The Elliott Wave Principle popularized by Robert Prechter is a market and economic forecasting tool that focuses upon a theory of "Business Cycles" akin to that proposed by Austrian economist Joseph Schumpeter in his classic text, Business Cycles. Schumpeter proposed there was not just the typical 3-5 year cycle in economic activity, but rather cycles within cycles within cycles such that there are 4-year cycles, 9-year cycles, 18-year cycles and long-waves between prosperity and depression like the 50-60 year Kondratieff wave. Schumpeter recognized that collective pulses of innovative and investment activity underlie these cycles in the general economy. What seems to occur is waves within waves of innovative and productive activity overtime that engender the creative development of economic knowhow.
Robert Prechter, through his studies of market analyst R.N. Elliott, takes the idea of cycles within cycles to a whole new level and proposes that markets and economies fluctuate according to a fractal "Elliott Wave" pattern that has distinct mathematical parameters:
According to the Elliott Wave Principle, as with any fractal pattern, there is no limit to the scale of cycles within cycles from very small day-to-day or even hour-by-hour cycles to cycles that unfold over decades, or even centuries. In this context, the very long-term patterns of cycles is highly relevant to the current historical juncture.
In his October 19th Elliott Wave Theorist newsletter, Robert Prechter highlights how very long-term historical stock market patterns have completed Elliott Wave structures suggesting an epic turning point is at-hand decades, if not centuries, in the making. In this regard, examine the following charts:
The numbers on the above chart are not in error. The Elliott Wave Principle, if accurate, currently suggests the DJIA is now entering a 90%+ plunge in value.
But what could cause such a calamitous collapse in equity values in the U.S.? This is precisely what I've been trying to warn the world about ever since my apocalyptic vision in 1991 (apparently to no avail). While a massive economic depression might explain some degree of a breakdown in financial markets around the world - and to be sure an historic speculative bubble has been inflated to preposterous extremes via central bank money printing and the creation of explosive financial derivatives (what Warren Buffet dubbed financial weapons of mass destruction) thus setting the stage for an unprecedented economic calamity - the truth is that this is just a part of the bubble in irrationally optimistic collective beliefs and expectations set to pop. To bring utter collapse to America and world capitalism would clearly require a more direct blow, and this is where 9/11 has been pointing the way to the complete oblivion of the Western populace.
The reality is that the totalitarian forces of the East have long been plotting the capitalist West's demise via a surprise nuclear third world war. In this light it is important to recognize that what is unfolding over the course of human history is, in fact, what I've outlined in my thesis, i.e., a "Global Bipolar Disorder". Elliott Wave patterns in the stock market represent fluctuations in mass beliefs and expectations between irrationally extreme highs and lows. The course of human events unfolds in the context of these extreme mood swings and fulfills the insanely unstable collective sentiment. I believe the underlying source of the instability in mass mood, thought and behavior is what Jesus pointed out to this world 2000 years ago, i.e., selfishness has driven this world crazy and we must learn to love God and love (value) thy neighbors as thy-selves lest we end up in an Apocalypse.
Ahhh....but everyone has better things to do then consider my apocalyptic rantings on the internet.
The DJIA is quickly approaching the psychologically important 13,000 mark in the seasonally dangerous autumn period (never mind going into a Puetz eclipse crash window around the time of the 11/13 total solar eclipse).