Primary wave  has been in progress for 2 years. Hopefully, people have used this time to get their financial house in order and get properly positioned for what is coming next. When Primary wave  starts, deflation will unfold in full force, unemployment will skyrocket, and social mood will rapidly go south. The socionomic events of Primary wave  was just a teaser-trailer preview of the hard times that will start to unfold when Primary wave  starts.
There is a model that we can use to predict how Primary wave  will unfold. We'll go all the way back to the 1929 - 1932 period of the stock market. We can show that Cycle wave c of Supercycle wave (a) has been making the same price moves as Supercycle wave (IV). Further, it is also interesting that the DJIA made the same price moves from 1974 - 2000 as it did from 1921 - 1929. The major depression really has been decades in the making.
Here's the charts showing the initial declines from the top.
DJIA, 2007 - 2009
First of all, notice that the patterns of the initial declines are almost identical. Let's illustrate how the declines are identical:
1 -- The first wave was a moderate strength downward impulse. The stock market declined slowly.
2 -- The second wave retraced 50% of the first wave.
3 -- In the third wave, the stock market declined with increasing momentum, culminating in a full-scale crash.
4 -- The fourth wave was a dead cat bounce, forming the first part of an inverted head and shoulders with the neckline at the 23.6% fibonacci retrace.
5 -- The fifth wave resulted in additional declines in the stock market. The fifth wave has a relationship of equality with the first wave, but unfolded much faster than the first wave did.
The sentiment of both declines are identical as well. A waves are seen as a pullback pursuant to the next leg of the advance. It is quite reasonable that a first wave in a bear market will be seen by people in the same way -- just a pullback within a larger advance.
In both cases, the initial decline was followed by a substantial bear market rally. Here's the charts showing the bear market rally that followed the bottoms of the initial declines.
DJIA, 1929 - 1930
DJIA, 2009 - 2011
The bear market rallies do have some differences between them, notably the location of the A wave top and B wave bottom. However, there are characteristics that are identical.
1 -- Following the bottoms of the initial declines, the markets put in an aborted H & S with the neckline at the 23.6% fibonacci retrace.
2 -- Both bear market rallies occur in three waves.
3 -- Both bear market rallies put in a head and shoulders top.
4 -- Both bear market rallies have the left shoulder halfway between the aborted H&S and the head.
5 -- Both bear market rallies exhibit decreasing volatility and volume as they approach their peak.
Again, the sentiment is identical in both cases. Both B waves and second waves are seen as a continuation of the previous trend. In both cases, optimism returned by the end of the bear market rally, with the consensus that the worst is over.
Now we are in position to start predicting how Primary wave  will unfold. The bear market rally in 1930 was followed by another leg down, taking the market to greater depths. The current bear market rally will be followed by another leg down as well. In part 2, we'll look at how the next leg down will unfold.