Jump to content
House Price Crash Forum
Sign in to follow this  
vinny

Ew Theory Addendum?

Recommended Posts

Firstly I'd like to apologise for not posting graphs to support my theory (I never have been able to on this forum - I don't know what I'm doing wrong).

However, in short EWT implies that in a rising market there are three waves up interupted by 2 separate waves down. for sake of arguement let us say a top then occurs in the market - and the market falls. Classically we would then observe either an ABC or three waves down interupted by two separate waves up.

So far so good. Works for every market - all of the time!!! OR DOES IT?

My challenge to this theory. Look at major tops in what will be later described as speculative bubbles which inturn normally lead to recession.

Eg's Nasdaq circa 2000.

There appears to be a sixth wave, sharp in gradient leading from the point at which one would normally expect the fifth wave to complete and start the rot.

Look at HPI and HP (inflation adjusted and raw data) since 1989 and the one oft posed on here from the 50's.

May just be me but I'm seeing a sixth wave, If I'm correct, when it is complete (very soon)....................................Watch out below!!!!!!!!!!

Share this post


Link to post
Share on other sites

Firstly I'd like to apologise for not posting graphs to support my theory (I never have been able to on this forum - I don't know what I'm doing wrong).

However, in short EWT implies that in a rising market there are three waves up interupted by 2 separate waves down. for sake of arguement let us say a top then occurs in the market - and the market falls. Classically we would then observe either an ABC or three waves down interupted by two separate waves up.

So far so good. Works for every market - all of the time!!! OR DOES IT?

My challenge to this theory. Look at major tops in what will be later described as speculative bubbles which inturn normally lead to recession.

Eg's Nasdaq circa 2000.

There appears to be a sixth wave, sharp in gradient leading from the point at which one would normally expect the fifth wave to complete and start the rot.

Look at HPI and HP (inflation adjusted and raw data) since 1989 and the one oft posed on here from the 50's.

May just be me but I'm seeing a sixth wave, If I'm correct, when it is complete (very soon)....................................Watch out below!!!!!!!!!!

in terms of HPI you are dead right,we seem to be in the death throws of "the last bounce",before we head MUCH lower.

the stockmarket is not quite as obvious,but it ALSO looks like it's due to roll-over.The dow has been hovering around 11000 for a LONG time now without much will to break through,even with all the fairly positive job news.....it's all overshadowed by threat of inflation/higher IRs.

..I would suggest the next move for the dow/ftse is DOWN.....and quickly!!!!

...I've pencilled in a sharp move down the end of MARCH!!!!!........GLOBALLY.

japan is not immune from this but will be more resillient,they don't have a defecit to worry about.....that's why I've gone for the jap option...so I can convert back to sterling at a more favourable rate in a year or two.

it's all about RISK*

Share this post


Link to post
Share on other sites

in terms of HPI you are dead right,we seem to be in the death throws of "the last bounce",before we head MUCH lower.

the stockmarket is not quite as obvious,but it ALSO looks like it's due to roll-over.The dow has been hovering around 11000 for a LONG time now without much will to break through,even with all the fairly positive job news.....it's all overshadowed by threat of inflation/higher IRs.

..I would suggest the next move for the dow/ftse is DOWN.....and quickly!!!!

...I've pencilled in a sharp move down the end of MARCH!!!!!........GLOBALLY.

japan is not immune from this but will be more resillient,they don't have a defecit to worry about.....that's why I've gone for the jap option...so I can convert back to sterling at a more favourable rate in a year or two.

it's all about RISK*

I think we are in agreement with the housing market.

I would also apply my theorem to the stockmarket(s) though, it peaked way back in 2000. For those who follow EWT - I think we are on either a "b" or 2 wave- we are just rebounding from lows, the next move being down - probably sometime soon. I believe the rally from the lows after the slide started has been weak and is just about done. The stockmarket slide that started 6 years ago is not yet over IMHO.

Share this post


Link to post
Share on other sites

I hear a lot about EW and Kondratief on here, is this a well known form of analysis? Hadn't Prechter et al predicted a big drop back in 2004? Forgive my ignorance, im new to all this.

Share this post


Link to post
Share on other sites

I hear a lot about EW and Kondratief on here, is this a well known form of analysis? Hadn't Prechter et al predicted a big drop back in 2004? Forgive my ignorance, im new to all this.

Prechter correctly predicted a bull market for the eighties and a bear to commence circa 2000 - much against the grain of "analyst opinion" preceeding both market directions. Reading much of what he had to say post 2000; then I have to infer that he has had great oppertunity cost in not seeing the recent rally (2003 ish to now) comming. I've read that he himslf puts some store in to the Kondratief cycle - and is very much favouring of a period of a deflationary depression to destroy debt and the overvaluation of all asset prices in the same swoop (including gold). Note :Other EW analysts predict the Dow at 100, 000 within the next few years!!!!!!! Personally I'm with Prechter, if anything.

EW could indeed be descibed as a form of analysis - based on psychology but keeping a firm eye on fundamentals to make sense of where we are in the grand scheme of things (what wave we are on). I could not begin to do the theory justice and suggest anyone interested in what moves markets to do further research. (Invite to the likes of Dr Bubb / A.N Other to explain EW here please)?

Share this post


Link to post
Share on other sites

for those who have been studying kondrattieff and wondering why the pullback devastaing deflation thing hasnt really happened(obviously) yet,can I just throw a variable into the mix for you.

what do you think about the possibility it is linked to average life expectancy????...that would give it the necessary elasticity to hold out for so long wouldn't it?

...would also make for a brute of a move down in a couple of years.

the last cycle was approx 55 years,this one could be more like 75(rolling average over period)

1945-2020

75/4=19

2020-19=2001........funny stockmarket crash thing happened then!!!

Share this post


Link to post
Share on other sites

Yep, there is a well known saying that: Things are sure to go titsup once the last person to remember the last feck up has left.

Share this post


Link to post
Share on other sites

for those who have been studying kondrattieff and wondering why the pullback devastaing deflation thing hasnt really happened(obviously) yet,can I just throw a variable into the mix for you.

what do you think about the possibility it is linked to average life expectancy????...that would give it the necessary elasticity to hold out for so long wouldn't it?

...would also make for a brute of a move down in a couple of years.

the last cycle was approx 55 years,this one could be more like 75(rolling average over period)

1945-2020

75/4=19

2020-19=2001........funny stockmarket crash thing happened then!!!

It had also occurred to me that perhaps the length of the K cycle was related to life expectancy, hence, perhaps the delay in the onset.

Other possible factors?

Ever increasingly inventive ways of creating “money” and credit.

World war 2.

Derivatives.

Perhaps also the cycle has been kept going recently by Yen carry trade in particular, but also by the low interest rates elsewhere (I’m thinking of the ongoing ECB low rates, plus the much discussed on here – Fed / BOE aggressively cutting rates post 9/11).

Are these, amongst others, the fundamental supports to asset prices?

What though drives markets? ………Back to EWT………has a global media, which includes TV for the first time in a Kontradieff cycle, influenced investor psychology so much as to keep asset prices so high. With reference to previous cycles; how many more westerners are literate enough to read newspapers, but reared in a system where thinking for yourself is an aberration?

Is the length of the cycle more related to how many make up the “masses” and how powerful the bullish message has become?

Share this post


Link to post
Share on other sites

What though drives markets? ………Back to EWT………has a global media, which includes TV for the first time in a Kontradieff cycle, influenced investor psychology so much as to keep asset prices so high. With reference to previous cycles; how many more westerners are literate enough to read newspapers, but reared in a system where thinking for yourself is an aberration?

Is the length of the cycle more related to how many make up the “masses” and how powerful the bullish message has become?

Maybe it's got nothing to do with cycles, the position of the moon or the global media, but instead is simply a measure of how well humans are doing at creating wealth at any given point in time?

Share this post


Link to post
Share on other sites

Maybe it's got nothing to do with cycles, the position of the moon or the global media, but instead is simply a measure of how well humans are doing at creating wealth at any given point in time?

Perhaps. There are those that completely dismiss notions of cycles. Though we may be good at creating wealth, putting faith in cycles may give us an explaination of how wealth becomes distributed in the future.

Share this post


Link to post
Share on other sites

Perhaps. There are those that completely dismiss notions of cycles. Though we may be good at creating wealth, putting faith in cycles may give us an explaination of how wealth becomes distributed in the future.

IMO the cycle is not a cause, existing somewhere 'out there' and determining what happens. It's an effect of a network of interactions. The important thing is not its length, which might vary, but the processes that produce it, primarily in this case attitudes and practices about debt.

Edited by New Bear

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 331 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.