DJI Elliot Wave and its HistoryBy using parabolic curves and the logarithmic chart I have found something very consistent and interesting with the DOW starting from its inception.
***Note: IF this has been discovered before then all credit to them, this will just be a decent idea to think about now and to bring up given recent events and trend.***
The Great Depression marked the first parabolic curve break on the chart but after I drew more parabolic curves using these guidelines:
- Each curve must touch the initial bottom back before 1900 and the bottom of the Great Depression (~1932) and must touch the start of Wave 1 and the bottom of Wave 4 for each of the cycles throughout DOW's history.
- There had to be 5 waves that match the rules correctly on the Monthly chart
- There had to be a matching A,B,C style correction after each cycle once the parabolic curve broke
- The 1973-74 recession was more of a W,Y,Z where it ended in a zig-zag type pattern
- Also, the pandemic fall back was very fast but still had a quick A,B,C which I left off the charts since it was too small to view
- Each parabolic curve break had to be after or during an important part of U.S History and sometimes World History as with COVID-19
In the end it seems to be pointing towards a large scale 1 - 5 Elliot Wave on a Super-millennium type cycle. Now this is just pure speculation but proper to ponder as an idea as the rules do fit currently to be so.
If there are debates to this please let me know as I am still a bit intermediate level with Elliot Waves. Same goes for each of the cycles I have shown.
So what does this mean for a possible future?? Once again high speculation here.
- If this is true then this current possible pullback is just a number 2 on the Monthly Elliot scale of this cycle which, if history repeats, would be a 50%-62% retracement back to 22-25k range and should be completed by mid-year next year (2022).
- That means a 3 would reach ~53k with a wave 4 to touch that current parabolic wave at ~36k. Then it would follow a wave 5 pushing towards 55k area.
- After this parabolic break I would speculate that it would be the last and it would end wave 5 of the super-millennium type cycle that DOW has been on since inception
- Once broke it would result in a large scale and long scale bear market that could last many years and see a correction pushing past 80%, 9.6k seems to be a good area with strong support as an eventual target
- Another possibility that points to this being the end of a very large cycle is that each of the parabolic curves are getting more narrow showing the overall rapid price rise as this has aged.
- Also, drawing out the Elliot Waves for this cycle showed 3 and 5 being very close for their tops with 1 and 4 nearly matching in price as well.
- Current Wave 1 has been riding the bottom of the last parabolic wave for some time now.
- Each correction in these Waves have been either been related to a big economic or historic event (sometimes both) so looks like this one could be another housing industry bubble as has been speculated to happen soon.
- IF this stays on course as shown then it would point towards the second half of 2027 as a huge historical event to come especially one that could cause a break of the long-term cycle. This would also be devastating too all markets as well if it happens.
This is just something I did and thought it would be a good idea to share. The DOW has been showing signs of a large correction coming and the speculation of another housing bubble bursting has got some thinking of a 2008 recession. What I have found does show a correction but it is at this time pointing to a much larger correction to come but at a later date this decade.
I would speculate though any monthly close below 20k on the DJI could mean serious trouble indeed as it would break this parabolic curve and each time it has at least meant a multi-year bear market to follow.
Anybody have anything to add or to help correct me on (I'm still not quite to an expert level with Elliot waves) then let me know be glad to comment back!
***Disclaimer: I am not a financial professional/expert and all ideas from me are all speculation based off of my own research. Please do your own research as well as I am not responsible for others when it comes to their financial decisions.***
