Elliott Wave Bull Market Projection

 U.S. Equity prices have continued to remain strong, as the expected ongoing correction scenario posted in January did not materialize. The long term bull market, however, remains intact as expected into 2022.  Below is the favored Elliott Wave Count and projection for the remainder of the bull market. Although Intermediate Wave (2) was shallow, wave (4) is expected to be sharp to set the market up for the final top.

 

Long term price targets are derived from the previous bull markets of Cycle wave V of Supercycle Wave (III) and Cycle wave I of Supercycle Wave (V).

Crude Oil's Secular Bear Market

 Back in March 2020, amidst a crashing stock market and outright fear amongst speculators, the primary concern was deflationary pressures as the global economy went into recession. Oil prices went negative in April 2020, and many pundits were speculating oil would "never recover". While not published here, I was expecting a recovery in oil and that has now occurred. Now, all the talk is of inflation concerns. Just as occurred last spring the markets are once again poised to fool the greatest number, and reverse back into a deflationary trend. Below I present a long term Elliott Wave Picture in Crude Oil Prices. From the July 2008 Bull Market top, oil declined over 95% to a low in April 2020, and staged a throw-over of the lower trendline connecting the 2008 and 2016 lows. From that low oil has staged an impressive rally back to the 2018 wave (4) highs, as well as the 50% price retracement from the 2008-2020 decline, a common stopping point for price in Elliott Wave Analysis. Also of note is it has been a Fibonacci 13 years since the 2008 peak. It is fitting that the timing of the cycle wave V high and the cycle wave b high are separated by a Fibonacci number of years. 

Given my longer term deflationary thesis in equities and global markets, I do not see oil beginning a new secular bull market. It now appears oil has completed its bear market rally from the 2020 lows, and is apt to continue it's secular bear market. The above notwithstanding, oil could hold up relatively well until the anticipated peak in equities in 2022. Updates will be posted periodically.

A Potential Bear Market Fractal

It is anticipated the final peak for Supercycle Wave (V) and thus the Grand Supercycle Bull Market will occur in 2022. While it has long been widely held amongst Elliott Wave Practioners that Supercycle Cycle Wave (IV) ended in 1932, and a Cycle Wave I Bull Market occurred  from 1932-1937, I present an alternative in which the entire period from 1929-1949 was a barrier triangle. If correct, this interpretation would explain the failure of the bull market to top in 2000 or 2007, as that period from 2000-2009 would be labeled as an expanded flat correction for Cycle Wave IV, with Cycle Wave V, Supercycle Wave (V), and Grand Supercycle Wave III terminating in 2022.

The projected timing is derived from time ratios of the durations of wave a of (IV) relative to the durations of wave b-c-d-e of Supercycle Wave (IV) as a basis for determining the duration of ensuing waves (b), (c), (d), and (e) of Grand Supercycle Wave IV

Under this scenario, wave (a) would last a Fibonacci 8 years, wave (b) would last a Fibonacci 13 years, wave (c) would last a Fibonacci 13+1 years, wave (d) would last a Fibonacci 13-2 years, and wave (e) would last a Fibonacci 8+1 years. Even assuming a margin of plus or minus 2 years for Fibonacci Durations, the internal wave duration discrepancy from a Fibonacci number of years of the entire structure balances out. Finally, the entire Grand Supercycle bear market would last a Fibonacci 55 years from 2022-2077. 

An Ongoing Correction

Happy New Year. The Intermediate Wave (2) Correction that began on September 2, 2020, despite new all-time highs in the stock market, is still ongoing and has taken the form of an expanded flat. The lack of an impulsive wave structure from the October low supports this interpretation. 

All expectations are for the market to trace out 5 minute waves down into the intermediate wave (2) low sometime in the first quarter. Should the duration of Intermediate Wave (2) equal Intermediate wave (1), timing symmetry points to a low on February 15, 2021. Additionally, on a closing basis, wave c of (2) would be equal to 161.8% of wave a of (2) at 26,401.46. Previous price targets surrounded the 50% and 61.8% retracement range between 22,600- 22,800. While this is still feasible based on Elliott Wave guidelines, it is less likely due to the expanded flat structure of the correction. Nevertheless developments will be monitored closely. Minor wave c is apt to be sharp, in keeping with typical c waves of flat corrections. 

When Intermediate wave (2) completes, Intermediate wave (3) should carry the stock market to new all-time highs. As previously stated, a final top for the bull market is not expected until 2022.