternative wave count in chart form.
Note: my chats could be much better should I pay for Stockcharts.com's services (sigh).
One final bit of history. In 1932 the stock market bottomed after a perilous journey down, with several corrections up along the way. A new bull market of large degree started at that point, but it took over a decade before the 1929 highs were seen again.
Unfortunately, due to java tomfoolery, I am unable to post an updated chart at the moment, but feel it necessary to mention an alternative count that is gaining popularity (amongst myself). This alternative is that the 666 bottom was NOT an intermediate wave 5 of primary wave 5 of cycle wave C bottom. If it was, it would suggest we are about to embark on a new bull market of cycle degree (which is of large degree, possibly decades). Even if my original count is true, it does not necessarily mean we are about to embark on new highs in the next few years.
My alternative count, which I am inclined to make my primary count considering media was so quick to call a bottom, is that the 666 low was an intermediate wave 5 of primary wave 3. If this is true, then we are in primary wave 4, which has potential to rise above 1,000. However, the end result would be a new bottom of primary 5 of cycle C below 666 (unless truncated).
I have seen only one other Elliottician out there with this possibility. You can view his charts here. The count is not the prettiest, but I'll see if it will make sense in my own analysis later.
There are numerous reasons why declaring 666 a primary 3 instead of 5 makes sense.
- The cyclically adjusted P/E has not fallen below 10, which historically happens during major bear markets (overshooting).
- Commercial real estate, credit cards, state budget shortfalls and pension funds are still pending epic downturns.
- Unemployment, though a lagging indicator, is still gaining momentum; even in weekly claims.
- The government is determined to keep insolvent institutions alive, at the GREAT expense of taxpayers.
- Consumers are still heavily indebted and impaired in keeping good on payments, and/or have no means to go willy nilly in spending freely and/or take on new debts.
- Consumer confidence is still low and a large cloud of uncertainty is in the air regarding the future.
- There are no significant earnings drivers to look forward to in the next few years.
- All hope has not been lost. A characteristic of orthodox bottoms is that everyone is bearish and net sellers. That my friend, is capitulation. The bottom on March 9th, all hope was not lost.
So many believed prices always go up and many a trader and fund have perished for that belief. I contend to not be one of them. Instead I try to remain objective, but even this in such a volatile market is no easy task.
Overall, my investing strategy is to use Austrian economic theory, fundamental, socioeconomic and technical indicators such as Elliott Wave in forming broad opinions about the economy and the market. In terms of individual securities Benjamin Graham's theories remain king in my opinion.
As soon as I get the chance I will update this alternative wave count in chart form.
Note: my chats could be much better should I pay for Stockcharts.com's services (sigh).
One final bit of history. In 1932 the stock market bottomed after a perilous journey down, with several corrections up along the way. A new bull market of large degree started at that point, but it took over a decade before the 1929 highs were seen again.
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