Daily Archives: January 9, 2018

Crude OIl Daily Chart Vertical Move Update!

Oil has now exceeded that $60 price level, but oil has done so with a wild surge to the upside. This last wave I have is starting to look like a single long 5th wave after what was a potential triangle 4th wave. I can’t remain bullish on oil until oil has made a significant correction. Traders are chasing anything that goes up so oil makes for a perfect target. Even a normal correction could retrace this entire 5th wave in a hurry, as commodities just love to create fast unexpected corrections.  Remember, when any bullish phase moves higher, sell stops start to pile up below present prices. When they get triggered things can move pretty fast.

The Gold/Oil ratio is still decent, but it has compressed a bit more everyday. In 2014 the Gold/Ratio shifted to 17:1 just before it started to crash, so maybe 20.66:1 will do the same thing. If I’m correct, then the Gold/Oil ratio should start expanding again.

In this case oil can fall back down to our  previous 4th wave of one lesser degree, which would be close to the $40-$50 price range. That would mean about a $20 price drop from todays levels. Oil crashed along with the stock markets in 2008, so oil crashing with stocks this time, would not be that much of a stretch.

Sure, we could get more upside, but the combination of a triangle in the 4th wave, followed by a “thrust” sure has ominous meanings.

Crude Oil Daily Chart Bull Market Update

If there is any doubt from the public perspective, if oil is in a bull market or not, then this rally to $63 should help to dispell that. Of course the herd took about 2 years before they figured it out. The $60 price level produced some resistance, but now seems to have barely worked past it.  Oil should still correct, but it can do this very suddenly, and freak out all the oil bulls again. This last surge to the upside is the result of the previous correction, but diagonal wave structures can create havoc in forecasting any future price targets.

We need another price target as the $60 price has been achieved. Oil also wobbled around the $55 price level and the next even Fibonacci number would be $89  oil. Just in case that is not enough, we can use $115 and then $147. That would force a degree change in my present wave counts, but that is to be expected with such an ugly oil bull market start.

The Gold/Oil ratio is compressing a bit all the time, but nothing to get really excited about at this time. The Gold/Oil ratio crossed below the 21:1 ratio, but that is still a far cry from the 9:1 ratio we had at the top of 2008. If the ratio changes dramatically, in a short period of time, then a bigger bull market correction could happen.

The previous 4th wave dip is between $58 and $56 USD, which could turn all the bulls bearish again, when that illusive $60 price level doesn’t hold.

I know I give price projections, but the price is just for public consumption as the whole world works on price. The pattern is far more important than any price forecast as when we can identify any 3 wave decline, we know that the market will retrace the entire move from where this specific  “A” wave in question, started from.  Everything is relevant to the largest degree, we think we are working in.

US Dollar Intraday Bullish Phase Update

After a great US dollar crash or swan dive, it has now recovered and started to soar with the stock markets again. This rally is not the resumption of the big US dollar bull market, but just a small bearish rally. We will get these small counters rallies all the time, but the trick is not to get fooled by any single rally, even if it travels further than anticipated.

Long term this US dollar can retrace its entire bullish phase, which started in early 2008. The US dollar rally started well before the stock market bottomed in early 2008.  A few places where my parallel lines get sliced in two, is not that big of a deal from my perspective. Trend lines are abused by most technical analysts, as it’s not rocket science to see a trend line. Even a kid with a ruler can see the trend lines without any instructions.  A little more upside can happen, but the reversal should push the US dollar to another record low.

Gold has also reacted down with this US dollar rally, so if gold is still set to soar, then the US dollar is still set to crash and burn. As usual the majority can never take advantage of these cycles, as they don’t have the patience to ride out any corrections.  Emotional traders charge through most of the markets, chasing anything that moves up or down, but the seasoned contrarians get a big laugh out of these market antics. Monkey See! Monkey Do! Seems to be the herd mentality at any given time.

PSAU PowerShares Global Gold & Precious Metals ETF

In a search looking for other related gold stock, ETF patterns I found 3,  but I will work with just one of them. PSAU is one of them, which also pays a current dividend yield of 4.65%.   PSAU ETF Guide | Stock Quote, Holdings, Fact Sheet and More

Since early 2016, PSAU bottomed like so many other gold related stock assets did, and then PSAU exploded into the mid 2016 peak after which PSAU went south  developing a bearish phase. The first move up in 2016, ended with a 245% gain, and gathered worldwide attention that a gold bull market has arrived.

It took the majority 6 months or so to figure it out, and as soon as the mass media talking heads were in consensus agreement, the gold stock market turned bearish. Bitcoin was the latest craze, and who needs gold when Bitcoin is as good as gold? Nothing is as good as gold, except “gold”.  Dumping gold for Bitcoins was the battle cry, but then Bitcoin crashed and has yet to break out into new record price territory.

Late last year PSAU seemed to have turned upward again from a base of $18, touching $20 before backing off. Yes, that $18 price level is a line drawn in the sand, because if we are back to the bullish phase, we don’t want to see that $18 price level get trashed for any reason. Even if that $18 price level didn’t hold, this bull market is not over until the majority of my Gold ratios show overbought conditions.

We’ll be starting our third year with this bull market, and it may still take 1-2 years before it’s finished. GDX and GDXJ have similar stock patterns, but PSAU pays out a much higher dividend payment.

My top trend line is based on the two biggest dips connecting the bottom trend line. I always draw these trend lines in parallel fashion, but there is no guarantee that the top trend line will ever get hit. I have to check a few more top and bottom ratios, but I have at least two I can work with. Our present Gold/PSAU ratio is sitting at 66.36:1, and it still has a long way to compress until we get into an expensive 27:1 ratio. PSAU may never reach that extreme, but a ratio of 66:1 seems to be pretty normal right now.

I believe that PSAU can still double up from todays price levels, as “C” wave bull markets can and do produce some amazing or stunning vertical moves.

Short term the gold stocks could still be in a correction mode, but long term I’m still very bullish.