AynCzubas
Short

Potential for a Triangle to Trigger the Bear Market

FX:SPX500   S&P 500 index of US listed shares
130 25 0
My previous forecast had proposed that the 2137.1 May 19th all-time high was the end of wave "(a)" and the 2107.4 August 18th high was the end of wave "(e)" to complete a bearish triangular wave "b" which originated from the low of year 2009.

However, since the index has now exceeded 2107.4 and therefore moved back above the presumed starting point of the expected post-triangle thrust without having first approached the downside thrust target, I must re-assess the wave structure down from 2137.1.

To recap: I still view the entire 2009-2015 rally as being a "b" wave of the 4th wave of Grand Supercycle degree.

Given both the historically overvalued state of equities and extreme levels of margin debt at present, the apparent pattern of chronological equidistance between S&P 500             market tops in 2000, 2007 and 2015 that suggested a top "due" in May which has, so far, proven correct, and the fact that the "b" wave has reached equality with the "a" wave from 2000-2009 and not exceeded the 2000 peak (the top of Grand Supercycle Wave 3) in inflation-adjusted terms, I am strongly inclined to believe 2137.1 was the ultimate high of Wave 4 before its wave "c" down begins.

When a "b" wave completes, a following "c" wave ensues as a 5-wave (impulsive) structure. However, I find it very unlikely that the decline from 2137.1 to 1833.5 was impulsive. It appears corrective.

How then -- one might wonder -- could the final high of Wave "b" have been reached but the impulsive wave "c" not yet have begun? Under what circumstances could there be any interim?

The only possible answer is: Assuming wave "b" is a contracting triangle, the high point is not the end of it. A triangle is complete when contracting waves (a), (b), (c), (d) and (e) have all developed. The high point is only wave "(a)". The true end is wave "(e)", which will be lower than wave "(a)", and this is where the post-triangle thrust (i.e. wave "c") will begin.

A post-triangle thrust would give this indecisive market the necessary propulsive downward force that is called for in the impending "c" wave. A standing wave bouncing between narrowing extremes and picking up momentum over a few months will finally break through the weaker deflector, to the downside.

What would this imply in terms of trading the S&P             now and going forward? The present implications are that waves (a) and (b) of the triangle wave "b" are complete. Going forward, Wave (c) is nearly complete and should not go higher than wave (a). Wave (d) down should not exceed the low of wave (b) at 1833.5. Wave (e) should not exceed the high of wave (a). Assuming all goes according to pattern, when wave (d) completes we measure the vertical distance between the converging trendlines of (a) & (c) and (b) & (d) extended all the way back to the date of the 2009 low to assess the minimum downward thrust distance for wave "c" that we should anticipate to start from the end of wave (e).
AynCzubas
a year ago
This was my previous forecast:
Get Your Shorts On, It
Reply
look4edge
a year ago
Hi, like you have switched to corrective counts, like ti much more, however, what is your last C wave a-b-c could be either B/X or 4 of expanding triangle too...
Reply
AynCzubas
a year ago
Something following from this that I find very interesting: The green converging trendlines I have drawn are just guessed as to the boundaries for a developing triangle. They seem reasonable to me: the upper line is drawn from the high peaks since the 2137.1 high and the lower line is drawn from the 2009 low through the recent 1833.5 crash low (notice that it relatively well supports the troughs from 2009 to present).

The curious thing is this: if we assume those boundaries for the triangle, and we assume wave "(e)" will end at about where the trendlines converge, then we measure the post-triangle thrust distance back at the 2009 low, the resulting thrust distance from hypothetical wave "(e)" would extend down to just slightly below the downward-sloping trendline drawn through the market bottoms of 2002 and 2009!
snapshot
Reply
look4edge
a year ago
longterm count here, i consider X over, however D-E triangle case possible, as i do not believe in impulse 1-5 character of wave from 2009
snapshot
Reply
AynCzubas look4edge
a year ago
I also don't count the wave from 2009 as an impulse. I consider it a "b" wave, and "b" waves cannot be impulsive but only corrective. I never use W,X and Y labels, as I consider them to be directly analogous to what are just more complex A,B and C waves (except arguably with "Y" which some believe can be a 3-wave, whereas a "C" can only be 5-wave). Your and my long-term view of wave structure are essentially the same, except in the decline from the 2015 peak, where you expect a corrective decline (so far A and B). I expect an impulsive decline (the whole decline ultimately being wave "c" to match wave the 3-wave "a" (your W) of 2000-2009). I'm looking at year 2000 to the end of Wave 4 as a 3-3-5 flat correction.
Reply
AynCzubas AynCzubas
a year ago
snapshot
Reply
look4edge AynCzubas
a year ago
nice, but inflation is currently so distorted metrics....
Reply
AynCzubas look4edge
a year ago
Yes, the measure of inflation (i.e. Consumer Price Index or Producer Price Index) may not be perfect, but I think there is more distortion of market value when allowing for inflation (looking at market charts at nominal value) than by making an effort to exclude inflation by applying those indexes as filters. It's a matter of either trying to judge the true ongoing value of something even while the unit of measurement ($) is itself constantly losing value (thereby making the market appear relatively more valuable) or trying to judge after taking away that dollar-value distortion. So, I always refer back to the inflation-adjusted charts for better perspective.
Reply
AynCzubas AynCzubas
a year ago
I mean, simply said, when we take away the inflation, the effect of QE, etc, and envision the value of the Dollar as constant, what do we really see in the stock market? Great progress? No, we have a market that since 2000 has dropped immensely and then climbed back up to just barely scrape the level it peaked at 15 years ago. It's telling.
Reply
look4edge AynCzubas
a year ago
in fact, looks to me, we are much lower, inflation data is just a big scam, just go shopping foods in grocery, and all other stuff, lower quality/quantity for same price (except couple technostuff, taht was overproced yaers ago)
Reply
AynCzubas
a year ago
I consider that wave (d) down is underway since 2116. I suspect wave (d) will be about 61.8% of wave (c), which would suggest wave (d) low at around 1920-1930 before the final wave (e) rises up to complete the triangle originating at the year 2009 low. A first impulsive wave has almost finished, which I expect will stop at just under 2060 before a 2nd wave up ensues.

Keeping in mind that a type "D" wave is typically a zigzag, I presume there will be an initial sequence of 5 waves down, followed by an intervening upward ABC correction, followed by another 5 waves down.
snapshot
Reply
AynCzubas AynCzubas
a year ago
It occurs to me that this 5th wave could be taking the form of an ending diagonal with the following internal wave count, having an internal 3rd wave being shorter than the internal 1st, meaning the internal and final 5th would need to be shorter than the internal 3rd. It's not certain, but be prepared for the possibility that this wave could end abruptly after passing below wave 3, in the following narrow range...
snapshot
Reply
AynCzubas AynCzubas
a year ago
Here's a novel idea...
snapshot
. If this is still wave 4 and is a triangle, it could be targeting below 2030
Reply
AynCzubas
a year ago
Downside targets are 2036.8 for 3rd wave and 2029.7 for 5th wave of post-triangle thrust, according to my calcs.
snapshot
Reply
AynCzubas AynCzubas
a year ago
Interesting
snapshot
Reply
AynCzubas AynCzubas
a year ago
Target 2038.1 (not lower) for the next leg down, then a rise in a 4th wave followed by the final 5th wave potentially to about 2030.
Reply
AynCzubas AynCzubas
a year ago
snapshot
Reply
AynCzubas AynCzubas
a year ago
Now 2038.4 (whatever the ultimate height of cyan small wave "iv" is , subtract 11.5 from that and take the resulting number as the maximum low for cyan "v"). See chart below for reference.
Reply
AynCzubas AynCzubas
a year ago
snapshot
Reply
AynCzubas AynCzubas
a year ago
Price has exactly struck the prescribed 2038.4 target, to end wave (iii) of 5.

Now, price will make a corrective rally up in wave (iv) to likely end between 2047.6 and 2050.4 (.382 to .5 of wave (iii) ). It should not exceed the end of wave (i), or should not exceed it significantly if wave (iv) forms as a triangle. So just a few points above the end of wave (i) is a good place for a stop loss order on a short sale targeting 2030.

After that, I expect a final decline to 2029-2030 to end wave 5.

Reply
AynCzubas AynCzubas
a year ago
Also possible is a shot down through 2030 lower to 2016, based on the post- triangle thrust implied by wave "iv".
snapshot
Reply
AynCzubas AynCzubas
a year ago
2016 happens to be the 1.0 level if the post-triangle thrust from wave "B" represented .786 of the total thrust impulse wave, as it often does.
Reply
AynCzubas
a year ago
Upside Target: 2077.25, then reversal down toward 1961
Reply
AynCzubas AynCzubas
a year ago
Wave II of "D" is targeting 2077.25/35 for completion, rally should be blocked by 2082.4, then a decline toward 1961 for wave III of "D"
Reply
AynCzubas AynCzubas
a year ago
Just hit 2076.9, within 0.26~0.36 of my projected target. I expect this is the end of the rally.
snapshot
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out