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Category Archives: HDGE

HDGE, Alternate To The Stock Bull Market

 

 

 

HDGE is a very good inverse indicator for the stock markets. It recently just crossed the $9 price level, but so far has stayed above $9. HDGE can always make another dip, but the VIX is also struggling to go lower. HDGE has several small open gaps above, so that also helps to make the bullish case for HDGE, (Bearish case for stocks)

In the long run HDGE would have to clear  that $13 price level again as that would only correspond with one set of previous 4th waves.   Next week should give us more info, as this Trump bear market will get serious.  

I also started a Gold/hedge ratio, which sits at 134:1 right now. I still have to check back to find the extremely cheap Gold/hedge ratio, which would be at the February 2016 time period.

Once the Gold/Hdge ratio approaches the 91:1 ratio again, then I would say that HDGE has become expensive again, and that stocks would be cheap.   This may happen at an “A” wave or the first part of a bear market. 

E-Mini DJIA Intraday Record Tops Review

 

 

The March 2017 contract has been flirting with the 20,000 price level for some time now.  I love it because it’s like sticking a piece of candy in front of a kid and then taking it away, teasing and taunting all the way. It’s irrelevant to me if it does or does not hit that consensus forecast, as they have no clue what would happen once that 20,000 actually does get hit.  

The degree level is the same as the SP500, but it sure does not have the same wave count as the Sp500 does. At best I can get it into a 5th wave diagonal.

Shorting this market can be done with the ETF called HDGE, which I’m sure the season contrarians have been buying all the way down. Insiders have been sellers, not buyers of their own stocks like FB and APPL as that all adds to the bearish case.   Any wave count I may produce should always confirm what the season contrarians are doing, or will do, as they have a far better track record in building wealth than any wave analyst has ever done. 

The 2009 bottom was a clear example, when the wave counters were left in the dust while waiting for DOW 1000.  This will never change as any wave count that is in sympathy with the herd is doomed to fail!  The fact that sc#24 had started was like taking a sledge hammer to nail the bear market coffin closed. Yet the wave analysts ignored all this important data.  

Do we have to wait another 10-11 days while this market plays us like fools or will it pop sooner? 

HDGE, Inverse Stock Market ETF, New Record Low.

 

 

HDGE just recently recorded a new record low before it started to turn up again. This HDGE is a prime example how this great stock rotation can never happen. HDGE would have to keep grinding down and when it gets to $5  it would have a high probability of creating an inverse stock split.  The stock bulls are making us believe that HDGE is going below zero, which we know is impossible. I know the contrarians are buying on the way down, as my contrarian friend has already mentioned it to me.  They never buy their entire position at one time as that would be breaking every contrarian rule know to man. They buy with GTC orders placed incrementally lower and buying HDGE is just like shorting the main indices.

When HDGE takes off, then you can expect very volatile moves, as fear will produce violent reactions.    

The VIX is also starting to stir after it achieved new two year record lows. Between the VIX and HDGE it shows us that stock investors are still about as complacent as one can get. When the herd becomes this complacent, then it is ready for a potential bear attack. 

There is nothing to stop HDGE and the VIX to still head lower, in the short term, but it will keep buyers away as the majority will not buy low, they will buy once they see these two asset classes move up. 

HDGE The Opposite Of Stock Mania

 

 

HDGE has started to crack below the $9 price level, but the lower it goes, it could be setting up for an inverse stock split. Inverse stock splits seem to happen when we get closer to the magic $5 price level. There is never any guarantee that HDGE will get that far, but it is something we should be aware of.  In a last panic to get into stocks, this HDGE has been crashing.  How far will it fall, as it sure can’t go to zero? I’m sure contrarians have been buyers, as the majority are selling. The last people that may be buying this are the wave counters, as they are scared of losing money trying to catch a falling knife. 

At present we are coming to an end of a small 5 wave sequence, and after every 5 waves we get an alternate move.  Contrarians would be buying with a “ladder” of GTC orders, which is a foreign concept to most wave traders and the majority of traders and investors. 

I keep many gold ratios, but I thought I would take at least one calculation and record it in my little book. I would have to do some back testing,  to find a good extreme expensive Gold/Hedge ratio.

The Gold/Hedge ratio today is at 129:1 which means I can buy 129 shares with one US dollar priced, gold Troy Ounce. This would give us a reading that HDGE is extremely cheap when we use gold as money. 

I have to be bearish on stocks, until after this HDGE has cranked up again.  

HDGE Inverse Stock Indicator Review

 

HDGE-Aug-8-2016

 

Stock complacency has been at very extreme levels, even the VIX has seen lower lows.  Because HDGE is more or less inverse to stocks, we always have to flip the EWP upside down.  Looking at it from an ending diagonal perspective, my Minor degree wave 3 barley squeak by in going lower than wave 1 in Minor degree. 

Now when we get to the April 2016 low the fear factor exploded, which looks like a single fast impulse wave. If we count the small waves, then we could even get a flat, as a count of 7 can make a flat. These are “A” waves, and then following that “A” wave HDGE imploded again but not without another smaller zigzag.  This has the makings of an expanded move, which would be a “C” wave bullish phase.

That should make for a good rally that will force all participants to lose money or force them to change positions in a hurry. This may take us back to the $11.25 price level before the HDGE will implode one more time. 

Just replace my wave 3-4 with another “A, B” in Minor degree and we have the making of another zigzag.  From any  “B” wave top and then heading down would match the stock market 5th wave rally. 

The commercials are very net long with the VIX so their outlook also seems bearish at this time. For now I will work the diagonal wave pattern, as the triangle will take longer and will go deeper than the ending diagonal will.   

DJIA Cash Chart Review And The 15 Month Countdown to Oct 2017!

 

YMY00-Aug-6-2016

 

At this time it is still a bit early to explore other wave counts other than a potential triangle.  My other wave count would be an ending diagonal, which the 1st wave may already be formed. An ending diagonal is a fantastic sign that something will  reverse and that would help in giving us a better location. The SP500 and the DJIA have two different peaks, with the DOW is lagging well behind. Even the Nasdaq pushed to record highs with the exact same pattern.

We can only go month to month, as many trends reverse at these times.

This may be a long addition to this post, but my countdown needs explaining. I follow the 100 year cycle, where I just look back 100 years from any present year. This would put us back in the 1916 time period. 100 years is sufficient for history or financial history to repeat itself at least once. There are many smaller cycles that are active as well like the 10, 20, 30, and 6o year cycles.  

For now it is the 30 year cycle that this 15 month count down will finish. This means we have 15 months until the 30 year anniversary date of the 1987 crash.  We are watching early as the 13 month countdown would be the important one. 2007 to 2017 gives us a 10 year cycle, and 2007 would be a 20 year cycle from the 1987 crash. Years ending with a 7, is a bad luck number in the markets, as those years can bring turmoil that the public will not expect.

Jesse Colombo  at the  Bubble Bubble does a good job in talking about the 1987 crash. A 22% crash in one day just barely makes the bear market description. As soon as that bear market was hit it was over, and stocks really  got going with a record 5th wave extension, ending in 2000.   

HDGE and the VIX have also seen record lows, which shows that there is extreme complacency in the markets. 

When the bears see this then they know it is the perfect time to attack! Bears always strike from above, and they do it when the bullish herd is busy feasting on profits.  No herd can dominate forever, as sooner or later every bullish top gets saturated and very crowded. As soon as the bulls look up and at each other, asking who will be the greatest fool?, chances are good they are that greatest fool already! 

There are only so many exits and lifeboats on the DJIA Titanic, so when the music stops few will escape unharmed. 

Russell 2000 Daily Chart Bull Trap Review

 

RJY00-Aug-3-2016

 

When we look at this Russell 2000 cash chart, we can see that on June, 22, 2015 was its highest peak, before the markets crashed to another major bottom on about February, 11, 2016. From “B” to “C” is a very clean great looking zigzag.  I’m looking at the entire structure as a possible triangle in progress, and if this is true, then we can already look at the forecasting properties of this pattern. First, the “B, C” zigzag should get completely retraced sometime in the future, no matter how deep these markets will eventually go.  

Even this counter rally has not retraced the entire “B, C” wave, so this still needs to happen, it just may not do it this trip. If another inverted zigzag has already topped, then it too will still need to get completely retraced.  To do this the Russell 2000, still has to confirm that this rally is a fake. Bear market rallies virtually always get retraced, and the 2016 rally fits the bill right now.

I have to stress a very important EWP fact and that is, that many, many  times, the real physical top, is not the real degree wave top.  This fools the early bears all the time, as they think that the bull market has ended in 2015, when in fact we could just be in a bull market correction, called a triangle. I would call it a sort of extended triangle, because one wave travelled to new highs, while the others didn’t.  Of course, this would all be a setup for a great reversal, where the markets can then soar in a wild bullish trust to new record highs.  Futures traders would never let such a setup pass without jumping on it, nor would any Forex trader pass on it with their Dow 30 units.  

This expanded top makes us think we are getting into lower lows, but this would be just a short term thing, as the potential “E” wave would stop this bear dead in its tracks. If and when this market gets down to my “E” wave, then the majority should be very bearish and screaming that the worst of the crash is still to come. The more intense this screaming becomes, the greater that chance of a reversal. Both HDGE and the VIX would be ready to get dumped when the Russell 2000 hits the “E” wave. 

I have now posted about 3 indices all containing a potential triangle, and triangles are not the start of big bad bear markets, they are just corrections in a big bad bull market.  

There was also a double Head setup, and I’m sure another H&S pattern will be created once this chart hits my potential “E” wave, close to the 920 price level. 920 is also about a 40% correction, which is the general retracement level I use, for a 4th wave bottom.  

This all indicates that Cycle degree wave 3 is still ahead of us and not behind us. 

HDGE ETF Review

 

HDGE-July-15-2016

 

The HDGE ETF travels inversely to the indices, and does a pretty good job of it. We still have to decipher it’s wave count, which has to be done by flipping the EWP upside down. In the very long run technically, it would eventually always head down the imaginary wave counts.

When I looked at this pattern, I could see a potential triangle forming, but we need the “E” wave pattern to play out, to make this happen.  What would have to happen after the “E” wave does get hit?  The last leg down, could end up as part of another zigzag decline.

 A zigzag with a triangle inside the “B” wave, would also give us a clear warning that once the “C” wave has completed, then another higher degree must be ending or starting as well.  This would then have a good chance of going well below the $9 price level. At $5 it could be a target for an inverse stock split, so that would add a pile of excitement into the mix.  

Yes, HDGE could continue down as well, but we would just run into the same situation again at a lower price.  A little short term panic in the markets, started by the Brexit Boogeyman, could set this off. 

HDGE, Crank Me Up!

 

HDGE-June-22-2016

 

In the beginning of June HDGE mad another strong bottom, but it was a higher low than the end of the April bottom. We could get a nice impulse that can send this HDGE ETF north, but this could be a fake rally. Any fake rally will eventually completely retrace itself, so if this inverted “C” wave shows itself, then it would be time to dump HDGE one more time.  I have open gaps way up high, but also one smaller one, below present HDGE price levels.

HDGE, Crank It Up!

 

HDGE-May-13-2016

 

I will make it short on this HDGE, but once I studied most of the other indices, this HDGE may have seen a major low, and it has much further to travel.  Again, it ended very close to the end of April, which is also the low for 2015. Now we have to look forward to the high of 2016. Markets do not travel in straight lines like I have shown, as this was drawn in just for dramatic effect. 🙂 

I have no clue to what that price will be, but what it ends up with will have to happen late enough in the year, so it has no more time to move higher. 

HDGE, Bullish Phase Review!

HDGE-May-12-2016

 

This HDGE ETF  has made a beautiful run up, but a spike has also shown itself. As you can see we have many spikes that form and I target these patterns with potential wave counts. I have included a wild expanded pattern, but that will get trashed as soon as we see what type of HDGE correction we are going to get. 

Anymore extreme bullish runs in stocks will give us a bearish move with HDGE. The thing is, it doesn’t have the much room to fall before it can hit inverse stock split territory.  The further HDGE heads north the less of a chance there will be for an inverse stock split. Short term I have to be bearish with HDGE,  but not in the long term.  

The VIX suggests the fear factor can head higher so this would all be negative for stocks. 

Mini DJIA Intraday Rally Review

 

YMMY16-May-7-2016

Shortly after the employment reports came out the DJIA turned and started to rally. I guess that means all is well in the economy and stocks are going to soar!  If stocks are going to soar, then the HDGE ETF is going to implode, as it acts inversley to stocks.

I will talk about HDGE more below.

Apple barely moved so if there is no hope for Apple then there is no hope for the DJIA.  This decline is not a healthy impulse decline, as I am having to struggle with an impulse wave count. When this happens, I must assume the we are in some diagonal.

I have an “E” wave at the very top in Minor degree, but I think that is not going to last that long.

The problem with diagonals is that they can decline like this for a long time, driving us wave counters nuts. Sure, we had a sharp spike to the downside, but that one was pretty small for what I would like to see in a bigger reversal.

 

HDGE-May-7-2016

 

HDGE came to a screeching halt in the last days of April, before it turned and headed north while stocks headed south. This ETF will not react on a dime like futures will as futures are leveraged and act far more violently to news.  For stocks to continue in a big bull market, HDGE would have to implode and head closer to zero.  At $10, HDGE doesn’t seem it would have that far to fall and we could think that a major bottom is close at hand, until they inverse split it. If they did this 3 times, then this $10.75 ETF would be at $32.25 and then it would have much more room to keep falling.

I have seen this happen many times and no stock or ETF is immune to this. Any price getting to $5 and lower is a prime target  for inverse splitting.  With HDGE going vertical a correction should be due, and it is this correction that can help us determine if stocks are going to push much lower. I will be looking for an “ABC” type crash which will tell me that another leg up in HDGE is going to happen.  How far any move can go this time around remains to be seen, but after a correction I will turn more bearish on stocks.

The VIX has made a dip, but would head further south if stocks still have a bit of steam left in them.