We’re very near a top. I don’t think there’s any logical discussion to the contrary at this point. Society is turning decidedly negative, and the revolution is becoming more and more obvious to the “enlightened.”
As well, in an impending depression, commodities always drop first (oil and gas are a great example, as is the DOW transportation index), due to demand simply drying up. Banks always move to an expansionary monetary policy (The Secret Life of Real Estate and Banking, Phillip J. Anderson), and real estate morphs into a bubble. The bubbles almost always break in that order, followed by the demise of banks.
This time will not be different.
In fact, if you look to the bigger picture, as per my video entitled “Global Cooling,” this major cycle turn is in the midst of a 5 century top. In terms of Elliott Wave Theory, we’re in a Super Cycle turn, which is ushering in a major global revolution, because it’s doesn’t only affect the market, it affects the mood of humans, climate, health, the economy, and just about everything else that happens on this planet. As in other major revolutions, it’s revolt against the merchant class, which always takes advantage of everyone else.
I recently returned from New York City, where I spent a few days researching the work of Dr. Raymond H. Wheeler, in the MTA archives (Market Technicians Association) at Baruch College. There you can find Wheeler’s Big Book (when opened, it spans 7.5 feet with a depth of about 2,000 pages). It contains notations by hand of major events in a wide range of areas, along with climate trends of the period.
In the early to mid 1900s, Dr. Raymond Wheeler, with a team of 200 researchers, analyzed climate back 20 centuries to 600 BC. He used tree rings and sunspot records to plot both temperature and rainfall over that entire period.
He identified major climate cycles of 100, 170, 515, and 1030 years and predicted extreme weather at about the year 2000, followed by a turn colder and a long-term drought … and sure enough, that’s what seems to be happening. You can find his drought clock here. My video on Dr. Wheeler and his seasons is here.
The picture above shows Dr. Wheeler with “The Big Book,” over 2000 pages of all his data on climate cycles in which he correlated major events throughout history. He’s shown how climate cycles repeat with event patterns over and over again.
Above is a picture of The Big Book today.
Here’s what Dr. Wheeler wrote in the 1950s about the period we are entering now:
- The divisions of history long ago observed by historians—ancient, Medieval, and modern—are more than divisions of history. They are long climatic cycles.
- The sixth century BC, the first AD, the fifth AD, and the 10th and 15th were all natural turning points in history, marked each time by the decline and fall of civilizations the world over and the birth of a new era. In each case, these centuries terminated 500 year cycles in long range weather trends. Each was an exceptionally cold period in history..
- The six century BC, the fifth AD, and the 15th marked a end of the still longer cycle, on the order of 1000 years. These sentries were characterized by exceptionally profound reorganizations and revolutions in the civilizations of the world.
- 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.
But let’s get back to the market. The US market typically tops in the September/October timeframe. That’s what happened in 1929. It’s what happened in 1987, and again in 2007. Let’s take a look at the charts to see what the tops looked like:
Above is a daily chart of the year leading up to the 1987 DOW top. This wave down was a fourth wave. It was an ABC corrective wave. As such, it came down in an A wave of 3 waves (the A wave down was in 5 waves but the 4th (or b wave) was way out of proportion to the tiny 2nd wave, and so this made it a “3”). Then we had a B wave, which retraced 62%, which is typical. The final wave down was unmistakably a C wave.
The wave leading up to the top was an ending wave of a set of motive waves that began in 1974. Ending waves are either in 5 waves or they’ll be a triangle of some sort (either a traditional fourth wave triangle, or a fifth wave ending diagonal).
Above is a daily chart of the 5 year span leading up to the top of the 2007 DOW. The set of waves leading up to the top in this case, was also a five wave motive wave, which began after the drop in 1978. So, 1987 and 2007 had motive wave tops.
After the top, we have a first wave down and a retrace of 62% before a very much larger turn down, of course. That’s a very typical start of a trend down after a major top.
Above is the daily chart of the DOW today. This time in the DOW, we do not have a final wave up in 5 waves. We have waves in 3’s. So, we’re looking at finishing up what is so obviously a triangle of some type. The structure here is obviously (to me) an ending diagonal. That’s because we’re already had the fourth wave—(4) on the chart. So this is a fifth wave and the only triangle option for the full fifth wave is an ending diagonal.
Base on the chart above, we’ve all but finished the ending diagonal with the typical throw-over, but the other major indices are not finished yet. They have single waves in three waves, which means the structure is not complete. This means that in the DOW, we may get a second smaller ending diagonal to finish off the entire countertrend move up from 2009. This is a Super Cycle top that has been working its way up form the 1700s, so I’d expect this to be an historic ending before the crash of the century.
Note that we’re heading towards the same timeframe of September/October. You’ll find that the other major US indices seem to be beginning their ending diagonals, with only the first wave up formed (all the waves so far are in 3’s.