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I place the ideal high for the Kondratieff wave in 2000 and the ideal low in
2020, but the margin of error is several years at best. The probable range
for the equities market high for this K wave is 2005 to 2015.
Based on equities cycles (DJIA), a 39 year high is due 2007. The high for
this cycle may correlate with the high of the 2002-2008 four year cycle.
Observe that these cycles tend to alternate: crash, flat, crash, flat. We
appear to be a crash cycle. After a crash, it has taken a generation (26-27
years) for prices to exceed the previous peak. Even flats have taken more
than a decade to the exceed the old highs.
Crashes have retraced 70-80% of the entire advance, while flats have
retraced only 20%. Potential targets for the projected crash are: the
trednline, the 1987 high, the 1968 high.
Of course, the future is unknown. Patterns may vary or disappear. I don't
want to believe these projections; I want to believe the paradigm has
shifted and things will be different this time. Still, it may be prudent to
expect a larger than 20% retracement of this great bull market.
Another interesting observation: This cycle could retrace to the trendline
(somewhere around 6000 to 8000 depending on the angle of decent), take two
and a half decades to exceed the peak of this K wave, and still continue its
parabolic rise.
Stan
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