The Real Grand Supercycle Bear Market

 Many market observers and pundits have labeled the move from March 2009 a bull market, and say a generational low was registered. However, looking at the stock market in real-money terms, pricing the Dow Jones Industrial Average in Gold, tells a different story altogether. It reveals the obfuscation of the true value of U.S. corporations, which have made no net progress in a century. Robert Prechter. CEO of Elliott Wave International, has astutely pointed out, in his well-written piece viewed by Clicking Here that what appears to be growth in corporate net worth has been an illusion, as it has simply been a function of credit growth and resulting U.S. Dollar devaluation, rather than true corporate value growth. 

In Real Terms, the Grand Supercycle  Bear Market has been ongoing since July 1965, when the U.S went off a money standard, and on a FED Accounting Unit Standard instead. Many are familiar with the period of "stagflation" and sideways stock price fluctuation from 1966-1982. What some don't know is the stock market actually declined 96% from 1965-1980, measured in real-money terms. This certainly qualifies as a supercycle decline, and the fact that the Real-Money Dow Jones Industrial Average breached the 1932 low gives us as Elliott Wave Analysts confidence that the real-money bull market did in fact end in 1965. An Elliott Wave rule is that a Wave II cannot move below the low of the start of wave I. That happened here, telling us the Bull Market that began in 1932 ended in 1965, and was completely retraced by 1980. 

Additionally, looking at the move from 2009/2011, one can clearly see the stock market priced in real-money terms has retraced only 42% of the move down from 1999, a typical bear market rally retracement, peaking in 2018. It is only in nominal U.S. Dollar terms that the stock market has gone on to register new all-time highs. This suggests that rather than authentic corporate value growth, the rally has been liquidity fueled, which has had the effect of obfuscating the truth- The Grand Supercycle Bear Market is ongoing, and, as the chart below illustrates, is entering the deepest part of the bear market, Wave III of (c) down. The ultimate target is below 1.04, the 1980 low. This chart is for structure only, and not to scale, and the Real-Money Bear Market could last considerably longer than illustrated on this chart. 

European Markets, and even Asian Markets, are exhibiting the same major divergence in Gold terms when compared to Nominal Prices.

All of these charts are telling the true story- Corporate net worth, around the world, when measured in honest money, Gold, is collapsing in a large degree bear market; a bear market that is not over.