A Bearish 2024--Can We Move Down Yet?Early guess of the bottom is between November 2024 and March 2025 which relatively falls in line with the originally projected bottom from July 4, 2022.
This is where Cycle B has topped thus far. It was in the larger target area from my December 13, 2023 analysis, albeit at the tail end of the box.
Time for the study models.
1 - MOVEMENT EXTENSION STUDY
The movement percentage extensions have not changed from the recent initial analyses for Cycle wave C. The range for the bottom is likely below 3365 and above 2733.
2 - SPECIFIC WAVE RELATIONSHIP STUDY
The price models have a few pockets of interest which are the squares at the bottom right of the chart and included in the close-up image below. The strongest pocket across the models places the low between 3100-3200. Next strongest pocket is 3000-3050. Third is at 2750-2800. Additional pockets to consider are at 2900-2950 and 3300-3350. The lowest pocket (magenta rectangle) below 2800 is likely out of reach while the 3300-3350 model may be too high. The bottom is likely between 2900-3200. The duration models strongly favor matching durations and fractions thereof from Cycle wave A and B's duration. Based on the macro nature of the forecasted wave, I will discard these durations as explanations can be found in my prior analyses. Duration pockets of interest are strongest at 680-700 trading hours 2720-2740, and 900-920. These pockets may be too long and too short based on the additional studies, however, an interesting pocket exists at 1820-1860 and 1850-1900 trading hours. Additional considerations are at 1640-1660 and 2040-2060.
3 - DERIVATIVE MODEL STUDY
While this study is suitable for waves 3, 4, 5, and C; not enough data is available based on the macro nature of the current wave and this study was not conducted.
4 - KEY RELATIONSHIP METRIC STUDY
There are unique elements and descriptions for the behavior observed between Cycle waves A and B. For instance wave B came incredibly close to retracing all of wave A's movement. The current top places the retracement at 98.087% which is an A:B relationship of 1.0195. Wave B was also nearly twice the size of Wave A at a relationship of 0.5531. I studied similar instances to attempt to determine what Cycle wave C could do. Of note was a pocket of duration data around 1855 trading hours and a bottom between 2988.29-3290.59. I further refined the data by examining the rise over run (R/R) relationships between waves A and B. The current relationship is 1.8432 meaning Cycle wave A moved faster than Cycle wave B. These results yielded duration pockets between 1801-2122 trading hours and a market bottom between 3161-3181.
Based on the studied subset of data, common R/R relationships between waves A and waves C were further studied. The main areas of focus were relationships at 0.388, 0.68794, 0.75, 0.80, 1.00, and 1.20. If the number is greater than 1, Cycle wave A would have a larger R/R than Cycle wave C. Cycle wave A is typically larger, however, that would mean this next market drop would be very quick. My immediate chosen ratio was 0.388, however, this appears too slow. Stocks have been more highly volatile and have not generally dropped slowly over time. Cycle wave A's R/R of 0.97 was a quicker drop than Cycle wave B's 0.53. The index should drop below 3491, but likely over a longer term than Cycle wave A. Cycle wave B was nearly double the duration of Cycle wave A even though, wave A moved more on a points basis. Cycle wave A lastly just over 9 months, while B was around 14. I expect C to last 11-16 months. This next chart outlines the movement extension percentages from the first study, the potential pockets from the second study, while overlaying R/R endpoints on top.
The major intersections are addressed with vertical bars aligning to their R/R ratioed lines. I thought 0.388 was too slow and this layout indicates ratio 0.6879 is likely too slow as well. The sweet spot is likely with a ratio between 0.80 and 1.00. I will place the bottom around January 2025 for now which is around 1832 trading hours long.
This analysis will become more refined as we move forward with time. 2024 appears to be quite the down year for the market between the current military conflicts, shipping disruptions, companies gambling they can refinance their debt at a cheaper rate, incredibly high personal debt levels, and a likely Chinese reclamation of Taiwan. There are also elections in the United States bound to add uncertainty to the future. Things seem to subside by the first quarter of 2025 and the next push higher will likely be stronger and faster than those previously experienced so not all is lost. Protect the retirement accounts for a year and enjoy the future.
