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Stop the Insanity!

Yesterday, Elliottwave International completely flipped their count and determined that everything is going to new highs and that we’re in a fifth wave up. They didn’t really have much of an explanation that I could hang onto as a good reason for doing this.

They also said the indices have gone too far to be in a countertrend. Well, that’s just whacky. Not true at all. They can retrace up to 99% of the distance to the top and still be a second wave. I honestly don’t know what those folks are smoking sometimes …

I was out last night and didn’t get back until very late and then went through charts several times to figure out that was going on. So, let me throw up a few charts and explain why we’re still in a countertrend move and why I’m not changing my count until I see something that tells me I’m absolutely wrong (and I’m OK with that … it’s just that I don’t see it yet …)

NQ 09-15 (Daily)  8_19_2014 - 7_16_2015

Last night the Nasdaq futures (NQ) went to a new high—to be expected. This is my first chart above. That makes it a double top. This morning, in the main index, it appears that we’re on our way to a double top … bit by bit … BTW, look at the RSI. It tells me that if we’re going up, we’re sure not going far …

ES 09-15 (60 Min)  7_16_2015

The chart above is the SP500 futures (ES). I put this up to show the very clear 3 waves up. On top of that, the a wave doesn’t look like a 5, but it’s hard to tell. (all waves in a motive pattern, in the direction of the trend, have to be in 5 waves themselves—that’s a hard rule).

SP500zoom

Above is the main index (SP500). I’ve marked the waves to this point (intraday today). It’s an abc, 3 wave configuration and we’ve just about completed the fifth wave of C. It looks like it’s going to a double top to finish off the second wave. If that’s the case, we’re going down from there.

NYSE Jul16

The NYSE is still at 62% and I count on this “elephant of indexes” to lead the way when the world turns nuts (as it did last night). If the NYSE was to move up solidly from this point, I would change my tune (and change the count).

I still think we’re going to roll over from here. So far (intraday) we’ve hardly moved. So, no change here. We’re looking at a rollover—it’s a clear three waves up (abc).

DOWJul16

The DOW is doing what the SP500 is doing … what else is new?

Nasdaq Jul16

Here’s the Nasdaq this morning, poised to complete a double top. As this is a final wave up, it needs to be in 5 waves (another EW rule). It’s the only one so far up in five—all the other indices are sporting 3 waves up so far.

And that’s where we sit. I see no reason at the moment to think we’re going to a new high in anything but the Nasdaq, which is simply completing a double top of a final fifth wave. We’ll see what happens from here …

I don’t think the insanity is going to last much longer at all.

Similar articles by category: Market Forecast Overview
{ 27 comments… add one }
  • andre July 16, 2015, 10:52 am

    Tomorrow already major weakening of forces. On Tuesday some more. So during next week volatility should pick up with volume. When my analysis has any value, we should now be down into august 22nd for starters. Like stated before the longer cycles are down into early next year.

    If we succeed in combining EW analysis with timing tools we should be able to make some pretty nice forecasts.

    What I like about this site is the interaction with the host; something a lot of sites don’t have.

    Cheers.

    • peter July 16, 2015, 5:33 pm

      Thanks, André,
      I think we’re close to a top.
      You’re right—EW and cycles work really well together. EW certainly isn’t perfect.

  • John vd Meer July 16, 2015, 3:48 pm

    I also think we are verry close maybe a little more room to the upside :

    Are you familiar with theory of Tom McClellan it also points to this period (beginning of august)
    It has a good track record :

    http://time-price-research-astrofin.blogspot.nl/2015/06/tom-mcclellan-major-market-peak-in_23.html

    Cheers

  • Joel Lovingfoss July 17, 2015, 12:38 am

    Peter, nice work as usual. I posted a chart on fb of the DJIA Mini that shows it topping today (if the count is correct). Also posted a chart of today’s VIX that hit the level of the past two tops.

    • peter July 17, 2015, 7:43 am

      Opening Gap Reversal so far. Nice when a place comes together! Thanks, Joel.

    • peter July 17, 2015, 2:00 pm

      My measured objective for the Nasdaq is right here. first wave at 1X, 3rd wave at 2.6, 5th wave at 1.6.

  • Nicola Timpa July 17, 2015, 5:44 am

    Hang in there Peter…..Nick……you to Andre……..n

    • peter July 17, 2015, 7:43 am

      So far this morning, I think we have what we’re looking for …

  • andre July 17, 2015, 8:32 am

    Retail sales down. Consumer confidence down. Growth in industrial output down. Labor participation rate down.

    Shall I continue?

    A child can predict what q2 reporting will show; decline in revenue and boosting earnings by cost cutting (= less employment).

    In other words; everything you need for an all time high.

    • peter July 17, 2015, 9:21 am

      Haha … think I got it.

      • andre July 17, 2015, 9:35 am

        Yep; bit of irony. But I really think this supports our expectations.

        Crashes always occur after a weekend; when people have had time to think things over. Now very confident about a serious decline next week.

        This weekend maybe some more arguments.

        • andre July 18, 2015, 1:43 am

          7/16 was a MAJOR change date. A very tiny short natural cycle pushes this date to 7/20, like it knows crashes should come after the weekend.

          Nasdaq gave a new high but this was just a short-squeeze in Google; not a reflection of sentiment. So markets were weak Friday, as explained by the line above.

          Don’t let this confuse you. If you just look at prices and not at driving forces it is hard to understand markets.

          I already said that Friday and Tuesday will cause a further weakening of markets. Could be the market picks the midpoint : Monday.

          So as far as my understanding goes : Monday should see the start of the decline at least into Thursday for the first leg.

          • a July 18, 2015, 5:38 am

            Mastertiming is a Gann technique. The 2007 high and 1009 low were significant turns. They both give several turndates for 2015. There is one date they both give : 7/20. This means two gann lines are crossing. According to Gann this makes them stronger. This caused the insanity. This is the strongest turndate this year and the market simply wants to test this date.

            This simply confirms what we expect. But it also explains what we are seeing and fits nicely with what I wrote earlier.

          • peter July 18, 2015, 6:36 am

            Your post came through … your email address is incorrect here … why it didn’t show up.

          • peter July 18, 2015, 6:37 am

            Sorry … your name … was “a” …

          • peter July 18, 2015, 6:36 am

            There was nothing confusing about Friday. The Nasdaq reached its measured target … a textbook 5 waves up, which was expected, and also completed a textbook ending diagonal. It had two choices: an ending diagonal or a double top. Ending waves are always in 5s (I’ll post a chart showing measurements on Sunday). So you have an ending diagonal and 5 waves up. There’s no question as to what happens next.

            The DOW and Pees have done three waves up, so they can’t go to a new high unless they drop to a large 4th wave, which they haven’t. They really can’t now, unless the Nasdaq came way down to do a second wave (which is highly unlikely at this point) I don’t think the DOW and Pees will make the double second even – hence my comment about a 99% retrace, which is just about what the Pees did. The NYSE … well, that just shows where we really are. It sat at 62% while the animal spirits played out.

            The NQ has a little further to go on Sunday … another 10 pips or so to a measured target. So the next few hours will be putting in double tops, etc. Down on Monday.
            Euro and GBP continue to drop as the dollar starts up again. I got short ES at the end of the day and have been short Euro and GBP for a few days, along with a few wilting stocks.

            Your timing confirms the Elliott wave count.

  • John vd Meer July 17, 2015, 8:32 am

    Keep on have faith…

    If history repeats again:

    We could see the same party like 1998,

    Decline now till Sept 4 … some recovery till end of september and an other sell off till okt 8…

    https://finance.yahoo.com/q/hp?s=%5EDJI&a=05&b=1&c=1998&d=09&e=17&f=1998&g=d

  • andre July 18, 2015, 6:22 am

    Seems my post didn’t come through. Just wanted to say I found that mastertiming on 2007/2009 gives one shared date for 2015 : 7/20. So the trend is really down but the market is desperately trying to test this date on light volume. Let’s call it insanity. But it will be over; very soon. If I’m right this is the first gann cross since 2009. Should be significant.

    • andre July 18, 2015, 6:46 am

      Like astro? Monday Mars (!) activates the still lingering Uranus/Pluto square. And heliocentric mars will conjunct mercury.

      Thursday we had a peak in IMF (interplanetary magnetic field). This was caused by the new moon conjunct Mercury with Mercury at perihelion. Even the moon was at perihelion. This means Mercury was closest to the sun as possible (and creating a tidal pull comparable to Jupiter) with the moon and earth aligned. This surely must be one of the strongest pulls this year. Tidal pull affects solar activity. Only the heliocentric Venus-Jupiter conjunction is stronger. This happened April 25th, causing the high in some European markets. This IMF analysis confirms what I wrote about Gann timing; The IMF trend is down as of April. Another planetary cycle was up into June 25th/26th. Then IMF and this cycle were both down.
      The confluence of the second (weaker) IMF peak july 16 with the july 20 date (Gann) is a powerfull confirmation. As you can see IMF makes a lower high, creating a divergence.

      Both dates must be tested. Hence the importance of the july 16-20 time frame.

      • peter July 18, 2015, 6:57 am

        Great detail! I will take some time Sunday to fully take in. I have a couple of Gann books on the way actually.

        • andre July 18, 2015, 7:03 am

          Gann is great on timing; I’m still learning.

  • andre July 18, 2015, 6:50 am

    Victor Zubarev ‏@VictorZubarev 8h8 hours ago
    This I found on twitter :

    $GC_F #Gold
    Now we’ve created a triple bottom,
    today’s L=1129.60
    in Mar2015 L=1141.60
    In Nov2014 L=1130.40
    #Gann said buy the triple bottom

    Markets down is Gold up. Tripple bottom in gold yet another confirmation. Will stop now with posting 😉

    • peter July 18, 2015, 6:59 am

      I contribute to Gold group on Facebook and the consensus is the same. We’re looking for a spike in Gold. However, EW tells us this will be a countertrend second wave and we still have the big drop in gold to come. I will be waiting to accumulate real gold in the future, but it’s too early.

  • andre July 19, 2015, 8:14 am

    Some long term considerations. One lunar cycle I use is basically down from the end of 2014 into the end of 2017. This tells me the move up into may/june – is a counter trend move and once this one turns it is in sync with the longer term wave. For 2015 it means we are probably down into early December (5/6/7) before we see some retrace into January. But we are down into the end of 2017 before we get a last wave up into 2020.

    My cosmic energy system tells me the intensity level we saw this week (7/16) won’t be seen for some time. Only early December I see the highest reading of the year. This energy boost is likely needed to start the retrace into early 2016.

    You said earlier that the bottom was years away. How does the end of 2017 sound?

    Cheers,

    André

    • peter July 19, 2015, 2:40 pm

      New post up.
      I think the end of 2017 could be the first set of 5 waves down, but I suspect the full wave will last much longer. Sometime soon, I’ll post the 1929 wave, which is similar to what’s happening in China right now. They tend to follow the same pattern. And they usually (it seems) illicit the same response for governments, who think they are all powerful and change markets .. sigh.

      • John vd Meer July 19, 2015, 3:38 pm

        Hi Peter,

        Do you also have a chart of the waves till end of 2017

        Cheers

        • peter July 19, 2015, 3:51 pm

          I don’t off hand, but Prechter did a projection that I should have somewhere. It should look much like 1929. http://top-img.com/w/wall-street-crash-graph
          If you look at what’s happening in China, the trajectory is coming in similarly. Prechter developed a prognosis of time, which I disagreed with and started a reply to it, but haven’t had time to research and finish.

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