This is a copy of Glenn Neely’s long term Stock Market model first issued in 1988 Cycles magazine.

One of the key differences between Neely’s long term

count and Prechter’s is that he counts the period from 1860 to 1949 as a Supercycle Wave 2. Neely views the advance between 1860 and 1929 as
“corrective” in nature because of the massive consolidation right in the middle of the wave. An “impulsive” move should have witnessed an “acceleration”
phase in the middle. I have to agree with him that period from mid-1800s to 1929 peak CANNOT be counted as an impulse….

With this as his longer term model, Neely, after the 1987 crash, reached some VERY bullish conclusions for the stock
market well into 2060. Using this longer term model, I get the wave count on the next page…..

Andy’s Technical Commentary__________________________________________________________________________________________________

 Dow Jones Industrial Average (Monthly Log Scale)

The implications of this longer term count is that we’re in a Cycle Fourth Wave that
MUST last until at least 2028. Generally speaking, fourth waves should last as long as
the wave-3 which precedes them--in this case, it was an 28 year third. This suggests
the highs and lows established in the last decade will hold for the next decade as we
experience more whipsaw congestion. The wave <IV> should not last longer than 2000
162% of Wave <III>, therefore it will be over by 2045. It’s interesting to note that the < III > -B-
Baby Boom generation (born between 1946 and 1964) should be mostly “passed -V- -D-
on” during the time period of 2028 to 2045. This seems like an obvious
“inflection point” for the macro-economy.
-A-
-C- -E-
< IV >
- III - - IV - 2028-2045
1966
<I> -I-
-V- -X- This period was congestive/correcitve. The Wave
- II - -V- did not start until the beginning of 1995.
(X)
- III - -Y-
1929
(Y) -W- < II >
<X> - IV -
(W) 1982
-I-
-D-
-B-
- II -

-E-
<Y>
-C-
II
The Supercyle Wave II, which began in 1860, concluded
in 1949. It makes sense that the United States begins
-A-
its SuperCycle Wave III as it establishes itself as a
“Super Power” after World War II.

Andy’s Technical Commentary__________________________________________________________________________________________________

 Dow Jones Industrial Average (Monthly Log Scale)

III
The Cycle Wave < I > was a 600% advance across 17 years. If <V>
we get equality between Waves < I > and < V >, it would imply a
very strong move once Wave < IV > concludes. Dow 50,000?

2000
< III >
-V- -B-
-D-

-A-
-C-
-E-
- III - < IV >
- IV -
2028 - 2045
1966
<I> -I-
-V- -X-
- II -
(X)
- III - -Y-
(Y) -W- < II >
(W) - IV - 1982
-I-
- II -

II
1949

Andy’s Technical Commentary__________________________________________________________________________________________________

 A 60 Year Cycle in Corp. Bond Yields?

This is an interesting chart published by McClellan Financial Publications. They suggest the presence of a 60 year cycle in interest rates using this
compelling graph of High Grade Corp. Bond Yields. This 60 year cycle matches up nicely with the theories of Nikolai Kondratiev who discovered a 50-
60 year “long economic cycle.” The Kondratiev Wave theory is that capitalist systems undergo sinusoidal-like waves of prosperity, stagnation, and then
recession. It would make sense that corporate bond yields would undergo a similar long cycle.

The authors of this graph suggest the end of the lower rate cycle--it’s difficult to argue against that point using this data. However, it’s worth noting that
the “bottoming process” can take several years. For instance, we may not see a “meaningful turn” in rates until 2015-2017. What’s very interesting
about this idea, in light of the wave count on the previous pages, is that we will experience a meaning inflection point in corporate yields during the midst
of a Cycle Wave < IV >. The Rorschach test for readers is this: Would a rising yield environment for the next 15-30 years be bearish or bullish
for the Stock Market? The answer, as is the case for many economic questions, is that “it all depends.” Are the higher interest rates in response to
greater economic activity or runaway inflationary pressures? The period between 1949 and 1982 (Cycle Wave 1&2 on previous slide) is instructive:
1949 to 1966 was a great time for the stock market (up 600%) and was also a period of rising Corp Bond Yields. On the other hand, the period between
1966 and 1982 was a horrible time for stocks as inflationary pressure wracked the economy with yields soaring.

Andy’s Technical Commentary__________________________________________________________________________________________________

 Dow Jones Industrial Average (Monthly Log Scale)
This would be a very difficult wave model to deal for investors over the next few decades. However,
one of the things that’s apparent about this wave count is the opportunity to play some very large
III
swings in the next few decades. For instance, the gradual bottoming in rates might be associated with <V>
periods of economic expansion, like the -D- wave here. Perhaps, though, rates goes parabolic in the
next decade as we witness strong inflationary pressures that wreak havoc with the economy until 2028.
Those pressures would likely be the result of an aged Baby Boom generation that burdens the economy
with health care costs and a Social Security system that goes bust.
2000
< III > -B-
-D-

-A-
-E-
-C-
< IV >
2028

1966
<I>

< II >
1982

This wave count implies that Stock Market

cannot advance in its Wave <V> until the Baby
Boomer generation full passes on.
II
1949

Andy’s Technical Commentary__________________________________________________________________________________________________

 Dow Jones Industrial Average (Monthly Log Scale)

This would be the “optimistic” wave forecast, which must be attributed to Glenn Neely. He
suggests that Wave <II> concluded in 1988 with another running X-wave (similar to 1830-1945 2035-2040
move). This would mean a Wave <III> that lasted only 18 years. This would mean that the Wave III
<IV> could take only 18 years and be done by 2018! <V>

2000
< III > -B-
-D-

-E-
-A-
-C- < IV >
2018
-X-

1966 -Y-
<I> < II >
1988

-W-
Using the rate cycle chart on Slide 4, this would be the one that suggests a ‘gradual’
bottoming in interest rates across the next several years, with economic activity
picking up significantly in 2018. The period between 2018 and 2035 might look a lot
like the 1949 - 1966 move. As was the case with the Wave < I > conclusion, the
Wave < V > might also finish with sky-rocketing interest rates and hyper-inflationary
II pressures. Essentially, the Supercycle Wave III of America would trace the arc
1949 of the Post World War II Baby Boom Generation.

Andy’s Technical Commentary__________________________________________________________________________________________________

 The “Impulsive” Wave of the United States?
2150-2200
V
An idealized (and optimistic) “Impulsive” wave for the United States The END
might look something like this--a five wave advance that began
when our forefathers became economically strong enough to form
their own sovereign nation. 2040
III
<V> <B>
2000 <D>
< III > -B-
-D-

<E>
<C>
1966 IV
-C- -E- <A>
<I> 2110
1929 -A- < IV >
<X> < II > 2018
- B -- D - 1988

1835 -E-
-C-
I -B-
-A- <Y>
II
1949
-C-
-A-
<W> Obviously, the main problem with these sorts of long dated counts is the accuracy of the
1860 data and how one estimates the path of “human progress” progress before there was good
record keeping and data. For instance, there was certainly economic activity in the United
States in the early 1600s. Was there a Wave I and II somewhere between 1600 and the
mid-1700s that couldn’t really be charted? Perhaps the 1835 high was Supercyle Wave III
1600-1760: Seeds of the and the 1949 low was the Wave IV. If that’s the case, the next wave higher into 2040-2050
American Wave are “planted” would be the “END” of the American “Impulse.”

Andy’s Technical Commentary__________________________________________________________________________________________________

 DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any

kind. This report is technical commentary only. The author is Wave Symbology
NOT representing himself as a CTA or CFA or Investment/Trading
Advisor of any kind. This merely reflects the author’s "I" or "A" = Grand Supercycle
interpretation of technical analysis. The author may or may not I  or A  = Supercycle
trade in the markets discussed. The author may hold positions <I>or <A> = Cycle
opposite of what may by inferred by this report. The information -I- or -A- = Primary
contained in this commentary is taken from sources the author (I) or (A) = Intermediate
believes to be reliable, but it is not guaranteed by the author as to "1“ or "a" = Minor
the accuracy or completeness thereof and is sent to you for 1  or a  = Minute
information purposes only. Commodity trading involves risk and -1- or -a- = Minuette
is not for everyone. (1) or (a) = Sub-minuette
[1] or [a] = Micro
Here is what the Commodity Futures Trading Commission (CFTC) [.1] or [.a] = Sub-Micro
has said about futures trading: Trading commodity futures and
options is not for everyone. IT IS A VOLATILE, COMPLEX AND
RISKY BUSINESS. Before you invest any money in futures or
options contracts, you should consider your financial experience,
goals and financial resources, and know how much you can afford
to lose above and beyond your initial payment to a broker. You
should understand commodity futures and options contracts and
your obligations in entering into those contracts. You should
understand your exposure to risk and other aspects of trading by
thoroughly reviewing the risk disclosure documents your broker is
required to give you.