More Bottoming Action Needed – 06/24/11 © ™

  • SHORT TERM – MAY 2, 2011+
  • UP, CONFIRMATION NEEDED
  • INTERMEDIATE TERM – FEBRUARY 2011+
  • DOWN, CONFIRMATION NEEDED
  • LONG TERM – MARCH 2009+
  • UP
  • VERY LONG TERM – JANUARY 2000+
  •  DOWN, WIDE RANGING MEGAPHONE FORMATION

The market isn’t ready to take off and needs more bottoming action.  The expectation is that the bottom may be in and we are now meandering around completing the process.  If the market should receive bad news like Greece will default, that might precipitate a climactic downturn.  Although the Greece situation is highly volatile, one would expect cooler heads to prevail.  But different cultures sometimes don’t think like us and that’s why the market is so edgy.  I suppose edgy will prevail until the Parliament votes for the austerity measures on June 29.

06-24-11, DJ INDUSTRIALS, 60 MIN BARS, SINCE 3-28-11, WAVE COUNT

At the top of the page under “Very Long Term”, I have “Wide Ranging Downtrend, Megaphone”.  Below is a chart of the current megaphone formation in the DJ Industirals.  You can see the widening formation with higher highs and lower lows.  This is identical to 1966 to 1974 except we are traveling at a slower pace.  I would expect the megaphone to be completed in 2018 with contact on the lower line.  This would complete the 3 steps down from the multi-generational peak achieved in 2000.

My reason for 2018 is the 18 year cycle.  The 1982 bottom plus 18 equals the 2000 peak.  1982 minus 18 equals 1964, which was nearly the peak in the stock market (actually early 1965).  1964 minus 18 equals 1946, which was the bottom and kickoff for the bull market of the 50s and 60s.  1946 would be an equivalent to 1982 as 1982 was the kickoff for the bull market of the 80s and 90s.  1946 minus 18 equals 1928, which was nearly the peak of the bull market that ended in 1929.  So 2018 has adequate reason as the target date.

2018 = lo ; 2000 = hi ; 1982 = lo ; 1964 = hi ; 1946 = lo ; 1928 = hi

MEGAPHONE FORMATION

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