Daily Archives: February 15, 2018

Bitcoin Is The Bear Market Over?

Has the Bitcoin decline stopped and has now returned to a bull market.?  I doubt it, as this present rally is not producing the impulse waves required. Bitcoin definaly sliced through the top trend line so that alone will bump the degree level up by at least one degree.

Iceland to use more energy mining bitcoin than powering its homes | Metro News

Bitcoin mining takes up a massive amounts of electricity and computing power,  where the miners in Iceland consume more power than the entire Icelandic grid needs to run its homes. Many miners are moving to places that have the lowest electricity rates like Quebec.

Even though this rally looks impressive I think Bitcoin can still fall well below $3000 per coin. Of course, this rally could just be coinciding with the stock market rally,  so we will see how long this rally will last once the markets resume their bearish trend. After all it was the Nasdaq bull market that spawned this Bitcoin Mania so Bitcoin Mania can also keep dying right along with the Nasdaq.  A $4000 rally does not make a bull market, but it sure gets the bullish investors excited again,  with the injection of “Hope”. Hope that Bitcoins keep going up in price.

The Gold/Bitcoin ratio touched 7.48:1 this afternoon, which is about a 50% crash from its high ratio of 15:1.

The amount of new Cryptos seems to keep going and now registers 1533 ICO’s,  with a total capital base of $467 billion US dollars.

Investors think they can hide Bitcoin gains from the government, but I think this is a big mistake in their thinking. Bitcoins are unstable at best and nobody in their right mind will hold Bitcoins when they start crashing again. Imagine buying a house with the price of $20,000 for a single Bitcoin,  and as soon as you get these Bitcoins they start to crash to $6000 in little more than a month. Bitcoins will crash faster than any real-estate will, so your Bitcoin windfall can turn into a disaster very quickly.

Crude Oil Explosive Rally Update!


I was expecting a 4th wave rally and the markets did not disappoint us. There was a strong small counter rally that may put a crimp into this wave count, but eventually the crude oil should resume it’s southerly path to what could be a new wave 1 but in Minor degree.

So far the Gold/Oil ratio of 22:1 has been improving, but it will be a slow process. I constantly look at the daily and weekly oil charts, but switching  from a daily chart to a weekly chart will dramatically change the wave counts. Until all the oil bears have come out of their caves and sliced every oil bull in the process will we be in a position when oil can start another huge leg up. Maybe crude oil can turn back into a glut when the US government sells off its reserves.

Fundamentals are lagging indicators so if the experts see that an oil glut has arrived, chances are good the glut is over and a new bullish phase will start.  The markets will always do the opposite of what fundamental reasoning suggests, as the biggest gluts produced the biggest oil bull markets.

Until I see a great looking corrective oil crash playing out, I can’t turn bullish for the longer term.

The VIX Crash Daily Chart Update

The VIX spiked up to 50 after which it turned south with a vengeance.  It was an ugly correction and if I’m right,  then another leg up in the VIX will happen. We can see that the VIX  developed a “wedge”  which every technical analyst is taught to recognize, yet they never saw this explosive VIX rally coming.  Everybody on this planet was betting against volatility, but in doing so the VIX bears painted themselves into a bear trap.

Yes the commercial traders ended up becoming net short the VIX, but that can all change dramatically in a very short period of time.

One thing we can always depend on and that is investors can easily get into a trap, and recognizing this fact before it reverses is very important. The VIX is a world full of diagonal wave structures so don’t expect some perfectly formed impulse waves to develop. It isn’t going to happen,  no matter how much we wish any pray for it to happen.

In late 2008 the VIX had already peaked out at 90, yet the bears persisted in forecasting lower lows in stocks.

Insiders were buying stocks in late 2008 already, so the VIX bull market was doomed at that time. Will this happen again?, of course it will, nothing will stop it. When the public and the VIX are in general agreement, then the VIX will see a dramatic reversal. This will not be easy to catch as the VIX may have to score 100+ before a big reversal becomes a reality.

Mini Nasdaq Comes Back From the Dead.

The Nasdaq plunged to record lows on the 9th of February but came alive and then soared in a stunning rally.  Today is a new moon date, which in the past have produced some stunning reversals. There is never any guarantee of a reversal as it has never been reliable enough, to use on a constant basis.

What the media calls a 10% correction is just a Minor degree move in the language of Elliott Wave. That’s just a “Little Dip”  in a world where the “The Big Dip” can show up. A Cycle degree “Big Dip” can still take a few years, but many time markets have crashed just before the bottom when solar cycles arrive. This may take until 2020 or even 2021 but it sure will not be some obscure 600 year bear market.

Until all the 5 waves in Cycle degree are found and confirmed, there will be “NO” SC or GSC degree bear market. It is sequential and mathematically impossible to be in a SC or GSC degree wave count, without all the Cycle degree peaks being found first.

Yes, the Nasdaq has a few quirks that produced a different pattern, but we can still use it as a 5 wave count since the 2009 bottom.

The counter rally was very powerful but most of that came from protective buy stops that were in place. Protective sell stops are piling up below present prices, and they sure are not “buying the dip orders”.

We could still see the markets rally a bit further, but sooner or later investors running with the bulls will become tired and drop out of the race. If they don’t drop out,  I’m sure the sharp horns of the bulls may change their minds.

Any counter rally like we are in, would get completely retraced, if the big bear market is going to come back and haunt us.

Mini SP500 Intraday Bullish Phase Update

Is the stock rally running out of steam or is it going to soar to the moon with another super leg up?  Many experts say that this is just a healthy 10% correct and that this bull market will return and soar once again.

Blame Ontario Minimum Wage Hike for Canada Job Plunge. Or Not. – Bloomberg

The experts see no recession on the horizon in the US markets, but in Ontario, where they voted themselves a minimum pay increase  massive amounts of layoffs were announced. I doubt it very much that the USA will skirt a recession while Canadian fundamentals implode.

Fundamentals are lagging indicators, not leading indicators. It took 9 years for the fundamentals to change from horrible in late 2008 to great in early 2018. When the markets start to turn down again, you can bet that the experts will come up with all sorts of fundamental reasons why the markets are going down. The second deep plunge in February sure looks like a nice declining impulse, but in reality it counts out much better as a diagonal making it a potential 5th wave.

Today is also a new moon date, which in the past has produce some dramatic or very energetic reversals.  The February double bottom will never hold if the “Dip” so far, is actually just the start of the  “Big Dip” in Cycle degree.  The blame game will continue as they always need a scapegoat to blame stock market losses on. It’s never about stupid investors or stupid money managers that always get into a trap, but they will blame computer trading as part of the reason. The fact is behind every computer trade is a human with an itchy finger sending Algorithms crazy.

Below todays present prices, the protective “Sell stops” are piling up, and we don’t need any fancy computer to figure that out. Traders have been brainwashed to move protective stops up, which will easily get triggered once the “Big Dip” resumes. “Big Dip” I mean a Cycle degree 4th wave dip, not some pussy Minor degree correction that we are presently in.

They had a “Big Dip” from 1929 to 1932 as well, which was a Supercycle degree dip. That only took 3 years to play out. I’m sure any Cycle degree “dip” will not take any longer.  In the long run solar cycle #25 will put a screeching halt to any bearish wave counts or bearish fundamentals that we can dream up.  Solar Cycle #24 also destroyed all the bears by early 2009, so never underestimate the power of the sun on human affairs on earth.

The Gold/SP500 ratio has been hitting 2:1 on the expensive side from a (.75:1) ratio on the cheap side.  When the bearish mood returns, then this 2:1 ratio will never be exceeded for many years.