Does Everyone Know Their ABC's? If Not Take A Look At The S&P 500 Here

Recently I got into a talk about the basics of Elliott Wave Theory. Without rehashing a lot of the basic theory again, remember its all about 5's and 3's. Just remember that part and it'll keep you centered for the purposes of this conversation.

As stated in the last report. 

In bull markets its all about 5 waves up in a major degree when all said and done. 

Upon completion of a whole big picture 5 waves up the same 5 waves up big picture wave count reverses itself to 5 waves down which are commonly referred to as bear markets. Does everyone remember this diagram ?  

This is what the whole sequence looks like upon completion.

Its no secret our current bull market cycle is getting long in the tooth here by historical standards compared to other of the past.  This one is going on 8 years now!  

I bring this up because there is going to come a time where our markets go into a bear market as we all know. 

There will be stocks that take major headers to the downside. 

Think I'm kidding? Just take a look at the chart below because it is an excellent example of the whole sequence from start to finish played out in a real stock vs a diagram of the sequences.

How bout it!  

$100 per share all the way back down to a full blown retest of its whole run to the $15 per share zone!  How'd you like to be short during that ride! See what those who have learned how to sell short have to look forward to?

What's really crazy is YELP's drop wasn't even during a classic macro bear market cycle either.  One would also be wise to take note of the following :

This is a great example of what a high flying momentum market leading stocks looks like when they top!

Ok, now lets get back to what this report is all about and that is a pattern that MAY be building here big picture. Take a look at the current SPX chart.

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Chee Hin Teh 4 years ago Member's comment

thanks for sharing