Potential Market Top, Biggest Correction of a Generation
Updated
After looking at the macro conditions and the current Elliott Wave count, I believe these is a huge risk of downside coming.
Cases for market top:
• Elliott Wave count, with perfect ET triangle in Wave 4 marking the start of Wave 5
• 1.0 Wave 1 extension to project Wave 5 end
• Market Euphoria, large participation by retail
• Blow off tops in tech stocks and others
• Some traditionals have already corrected 80-90%, others look to be flagging
• US 2 year bond and US 10 year bond show we still have a long way to go to reach recovery
• We're at zero interest rates and negative interests rates in many markets around the world - all late cycle behavior
• Debt has only been increasing over the last few decades
Where we go from here:
• We could go higher and see a larger blow off top or reverse here from this current projection
• We will be correcting price behavior over the greater part of the last century
• A lot of the projections and studies look at the 2000, 2008, 2018 crash as distinct events. In fact, these crashes are linked. The correction we're seeing is not just correcting the last 10 years of a bull market, but everything since 1930s. The duration may take more than 36 months
Cases for market top:
• Elliott Wave count, with perfect ET triangle in Wave 4 marking the start of Wave 5
• 1.0 Wave 1 extension to project Wave 5 end
• Market Euphoria, large participation by retail
• Blow off tops in tech stocks and others
• Some traditionals have already corrected 80-90%, others look to be flagging
• US 2 year bond and US 10 year bond show we still have a long way to go to reach recovery
• We're at zero interest rates and negative interests rates in many markets around the world - all late cycle behavior
• Debt has only been increasing over the last few decades
Where we go from here:
• We could go higher and see a larger blow off top or reverse here from this current projection
• We will be correcting price behavior over the greater part of the last century
• A lot of the projections and studies look at the 2000, 2008, 2018 crash as distinct events. In fact, these crashes are linked. The correction we're seeing is not just correcting the last 10 years of a bull market, but everything since 1930s. The duration may take more than 36 months
Note
Just for context, here are some older charts during the crash and about a year before that go further on the long-term cycle we're seeing here:•
•
And to note for anyone trying to time the downturn: We need to look for confirmation of a change in trend. Blow off tops can rip your face off so it is risky to try to front-run the top. That said, I do expect that we are close and for the top to form around one of the fib extensions. Now might also be the time due to the weekly bearish divergence.
More notes: You're responsible for managing your own trades and positions. I will be monitoring this as events develop but I may not always be updating these ideas. Typically, I only post on TradingView when I find something compelling and interesting enough to post.
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