The title of this essay is a tribute to R.N. Elliott's "The Financial World Articles" August 25, 1941 essay, "Two cycles of American History." We'll get to his essay in a few moments, but first a word about today's market action.

Has the anticipated correction started? Smells like it. A powerful reversal on a good news day is often where a correction starts. Only time will tell if this is a correction from the insanity since November 2012, or a much larger swoon correcting at least 100% of the rally since 2009.

Did today mark the end of a 5-wave advance from 1776, yes, 1776? If it did, correcting the advance from 2009 will only be a small part of the bear market we've entered.

That possibility prompted me to dig out Elliott's 1941 essay and review his dates.

The R.N. Elliott essay is found on page 204 of R.N. Elliott's Masterworks, The Definitive Collection by Robert R. Prechter, Jr.:

"The earliest available stock record is the Axe-Houghton Index, dating from 1854... A cycle such as that from 1857 to 1929 and containing such a frenzied movement as that from 1921 to 1929 necessarily requires an extensive correction ... The whole movement (or all the movements) since 1928 form a tremendous triangle, and this triangle is regarded as Cycle IV of an order back to as early as 1776.

... This termination will also mark the beginning of a new cycle wave V (composed of a series of cycles of lesser degree), comparable in many respects with the long cycle from 1857 to 1929. Cycle V is not expected to culminate until 2012."

Elliott repeated the message in his October 26, 1942 essay "The Future Pattern of the Stock Market":

"The pattern of the past 21 years (1921-1942) furnishes a basis which may be used for forecasting that of the next 70 years, as well as what the record may have been between 1776 and 1850.

Graph 1 below covers the entire period from 1776 to 2012 and shows 5 waves of a large degree ..."

We'll have to wait and see how it plays out, but 100% cash is my bet!