Daily Archives: February 6, 2018

Crude Oil, Still In The Bullish Game?

 

Oil has not made the decline, like I hoped it would, but chances are good that a bigger correction still has to play out.  The bullish phase that started in June 2017 from the $44 price level, has a stubborn streak to it as it refuses to correct. This stunning rally could still see a 61% correction, which would bring oil back down to the previous 4th wave of one lesser degree.  One previous gully sits at the $50 price level so a 61% net retracement could end down at the second gully.

The Gold/Oil ratio isn’t exactly screaming cheap as it has been hanging around this 20.77:1 ratio for far too long.  Back in 2014 this ratio spiked to 17:1 before crude oil started to implode, so a 20:1 ratio is not all that far away from doing the same thing.

I wish I had a much better, wave count than what I see, but converting from winter fuels to summer fuels will change the crude oil dynamics somewhat. Of course the 2018 hurricane season could also have a huge impact, so oil could crash and then turn around and soar.

Bitcoin Eradication Program In Progress!

There is little chance that the entire Crypto scene will just suddenly get up and soar to new world records.  Ain’t going to happen! Chances are good Bitcoin will flat line once it crashes well below the $5000 price level. Any lower and it will cost more to mine Bitcoins that what miners can sell it for. They just about need a small nuclear reactor attached to the Bitcoin mining operation to stay profitable.

The bear market pattern in Bitcoins shows nothing that some miracle, “ABC” correction is taking place, so in the long run the wave count could die a slow and painful death.  I have no sympathy for those that are losing their shirt,  as this “mania” was pretty clear from the onset.  We also had enough warnings by mania watchers, that the Bitcoin Mania was out of control.

Pretty soon it will only be worth it for an update once every few weeks as interest in all things Crypto wanes and disappears in the dustbins of history.

DJIA Intraday Counter Rally Update!

 


Now that the initial shock of, “The Big Dip” is starting to sink in, a counter rally seems to be in progress. I will work this as a potential wave 2 in Minor degree.   There is a December bull market resistance area which could surprise us and give any bullish run some stiff resistance.  Wednesdays can always be  a good day for turnings, and so far the decline has been taking a break.

This potential wave 2 rally could take the rest of the week to play out, but the odds are that the bigger bearish trend will continue.  Some are calling it the biggest one day point drop in history.  Some of the analysts are also calling Mondays move a “Blue Monday”, which is just a name change from what they used to call,  “Black Monday”, or any other day of the week.

Many talking heads, are looking for a simple 10% correction after which the bull market will carry on heading north.

The stock market crash so far is just a little bee sting and does nothing to solve underlying fundamental issues. Many experts don’t see any change in the fundamentals, so this bull market should be right back. Good luck with that thinking as fundamentals do not change prices, but price shifts change fundamentals. By forecasting a future price move, we know that the fundamentals will change as well.

 

This is the VIX, which made the biggest one day jump in its entire history  as the VIX bears all got trapped again. It’s the VIX that gives a direct visual of the fear injected back into the markets. The VIX peaked out at  the $50 price level, which ended up being just 40 points away from the fear level of the 2008 stock market crash.   Eventually that $90 VIX price level should get exceeded by a wide margin.

The VIX should decline again if we are at a potential wave 1 in Minor degree. Any wave 2 decline with the VIX may not last that long, as fear levels like this cannot be maintained indefinitely.