Wednesday, September 16, 2009

What does the future hold?

  • Here are two charts comparing the Dow Industrials (1921-1933) to the Nasdaq Composite (1978-2018).........I am a firm believer in Elliott Wave Theory. It is not the be all end all, but it does give you a firm grasp of where we are likely to head in the future. The Dow from 1929-1933 experienced a Supercycle wave IV decline. To those unfamiliar with Elliott Wave this is a corrective phase in an even bigger bull market. Since 2000 the Nasdaq has entered a Grand Supercycle wave IV decline. Yes, this is a correction in the midst of an even larger bull market, however this correction isn't over yet.
  • Wave IV's behave somewhat the same in how they unfold, that is why we can 'predict' what the market is likely to do over the course of the next few years by looking at what it did during past wave IV declines. The Nasdaq decline will look a lot similar to the Dow of the Great Depression, however it is one degree larger (Grand Supercycle rather than Supercycle) so its devastation and scope are likely to be larger.
  • But remember.....THIS IS A CORRECTIVE PHASE IN A LARGER BULL MARKET!!! So when this rocky bottom does come there is reason for optimism. The trick is arriving at the bottom with a penny to your name.
Dow Industrials (1921-1933)

Nasdaq Composite (1978-2018)

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