It Might Have Started Early

I thought I was probably the only one thinking about three peaks and a domed house (pattern above).  I did a Google search on it, and it turns out there are lots of people talking about it.  And they all seem to know more about it than I do.  The one thing I was keying on was that the pattern says it is 7 months and 10 days from point 14 to the final high at point 23, which I was saying would take us to about July 9.  Turns out, from reading some of what others are saying, that sometimes you have to count the 7 months and 10 days from point 10 rather than point 14, which would make the final high sometime in May.  It sure seems like that could be what's happening this month.  So I'm just going to say that I'm not a 3PDH expert and that you might want to Google three peaks and a domed house and read what others are saying about it.

However, I do consider myself an expert of sorts on the positive/negative numbers that I've been watching for over a decade now.  To quickly summarize:

I watch the positive versus negative numbers on the Nasdaq 100 to get what I think is a great long-term view of what's going on.  When I started watching these numbers, it was pretty regular that when the numbers got over 2 times the money on the positive side versus the negative side, we reached a high of some sort, then went down until the money was pretty much even positive versus negative or even maybe a little negative.  The highest ratio I had seen at the time was a 2.69 seen right at the all-time high back in 2007.  Then we had our big scary drop, with the largest banks failing, etc.  Then we climbed back up over the next few years, and this time that positive versus negative number climbed above 3 a couple years back, which I thought was amazing at the time, and kept going up, up to a high of over 7 last spring, when we were completing the third peak of the three peaks pattern.  Then we had the big drop into the summer.  Then we climbed back up again after an up-and-down start, and the positive versus negative number kept going up and up and up, past 7, past 8, up over 9.  We started going sideways earlier this year after the big climb, had a bit of a drop, came back up from that, and at that time we had the highest positive versus negative number ever seen by me of 11.05 times the money on the positive side versus money on the negative side.  That number came on May 2, just a couple weeks ago.  And we've been going down ever since.

So I'm worried the big drop has begun.  And please remember the premise of my blog, that history is going to get it wrong.  History will say it's because of all the debt in our country and others.  My blog says it's because of everyone piling onto the positive side, trying to make money where they can as all other ways of making money are drying up.

Again, I'm not an expert on 3PDH.  But even if we have started the big drop, I would still think there will be a rally from a low at what would be point 26 up to point 27 before all hell breaks loose, as Jerry Favors used to say.  And I'll also mention that I remember some examples of the 3PDH pattern in Jerry's newsletter that I used to get, and at least a couple of those examples had the move up from point 26 to point 27 actually going higher than point 23.  So it's possible that that rally will be a very big one.  Don't let it suck you in.

As usual, I'll say as I've said in the past, I hope I'm totally wrong about all this.  Because if the degree of the fall is directly related to how high the positive versus negative number got, which I think it is, the greatest fall of all time is coming right up and might have already begun.

Rob