TarCottage

Is the Bear Market Almost Over for the S&P and Silver?

Hi Roland:

I enjoy your Elliott Wave comments and always read them with great interest because few are brave enough to publish their Elloitt Wave counts for all to see. Not being at all an expert, it is my understanding that generally the very long Elliott Wave usually consists of about five waves (3 up and 2 down + more shorter waves inside of these waves, which is where I get lost!).

However, have you ever considered that maybe the time periods you have assigned for your 1-2-3-4-5 Elliott Wave positions are off? Below is the reason why I think you might want to reconsider the timing for your Elloitt Wave counts.

To my way of thinking the 5th Elliott Wave of the long term bull ended about 2000 and with that a new long term bear market then started. I am using 2000 as the end of the secular bull because (my) Elloitt Wave (count), Knodratieff Wave, and Ian Notley all seem to generally concur on this date.

I believe most people don't understand that we are already in a bear market and have been for 8 years now. In a bear market, buying the dips and holding (as you do in a bull market), provides little upside (reward) but plenty (mostly) of downside (risk). All risk and no reward, hardly a winning stradegy.

In a bear market, to make money investors (not traders) need to avoid investing in those sectors of the market that are in secular (long term) bears and only invest in those areas that are in secular bulls. Starting about 2000, maybe earlier, energy and gold began their secular bulls after having been in secular bears since 1980. Starting in 2000 just about anything based upon paper (i.e. financials, banks) entered their secular bear.

What seems to have confused most people is the so called bull market that started about 2002 ending mid-2007. I believe this actually was a bull rally in a secular bear market. Many will say but this rally reached the same high as the dot.com rally in 2000. Yes, nominally it reached the same number, but when adjusted for the "real" rate of inflation, at best it retraced about 1/2 of it's 2000 high.

So if investors make the mistake of continuing to invest as if they are still in a bull market, then they are going to experience continuing losses. This is because in a secular bear, each succeeding bull rally makes lower highs and each bear portion lower lows. It is like going down rapids. If you buy and hold like you did in a secular bull, you are going to go lower and lower. That is like trying to make money by buying high and selling low.

It is for the above reason that I am questioning the timing of your Elloit Wave counts. I think if you adjust your Elloit Wave count with the 5th wave of the secular bull ending in 2000, you will find many of the little things that haven't made sense will start making more sense and agree better with current market conditions.

Best regards.