The Dow Industrials’ Big 8-Wave Cycle is Incomplete
“We finally understand our full Elliott wave position”
by Bob Stokes
Updated: June 09, 2022
The Wave Principle's basic pattern includes five waves in the direction of the larger trend, followed by three corrective waves, as illustrated in both bull and bear markets below:
Keep in mind that the stock market is a fractal, so this pattern unfolds at all degrees of trend, whether the timeframe is 3 months, 3 years, 3 decades or 3 centuries.
As you might imagine, the size of countertrend corrections are in proportion to the size of the preceding five-wave move. In other words, a five-wave price move that took 3 decades to unfold will sport a much larger correction than a five-wave move that took 3 years to complete.
Here's what you need to know: Elliott Wave International's publications shown subscribers the complete, eight-wave cycle at all relevant degrees of trend, including the Grand Supercycle trend which began in the late 1600s.
For instance, after showing a price chart which began in 1697, the February 2021 Elliott Wave Theorist said:
[The chart] shows the market at the highest scale for which we have data. It comprises countless individual Elliott waves that have taken many generations to play out.
At this scale, we finally understand our full Elliott wave position.
Less than a year after that commentary, the Dow Industrials and S&P 500 index topped in January 2022.
As implied, that top may be far more significant than marking the end of the bull market which began in March 2009 and far more significant than many market observers believe.
Indeed, the sentiment expressed by two recent headlines from major mainstream publications is "buy the dip":
- Stocks Have Been Falling. I'm Still Buying Steadily. (The New York Times, May 20)
- Don't Panic. It's Time to Be Bold and Buy Stocks. (Barron's, May 13)
However, Elliott Wave International is emphasizing financial protection and safety.
The main reason for that stance is that the Dow's centuries-long eight-wave bull market cycle (which, as you'll recall from the illustration, includes three corrective waves) is incomplete, according to our analysts' best interpretation of the wave structure.
You can get a good idea of the Dow's current juncture within that big eight-wave cycle by reading our Financial Forecast Service, which you can have on your computer screen in just a few minutes as you follow the link below.
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Right now, you can see the time-tested indicators our analysts are using today -- and learn what they suggest for the future price paths of major U.S. financial markets.
Get our outlook for stocks, bonds, gold, silver, the U.S. dollar, the U.S. economy and much more by reading our flagship investor package -- The Financial Forecast Service.
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