Kondratieff & Elliott Waves: Top In?

When you read a lot of alchemy you will no doubt run across the Philosopher’s Stone references. The stone is said to have magical powers like turning mercury or lead into gold. It’s also reputed to be used in making the elixir of life which can extend/delay aging.

Magick, though, runs off the rails. People do things like pee in a glass container, seal it, and lay it in the sun for years then drink it believing the “powers” are in there. Greed and the thirst for eternal life are brothers, psychologically speaking. Given enough promises, reason gets set aside and insane behavior appears.

Which gets me to the first point this morning: The data (actually a couple of scatter plots from m y research) offer the insight that the top for the market may really be in already.

It is not conclusive, mind you, but remember the date ranges I recently posted. If we get to mid October without new all-time highs, which is looking dubious, then standing aside must be considered.

Another way to frame the question is to look at a suitably broad index, such as the ^SPC (S&P 500). From early September (around 2,190) down to the lows of mid September (around 2,125) we can see a pretty clear Wave 1 down in Elliott wave terms. See the book: for an explanation if you don’t understand waves.

As of yesterday, we have a nicely defined three wave rally.

The Economist’s Stone is figuring all this stuff out so it makes sense and follows a set of rules. Things like “Wave 2’s may be as small at .382 retracements of Wave 1, but are often .618 to .80.”

Plugging in the recent data, we note the rough size of the decline was 65 points on the S&P. And with yesterday’s 2,178 (rounding) we have a 53 point bounce.

Doing the math: 53 point bounce divided by 65 point move means the trace is about 81%.

This being the case, then, where should we go next?

Peoplenomics subscribers have access to a little spreadsheet I built exactly for this kind of situation: It lays out – based on the Wave 1 move – what targets are for the subsequent waves.

The “brainamp” says ideally we should have stopped around 2,165. I’m willing to provide for overshoot though, since the Fed has been pumping money like crazy and federal spending is presently going wild in order to make up economic activity going into the election.

Regardless, the third wave down (which might begin any old time) should take us down to best case 2,068 or as low as 2,051 or even lower. Wave 4 should bring a bounce but then the move should finish around 2,008.

I expect this is where we will go before the election.

Problem is? Well, this five waves down will quite likely turn into a LARGER Wave 1 down. The rally of the larger degree Wave 2 gets us back to the 2,120 area in March/April of 2017 and about then we roll over into the Wave III down which then takes us down to an ultimate S&P low ranging from 1,789 down to 1,675.

Timeline on this might be something like fall of 2017. Spring of 2018 rallies back to 1,993.

But then we head for the real start of the Greater Depression such that by late 2018 (earliest?) to 2020 (latest?) we drop in a best case to 1,060 on the S&P 500, but more likely to the 802 area (mid-range case) to 742 worst case.

This is not financial advice. Economic Outlook only.

I have only shared my scatter plot work with a few people. One of them is my consigliere.

When I pointed to the scatter plot results, he reminded me of the work of Tony Plummer, who used to drop in on the old University of Colorado Longwaves discussion group. “As I recall of Tony’s work, the relationship between interest rates and equities pricing came be very loose and in major waves can be displaced by up to six months, or so….”

I won’t bore you with the details from there, except to say that it is POSSIBLE the top is in, but not a certainty yet.  Stupid c van have a long echo.

If you’re serious about economic forecasting, add Tony Plummer’s book to your readings: Forecasting Financial Markets: The Psychology of Successful Investing

Nevertheless, a decline as the fall progresses, perhaps based on the fear pandering that an election of Donald Trump would upset the Globalist apple cart. See, as examples, alarmist reports like “What a Donald Trump Presidency would o the the global economy” and this peach: ”Trump presidency could cost U.S. economy $1 trillion: Oxford Economics.”

Democrat economic masters of economic exploitation, like George Soros, are promoting a campaign to “register 8-million ‘global citizens” to vote.

And while the Federal Election Commission is regularly lobbied to slam down on Drudge report and other non-MSM outlets, we haven’t heard anything yet about the Facebook campaign to register voters, though we expect which party is banking on lots of young, gullibles to put them/her over the top.

Missed completely by the MSM and by most of the Alt-Media too, is the simple fact that the U.S. economy is on an unsustainable course and will likely implode during the next presidential term.

  • It’s baked in bond/stock relations.
  • It’s baked in long wave economics.
  • It’s baked in compound interest.
  • And it’s baked in globalism which has stolen American jobs such that we don’t have enough jobs here as it is.

Are there other causes? Why sure.

We could toss in Welfare rules that have systemically destroyed black and other minority families and which have given financial rewards to welfare moms to have more and more children…

And then we all feign surprise when things like Charlotte happen.

BTW, the lady cop who was involved in the shooting in Tulsa has been charged.

Did you see in Charlotte, as we suspected, there is a report that 70% of the people arrested were out of state agitators!

While there seems to be a lot of “news” going on, the markets are making a pretty grim prediction is you read the numbers a certain way:

No matter who wins the election in November, the market’s wave structures are hinting that there are some very serious downsides ahead over the next two or three years.

And whoever wins doesn’t really matter much.

The markets have already spoken. It’s the language of collapse to come.

The detailed scatter plots for subscribers tomorrow.

Have a great weekend and see you Monday!


Comments

Kondratieff & Elliott Waves: Top In? — 15 Comments

  1. ”Trump presidency could cost U.S. economy $1 trillion: Oxford Economics.”

    actually I don’t think it makes any difference who becomes president.. from borrowing money for so many years at an interest rate.. the only way for america to get out from under it is to claim bankruptcy on the dollar which would collapse the country instantly.. that is why we are trying to print our way out of it.. but then that is an option since the dollar isn’t really backed by anything more than a promise anyway..

    “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” Albert Einstein..

  2. “But then we head for the real start of the Greater Depression such that by late 2018 (earliest?) to 2020 (latest?) we drop in a best case to 1,060 on the S&P 500, but more likely to the 802 area (mid-range case) to 742 worst case.”

    I think that is a very Nice optimistic projection..
    ( my wife says I am a pessimist ) I am still going to stick with six months after the new administration takes office.( my real projection is late march through the end of may) .
    I am anxiously waiting for that picture where the out going administration is walking down the well lit hall while the president is congratulating the incoming administration for his or her ( since the one percent want hillary ) skill at campaigning .. then they get a real look at the books and soils their shorts and their hair turns grey instantly LOL.. the tag your it photo shoot..
    they will have only a couple of ways to float this noodle.. either way sinks us..But then that is my opinion.. from what I read it isn’t a good view.. but heck maybe I am really an optimist..

  3. Dear George: For sure, this is your best piece of market Observations! TY! please consider the chart, free, to watch the Spoozer price vs, PRICE of 30 year Trashury.
    Armstrong still has higher for Equities (USA) due to Flight Capital. Personally, I find this hard to support, yet. hope the chart works for you…here it is:
    http://stockcharts.com/h-sc/ui?s=%24SPX%3A%24USB&p=W&yr=5&mn=0&dy=0&id=p79904260352

    you and your work are Outstanding! Walter

    • I don’t comment on the work of others much, but my sense in terms of domestic market is that the top may well be in…

  4. Tim Woods has been stating the last few years about the big cycles drop. He expects a 9 years cycle last drop for gold this winter. Then it off to the races in gold.Plus he states that stock markets that have big major drops always go below the last cycle low. Which would be 666 on the S&P.

  5. Hey George:
    Just saw that Trump’s newest policies now adding $5.3 trillion to the national deficit and Hillary’s are adding $0.2 trillion. Conservatives not see too bothered by this. And Reagan tripled the ntl debt. So should we be worried about the ntl debt thing, or not? Also, if we are going to add to the national debt, tax cuts are the least effective way to stimulate the economy, no? Shouldn’t we be seeking a better bang for our buck? Best, Mike.

  6. Don’t forget about the major change coming in December to Overtime laws! This could be another game changer to the economy!!

  7. I understand the First Amendment right to protest. I think racial inequality should rest with the dinosaurs. But isn’t it interesting that the MSM does not touch the ‘out of state’ agitator factoid? Even more specious, how do hundreds of apparently unemployed but ‘professional’ protestors manage to afford lickity split travel to the protest hot spot de jour? Anyone who’s ever booked same-day travel knows the rates are not exactly rock bottom. And who pays the bail and/or legal fees when the more ‘enthusiastic’ protestors are arrested? My guess is that many of these folks are carrying gold card members of the George Soros Travel Club.

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