11/29/11

Short term the count is unclear.  Somewhat higher highs were made on weakening technicals.  I suspect we are still in wave "ii" of (iii) of [i] of 3, with upside potential to ~1225.

Because of the similarity that I and others (Pebblewriter in particular) have noticed to 2008, I propose a Groundhog Day count:  a bearish leading diagonal at Cycle degree.

This large-scale count postulates that the Grand Supercycle top was 2007 and that it is, indeed, P[3] down and maybe already Intermediate (3) of it, but that P[3] isn't P[3] the mutant monster that will annihilate everything.  Rather, this P[3] is the third wave of a leading diagonal, with the target being the line passing through 666.70 parallel to the 1576-1370 trendline.  (In this case, my short-term counts still stand... just hike them by a degree.)

It should be noted, also, that the Cycle degree wave I have labeled here is Cycle I, not Cycle a, and arguably is more bearish in the long-term as it implies that Grand Supercycle [IV] (if indeed it is "just" G. S. [IV]) would be a zigzag correction rather than a triangle or flat.  In this case, Cycle III of Supercycle (a) would likely be the "demographic meltdown" in the early '20s expected by a lot of permabears.  Cycle V might truncate as the Kondratieff cycle would probably put us in Kondratieff Spring or even Summer by then.

Supercycle (b) would, presuming it's not hyperinflationary (as the deleveraging would have finally been completed), be a welcome relief that would probably encompass the later 2030s and the 2040s before Supercycle (c) hits in the 2050-60s.  This likely would be the oil crash and "peak everything" (delayed somewhat by the demographic meltdown).  It ends in all sorts of not-very-pleasant things happening.