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Historical Analyzes of Markets from 1696 to January 14, 2000

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Historical Analyzes of Markets from 1696 to January 14, 2000

Historical analyzes use TC2000 charts of DJ-30 to practice recognition of Elliott wave patterns, wave counting, degree, Fibonacci levels, and so on. We choose a top-down approach. This means that we will use the very highest degree of available charts first, then, zoom into waves of shorter-term or lower degrees, whenever desired.

Before using TC2000 charts, we try to analyze and understand where waves are coming from, where they are in August 2014, and where they want to go. The longest chart currently available starts in 1695. This will let us get familiar with Grand Super Cycle degree waves 1, 2, 3 and part of 4.

Grand Super Cycle Degree Wave 3 from 1789 to 2000

Figure 3.1 shows the Grand Super Cycle degree wave 4 in progress. Represented by DJIA, its subwave 1 completed in 1720, subwave 2 in 1789 (the French Revolution or ratification of Constitution of the USA), and finally, its subwave 3, on January 14, 2000. Since then, its subwave 4 is in progress. Please note that the Super Cycle degree wave (V), at one degree lower, lasted from 1932 to 2000. Figure 3.1 is an extract from the June 2014 edition of the “Elliott Wave Theorist.” According to the Elliott wave Guidelines, the corrective wave 4 tends to end in the area of subwave 4 of the preceding wave 3, at one degree lower. This knowledge should guide us to estimate the bottom of the Grand Super Cycle degree wave 4. The Grand Super Cycle degree wave 3 lasted from 1789 to 2000. Its subwave 4 at one degree lower, of Super Cycle degree, lasted from 1929 to 1932. The associated market crash is called the Great Depression. It corrected some 89 percent of DJIA from the top price of 386.10 down to 40.60. The correction lasted approximately three years. As already said, the Grand Super Cycle degree wave 4 started on January 14, 2000, and was in progress in August 2014. Will this correction bring the price of DJ-30 down to the area between 40 and 386? This is a good question. The future will bring advice. Chapter 12 of this book predicts in detail the pattern of the Grand Super Cycle degree wave 4, where it stands and more importantly, where it intends to go until 2021.

3-1Figure 3.1 shows the market price evolution and wave labels since 1695.

We can highlight the following points:
  1. The Grand Super Cycle (GSC) degree wave 1 ended with a huge gain of over ten folds (logarithmic chart) within only a short period of approximately one year.
  2. The gains were lost nearly as fast as they came. The correction then continued for almost 70 years. It was a zigzag. It hints that the correction of the ongoing wave 4 since January 14, 2000, is most likely of a different pattern, a flat, or a triangle.
  3. The GSC degree wave 3 started around 1790 until 2000, for a duration of some 210 years. The gains went from some 3 points up to 11,750 during that period.
  4. The Super Cycle degree wave (V) started in 1932 and completed in 2000.
  5. The GSC degree wave 4 should end at the support line that interconnects the waves (II) and (IV) and within the area of subwave (IV) of the Super Cycle degree that lasted from 1929 to 1932.
  6. The duration of the Super Cycle degree wave (II) was close to some 30 years from 1830 to 1860.
Within TC2000, the DJ-30 historical data is available since January 15, 1915. Figure 3.2 shows the DJ-30 for the period from January 15, 1915, to April 30, 2014. The Super Cycle degree wave (IV) lasted from 1929 to 1932. The subsequent Super Cycle degree wave (V) started in 1932 and ended on January 14, 2000. This has also completed the Grand Super Cycle degree wave 3. The Grand Super Cycle degree wave 4 started on January 14, 2000. It has taken the pattern of an expanding triangle. In 2014, it continued developing its subwave D. Its subwave E will follow the subwave D to complete the expanding triangle.

3-2Figure 3.2 Chart courtesy of the TC2000.com

Figure 3.2 shows a quarterly chart of DJ-30. It covers the whole period of available historical data of TeleChart for DJ-30 in a semi-logarithmic Scale. This means that each dotted line immediately above is 65.08 percent more than the one below. The market crash of 1929 is clearly visible. It is a zigzag. Due to lack of historical data before 1915, we cannot verify the relative amplitude of the correction against the previous wave of the same degree. The market top price of 386.10 was achieved on September 9, 1929, and the market bottom of 40.60, on July 8, 1932. This represents a duration of some 34 months.

The correction of 1932 being of Super Cycle degree wave 4, the next wave is the Super Cycle degree wave 5. The duration of wave 5 is easily recognizable. It lasted from July 8, 1932, with a low price of 40.60 to January 14, 2000, with a top price of 11,750.28. It lasted 810 months (see figure 3.2). We can deduce then that its subwaves 1, 2, 3, 4, and 5 are of cycle degree. The Super Cycle degree wave 5 also completed the Grand Super Cycle degree wave 3.

The current wave is the Grand Super Cycle degree wave 4. According to DJ-30, it started on January 14, 2000. Therefore, its subwaves are of Super Cycle degree. We also know that the Grand Super Cycle degree wave 2 was a zigzag. Consequently, we deduce that wave 4 would be a flat or a triangle.

Meanwhile, we can exclude a flat pattern because its current four subwaves A, B, C, and D so far, reveals the pattern of an expanding triangle.

For information, the correction of 1966 to 1974 took also the pattern of an expanding triangle. It subdivides into five subwaves A, B, C, D, and E as well.
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