When and where will it arrive?


Recently several data points have caught my eye which when combined with my favorite larger image Elliott Wave Principle (EWP) for the stock market, start to point to a massive high-level brewing. Thereafter, potentially all gains since the infamous low of March 2009 will be wiped out. This article will focus on S & P500 (SPX), but the ramifications apply to all major US indices. As I always say to my premium members of the market, “to those who want to listen, warned is warned. “And this article is precisely meant to be like that.

The first data that caught my attention was a Tweet from Mark Ungewitter: he found: “Today’s normalized P / E ratio of 27x [for the SPX] suggests a negative 10-year forward yield. … Many possibilities on the road to dismal returns. “

The second piece of data, along the same P / E line, was a more recent interview with Barry Bannister of Stifel by Barbara Kollmeyer. He showed how the SPX behaved over the past hundred years when the P / E of the index started to exceed its normalized P / E ratio. It can be boiled down to a simple statement “Later in 2022-23E, we believe the Fed “behind the curve” could create the third bubble in 100 years, by 2023 at 6,750 for the S&P 500 (Nasdaq [approximately] 25,000), ”said the Stifel team. Then the third bubble in 100 years arrives. “

The third piece of information is based on an article by Brian O’Connell, where he interviewed James ‘Rev Shark’ Deporre, who “sees continued erosion in markets although this does not typically happen. In other words, only a few large market cap stocks maintain the market cap weighted SPX. This ‘bad scale’ is attested, for example,

  1. the decreasing number of actions on buy signals for the NASDAQ,
  2. the growing number of new 52-week lows for individual NYA and NASDAQ stocks,
  3. the long-term decline in the average number of stocks above their respective 200-day simple moving average for the SPX.

Charts 1. Market Scope Indicators

The fourth piece of evidence, which lines up quite well with the “S & P500 to 6,750 by 2023”By the Stifel team, is my mid and long term EWP count for the SPX. It points to a peak around SPX6000 for a Super Cycle Wave-III by late 2022, early 2023. See Figure 2 below. Since it is always good to get independent confirmation of the work of other people I respect, as two know more than one, I have found that Avi Gilburt, for example, aims for similar heights and is afraid of them. Next 10 to 20 years. As well as a great job from “Bretzel”, who introduced me to EWP over ten years ago.

Figure 2 Medium and long term EWP count for the SPX.

Finally, how important is a Super Cycle Wave-III effect, you will ask? Well, as described in my book “Tomorrow Happened Yesterday”, using the Dow Jones, I deduce that the 1929 high was a Super Cycle Wave-I high, and the following low in the 1930s was the low of. wave II. The index and our company have been in this SCW-III since then. And as we now know, after wave three comes waves four and five. It is therefore inevitable that the markets enter into an SCW-IV. As mentioned in my book, Mr. WD Gann predicted that 2024 would be a year of panic, just as he predicted that 2020 would be, until 2028.

At the end of the line: Independent evidence suggests that a major market peak is brewing over the next two years and that most of the gains since 2009 will be wiped out thereafter. As the SPX will now navigate its 4e and 5e waves for ideally SPX6000, closing the rally that began in the early 1930s, perhaps now is the time to start thinking about an exit strategy.

The impending pain for those who navigate another lost decade will likely be unbearable, as it will take many years for the markets to return to equilibrium. However, a silver lining is: Once SCW-IV is completed, it will take several decades for SCW-V to deploy. So those who can keep their gunpowder dry will do well. Or as they say: “(c) whoever loses the least money in a bear market wins. ” And “From its ashes, the phoenix will rise again. “


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