October 2007 saw the end of an Elliott Wave Super Cycle, part 1. The full Super Cycle typically takes 80 years to play out and the second part will ‘correct’ the upward move of the first. The first started in 1932 and ended October 2007.

The corrective phase will likely take around 5 years to fully complete. This is a 5 year bear market. Since this is the first of these in 75 years, there are no specialists, no TV talking heads and no experts that have actually lived and worked through one.

Within any bear market, rallies are often sharper and bigger than any within an actual bull market.

The first of these rallies will likely start in the early part of 2009 at a level of around 6,700 or 7,400 on the Dow and will rally up to around 11,000.

After that, it is down again and likely will really take all the experts by surprise as by then they will all be talking about a revisit to 14 or 15,000.

It has been a while. Here we mid-December and this is my first post of 2008. To say it has been busy would be an understatement but at least it has been positive busy; I have not been scrabbling to get everyone out of the markets at the last minute, we did have an orderly retreat starting November 2007 so I am happy to say clients have not seen 50% wiped from fund values like some have seen. The real bloodbath has been in the last few months.

It is looking more and more likely we will see a significant rally in the markets that we are well-positioned for but wary that the secular bear market is very much in place and further massive falls are on the cards. We should gte a decent 2009 out of it.

Alternative investments are flourishing wioth Tulip trend, Man AHL Diversified up more than 30% this year and IQS positive almost 60% since August 1st.

For our part we have introduced a managed account concept which day-trades the Dow 30 by using Elliott Wave, Dow Theory and Exchange Traded Funds as investment medium. Check out an example of the Daily Dow Letter here