The 1987 (stock market) change-in-trend projection given by yearly Fibonacci Time Cycle Counts is as classic as we will probably experience in our lifetime in any market. 1987 IS THE 55TH YEAR FROM MAJOR LOWS MADE IN MANY MARKETS IN 1932 AT THE DEPTHS OF THE GREAT DEPRESSION.
As the Elliott Wave Theory states that the current major long term expansion is in the 5th and ﬁnal wave of a 5 wave move that began off the 1932 lows (the third wave peaking in 1966 and the 4th wave bottoming (arguably) with the 1974 recession lows), the 1987 change-in-trend projection given by yearly Fibonacci Time Cycle Counts is as classic as we will probably experience in our lifetime in any market.
1987 is the 55 year off the beginning of the entire move, the 21St year off the peak of the third wave, and the 13th year off the low of the 4th wave. 34 years from the 1932 low marked the wave 3 top in 1966. 8 years later, in 1974, the wave 4 low was made. 8 years after that, the 1982 major low was made. The entire 5 year bull market from 1982 to 1987 was equal in time to wave 1 of the bull market which lasted from 1932 to 1937.
Additionally, for you Gannophiles, I would point out that 1987 was 90 years from the 1897 April 19th and April 23rd lows at 38.49!
A peaking in 1987 would ﬁt nicely with the Kondratieff Wave and would imply that the forth coming period will be one of severe economic slowdown. In fact, this theory is so bearish that thue believers should consider have about 6-12 months future expenses of readily available cash on hand. Supporting this outlook in the late 1987 were the slowest M2 money supply growth that HIS country had experienced in 17 years, the out-of-control twin towers (and we don’t mean the two Houston Rockers basketball players or the New York skyscrapers, either, but the budget and the trade deﬁcits), the recent downturn in only the leading economic indicators, but also the Columbia University index of leading economic indicators (which tends to lead even the leading economic indicators and turned down spring, 1987), third world indebtedness, banking insolvencies, etc. In fairness, however, we do point out that the above is not the only scenario. Other viewpoints are discussed in other sections of the Almanac.
- Classical Market Theory By Frank Taucher