Patiently waiting for the top
It has taken another 6 months for the Dow to continue its rise, which is far longer than we have anticipated. However, the long term pattern still holds and the updated Supercycle top wave count is below.
It is our current view that we are currently tracing out wave D of a Supercycle Degree triangle. This is a less bearish view that the Grand Supercycle Top detailed in earlier posts, but nonetheless we are in the middle of the largest correction since 1929. Wave E that has yet to unfold will leave investors in no doubt as to the severity of the bear market. Wave E will last 2-3 year and we will look for a bottom in the 2H 2016. Hold cash and Treasury bonds, and exit all risky assets.
The reason why the rise from Mar 2009 – Apr 2014 has been so hard to count is because it has taken the form of a complex correction Zigzag/Flat/Flat which is relatively uncommon and hard to count.
Oct 2011 – Apr 2014 can be counted as a Major Flat which is relatively uncommon and harder to predict. It has an impulsive look and feel about it which coincides with current market sentiment that we are at the start of a new bull market. However, this belief will prove to be investors folly as Cycle Wave D of Supercycle Triangle Wave (IV) tops and gives way to Cycle Wave E.