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    MarketMap™ 2024 Scenario Planner Issue#15

    May 22, 2024

May 22, 2024

MarketMap™ 2024 Scenario Planner Issue#15

Elliott’s Alternation Rule

EWT: Alternation (guidance) – If wave 2 is a sharp correction, wave four is usually a sideways correction and vice versa. If the first one is simple the next one is complex and vice versa. However, triangles can be the alternate when considering a fourth wave.

A simple EWT rotation rule says that corrective waves 2 and 4 cannot be the same, so traders should expect something different. The trick is to figure out if the next correction is of the same magnitude as the previous one. The size of the counter trend referred to in terms of “degrees.”

This makes EWT sometimes biased, regardless of its motivation. Naysayers can debate whether or not this market has finished the great super-cycle that just started in 1871. In practice, both long-term investors and short-term traders are concerned with the contours of the market over the next 10-20 years, when the rotation rule can be applied in many ways, not just within EWT.

The chart I have been showing is the last three major tops each of them the same but of progressively higher degree. Hence the current topping process caps off the secular bull from 1974, a fifty year bull market, what has just not run out of space but its run out of time. The demographics are no longer their.

The flight to the dollar is still in its early stages, all cycles flip with the start of the second half of 2024. The annual scenario chart for the dollar tells the story well.

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