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.

9/29/10 EOD Update #2 (11:15 PM BOLLINGER BANDS)

11:15 PM BOLLINGER BANDS

Bollinger Bands

Those bands are tight which is signaling an explosive move is in store. Which will it be? A thrust out of the triangle or a breakdown out of the ending diagonal?

9:26 PM : NASDAQ


Here's a long term view of the Nasdaq Composite. Notice there is a big difference with this index vs the SPX or the DOW (See my DOW chart here. It's sporting a potential expanding triangle)?

Either we are seeing a very large triangle in the works or Grand Supercycle 4 completed at the March 2009 low.

There's a very large looking inverted head and shoulders pattern developing. This may be seen on the SPX (See my SPX version here) and DOW as well. The target for this IHS is approximately 4000.

Why would we care? I think this may support a Grand Supercycle count for the SPX as well as posted here over the weekend.

NDX

The NDX is pretty similar and looks like it is about to break out of its IHS.

Ok here is an update to my current count. I changed the triangle subwave labels to the primary and must correct my previous post. Since I added the Fibo for wave i (red). v=i at 1166 and not 1175 as previously posted. Wave v=.618*i at 1156, which is just about 1158, a level the bears are watching since per the bear count C=A here.

The purple line represents the triangle thrust target. This sits at 1174.

GRAND SUPERCYCLE 4 COMPLETE- A NEW BULL MARKET?

I have posted the top chart before and I have previously posted this count about a year ago or so.

So why can't the Mar 09 low be counted as the end of a Grand Supercycle wave 4? That structure since 2000 looks like a textbook flat. Cycle Wave C extends just beyond Cycle A and at a very acceptable Fib extension.

FLAT

This is a figure from Elliot Wave International on flats. Click here for an explanation.

Just something to think about.