Anon wrote: "FDRAOA, any chance could you post some longer-term charts showing your wave counts - maybe one showing the count from the market top in 2000 and one that includes the 1930s and maybe even a multi-century one?"
Great question, thanks for asking. I'm not sure a chart would be of much use, since accurate price data is iffy beyond a century or so. But general trends are pretty clear. There are lots of potential very long wavelength EW possibilities and interpretations, so which ones you buy into are obviously up to you.
Wave personalities are important and should align with the time period. As we talk through each set of waves, remember that all (W1-W2)s should be fractally self-similar to the larger degree W12345ABC, of which they form the first two waves.
With that in mind, these are my thoughts. I've never seen EWs dissected quite this way before, but I'm sure it has been thought-through by many.
Biggest picture (the Waves of human civilization):
W1 - Roman Empire
W2 - (Deep Zig Zag) Dark Ages and Crusades
W3 - Renaissance
W4 - (Sideways) Exploration and consolidation of the New World
W5 - Era of Modern Central Bank Looting (BoE counterfeiting model)
WA - Now forming
WB - TBD
WC - TBD
Lesser degree discussion:
In W1, we see a frenzied, extended top that culminates in the severe overconfidence of a single Global Super-Power, the Romans, followed by a total currency collapse as money evolves from hard precious coin to banker-fiat, finally ending in barbaric warfare against an "invincible" professional army; the barbarians eventually win outright.
In W2 we have centuries of lost culture, suffering and famine, seemingly endless wars and unthinkable brutality. W2 is a fractal match to the era we are slowly slipping into today.
In W3 mankind rediscovers culture and civility in an explosion of creativity and scientific competence.
In W4 we explored new worlds and consolidated them into existing economic relationships.
In W5 the Bank of England invents and asserts itself for the purpose of royalties paid by the globally less sophisticated to the lazy, inbred global king pins of a massively corrupt criminal underworld. W5 culminates with the rise and (coming) fall of the modern Federal Reserve system.
Lesser degree discussion:
Let's only talk the internal structure of W5, above, the Era of Modern Central Bank Looting.
W1 of W5 - BoE creates the South Sea Bubble (1694-1725)
W2 of W5 - (Deep Zig Zag) Crash of 1730
W3 of W5 - Economic Rise of New World (America and Far East) (1730-1776)
W4 of W5 - (Sideways) BoE causes American Revolution and plunder of Far East (late 17th century)
W5 of W5 - American Capitalism (1785-ish to 2000)
Let's only talk the internal structure of W5 of W5, above, the fifth wave of the Era of Modern Central Bank Looting.
W1 of W5 of W5 - Hamilton resurrects BoE ties in the form of FBUS/SBUS
W2 of W5 of W5 - (Deep Zig Zag) Andrew Jackson sends BoE packing, all currency is extinguished
W3 of W5 of W5 - Jacksoinan era sparks Industrial Revolution
W4 of W5 of W5 - (Sideways) WWI thru Great Depression (nothing compared to 1836-42)
W5 of W5 of W5 - 1932 to Present
W1 of W5 of W5 of W5 - New Deal socialism sputters (1932-1939)
W2 of W5 of W5 of W5 - WWII (1939-1942)
W3 of W5 of W5 of W5 - Rise of modern American might (1942-late-60s)
W4 of W5 of W5 of W5 - Late 1960s dopers (now in charge of America) thru Vietnam
W5 of W5 of W5 of W5 - 1974-2000 Rise of mega-government-enabled Central Bank Looting
W1 of W5 of W5 of W5 of W5 - Gerald Ford
W2 of W5 of W5 of W5 of W5 - Jimmy Carter
W3 of W5 of W5 of W5 of W5 - Ronald Reagan
W4 of W5 of W5 of W5 of W5 - George Bush I (closet aristocratic socialist)
W5 of W5 of W5 of W5 of W5 - Bill Clinton
After 5 completed movements of fractal degree, all waves reverse and begin their ABC. Note, Wave A may also subdivide into 3 waves, which is my prefereed count.
WA of WA of W5 of W5 of W5 - George Bush II (closet aristocratic socialist)
WB of WA of W5 of W5 of W5 - "
WC of WA of W5 of W5 of W5 - Barack Obama (still unfolding)
...completion of WA bottom, around 2012
There are various ways to interpret the opening stages of the long, grinding collapse of Planet Earth, but it's mostly academic. Centuries-long Dark Ages to follow....
Maybe I’m seeing this wrong, but if Ford was the W1 of W5 of W5 of W5 of W5 does that make Richard Nixon’s presidency the zenith of civilization? Good old Dick, I guess they don’t have him to kick around anymore.
ReplyDeleteAnyways, nothing more but a dark plunge into the abyss to look forward to? Not even snuggle robe, a pair of tenny shoes and the promise of a comets tail to latch onto? Bummer, and I was always hoping we would go down something like this:
www.youtube.com/watch?v=hPJn0QJPaoc
Maybe I’m seeing this wrong, but if Ford was the W1 of W5 of W5 of W5 of W5 does that make Richard Nixon’s presidency the zenith of "civilization? Good old Dick, I guess they don’t have him to kick around anymore.
ReplyDeleteAnyways, nothing more but a dark plunge into the abyss to look forward to? Not even snuggle robe, a pair of tenny shoes and the promise of a comets tail to latch onto? Bummer, and I was always hoping we would go down something like this:
www.youtube.com/watch?v=hPJn0QJPaoc"
Actually the tippy top would be Bill Clinton/GWB, by my model above. The plunge into the Abyss could take centuries (or happen quickly - achieving the price target is more important than time) and should have several, lengthy, various degree B waves of relative prosperity.
I know you say the future will be dirty and cheap but what are your thoughts on Peak Oil?
ReplyDeleteHealth care induced P3 is a whopper! Check out the plunging markets
ReplyDeleteI have come to the conclusion that numbers anywhere cannot represent the true state of affairs.
ReplyDeleteThe masters are in charge, thus can make the dow 20,000 if they so desire. It's all an illusion.
Does anyone truly believe the slaves control the market place?
I am glad to see the chart has no axis value since the rise and fall of a entire species cannot be monetized.
Since the human species came into existence, the battle between an freedom and slavery was there.
Unfortunately, humans are headed to greater slavery and less freedom.
I am glad to see the chart has no Y axis value.
ReplyDeleteThe rise and fall of human civilization cannot be monetized.
The masters are in control. Hence, they can decide to make anything be priced to their needs. If the masters decide a 20,000 dow index is in their best interest, it will be. Or, if they decide it would be better to make it 5000, it will be.
Does anyone here truly believe the slaves, aka the mass population, control market pricing?
The use of markets is an intentional illusion to control people.
The battle of humanity is between freedom and slavery. To me, the chart above represents that.
Since the earliest human existence, I bet there was lying and emotion manipulation to drive people a certain way that benefits only a few who understand this technique.
Doug Kass capitulates…?
ReplyDelete"All this said, I have been wrong — at least, Mr. Market has been saying so!
…
The discipline of recognizing the errors in the timing of one’s analysis and, even more important, respecting Mr. Market’s price action are integral parts of the investment equation — whether or not the price action is later confirmed or unconfirmed by the fundamentals."
http://pragcap.com/chart-of-the-day-the-small-investor-hates-this-rally
ReplyDeleteFDR -When I vote for a president, all I care about is the economy. Under Obama the economy is screaming. When I say screaming, I am referring to the stock market, because that is the only measure of the economy that I care about. The reason I care about this is that this is the only part of the economy that pays me ten fold the actual labor. If Obama is willing to do whatever it takes to make sure I am a millionaire then i will take it. Most people who are upset are not in the market, or are short, so they want the fundamentals to drive the market lower so they don't feel left out. I assume if it goes low enough then they may even feel like they are ahead. But what I don't understand is that the government is giving you free money today via the stock market. Obama told you to buy stocks and I did and he was right, why, because the FED is larger than the stock market with it's leverage. Obama will tell you when to sell as well, when he makes a comment on overheating, it will be a hint but one we have to listen for. This rally has not even gotten to the high volume part yet, so we have a lot further to go in both time and distance. The majority of people have missed this rally as you can tell just by looking around at the blogosphere, they are all bearish. The few that hold will not sell until there is a buyer and they can wait years to sell. Eventually the public will get sick of earnings nothing in their savings account and watch gas prices jump higher and higher and they will be forced into the equity market. This is all planned by the FED as they hold all the equity shares via collateral swaps with the big banks. I love most of what you say, and in a perfect world it would work that way, but today the FED is much larger and like you say these are just pieces of paper and we can mark them anywhere, especially on no volume. So short with caution as it is not time yet, there will be a time, but it will be like every other time. until then the shorts keep transferring money from their account to mine on an almost daily basis. It does make me nervous to have this kind of winning streak, but disbelief is what drives the market.
ReplyDeleteFDR, it was me that posted the original question. Thanks for taking the trouble to reply in such detail. Much appreciated.
ReplyDeleteRecluse (from MW)
"I know you say the future will be dirty and cheap but what are your thoughts on Peak Oil?"
ReplyDeleteI've posted quite a bit on oil usage over the years. My position: if the decline in the usage of oil continues at its present rate, we'll use about 20% of known reserves over the next 17,000 years.
Oil, water; the only real difference is you can't drink oil.
"Under Obama the economy is screaming."
ReplyDelete17 of the 20 biggest Dow "up" days were during the Great Depression. The reason is simple, when the Dow goes down 65%, subsequently going up 65% still represents an enormous loss.
This cruel trick of nature is a key reasons so many people lose money in the market while thinking they are getting rich. Another cruel trick is an invention of man:
The Dow 30 from the year 2000 no longer exists. 10 of 30 companies were booted for going bankrupt or otherwise abysmal performance. So I would caution you against confusing "stocks" with a marketing gimmick like the DJIA.
in the short term, meaning into summer, I suppose wave 2 retracement in the dollar and oil heading higher around $86 moving XOM to fill it's gap in the 70's will propel the S&P into the mid 1200 range. I think this is where EWI moved there forecast to as well if I am not mistaken. The recent new highs across all indexes should spell further gains into summer. P2 is still rather small in comparison to other rallies after crashes in the past. The Nasdaq has retraced about 90% of it's value so far and the companies in the nasdaq are cheaper today than they were last year due to large earnings gains. How high do you think the nasdaq retrace in P2? I assume it could double and still fit in the guidelines for P2. Do you think the high beta nasdaq can double from here before we roll over for good? As far as EW goes, the recent moves seem clearly impulsive as I can count a 5 wave layout from across the room. DO you think any chance that this is bothering many EW camps. It seems that all the counts going back years are wrong if the market does not turn soon. I saw some of your counts, but they don't seem to fit the actual market, more like you drew a squiggly line and labeled it to resemble what you would like to see. Can you post a real chart with your count at all? thank you
ReplyDeleteThe Dow 30 from the year 2000 no longer exists. 10 of 30 companies were booted for going bankrupt or otherwise abysmal performance. So I would caution you against confusing "stocks" with a marketing gimmick like the DJIA.
ReplyDeleteMARCH 22, 2010 8:41 PM
If the DOW is up and making new highs, the odds are your stock is up making new highs. 75% of stocks move up with the market and 90% down. So confusing the DOW with " the market" is not confusing DOW with "the market".
You speak much more like an economics professor than a trader. Traders don't care much about market direction but rather about risk management and position sizing. At least all those that actually make money. Many waste there time trying to predict market direction when that is of very little concern to the trader. You have never explained position sizing and how you determine when you cover. You can proclaim a down market forever in fantasy land and eventually be right. You are like Cramer. The problem is, if you were actually trying to make money you would need to put on a real position. That position would require some sizing. Sizing would be dependent on a stop loss, or how much you were willing or able to lose should you be wrong. If you put something on and let it ride forever in one direction your position would be so small that you would not have any real gains should it go your way. So again, if you are fot real, explain to me your method of position sizing for profit. Granted you could take the Prechter angle and talk up cash, thus never exposing yourself do more downside than inflation.