With everything going on in the world today, we can not help but wonder if we are on the verge of a complete economic collapse. This idea is a very bearish scenario that I hope never comes to fruition but one that people should be aware of and understand is possible. If this scenario plays out we could see a 30-40 year decline.
This count is based on harmonic elliot wave and wave C has passed the 100% extension of wave A. After a major cycle, once wave C completes, a major correction takes place which has no limit on the retrace. Common reversal points are at 0.236, 0.382, 0.5 and 0.
618 but nothing is guaranteed. Even drop to 0.236 would be a wipe out close to 80% of most portfolios.
To make matters worse, the time it would take to correct would take very long. The 0.382 time extension falls past the year 2052 which is the last value on the monthly chart. This extension usually measures the end of a correction accurately. We have been going straight up for over 100 years and what goes up will come down.
We could be at the top of the head right now on a developing large head and shoulders pattern. This would take years to develop. We would first drop down to the 0.236 to finish the head and complete wave A, retrace to the top of the downtrend channel for the right shoulder for wave B and then move down for wave C. To me the 50% retracement level looks most likely because its the 100% extension of the head but it is way to early to even go there.
Of course there are many bullish scenarios and different counts that could justify other outcomes so this is not guaranteed to happen. However, if this scenario does in fact play out, most of us would not even be alive to see the recovery of this correction if there is one, which is a scary thought.
This count is based on harmonic elliot wave and wave C has passed the 100% extension of wave A. After a major cycle, once wave C completes, a major correction takes place which has no limit on the retrace. Common reversal points are at 0.236, 0.382, 0.5 and 0.
618 but nothing is guaranteed. Even drop to 0.236 would be a wipe out close to 80% of most portfolios.
To make matters worse, the time it would take to correct would take very long. The 0.382 time extension falls past the year 2052 which is the last value on the monthly chart. This extension usually measures the end of a correction accurately. We have been going straight up for over 100 years and what goes up will come down.
We could be at the top of the head right now on a developing large head and shoulders pattern. This would take years to develop. We would first drop down to the 0.236 to finish the head and complete wave A, retrace to the top of the downtrend channel for the right shoulder for wave B and then move down for wave C. To me the 50% retracement level looks most likely because its the 100% extension of the head but it is way to early to even go there.
Of course there are many bullish scenarios and different counts that could justify other outcomes so this is not guaranteed to happen. However, if this scenario does in fact play out, most of us would not even be alive to see the recovery of this correction if there is one, which is a scary thought.