Hope for the Best

by Joseph Russo, Elliott Wave Technology | October 13, 2008

Bottoms’ Up?

Top down? It really does not matter now that the fat lady is singing at the top of her lungs. The ultimate effect however is yet unknown. One thing is certain; the era of corrupt 20th century capitalism is OVER.

We hope the outcome of this clearly telegraphed inevitable and avoidable crisis will expediently produce radical change that will bring about prudent and durable solutions for future generations.

The Elliott wave structures we alluded to in the article-link and chart below have adopted a clear path toward the most bearish of outcomes.

From Big Bang or Bust June 9, 2008
From an Elliott Wave perspective, one can argue with good cause, that the Dow Jones Industrials are en-route toward retesting their October 2002 lows… Case closed…

CHART FROM JUNE 6, 2008

How low can we go?
Given the present set of conditions, the chart below represents the worst-case scenario for a crash of standard proportion pummeling the Dow toward 3000 by years-end. Such a decline would equate to a near 80% decline over the course of 12-months, which is historically quite common for typical resolutions of this type. That said, all we can add is to hope for the best and prepare for the worst.

Some Inevitable Cures

Accept HUGE losses – establish a solid floor in market valuations across all sectors of economy
Re-think the practicality and necessities required of 20th capitalism – embrace durable change
Punish those responsible for treasonous stewardship of their oaths and mandates

Tear down and rebuild the corrupt and fraudulent monetary/political systems of banking and credit

A snapshot of Long-Term Secular Trends
Below, we take a fresh long-term secular look at four of the most essential sectors in the financial sphere. In general-order of importance, they are sovereign nations’:

Currency and/or supply of money
Long-Term Interest Rate, or cost of currency
Commodities (In this case, represented by Gold)
And finally Broad Based Equities or Stock Indices (represented below by the S&P 500)

Contact Information

Joseph Russo | Chief Editor & Technical Analyst, Elliott Wave Technology | Email | Website