Degree of Trend Transitions
When there’s a change in the degree of trend, along with a change in direction, the a-b transition becomes a-b-(a), a-b-(b)to include both direction and degree. The degree transitions infer a log step up or down in magnitude for the subsequent move. The 1929 Crash occurred before the transition to Supercycle degree was complete. That’s the reason it was relatively mild, in relation to the plunge that followed. Had the Crash occurred after the Supercycle Transition, it would have been far more severe and also ended sooner. Logically, we can expect a far more severe crash this time.
As you see below, after the completion of wave C, there was another transition back down to Cycle degree. In essence, only the C wave unfolded at the higher, Supercycle degree, which resulted in stocks losing over 90% of their value in just 3 years.
The wave count continued higher at Cycle degree until the end of Cycle wave IVin 1978, shown below, when another Supercycle Transition took the wave count back to Supercycle degree by 1984,to kick-off the longest bull market in history. Although log and semi-log charts distort the relative proportions, the price territory travelled from the completion of the Supercycle Transitionin 1984 to the Supercycle Wave (III)summit in 2000 was approximately 1100%of the entire previous level.
The final segment of Supercycle wave (III),Cycle wave V, transitions from Cycle to Supercycle degreefor impulse or bullish sub-divisions, while the corrections remain a degree of trend lower at Primary degree. This is precisely why the final segment of Supercycle wave (III) was the longest bull market in history and contained only relatively minor corrections, aside from the 1987 Crash. Although part of a very bullish Diag II, which indicated the beginning of a long, bullish move, the 1987 crash was nevertheless relatively severe, because it occurred in Supercycle degree.
The implications for Supercycle (IV)waveCwould infer a similar log step increase in magnitude of now downside impulse waves, exaggerated by gravity, while upside corrections would remain at the lower, Primary degree.
Below you see two very large Diag IIs, followed by the latest Supercycle Transition ready to plunge! This time the Crash will occur as the country remains naively hopeful of recovery.
The entire move since the 2007 market top then has been a preparation for a monolithic Crash, with two huge Diag IIs(read Diagonal 2s) which indicate the beginning of a long Bear plunge, followed by a transition back to Supercycle degree, to indicate this Crash will be worse by a factor or 10 than the one which occurred in 1929.