Daily Archives: February 16, 2018

Mini SP500 Index Review

This is just the index chart of the SP500 and only moves during trading hours. It does not move at night like the real contracts do.  Some of the wave patterns come out more defined that those wild contracts that many investors trade with.  This chart shows much better the record low with no truncation or double bottom like it shows with the mini contracts that I normally use. There is no way I can ignore this index to double check in helping to confirm any wave count.

The SP500 index soared from the 9th bottom with only one main correction so far. This is a sign of a zigzag that may have just topped out.   Stock bulls are thrilled with this run as they think the 10% bull market correction is over!  Maybe so, but this move is too vertical and a correction must happen.

The fast decline from the top does not suggest that a correction has even taken place.  I would have to see a completed correction like a full fledged flat or zigzag, in order for me to call it a correction.  Just because this index dropped 340 points does not mean a correction has taken place.   The majority of all investors work on price, they care little about the pattern that has actually developed.

I believe that a Cycle degree 4th wave bear market is coming which I call “The Big Dip”, 😉 . All those that think they are buying into the little dips have no clue that this market has a long way to crash.

Steven Jon Kaplan has sent me a very detailed description of what’s coming in the next few years, and I am the last guy on this planet that will argue with him. EWI also thinks a major top is in and they are pretty good at picking tops. Picking the bottoms by wave analysts needs to be improved dramatically. If the younger investing crowd has no desire to learn what happens at bottoms, then they are following a strategy that the majority practice.

Most investors also ignore the sun cycles, even though the sun cycles control all action on earth. The switch from sc#24 to sc#25 may happen anytime close to the 2021 time period, and when sc#25  does start up,  all our bearish thoughts, bearish wave counts, and opinions will get trashed.

DJIA Intraday Bullish Phase Update.

These futures charts do not produce the same wave structures as most of the ETF’s do, as there are far more intraday spikes created in futures than any other asset class. Many of these spikes happen so fast that I know or suspect many of them are computer generated spikes. In line type many spikes disappear, and when they do, I count the bar charts bypassing the spikes.

We had a truncated 5th wave just before the DJIA charged back up again, even leaving the previous 4th wave peak in the dust. I cover 5 indices and only the DJIA and the SP500 have made shortened 5th waves.

The rally since the 9th fits into a zigzag so if this market were to charge much higher, I would need 2 more full zigzag patterns for wave 3 and then wave 5. Waves 2 and 4 can just about be anything.

We’ll see if this rally lasts to the end of the day, but my take on this at this time, is that a new record high will not happen. Besides the wave count being false, the Gold/DJIA ratio had been bouncing off the 21:1 range many times. In order for this super bull to actually continue this 21:1 ratio would have to keep on expanding. It will take more and more gold ounces to buy one unit of the DJIA.

Recent reports mention that  Warren Buffet has been buying into Apple stock at record highs! Wow, even Warren Buffet is buying into this historic stock market peak. This is not what a true contrarian would ever do, but they will wait until the insiders start to buy again.

I thought I would add the DJIA big picture showing that Warren Buffett has been buying into the tops of  this historic bull market.

Warren Buffett more than doubled his holdings in Apple in 2017

Apple board members receive $262K in restricted stock

Buying into anything following Warren Buffet has produced serious downside moves in the past. Warren Buffet has lots of cash sitting around so he can buy something just because he likes it. Every major investor loves Apple stock, as it is one of the most widely held stock by institutions. Apple is in the DJIA and it will suffer in price once the “Big Dip” reveals itself again. Think that it’s a good time to invest as the DJIA records a record spike to the upside?

From the 2009 bottom the markets create 5 waves up in Intermediate degree. Not 5 waves in Minor degree and not 5 waves in Primary degree. If this record bull market has another super leg to go, then at a very minimum, the DJIA would still have to correct down to 15,000.  5th waves are never fundamentally strong like 3d waves are, so we will not get multi generations of 5th wave extensions. This has never happened in the past and it sure is not going to happen this time.

US Dollar Intraday Crash And Rally Update!

The US dollar has resumed its downward path recently while the Euro charged up. This is the great inverse relationship that also influences the price of gold in US dollar terms. As long as the US dollar remains bearish over all, the gold price should keep on benefiting.  It also works the other way, when the US Dollar is set to rally, then it usually crushes the price of gold as well.

The gold price got crushed in 2011 as stocks took off  and the US dollar charged up during that time.  The US Dollar hit another record low this morning  before it reversed and charged back up  ending with another small spike to the upside.

To finish the 5th wave down I need 5 waves down in Minuette. Since it’s a 5th wave decline, this 5th wave can extend dramatically so there still could be some downside left in the short term.  Sooner or later we  may end at a wave 1 in Minor degree and then a strong US dollar rally should happen.  It could be a slow move or a violent wave 2 counter rally, but in the long run the US dollar should resume its bearish trend.

A rally does not make a bull market, but a rally big enough sure can fool the crowd. The easiest crowd to fool are the speculators as they always get themselves into a trap. Recognizing that a trap has formed or is forming, allows us to get out of or into positions,  that otherwise very few people can ever execute.

In order for the US Dollar to turn back into a real bull market, we need the commercials to switch into an extremely skewed net long position. They are net long already, but not nearly enough for a super bull to materialize. The bearish phase can still last until the end of the month, so until I see all 5 waves down being completed, this bearish phase is still active.

If we are approaching a higher degree wave 1, we could get some very choppy declining patterns indicating that diagonal waves are starting to dominate again.