By J. Adams
Updated: March 7th, 1996
"Technical indicators reveal
that the stock market is engaging
in one of the rarest of events, a blowoff, i.e., an accelerating
upward move into a spike reversal that resolves in a crash.
How rare is a stock market blowoff? One has not occurred in modern
history. They are common in fifth waves of Primary and Cycle
degree in commodities, but not in stocks. Even the upward surge
in 1928, the closest thing to a blowoff in the last 276 years,
was followed by a five-month consolidation and a new high on
lesser upside momentum, the typical profile. The last time the
stock market had a commodity-like ending was the year 1720,
which saw the culmination of investment manias in England and
France. That was the last time a wave of Grand Supercycle degree
ended. So in this context, a blowoff is apparently normal stock
market behavior. This advance has the characteristics
of a terminating fifth wave."
-Robert Prechter, excerpt from his February 9th issue
"The Elliott Wave Theorist" (see Feb.19th Barron's,
Today, with the full moon opposed by the planet Mars, the
closed at an all-time high above 5600 that was not confirmed
by all-time highs in most other major indexes like the ,
the , the
and the .
Consequently, we might be at the Grand Supercycle peak after
which an unprecedented should occur,
possibly into the the spring sometime (note that the suicide
rate peaks into the month of May, when stock market panics often
occur). Indeed, one should be particularly alert since we are
now approaching a dangerous planetary alignment on .
So you understand just what the Elliott Wave Principle is
and what sort of historic stock market top we are looking at,
read the following.
According to the (Australian link, so be patient), the stock
market should rise toward cyclical peaks in that develop between upper and lower channel lines.
As seen in a logarithmic chart of the DJIA from the late-1800's
(), a trendline drawn through the
Supercycle wave-I peak reached in 1937 and the Supercycle wave-III
top made in 1966, continues through Dow 5400 at the current juncture,
which the stock market is now above (monthly projection for 2/96
is 5425, which the DJIA has breached by a few percent; note that
the Elliott Wave Principle calls for the use of logarithmic charts
when dealing with large-scale cycles like the Supercycle). (A
similar five-wave Supercycle pattern between channel lines is
also visible in a long-run chart of the .)
If a line drawn through the 1937 and 1966 peaks in the DJIA is
the correct Supercycle upper channel line, then it is parallel
a lower channel line drawn through the Grand Supercycle wave-(IV)
low in 1932 and the Supercycle wave-IV low in 1982. Importantly,
one should note that the 1937 and 1966 Supercycle tops and the
1942 and 1982 wave-II and wave-IV lows all occurred around the
time (within a month-or-so) of major planetary alignments similar
to the one that will occur with the upcoming Spring Equinox new
moon (astronomical configurations for given dates can be checked
the alignments associated with Supercycle turning points occurred
on , , , and .)
If, indeed, a Supercycle peak is now being reached above the
Supercycle upper trendline, then this should be the top of an
Elliott Wave Grand Supercycle and possibly a Millennium Cycle
as well. To understand how this is so, first keep in mind the
way Elliott Waves develop in where any given cycle is made up of smaller cycles.
Now examine the diagrams below to see how stock prices and general
prices have climbed to a final top in five-wave patterns of increasing
scale from 1932, 1775 and the Dark Ages, respectively. This represents
the rise of Western civilization toward a Millenium Cycle, Grand
Supercycle and Supercycle peak over the last 1000 years, 200
years and 60 years, respectively.
As I have been explaining in previous articles, following
the final peak, an unprecendented cyclical decline should get
underway that will outline the collapse of Western civilization.
This social collapse may take the form of a .
The rise to a final peak of Western society is shown