A Couple Long-Term Count Possibilities

The long term count possibilities, as I see them, are as follows:

First of course is the Prechterian or pseudo-Prechterian "P[3]" count.  The main thrust of this count is that 2007 marked a Cycle-degree top of some kind, and that the May 2011 high was Primary [2] of a Cycle-degree impulse down.  It could, in fact, actually have been Primary [B] of a Cycle-degree correction where the top is 2007 and the March 2009 low is P[A] - the salient point is the same:  we are ultimately headed for a low below 666.70 before breaching 1370 to the upside. 

What happens after that point is up for debate and depends on the exact count used.  A P[3] count proper would have us wallowing in deflationary misery in P[4] followed by things deteriorating even further in P[5].  A P[C] count of course would take us to new highs (though these new highs may be aided by inflation).  The "Minor 3" count presupposes the larger P[3/C] count, as would a higher degree count that has us at Intermediate (3).

An alternative count, which still has a significant bear move down but which does not take us to new lows, is as follows:

This is a sketch of the "medium term bear, long term bull" count, which is my alternate.  This has us in or having just finished Intermediate (B) of Primary [2] of Cycle V.  This Cycle V would be an ending diagonal (3-3-3-3-3), which accounts for the move up from 2009 being in three waves.

The next step down in such a count is an Intermediate (C), which would look a lot like a Minor 3.  The difference is in the targets--an Intermediate (C) would probably make it at least to sub-1000 before reversing upward; a potential target I would be watching is 878, the .618 retracement of the move from 666 to 1370.  A Minor 3 might stop at the same places, but would be followed by a tepid Minor 4 that probably won't get above 1100.  An Intermediate (3) of P[3] would almost certainly take us to 665 or below...

...unless it's of a leading diagonal.

While in the near-term this count is less bearish than the Prechterian P[3], further afield it is worse.  A leading diagonal is, well, leading, and presupposes a Cycle III/c down in the still-distant future.  In other words, at least the traditional "P[3]" count has a large-scale bull market (even if just a corrective bull market) begin sooner.