Global Stock Market Crash Alert- Here We Go Again?

By: Eric_Chevrette

After warning of an imminent global stock market crash in August 2008 in the first instance, GEW started in late October (please refer to “Global stock markets: time to think of the unthinkable?” on Oct 24 and “Global stock market inverted crash” on Oct 26) to support and assess thru its home made EW_MS technique (please refer to “Time to think of the unthinkable?” for detailed explanations about EW_MS ) the technical EW case that the October slaughter though severe would soon be followed by another major leg down possibly matching or even surpassing the October 2008 slide.

In 3 later articles on Nov 8, 12 and 16, GEW first revealed how the starting point of that new leg down could easily be identified and located thru EW_MS as “ brown point P2 ” (see “What happens next?” from Nov 8) and then gave you the rare opportunity to follow step by step the slow birth of the multiple extensions inside that new crashing leg; on Nov 12 (please refer to “Imminent global stock market crash”), GEW assessed that the crashing leg would go thru a violet i/ii/iii/iv/v slide , though further extensions could possibly arise . As a matter of fact, as soon as Nov 16 (please see “Global stock market crash extended leg lower”), it had become clear that violet wave iii would AT LEAST extend as black i/ii/iii/iv/v .

AGAIN , GEW did warn on Nov 16 that “the possibility of further extensions within black wave iii was still left OPEN and should NOT be prejudged”. As a matter of fact, as you can check with chart #1 below (please note that we took the INVERTED ADR index, which is facilitating the understanding of the EW approach thru a mirror bullish view of the slide currently in the making at worldwide level), we're now faced with ANOTHER extension as black wave iii is clearly extending thru red i/ii/iii/iv/v . Of course, as it is featured as well in chart #1 , we're still benefiting from the help of the “echoing” EW path of the US $ (please refer to previous articles where the current EW link between global stocks and the US $ is explained in details).

The probability is now very HIGH that NO MORE extension will appear while yesterday, Nov 19, 2008 was “day #1” of the MOST VIOLENT impulse within the current bear leg ; as a matter of fact, it is standard market behaviour that several initial extensions just provide the necessary time window for the “slow walk” thru which the market does get back to the previous lows in a sneaking style. Then the market is “all set” at the most favourable location for the CENTRAL “wave 3” to unfold lavishly to the highest surprise of most investors.

As to the size of the crashing leg at work since brown point P2 , you should note that there is currently A LOT MORE “preparatory work” below (please read “ ABOVE” instead of “below” as you view an inverted image of reality) the green “frontier line” than we had registered with global stock markets prior to the October crash. Alas, “more preparatory work” should be expected to lead to a “larger impulse wave”……….

Chart #1

Alas again, as GEW had warned on Nov 16 (refer to “Extended leg lower”) , the threat does now look more real and tangible than ever before that the light-heartedness with which governmental authorities took the current situation at the G20 meeting a few days ago is about to be “vomited” on their back in a violent gush of deteriorating reality.

By Eric F.M. Chevrette
France
eric_chevrette@yahoo.fr
Fone: 00.237.9.660.53.59

© 2008 Eric F.M. Chevrette
Eric Chevrette translated Bob Prechter's “Elliott Wave Principle” in 1989 after graduating in 1984 from the ESCP (Ecole Supérieure de Commerce de Paris, see http://www.escp-eap.net ) which has been ranked 6 best business school in Europe by the Financial Times in 2006. He since has become interested in “market forecasting” and “global economical analysis” since 1987 and is currently helping people to protect and grow their assets while anticipating the big trends. 

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