Saturday, October 16, 2010

10/16/10 -Grand Supercycle 4 Combination Corrective

****The long term count below assumes that EWI's count for Grand Supercycle 3 is correct****

While posting the combination corrective count at EOD yesterday (stay tuned. I may have to make some adjustments to that count), it got me thinking yet again about the long term (20+ years) count.

I start out with EWI's version of the flat corrective structure. Please refer to the Elliott Wave International Educational website for the basic tenets.





Elliott Wave Principle, 10th Ed., page 46, "A flat correction usually retraces less of the preceding impulse wave than does a zigzag. It tends to occur when the larger trend is strong, so it virtually always precedes or follows an extension. "

I have posted a version of the chart below previously. I still believe we have completed a textbook flat that began after the 2000 dot com bubble busted. This makes sense since Grand Supercycle (GS) 3 lasted 70 years. That's a pretty strong trend so it makes sense that we correct with a flat.

So playing off the combination corrective theme, this is one way I am interpreting our current progress on GS4.

EWI expects GS4 to correct down to the previous wave 4 of GS3 which is approximately 400. However, I propose that what is not corrected in price, will be made up in time.





****Below assumes EWI's count is incorrect****

The alternate count is that we are still in Supercycle wave 5. The flat, which completed in 2009, marked the end of Cycle 4 of Supercycle 5. If this is correct, then we are in a new bull market with Cycle wave 5 hitting a new high above 1576 to complete GS3.

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