Hope on steroids, otherwise known as “Hopium” is the “placebo” of the 21st century. You’re going to see it play out as never before with the final wave up in the US indices.
Hopium creates “false” euphoria, a sense of hope that’s got little in fact to support it. The herd is on this drug “big time” right now. They’ve been influenced by the government telling them everything’s ok. Pop culture and entertainment virtually rule the marketplace. There is very little “real” news anymore. The government of the day did the same thing just after the height of the Roman Empire—placated the populace with spectacular events in the amphitheatre. The same pattern happens over and over again throughout history.
Euphoria and a positive outlook is still being exhibited by the majority, but it’s rapidly declining. There’s a sense now of the 11th hour of a party, but the truth is, the let-down at the end is going to be a rough ride—a really rough ride!
I’m particularly worried about those who’ve never experienced failure, or have minimal support around them.
There are cracks in the euphoria is still rampant as we reach the top of this warm-dry cycle, due to the extraordinary rise in the stock market and the easing of credit (Wall St. vs. Main St.). Not everyone in the herd believes the party line, though. And so we have Donald Trump and Bernie Sanders, who are both anti-establishment and fifth wave icons. Hilary represents the oligarchy—the establishment. The friction and divisiveness couldn’t be more obvious.
As the market tops, the cracks in the euphoric facade are starting to show more and more.
These cracks are more apparent at the level of what used to be “the middle class.” An immense number of people have fallen into poverty; those how are close, are living off credit cards. This is where the revolution has begun. It will soon start to spread throughout the 99%.
In the meantime, the disillusioned have turned to opioids and even scarier drugs to replace the “hopium” doled out by government and the media. It is indeed the 11th hour.
I have Crohn’s disease; I’m very lucky that way. In my seventeenth year, I spent four months in hospital. That was a life-changing experience for me, one I look back on for the lessons it taught me: You can bounce back from anything. If you fall down, success is having the strength of character to get back up. It’s a learned response.
I grew up really quickly that year.
Fast forward the my mid forties. My family doctor prescribed codeine for short-term pain, but while I was on it, I noted how much it regulated my intestinal tract. As a result, he moved me up to oxycontin for what ended up being about a five year period. Oxycontin was new on the market at the time, but the attractiveness was that its effects would last about ten hours (as opposed to the usual three and a half).
Over time, of course, I became physically addicted, a story I’ve told on stage a number of times. I was running a television production company at the time (my own) and that medication gave me continued energy to counter a disease that could easily upset the system and leave me suddenly tired and irritable. After a year or so, any “buzz” from taking the medication wears off. What’s left are the symptoms of withdrawal that set in every ten hours and give you an instant alert that you need another magic pill.
At about 5 years into the ordeal, I started to get the sense that this addiction was going to kill me. I had had weekends in which my prescription had run out and my doctor was not reachable. Scotch, I found, was about the only thing that would keep me going until the following Monday.
I confronted my new doctor with the promise of my previous doctor (who had originally prescribed this drug) to send me to rehab to get me “clean.” He blankly stared at me and told me he didn’t know how to arrange for that event. So, I came back two weeks later with a list of the dosages I wanted in a series of two week prescriptions lasting throughout that “summer of hell.”
Withdrawal is not fun. It took me about three months of dogged determination to get free of that brutal pharmaceutical creation. But in time, you get well, and the difficult days of climbing the walls, of lying on the sofa under a heavy blanket shivering from morning ’til night, gradually disappear from immediate memory.
I’m telling you this because of where society is at the moment. I see an obvious parallel.]
We’ve been put on this false hopium in the belief that it will help to cure society by raising our spirits and somehow strengthen the economy. It’s a lie, of course. I’ve put the responsibility for this squarely on central banks and governments. Some of us have become so disillusioned that we’ve opted for the real thing—and hence we have a huge opioid problem caused by the very people who prescribed hopium to begin with.
The withdrawal (the coming crash and economic devastation) will be very difficult, particularly for the younger generation, who’ve been shielded from any type of failure. They’ve never had to live through tough times and simply won’t know what to do about it. They will attempt to run to their “safe spaces” but the reality is that there will be nowhere to hide.
Failure in life is good. It sets you up to know that when you fall down, you can get up again … and again … and again … and be better for it in the long run. I encourage everyone to fail at once early in life!
We all need hope. Hope is a great thing and gives us a reason to reach for our dreams. We, as human beings, have always done that. It’s why the stock market has always trended up, even taking in all the crashes. We humans are resilient; it’s built into our DNA. When we lose hope, we die.
This downturn will be a blip in history, but “oh, so real” while it affects us all directly over the coming years. False hope (hopium) is what will make withdrawal so much worse. In a time when we could be preparing the ship for the hurricane, so many are on shore partying the night away, celebrating their material acquisitions at a devastating cost to those around them.
We must change our society for the longer term so that those in charge are never again allowed to create the bubbles that harm so many. The good news in all of this is that each time we experience one of these major downturns, we achieve a higher level of democracy, but it will take many years to get there.
From the work of Dr. Raymond Wheeler:
Current events show that another world convulsion is occurring second only to
- the emergence of rational thought in the sixth century BC,
- the fall of Rome and other ancient civilizations in the 5th-century and the beginning of the medieval world based on feudalism, and
- the final collapse of the Middle Ages in the 15th-century. The current convulsion is comparable to the birth of Christianity in the first century and to the birth of the modern nation as a feudal principality in the ninth and 10 centuries.
All of these reorganizations of society were marked by spurts in the evolution of democratic institutions.
I hope to play a little part in helping communicate the importance of understanding Earth’s natural cycles and what a tiny role we humans play at the whim of the Universe.
The coming years will be the greatest transfer of wealth in the history of the human race. I hope that many of us will use the resulting windfall to help make the world a better place for everyone.
That is a very large part of why I do what I do. Thank you all for being a part of this extraordinary journey.
And now to an overview of the markets.
Below is the bigger picture for the SPX futures (ES).
Above is the daily chart of ES (emini SPX futures) showing the ending diagonal pattern similar to the one in the SP500. We look like we’ve had the bulk of the 4th wave down. I put us in the fourth wave of the fourth wave. We have more downside to go, but not all that much.
Here’s why this final pattern has to be an ending diagonal (and why I predicted it months ago):
- the final wave of a sequence has to be in 5 waves, with one exception—an ending diagonal, which is part of a 3 wave pattern
- the final wave up so far (from Feb. 11) is in three waves because:
- we’ve already had a first wave of 5 waves and no large second wave following that’s retraced 62%, which is mandatory for a 5 wave sequence
- the small “second wave” (black B) did not retrace 62%, which is a requirement of a motive wave in 5, so for that reason, it must be considered a B wave
- the 5th wave of the black 5 wave sequence is in 3 waves, which a requirement of a final motive wave is that all the subwaves are also motive
- the black third wave does not have a full subset of five waves, which is required for it to be a motive wave
- for all the above reasons, the first sequence up from Feb. 11 is a zigzag.
Summary: This is the final fourth wave dip before the “blow-off” fifth wave and the top of the largest bubble in history. I expect a little more downside before we turn up again to head for a new all time high.
Introducing: The Chart Show
Thursday, September 22.
The Chart Show is a one hour webinar in which Peter Temple provides the Elliott Wave analysis for the US market, gold, silver, oil, and major USD currency pairs.
Get caught up on the market from an Elliott Wave perspective. You’ll also get Andy Pancholi turn dates for the balance of the current month. There’ll be a Q&A session during and at the end of the webinar and the possibility (depending on time) of taking requests.
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Thanks, Peter Temple. Worldcyclesinstitute.com is the best site for cycles research. Believe you are right about near term market direction (mania into early of new US admin. so as to add risk to market).
Thanks, Valley. I’m not sure about timing. I still think we’re looking for a top in October, but I can’t support that, except for the fact that the final fifth wave is part of this existing ending diagonal pattern, and as such, should not be much longer than the previous waves of the pattern, time-wise.
Seasonally best months of the year are mid October until Christmas, so that is where I am looking for most of the rally.
Hi Peter …. I’m a bit confused by the very last section, and the references to the move having to be in three waves. Your chart shows two five wave moves. Red 1 in five black subwaves. And then the larger pattern in red. Now if this is to become a final ED, from February, then all five red waves have to be three subwave moves. So your black 1-5 as counted for red 1 violates that. There are other ways to get there in accordance with the rules, but I’d welcome your take on how that would be done. And if I’ve misinterpreted, I’d welcome a chart showing abc’s instead of 1-5s. I happen to believe the ED is correct, and we have a bit more downside to go on 4, but much below 2100 and something different is playing out.
You’re correct. I had simplified the chart from my original version, but I’ve gone back and clarified it and added to the explanation. I had called the AB wave up from the very start because the first wave was clearly not motive. Thanks for keeping my work “honest.” If I know you’re watching, I’ll try not to get lazy again 🙂
The ending diagonal breaks at about 2080 or so in ES.
Just curious to where you are thinking 4 stops..
Good qtn, Jody.
It only needs to go below 2110 for the overlap to give the ED more cred.
If it goes below 2100 it threatens the convergence in the wedge.
My toolkit says we have another leg up in rates to drive the small v of C of 4.
Could go 3-4 days even. Deep decline paints a different picture and I’m not sure what that would be yet. Perhaps larger scale ABC decline off the highs.
Just curious if we break down below that 2100 area if the expanding triangle (Megaphone) pattern is in play. Peter a few months back had it in play but disgaurded it for the ED. Everybody is watching that pattern and I was curious if you might have had the expanding triangle on your radar too. S&P 1900 would be the bottom (D) and finishing with a blow off (E) to 2225.. just a thought..
Sorry .. no thoughts on megaphone yet … if 2100 breaks we can begin to consider that. Re the triangle, this is pp’s version from today. I think the c leg is only now forming up as the complex leg. So its still alive and well and d and e are still ahead. If this link doesn’t pull up, its behind a (free) reg. wall.
I have a question or two…In your post a little earlier today when you say,”the trading day timing in 1974 give 4/27 as a turn date”…Does the 4/27 stand for
April 2027 or April 27th of 2016?
In the same post …Does the date 9/22 stand for September 2022 or September 22nd 2016?
Thank you for your posts! Quite interesting to me and I am sure a number of
4/27 is 4/27/16,
9/16 would be september, 12/23 december 2023.
Nice opdate with a very personal touch.
I see the market go up into the fed meeting till Sept 22.
Goodluck to all.
Calgary, where I live has been hit very hard very early due to this being the oil and gas capital of Canada. There was a story on our national news network this weekend about all the people here who are parting with their pets, because they can’t afford to keep them. It sent me down a somewhat empathetic path …
At the same time, the overall feeling here is this is a little blip in the economy, even though it’s gone on for over 8 years, and it the largest recession in decades with no end in sight, and at the top of a real estate bubble. That’s the frustrating part. Nobody wants to listen and prepare.
I am with John (±21 september). 😉
natural cycle versus man made intervention – you mentioned that the extreme efforts of the central banks have distorted the ‘natural cycle’ [i call the natural cycle – economic mother nature] – almost artificially extending it – as seen through the extending of the equity indexes. since this divergence has occurred between the natural cycle, and extreme man made efforts to counter it – can the man made one play out to its logical “blow off top”? can economic mother nature reassert herself in this moment? can economic mother nature interfere with the artificial central bank distortion to social mood? can the blow off top be just a hillary clinton cough before it mean reverts?
haha … the Hillary Clinton cough … an icon for the times …
“can the man made one play out to its logical “blow off top”?” This statement I find a bit confusing as the high that will occur is part of the natural cycle—it’s not man-made.
Social mood determines what happens with the waves and humans en masse always react in a similar pattern. They do this over and over again. That’s why Elliott Waves always work and can be a predictor of future mood.
What I’d meant by my comments is that on a grander scale, we expected a top in 2007, but we’ve moved it eight years later, by flooding the market with easy credit, and so keeping social mood elevated longer than it might otherwise have been. However, mood still ebbs and flows as always, even though the time scale has extended.
So, the waves will play out the entire pattern. Events don’t affect the market. It’s just a matter of waiting until the balance turns negative, and we’re not very far away from the “great divide.”
Thanks Peter keep up the great work…any word on gold?
I can only tell you that it’s not going anywhere important for awhile. I’ll be covering it detail in the Chart Show.
You mention 9/22/2016 as a capitulation date based on your Gann work or at least that is what I am assuming…The Autumnal Equinox on 9/22/2016 is only coincidental occurrence, Is that right? Does the duality of 9/22/2016 add to your conviction level?
In my world everything is just one vibration that materializes in many different ways. So Mercury direct, lunation conjunct Saturn, Jupiter declinaton at zero; it is all 9/22. But it is just a coin with 2 sides. The sides are different but it is the same coin. The FOMC meeting itself is the vibration. And the vibration says no rate hike. Jannet is like a hologram that is pre programmed. (just don’t tell her that!)
The same cycle that gave the 9/1 low and the 9/9 decline now gives 9/22. So even the past is connected with the now.
I LIKE! 😀
@Peter, where is the LIKE button? 😉
Oh you Millennials ….
Just to throw it out there.. VXX today is reading it’s lights out for the market starting tomorrow or Wednesday.. I will still look for a bounce @ or around 2100 but from what I am seeing we will drop a lot further than what everyone is thinking.. Good luck all…
With you on all that Jody. More likely Wed by my read. But there’s some kind of trouble lurking out there for certain … lots of potential sources …. GLTA as well. Mainly, be ready.
Jody, please would you tell us or show us what it is you are seeing that makes you think that ‘we will drop a lot further’.
Purvez, If you pull up a 30 min chart of the XIV (VIX Inverse) the downward movement from 9-7-16 is an impulse down to 9-13-16 then a series of zig zag 3 wave moves that we are in right now. It has the structure of a Bear Flag or a EW(1) down and now in a EW(2). So having an EW 3,4 and 5 to come once XIV breaks 32.99 says there is quite a bit of downside to come in S&P if the count is on. So I watch for the 5th wave up on the main count but keep and eye on XIV while S&P is under its 8 and 21 EMA daily.. Good book says momo is gone when we are under them and add the fact we are under the 50 SMA daily builds a even stronger case..
Thx Jody. That provides quite a convincing argument. I hadn’t thought of using XIV in that manner. Quite clever.
Purvez, No worries.. Sometimes S&P is clear as mud so I look at VIX, KRE and IWM to have a plan if the main count fails. Mike Tyson once said “Everyone has a plan….. until they get punched in the face” lol so I try not to get punched in the face..
Adre, now that the 19th Sept is out of the way does that mean that you are not expecting any move ABOVE yesterday’s high until at least 2017? Clearly you nailed the fact that the 19th would be a high and I seem to remember you saying that it would all be down hill from there.
Thanks for all your very interesting posts that keep hitting the mark.
“Monday will be the cycle peak, but Wednesday the price high”
Thx rotrot. Now that you mention it, I do remember reading that.
The following link shows in interesting perspective on why we should expect a rate hike tomorrow.
I’ve really been enjoying your nightly updates in “Traders Gold”. It really does help to put the markets in perspective and prepare for the next day. To all of those that are considering joining “Traders Gold”, stop considering and just do it. It is like a shot of calm certitude in a sea of turbulence.
Peter, if you can get a chance, could you take a look at Natural Gas. Given the cut back in in drilling, the likelihood of a cold winter (followed by more for the next several years), the inventory builds have been 30 Bcfe under prior year (although the storage is very high),… there may be a good long term play on the bull side. I am in the industry (E&P), been hanging on, so my interest is more than just abstract curiosity. Hope I’m not thinking from position and hope. Thanks,
Thanks so much for the kind words. I don’t normally cover natural gas, so I’ll address it here. And, I live in Calgary, which has more natural gas floating around than just about anywhere else. I’ve made a note to cover it more thoroughly in the Chart Show.
The future is not good. We have a lot further down to go. We’re in a countertrend rally which is getting near the end. We’ll end up seeking new lows. There are two things working against natural gas and oil. The big picture is that the first things to plummet in a depression are commodities. That’s because demand dries up. The money isn’t there. We’re heading into deflation (well, we’re already there, but it will start to spiral soon).
So … demand dries up, even though the climate is turning colder (which will be gradual, and only affects colder climates). It’s not enough against the supply glut and the lack of demand. During deflation, the value of currency goes up, so virtually everything else goes down relative to it.
The second problem is that the US dollar is going to go through the roof (the safe haven, reserve currency—in perception only. But in advertising, we always used to say, “Perception is everything,” which is certainly true in the markets). Because the US dollar is going up, which is what oil and natural gas are priced in, look for them to go down in relative value. There is simply nowhere to hide in a depression.
There’s a triple whammy here: US dollar strength, deflation, reduced demand. You simply can’t win agains that combination in the short or medium term, imho.
Thanks, appreciate the insight. Well, I guess that just leaves the old ‘Oil Patch Prayer’ to turn to. “Please Lord, let prices go up one more time, and this time I promise not to screw it up!”
Yeah, I’m pretty used to that particular mantra. 🙂
Just caught up to this note on natty. DGAZ is starting to display signals consistent with a major high for UNG being ‘near’. DGAZ was a ten bagger from Dec 2014 off the last confirmed signal. Won’t help your neighbors much though, Peter. But this is definitely on my radar screen as of today (9/23).
Clarification question! I know from a chart you posted on Crude Oil a couple of weeks ago…You were looking for a decline down to $36 or so and then a rally up to $62. Is that roadmap still on the table!
Per an email to you last week you commented that some new features to access your work. Any updates on that?
The newest “feature” is the Chart Show on Thursday, where I’ll cover oil and a full contingent of other market assets. There’s a link at the bottom of the post and in the sidebar.
I am such an ass. I was so busy that I didn’t read the post uptil now. AWESOME information and you know that I understand you for the fully 200%! Thanks for sharing such important life lessons with all of us! You are spot on…
Retraced 61.8% of the move down from the ATH on the SPX. Interested to see if that holds. I still see as low as ~2060 (as of today) without breaking the ending diagonal and have targets at 2071 and 2110, if the assumed pattern is still playing out.
So XIV ($37.14) is in the zone right now for the completion of wave 2 – In order for the theory i posted earlier this week to be correct the reversal should take place tomorrow. If not it looks like wave 5 is possibly under way.. Good luck all..
naturally BOJ has evidently disappointed and FED has done what everybody was expecting.
So, this rally looks suspicious.
Have a s/t sell alert today for XIV, the PM complex, and EMs. Its only an alert, and only s/t, but it gives credence to your idea, at least for another day or so. On the other hand, UVXY made a new AT low. So the alert could simply be pointing to a w2 p/b within the larger W5 from Peter’s chart above.
I’m not sure why your comments are getting hung up for approval. If you always sign in the same way, they shouldn’t. I’ll have to look into that when I get a bit of time….
Everyone was onto the triangle … so the market did what it does in those situations …
Combo Corrective … triangles are only allowed at the end of a three corrective set.
See third text box here:
Now see Dan’s proposed count … no wave 5 down of C of 4 down as I expected. Its over as of today, as he sees it.
We shall see, but it looks viable to me.
Pieter, here is an alternative count that I’m following on the DJIA since the Aug 15th high. After another small pop higher we should be ready for the ‘dreaded/exciting’ (depending on your point of view) ‘third of a third’. If ‘i of 3’ is anything to go by then the ‘iii of 3’ should be a doozy!!
Well crafted, purvez. My weeklies (non EW) like the w5 up count, taking 3-4 weeks to cycle through. But my monthlies are on “times up” and on to the bear “imminently” so I’m watching carefully. All eyes on Monday night. Any kind of top, micro i down, retrace to a lower top into Monday’s close, would be our cue to expect a gap down Tues. Short of that ….patience.
Now that we have seen the high today would you say that the top is done and that we will go down from here until Sept 27th.?
I gave 9/22 for the high. So one more leg up is possible, After that the cycle is down into 10/15-ish,
Thanks for your update Andre. I will take note of these dates. Keep rocking.
This gives me a bit more confidence. Shame I closed all my positions before reading this. I forget there is also a free section to this site with some great contributors like you Andre! I think ill still be sitting this out until October unless markets really start dropping after today aligning with your views.
Are you planning to short now, there are lot of stats which says post fed 1 percent gain is retraced by at least 2 percent.
PALS is mix of seasonals (bad until October 10), phase (positive until after NMoon), declination (positive next 10 days), distance (neutral next 10 days). So it is mixed but slightly bullish next 10 days. I am not invested at moment, taking a breather and trying to “day trade” using a daily version of PALS which uses intraday seasonals.
Is your conviction level still “high” that today could have been a “high on price”?
I have not seen Peter’s Chart that he did today…but I plan to view it tonight!
Peter has been looking for a “higher high” and that could certainly happen tomorrow. My question, Does that fit comfortably into your view on where we are headed from here? Thank You for any comments!
Ah; it works. Answered twice but site didn’t register,
9/22-23 strong (futures now red). But 9/26 is another major date to test. So I expect a consolidating day with a last test up into 9/26, But this is really the end of it. First stop down mid october but we will be down into march 2017. As first leg down that is.
Interesting note.. on a S&P daily if you connect the most recent tops and bottoms you can see the broanding triangle with a slight lean to the right and the E leg wrapped up today.. Hmmmm
Thank you Andre!!!
Colleague just the connected the dots at my end, re that triangle.
Not iv on the way down. Not B in a correction for 2 up.
But a B wave within 1 up within the larger 5th wave. ED. All threes from here on up.
could you explain your count a little bit more, please ?
Is it something like the Dan’s count ?
Similar. Correction ended at the low. Sharp rebound is a of 1 of 5.
The triangle is second part of the first leg (b of 1 of 5) up off the low.
See ET “Joe” ‘s Sat 9/24 chart here
He’s got the count as I’ve proposed it off the lows.
Not as confident about what he sees ahead, though.
So the market made a high 9/22; as expectected. A 1440 sme degree count on 10/15/14 gave 9/23; this gave the low on Friday. And the low was needed as the big turn comes next week. This all changes nothing in my forecast. I may have said 9/27 would be a low, but I’ll have to see if there was an inversion. I see tidal inversions on Monday and Wednesday. Both are high tide inversions and it is very rare to see two in three days. So something is brewing.
This is all about micro timing as the dominant cycle is definitely down into 10/15-16 within the longer term march 2017 low within the even longer term december 2023 low.
Have to do my analysis. Tomorrow an update. Next week will be special!
Thanks for your continuous update Andre. Wanted to know on what is high tide inversion. Are you seeing wild swings next week? Will eagerly await to see your next post. Thanks.
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