At the top of the third wave, expecting a drop to under 2100 in SPX, I said that the fourth wave would be blamed on the coronavirus. And sure enough, it has been.
Even though worldwide debt is larger than it has been ever before in history (250 trillion at last count, and obviously growing like wild fire), the “herd” believes that a virus is the thing that’s caused this market downturn. However, I predicted this wave down over a year ago (long before the virus). Nevertheless, politicians and the media blame the virus. The truth is the exact opposite.
When the stock market drops and mood turns sour, illness becomes more prevalent. The most recent pandemic before this one was the Swine Flu, which hit in 2009, right at the bottom of “The Great Recession.” As it turns out, that drop was actually the start of what’s going to result in a major depression that will dwarf the Great Depression of the 1930s. We’ll see more (and more lethal) pandemics ahead, as mood turns increasingly more negative (after the top of the market, expected early next year).
The numbers coming out now (after all the hype and fear-mongering) are pointing to the Coronavirus being another flu-like occurrence that will likely kill no more people than would have died this year, anyway, just like the Swine Flu pandemic.
Estimates are that the Swine Flu affected up to 1.4 million people, but killed only about 150-575,000. It was projected and hyped-up to kill many times more (19 million affected was the original prediction). What’s more, the annual death rates in the US for the years 2007, 2008, 2009, and 2010 were almost exactly the same. Statistically, the same number of people died during the year of the virus as died the year before and after.
This time round, figures coming out of the UK show the same phenomenon. 99% of deaths are to people who were unwell to begin with. The same number of people died in March this year in the United Kingdom (based on early figures) as died in March of last year.
In other words, these “pandemics” tend to hasten the death of people with underlying conditions that were going to die anyway.
It’s estimated that 650,000 people die every year from season flu. We’re nowhere near that number, in fact, at about a tenth of that number.
We have media who are hyping this thing like crazy, because, let’s face it, they’re broke, and more clicks from scared-to-death consumers makes them more money from advertising. Politicians, who we mistakenly call “leaders” (they’re really “followers” because they always react to the consensus) have jumped on the bandwagon, due to fears of losing their jobs if they’re not seeming to react the way the media and the terrified public expect them to.
The perfect horror-show cocktail.
In any case, I’m writing a longer-length blog post this weekend outlining all the inconsistencies in the numbers versus the heavy-handed response. The government has destroyed the already weak economy at a time that it can ill-afford to do so. It will not recover to its previous level and will simply limp into the inevitable depression that I’ve been predicting for over ten years now.
Then the real blame-game will start. It will end in civil wars and revolutions worldwide, just like it always has in the past, after a 500 year cycle top.
The pandemic is not “an unprecedented situation” as touted by the media and everyone you talk to on the street. What is unprecedented is the response. There will be a lot of explaining to do after the true facts come out. Fingers will start pointing in every direction. The truth is that the response has done (and will do) far more damage to people’s lives than the new coronavirus flu bug.
And that’s why history is so important. Paying attention to cycles gives you a head’s up as to what’s going to happen and why. We’re on a merry-go-round with incompetent “followers” and “the greedy” running the show. What else is new?
Know the Past. See the Future
Elliott Wave Basics
Here is a page dedicated to a relatively basic description of the Elliott Wave Principle. You’ll also find a link to the book by Bob Prechter and A. J. Frost.
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US Market Snapshot (based on end-of-week wave structure)
This chart is posted to provide a prediction of future market direction. DO NOT trade based upon the information presented here (certainly NOT from a daily chart).
Above is the daily chart of ES (click to enlarge, as with any of my charts).
The wave down from the 3400 area appears to be a double zigzag (the subwaves are difficult to label with certainly). At the bottom of the last zigzag, an ending diagonal traced out. That ended the main down-leg for the short term.
I'd then called for a rally, as we needed another wave up at least 38% of the distance from the 3400 top. This B wave rally has to be high enough to make the entire structure look like an ABC "three." We got that rally the week before last.
Last weekend, I called for an intermediate top, which we now have in place. The main trend is still down and it appears so far, that it will be another zigzag. Looking down to a new low.
Summary: We appear to be in a combination fourth wave, and have traced out double zigzags to the downside. We're beginning the third pattern to complete the large fourth wave drop. Another zigzag down appears to be the plan.
I expect to see at least a slight new low.
Once we've completed the fourth wave down, we'll have a long climb to a final slight new high in a fifth wave of this 500 year cycle top.
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