Today's juncture in the market's Elliott wave pattern is historically rare.
The 1929-1933 financial collapse was of Supercycle degree. The rally that followed the 1929 low lasted only five months. But the market rally that began in 2009 has lasted three years. The difference is that the entire formation is of Grand Supercycle degree—one degree bigger than 1929.
The difference between the two degrees is immense -- and is the major reason the recent market rally has lasted this long.
But as Robert Prechter warned in the September 2011 Elliott Wave Theorist, the end of the long rally will see a "commensurate resolution."
In the meantime, stocks have levitated. The latest Theorist observes:
It is not a monolithic rally...the rally in most stocks ended last year. A few strong blue chips are masking internal weakness.
The Dow and S&P 500 did recently climb a little above last year's high. But the NYSE Composite reflects the broad market, and has not come close to surpassing its 2011 high.
The chart below is from the latest Elliott Wave Theorist and reflects market action through February 17, the date of publication:
So will this sluggish and uneven rally indeed take a uniform turn southward?
As I mentioned above, the size of the wave pattern explains why the market's rise has lasted three full years. One other reason has also come into focus, namely a specific Fibonacci time relationship going back to 1932.
That relationship hinges on a stock market low that occurred 30 years ago.
This Fibonacci calculation points to one conclusion about the pattern's timing.
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