Tag Archives: Elliott Wave Mini DJIA

Mini DJIA Intraday Review: Still Lagging Behind

The DJIA is one index that is still running well behind the Nasdaq and others. The Nasdaq is the only index that has traveled to new record highs, but others are catching up, or getting close. I also switched to a line type chart, but this also changes any wave counts, I may be working at the time. If the DJIA is still going to play catch up, then it still needs more time to accomplish this task.

One burst of energy could push the DJIA to my top trend line, which would definitely force another wave count review.  I have some very questionable short term moves, that I don’t like, but those are the things that eventually need to be resolved.

The three trend line angles, is based on the bottom line, and the middle line helps to outline one degree lower wave patterns. We have the new moon coming on Saturday, and many times moves correspond with expiration dates closest to the 10th and 21st of each month.

Until this market displays a sustained decline like Bitcoin has been doing, then the end of the bull market is questionable in the short term.

President Trump is doing everything in his power to keep this bull market going, but sometimes bull markets end out of pure exhaustion, with nobody left to get in. Remember the idiots that love to buy high have to find other suckers to sell to,  and one day those greater fools will not show up. It must be a new bunch that has no clue what “Technical Analysis” or “TA” even is. The concept of contrarian thinking is completely absent in todays world, but from an EWP perspective, we must never forget any contrarian thinking.

When we do forget, we don’t see it “coming”so we miss all the market crashes and impending bull markets. Investors that think that bear market’s like 2001 and 2008, should never happen, are living in a delusional dream world, or they just arrived from a different planet. Of course, if a new group of aliens is buying into this market, then they also did not listen to or record earth’s market history.

The Gold/DJIA ratio spread increased a bit to 19.44:1 which makes it more expensive when compared to gold. About 21:1 is my top ratio record, which will be hard to beat.

No market stays permanently high, as they do wear out the participants if players are no longer make any gains. It’s been about 6-7 weeks already where the crowd that got in, in January, have made no gains or just stayed even.

Nasdaq New World Record Highs!

As I’m posting the Nasdaq has hit 7111 already and there still seems to be some momentum behind this move. All other indices I cover need to play catch up, but we know that the Nasdaq can march to a different drummer. In the end we may end up with a completely different wave count, for now.

The February decline sure can fit as a single 5 wave decline which could be part of an expanded top. From the February bottom I believe we have another diagonal wave structure, which created the new record high this morning. Everything seems to be rosy for the majority of investors again as chances are good this, “Tariff War” was just a lot of hype, or any real tariffs on steel and aluminum don’t matter much.

Since the late 2015 bottom we had a massive 5th wave extension which borders on being a diagonal wave structure.  In our EWP book they call it an “Ending Diagonal” but they do not count out the zigzags that make up any diagonal move.  The 4th wave in Intermediate degree is one warning, and a diagonal 5th wave is another, so this ethusium will get replaced by pessimism again.

One thing good about this new top, is that it hasn’t created a double or even triple top. When we do get them, then it is much harder because we have to work out where the decline starts from. In a Cycle degree zigzag, we can’t have the markets soar to new highs, as that breaks every rule in the book, but flat corrections sure can produce “B” wave highs, before they plunge.

DJIA Intraday Gyrations Update

The indices I cover make 3 month jumps, so when the March contracts finish,  I have to jump to June 2018 contracts. This chart is the first I will post in the new June contracts. (YMM18). Trading is a bit thin with this June month, but it should pick up in another two weeks.

I’m keeping my wave counts that would work for a Cycle degree zigzag correction. If this is not true, then eventually this wave count will get trashed, but it would also eliminate 2 out of three possible Cycle degree corrections. Any 1-2-3 declining wave count can be identical to any A-B-C zigzag, so until we get to the “C”or “3” wave count I can use my “B”wave top. The February 9th down spike you see is an erroneous spike, because it disappears with line type settings.

What gets me is that the DJIA secondary bottom of February looks truncated, which I have a problem with. It looks worse when I switch into line type settings.  These erroneous spikes, seemed to be computer generated due to the fact they happen so fast.

The rally is still going as I post and I would like to see that open gap closed before these markets resume any downside. All of my March contracts all registered Gaps, so it’s not an isolated event. (The Gary Cohon Dip) It would be fantastic if the gap ended up being closed, but still short of breaking out to another higher high. Trade war fears are not going to go away as they are part of the changing  fundamentals. Trump has made it pretty clear as he was always talking about tariffs and duties, so we should not be surprised at what is happening now.

The EU has threatened retalator attacks on US exports that are targeted at president Trumps heartland voter support. That is a very direct attack on Trump supporters as their jobs woud be on the line.  Fundamentals keep the masses entertained, but in the end if a big Cycle degree bear market is coming, it matters little what fundamental reasoning they use. Fundamentals will change like the wind and it will drive you nuts trying to make decisions based on fundamentals. In January 2018 the herd was extremely bullish as they bought into this “New Era” hype, and now two months later we hear lots of bearish news. When forecasting a price crash, before it happens, we would also be forecasting that fundamentals will change.

The idea that we always have to remind readers that markets never go down in a straight line is ridiculous, as that would only apply to investors that have never seen a financial chart before.

Mini DJIA Bearish Outlook Update

The DJIA has finally peaked last month and now has started an early March decline. March seems to be a popular time for reversals, as the biggest bull market since the depression, started in early March 2009. For now I’m going to stick with the possibility, that we could produce a diagonal set of 5 waves down in Intermediate degree.  This means the possibility of a Cycle degree zigzag correction.

I will run this wave count for as long as I can, and if I’m wrong and the markets make some wild moves that refuse to fit well, then this helps to eliminate the zigzag. Elliott Wave is all about eliminating other probabilities and then if we’re lucky we may end up with a better fitting wave count. In corrections there are “always” 3 simple patterns to chose from, which must be specific to the degree  that we think we are at.  Any  potential Cycle degree correction, has a very specific wave count for three types of “simple” corrections. In a Cycle degree correction, there can be “NO” alphabet wave labels bigger than Primary degree. Trying to count out 5 waves down in Primary degree instantly tells me that the wave analyst thinks they are in a Supercycle degree or higher, wave count already.

As I post the markets were charging back up again, so if this rally starts to break many previous highs, then I may have to throw out this wave count sooner than later.   When this market refuses to constantly push higher, then this historic stock party is over.

The trick is finding that last wave that belongs to the bull market, so we can start the new bearish count.  Oh, this obviously already happened back in January, but how many times did we think it was over, yet it turned and soared once more.

Once investor fatigue sets in,  then it could open the markets for a big “bear” attack.

Nasdaq Intraday Bullish Phase Review

This so called rally has gone on long enough and should have topped some time ago. The 21st of each month can provide turning dates, but so does the end of the month.  This is starting to look more like an impulse type move with the market crash just being part of an expanded wave 4 pattern. Some of these spikes we see can be ignored once they are double check by switching to line type settings.

This wave count may get trashed in a blink of an eye, if it does not soar to new record high. We have a little over 118 points of  upside room left before the Nasdaq completely trashes my wave 2 wave count. All other indices I cover could catch up to where they can all be part of an expanded 4th wave in Minor degree.

I’m not going to spend too much time on this wave count, because it can change faster than we can imagine. There may not be any updates on Friday, but I will post some on the weekend when I can. Markets may be very lethargic on Thursday as well, so it could be a really slow time period in the next few days or so.

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.

DJIA Bullish Phase Update And The Gold/DJIA Ratio!

Once I realized that this decline is not running as smooth as a 5 wave impulse decline should, I looked for an alternate. Yes, I labeled it a truncated 5th wave, but the other 4 indicies I cover do not contain any obvious truncation.

The majority are still in an extremely bullish mood to a point that they are foaming at the mouth. Running with the bulls will only last so long, but sooner or later the bigger bearish trend will take over again. Over and over we hear the experts constantly issuing bullish statements, which basically tell us that this bull market has a long way to go.

Hate to break it to you folks, but the experts have said the same thing at every major top since 2000. Those experts that are preaching the stock bull market are easy to spot as they get front page billing most of the time, or they may be looking for “value”.  In Canada, we had our employment meltdown, and are heading for a recession, so are US stocks going to soar while our TSE keeps imploding? Some wave analysts only cover one or two indicies, but I cover at least 5 of them, so I will be right or wrong on 5 indices.

I recently saw a DJIA wave count from EWI and they are also extremely bearish on the stock market. They are good at picking tops, but that only serves a very small percentage of traders. The biggest thing is to catch a big bearish bottom early enough, to take action to deploy more funds. The last thing we would want is to end up with a small token position,  because we had no confidence that a major bottom was approaching in 2009. The bear market was already over in November of 2008, well before the real bottom in early March 2009.

Overall the DJIA gained about 410% in about 9 years and they think it’s just getting started. The Gold/DJIA ratio sure does not confirm any part of this bullish rhetoric as it peaked at about a 21:1 ratio. It took 21 ounces to buy a single unit of the DJIA, the highest amount I have ever calculated. In order for this super bull to charge much higher this ratio “must” also keep spreading wider. 21:1 is a far cry from the 7:1 ratio in early 2009.  I believe this DJIA will return to a single digit ratio again. Yesterday’s ratio was 18.48:1 which is compressing  from 21:1 not expanding.

Since Apple is in the DJIA it will not be safe to buy the DJIA until Al Gore buys a bunch of Apple stock again. 😀 Just kidding folks, but you get the picture.  Insiders have sold out a long time ago, so until we hear of massive insider buying again, this bearish phase is still ongoing.

In most part, the commercial traders are net short most of the indices, so until those numbers obviously change the big bull market is not going to materialize.

Mini DJIA Crash Or Correction?

The markets are still soaring as I post, but I expect this rally to run out of steam by late this week or early next week. Any market move that was this unexpected, certainly unnerves the weaker investor, especially when investors just finished stuffing their RRSPs in January.

They paid no attention to how over-bought the market was as they do this just about every January. Many are calling it a correction in a bull market, and if this is true, then the DJIA must eventually push much higher and go back to breaking new record highs.

The longer it takes to push to new record highs, the less confident investors become.  The backlash to the initial drop is still playing out, but we are getting close to a previous inverse dip so this can produce some stiff resistance. This could be a wave 2 rally in Minor degree, and would be part of an initial zigzag in Intermediate degree.

The VIX is already crashing from a peak of $50 and is fast approaching the $21 price level. There still may be more downside to go with the VIX, but if this bear market is not over, than the VIX,  should crank back up again.  Sooner or later the VIX should soar above $90 again, which was the end of the 2008 bear market.

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.


DJIA Intraday Decline Update

This decline, we are now in should not be a surprise to anyone that takes this market seriously. Why? Because it always seems to happen during the last ditch effort to max out  RRSP’s for the 2017 season.  It has happened so many times before, that it’s become old news. You can’t blame this decline on profit taking as the smart money has left a long time ago.

It goes to show that investors care less about buying low and selling high, but they worry more about topping their RRSPs. We are about half way down and then the entire January bull move will be erased. Billions have gone up in smoke already, and there is much more carnage to come. Longer term the entire Trump rally will also go up in smoke, as everyone is underestimating the degree level of this decline.

Any Cycle degree correction has three simple possible outcomes, flat, zigzag or triangle and in that order that I expect. I favor a flat because wave 2 in Cycle degree looks more like a running zigzag.

By the time the Trump rally has gone up in smoke, we are looking at trillions of dollars that will disappear. If you think you can buy on the dip, then your thinking is still over on the bullish side. Not on the bearish side, that we need to focus on.

I had to move my degree level up by one degree because I was using the bottom of my list already. My cutoff is always Miniscule degree so I can better gauge where I am, plus we damn near need an electron scanning microscope to see anything smaller.

I will try and cover the gold and oil markets by Monday, but I have been fighting this flu bug for a week or so already.

DJIA Record High Review And the Fast Tumble

Some have no clue why the markets are crashing when all the fundamentals are running on all cylinders. Sort of. Besides the fact that the DJIA has made a near vertical move on weekly and monthly charts, this market is running out of steam. It could still take weeks before the herd has a slogan it can use.

The DJIA sliced right through the bottom trend line and it was exactly what I hoped would happen. If our wave counts start off too big then eventually we become too insensitive to major turnings. This happened in late 2008 with expert wave analysts calling for a DJIA crash down to 1000.  The expert wave analysts missed the biggest bull market since the depression and they have done nothing to fix that problem. Making cosmetic adjustments are easy, but if we don’t know the idealized wave structure we can flip numbers and letters around like a guy flipping hamburgers and they will have little meaning.

I would love to give this move more time for further downside.  We don’t have a double top to contend with, so our bear market starting point is clear “At this time” I never said the wave count is “clear” only the peak is clear!   😉

It will be tricky to catch any intraday counter rallies, especially this early in the game.

DJIA Record Intraday Bull Trap Update

For the last little while I have been counting the patterns between my trend lines as an ending diagonal, many waves critically overlap, during this 5th wave so an impulse wave count is out of the question. On weekly and monthly charts the 4th wave bottom produced a massive single spike. Most ignore this fact as the expert wave analysts keep adjusting the markets, introducing higher and higher degree levels, when in fact it’s doing the exact opposite. One wave count I saw had the 2015 4th wave as wave 1-2 in Cycle degree.  Another had the 2009 bottom as a SC degree wave 2! What a pile of crap.

Above, the wave count is one degree shy of hitting rock bottom as the 4th wave extended dramatically. I have never counted a more vertical 5th wave move than any other 5th wave. These spikes do not end well, yet money flows have been heading into the markets this spring.

Investors love to buy high and then sell out at a panic low, so investors have learned little in the last 18 years. With the top of 26,684 at this time, this gave the entire bull market a 410% gain 2009-2018.  Getting in “after” 400% gains has already happened is a crazy idea from a contrarian perspective, and I’m sure the contrarians  will agree.  Smart money is building cash positions so they have lots of dry powder once this stock market crash gets seriously over-sold.  That won’t happen, until the majority hate stocks again, so we still have a wild ride ahead of us.

The Gold/DJIA Ratio has not changed much as it takes 19.9 gold ounces to buy one unit of the DJIA. It only took 8 ounces of gold to buy the DJIA at the 2009 bottom, so we’ve had a massive shift since then.

Mini DJIA New Record High Update.

There is always a good chance that I may still be too early, but what I can say is that this recent bullish pattern is choppy as hell and would make a perfect ending diagonal. Any diagonal wave structures are can be found in any 5th wave and even can extend dramatically, which they don’t teach us in the EWP, which I call the “Little Blue Book”.  As soon as any wave does not follow a very high quality impulse wave, I switch and start looking for diagonal wave positions.

This could remain bullish for the rest of this month as month end, seems to be a popular reversal time period.  I’m sure that one day 2-3 years into the future this DOW could be heading to 8 or 7, 000, with many calling for much lower DJIA  market prices.  When that day arrives, you can bet I will be calling for the DJIA to charge back up to 34,000 which the majority will think is insane. This will never happen until we reach another massive bearish situation, and a 500% gain is just a bit more than the majority of 5 or 8 years 5th waves have done.  We are at a bit above a  400% gain in a 5th wave bull market already, so a 500% gain is not that wild of an idea. Especially if we are going to get the, “Roaring 2020’s in Primary degree.

Everybody hates stocks back in late 2008, and when stocks are at the extremes they love stocks. The herd will never change as it is also mathematically impossible for the majority to take money from the majority. Only a very small minority invests like the seasoned contrarians do, even though many brag about being contrarian. I consider insiders as contrarians and SEC rules require insiders to declare their trades. This is public information,  and  the majority chose to ignore this data.  Any bearish wave counts and bearish outlook after insider reports come out will have their opinions crushed, as the markets will always do the opposite of what the majority want it to do.

One main reason why this market is so extended is because we are coming to a  Cycle degree top. This is one degree lower than the 2007 peak and a full two degrees higher than the 2000 peak.  All three peaks since 2000 are wave three peaks which must all develop in sequence.  Sure, I’m working the SC degree wave 3 just like GSC and wave 3 in Submillennium degree. If we’re lucky we might reach SC degree wave three by 2029 and GSC could still be 100 years away!

The Gold/DJIA ratio is at 19.44:1 which it has done 3-4 times already. The ratio seems to have hit a brick wall which is very bearish from my Cycle degree perspective.

Mini DJIA Intraday Double Top Review

Yesterday morning the DJIA produced another record high of 26,149, after which the mini started a decline. From the beginning of January we’ve had a single move containing 5 waves in Subminuette degree. Subminuette degree is 4 degree levels above the rocky bottom of my degree list, which I cut off at Miniscule degree.   Not using a lower set of degree levels helps to judge potential extensions, and keeps me from wandering into a higher degree, before its time.

Recently the Mini DJIA topped at 26,149 with a square looking top that. I’m not jumping up and down with joy at the thoughts of a small double or even triple top wave structure. It’s the nature of the beast and I have to use several different wave peaks to count from.

It sure would be nice if the DJIA doesn’t break another world record, which the analysts are so good at counting and reporting back to the mainstream.  All I can say is, “Enough already” as we can only listen to the constant squawking parrots for so long.  “Who are all these analysts broadcasting to”? Day in and day out they broadcast to the world looking for the secret group to invest in these markets at record highs.

In reality, there is no secret group, as they are called, ” Retail investors”  which always buy in at the top.  There is something about this group that has bought in at every record high since the 2000 peak.

FUND FLOWS: Concerns Over Frothy Markets Not Stopping Investors

Doing the same thing as the herd will get you the same results as what they are going to get. The, “High Buying” retail crowd, doesn’t have the stomach and the account “headroom”,  (net cash),  to survive even a medium correction, nevermind a Cycle degree correction.  All the DJIA Titanic has to do is list to its side and the retail investor will start to panic and pull monies out again. The professional contrarian and insiders are long gone, this market, only the emotional investors are left to jump in.

In the last 17 years, investors have learned nothing about buying low and selling high as no amount of broadcasting has taught them anything.  Constantly trying to forecast how much higher this market can go, is all Smoke and Mirrors. They have no clue how deep a Cycle degree bear market can go down to but when it does, these same experts will claim how much deeper the markets can crash.

I’m very bearish on all the 5 main stock market indexes, that I cover, but we may have to put up with these intraday gyrations for a bit longer.

At a very minimum the entire Trump rally will get completely wiped out which may only be an Intermediate degree correction, nevermind the Cycle degree correction that we are supposed to get.

Mini DJIA Record High Update

In the last day the DJIA charged up and then instantly reversed heading south. So far we have another world record peak at 26,061 but we have to be aware that it also can still make another mad dash to the upside. In order for the markets being over on the bearish side already, we can keep on getting new record highs. Every new record high can be the last record high, which could mean that the 26,061 price level will end up being the last high of 2018. The VIX has also spiked to newer highs with many gaps opening as well.

Fear is starting to reverberate through the bullish ranks, but this must continue once the markets hit a brick wall.  We need some good looking 5 wave declines  to form,  as 5 wave sequences are the pointers to a new bigger and longer trend.

In the bigger scope of things I’m very bearish even if we get another record high. Not until the majority, (more than 80%), of my contrarian indicators show up, will I turn bullish.

DJIA Intraday New Record High Update

After a choppy sideways move, the Mini DJIA stock bulls decided they had enough of that and then charged up in another little choppy leg to the upside. This sideways action can fit into a small triangle fairly well, but we may not end up with a big “trust”. The markets are generally getting weaker from a fundamental perspective. That doesn’t mean that the markets can’t push higher, as emotional investors can do amazing things when they catch bullshit fever.

At the time of this posting the DJIA had spiked to 24,986 already, and it could still take until noon PST  before a reversal may happen.

From the March 2009 bottom to our present top, the DJIA has seen a gain of 384%. Not bad considering the majority of experts just figured out that we were in a recession in 2009.

From 1921 to the peak in 1937, there were two 5 wave type bull markets, one gained 595%,  and the other gained 473%. Yet the majority never saw the bull market coming.

Even the expert wave analysts were still calling for DOW 1000 in early 2009, but yet the market turned and started to soar. The contrarians of the day were very bullish as insiders were already buying in late 2008. Insiders don’t buy their own stocks back on a “whim” and they sure don’t sell on a “whim”. It may take them years before they decide to sell again.

The last thing that will work is a bearish wave count after insiders have been buying for many months already. We just finished the bottom of  solar cycle #23 so the big bearish cry babies never had a chance, as all bearish wave counts were doomed.

The chart below is a bit old, but the end target for Cycle degree wave 3 position is still the same.

All the wave counting in the world will mean nothing if we have no clue from where we are counting from. Even though the majority of  wave counting failures has happened since 2000, none of the expert wave analysis went back to 1929 and started a new wave count. When we point our fingers to the wave that was in the middle of the depression, all we can see is a single spike to the downside. This was a wave 2 SC degree crash where the “B” wave counter rally lasted about 5-6 months.

This was a Cycle degree “B” wave bull market lasting a very short time, so I’m sure a “B” wave rally in Primary degree could even be shorter.

In the middle of the depression the market turned up and soared 473% in 5 years, completely ignoring all fundamental conditions at that time. The market also did this in 2002 and again in 2009. Bull markets end when the majority have contracted “bullshit fever”. Only the completely brainwashed bulls love to buy high, and sell higher. The smart money has left the building a long time ago and they will not be back until they see their company’s prospects are going to turn around.

The Gold/Dow ratio helps in determining how expensive the markets really are. This morning we were at about 19:1 which is a bit below the average for December of 2017. It takes 19 gold ounces to buy one unit of the DOW, and we would need to get closer to an 8:1 ratio before the DJIA becomes cheap again.

Mini DJIA Intraday Record High Update

During the last 10 days or so, the Mini DJIA has produced a choppy sideways pattern on the verge of breaking to a new record high at any time. Of course the idea of a nice clean single top,  has been quickly trashed. Not until we figure out which peak still belongs to the bullish side and which peaks are over on the bearish side can we build a better picture.

This will take some time to sort out as 4 of the indices I cover are still lagging behind the Nasdaq by a large margin. If a sudden spike to a new record high happens then this is a good thing, as it would be nice to see a better defined top.

Today is the last trading day of the year and if the market stays up for the rest of the day, it pretty well tells me that investors have no fear of the future. “The future is rosy ” mantra, is usually a bad sign. The consensus forecasters are all preaching to the converted, so there is nobody left to come in.  If the average Joe investor can’t convince his buddies that this is a perfect time to get in, then you know this market is already saturated.

Stock funds see biggest weekly outflows in more than two years – MarketWatch

Fund flows do get reported which are mostly ignored by the majority, but the majority can never benefit from this information as the herd moves too slow for all of them to jump ship at the same time.  This is pretty typical at major tops, so it’s nothing new from my perspective. Capital preservation is most important at market tops and this time, “It’s no Different”.  Fund flows preceded every major peak since 2000.

Gold, Silver and Oil have all been soaring, as the US dollar implodes at year’s end. When investors see their paper assets declining, they could look for refuge in gold related assets.

I wish all my readers the very best and a “safe” 2018.

My postings will be curtailed until the 2nd of January 2018.

Mini DJIA Intraday Record High Review

At this time we have a mini type double top with one record high at 24,896. This is a far cry from when the DJIA touched 6500.  It has now gained about 383% and many experts say it will last forever, as we are in a secular bull market. They hated stocks in 2009, but now they love them. This has happened at every major top that we’ve had since the 2000 peak. That is just recent history, as the same mood was present in 1929! Each euphoric top produced a pessimistic bottom, before another major leg up occurred. “Is it going to be different this time”? I doubt it very much!

Remember that when you are listening to all those rosy fundamentals, think about it as,  “Fundamentals will always tell you the wrong things at the extremes”.

Short term this could still be just a correction, but even then the DOW could fall to a previous low of 24,200.  Right now the Mini DJIA is sitting at the bottom of the trend line, which technically will not hold when a bigger correction starts. At this point all we can do is take one new record high at a time, as record of records are being broken.

The Dow just set a record for setting records – MarketWatch

One day the DJIA will break all records of consistently lower lows. I found a very good chart that shows the psychological impact of the market swings from a very bearish low, then back up to a bullish top, and back down again. It is a very high quality chart, and all those readers that don’t understand the big swings I talk about should print it out in full color.


The Gold/Dow ratio is a bit more expensive, but not by that much, as it’s presently sitting around 19.77:1. It takes 19.77 gold ounces to buy the DJIA today. Below is another high quality chart, that shows this Gold/Stock relationships.


As you can guess I’m bearish for the long term which could last until the 2021 time period.

Mini DJIA Creates Another “New Era” Record High

Markets just keep on extending and the DJIA sure doesn’t want to be left behind. I’m sure that the fear of missing out is driving some of this mania, with Bitcoin mining, playing a huge part in the rise of the DJIA. In short the DJIA blew past any short term expectations, which means that extensions are dominating the markets right now, with most extensions being in a 5th wave.

Since the 2015 bottom, and looking at a monthly linear chart, the DJIA has created a vertical move that will get completely retraced, but the exact timing for a real top is still hard to calculate. Many times these markets would carry on into the following year, so at this point anything can still happen in the short term.

To show us another sign that a bigger correction is in progress, we need this DJIA to slice through the bottom trend line with conviction and then fall below all November lows.

The Gold/Dow ratio is at its highest it’s ever been at a record of 19.71. It now takes 19.71 Troy ounces of gold to buy the Dow. The Gold/Bitcoin ratio was only at 15.4 so it has some ways to go to match the Gold/Dow ratio.  The new moon has arrived but that can just trigger a reversal. Sooner or later investors will start taking year end profits as all the paper gains must be captured before it can become real money.  At these lofty highs,  capital preservation is most important. In the next few years you will see how many of these millionaires today, will no longer be millionaires. Trillions of dollars of paper wealth will go up in electronic smoke and disappear.

Insiders have already captured their cash as they have sold out in May of 2017, but the average investor is still hanging on waiting for better times. In late 2008 insider and contrarian buying helped to put a bottom to the stock markets along with the start of solar cycle #24.  This situation will happen again, but it will never happen when the majority is in a jubilant bullish mood.  A deep bearish mood has to develop first, as bear market bottoms are the breeding grounds of bull markets.

Mini DJIA Intraday Record High And Decline Update.

The Mini DJIA soared to a new record high and ended up a bit above 24,700 before the DJIA started to tumble.  One little stumble doesn’t mean much just yet, but for a bigger, more serious meaning, the DJIA has to slice through my bottom trend line with a sense of purpose or conviction. 

When a bull market corrects it sends fear into the minds of the bulls and they start to question everything. Many know this is going down, but they figure they can get out in time to save their trading accounts.   One expert says that the Nasdaq can still rocket to 8000, what price  do you think the DOW will go to?  I doubt very much that the Nasdaq can soar to 8000 and the DOW crash down to 8000! Plain and simple the extreme rosy outlook has everybody committed already, in other words,” Who is left to get in”?  Where are those greater fools hiding, to give present market bulls the huge gains, that the experts are forecasting to happen?   When all the analysts and smart financial reporters see nothing but good times ahead, then this bull market will go south.  Euphoric bull market peaks are the breeding grounds for bear markets, and until we understand this then we will always get caught up in the bullish sentiment of the day. 

There is a big chance that Bitcoin and other Cryptos could crash right along with all the other big indices, which will not be pretty. 

At this time the DJIA has to dip well below every bottom you see on the chart above, to wake up the bulls.  How these markets have been behaving, you don’t want to underestimate the ability for this market to spike higher. Maybe it will just screw around for the rest of the year, as markets can reverse at month’s end, or in this case at year’s end. 

Shooting For The Moon: Min DJIA Melt-Up!

This vertical move which started at the mid November lows works best as a diagonal move, as I have too many overlapping waves at critical places.   Today we are finishing another vertical move, after which I expect one of two things to happen. One is a bull market correction, with limited downside, but the other is the start of a much bigger correction with no real support.

At a minimum the DJIA should slice my bottom trend line before I get too excited as violent reversals seems to be the norm in the stock markets.  Usually a 5 wave sequence has to build heading down as they point the way of any new trend. The big difference is the degree level, that we are expecting. Cycle degree, SC degree or GSC degree. My vision is all from a Cycle degree perspective as the rest of the world is in SC or GSC degree. Three completely different worlds and only one can be right!      

DJIA 2009-2017 Bull Market Update.


This is the March 2018 contract at this time, which we will be going to when the December contracts stop trading. I stretched this wave count a bit, but it can still be adjusted at a few other positions. The most important wave count is always the 4th wave and in this case the 4th wave is in Intermediate degree.  The 5th wave in intermediate degree fell apart as an impulse, but another diagonal must be considered. One single zigzag to a new record high would work, but then the entire bull market that started in 2009 must also be a diagonal. 

The 4th wave in intermediate degree has not been moved and at this time, it is still safe at its present location. We already have doom and gloom forecasters, and we will get many more,  when this market gets serious in correcting. Many will get shocked, when the market dips lower than expected. At 21,000 the DJIA will be stepping outside the 2016-2017 trend line, which may barely give us a Minor degree correction, never mind a Cycle degree correction.

There is nobody that knows for sure what degree of a bear market we will get, and at what price level it will finish at!  I have been saying that we could turn at 7000,  while another popular number is DJIA 5000, plus a depression thrown in to crank up the fear factor.  I am very confident that when it comes down to the wire, solar cycle #25 will trash “all” those bearish price forecasts, as the market soars in another 8 year bull market. Markets will always leave the majority behind, as they will be ill prepared when they constantly waste time, figuring how much lower the markets will go. 

When we use the Gold/DJIA ratio it tells us that as of today it takes 18.3 gold ounces to buy just one unit of the DOW.  This is one of the most expensive Gold Ratio readings I have calculated in the last year or so.

Mini DJIA Intraday High Update: Is The DJIA Tired Of Breaking Records?

My iMac operating system has been upgraded this morning to “High Sierra” Version 10.13.1. So far so good, but my bookmarks were doubled up in the process, forcing me to rebuild them. I even lost one of my fonts that I use, or it’s hiding at this time. 

On November the 7th, 2017, the DJIA saw its last high at 23,557. As much as I would love to start posting a bearish wave count, this market has not declined enough to make the case  for a large bear market just yet.   We just slipped off record highs and I use Submicro and Micro sequences to make sure I start off small. The worst mistake we can make is to start with a much higher degree, which seems to be the popular thing to do. The higher the degree the more they can manipulate us by using fear tactics, with insane forecasts. 

By midweek this rally may top out, if not sooner and another leg down should happen. Worst case scenario is that a triangle is still going to form, which can push this market higher again. 

The majority will be looking for support, but when they do we know they just have a market correction in mind.  The only real support that will mean anything is the one that finishes the anticipated Cycle degree bear market,  as all other price support  levels will just be wishful thinking.

Just to get the bulls scared enough, we need the DJIA to fall below 15,500 which is just the previous 4th wave of Intermediate degree. The intermediate degree doesn’t correct a Cycle degree bear market, as at a minimum, we need the previous 4th wave of Primary degree.  Without a doubt, markets can fall well below the previous 4th wave, which the super bears are already predicting. DOW 5000 seems to be a good number to rant about, but what if it never gets there? 

Many missed the bull market that started in 2009, leaving a gain of 360% on the table. Many are convinced that this market is still going to the moon and have been brainwashed to believe a new era has started.  At the next major market low, you can bet the same setup will happen as what happened in late 2008 and early 2009.  Only a very small minority will see the writing on the wall when money flows start.  When the insiders start buying their own stocks back again., then a few months later, stocks will start to reverse. 

No matter how bearish of a wave count we may have at that time, our bearish wave positions will get trashed and the SC and GSC degree wave followers will be left behind again, or at best have a token position. 

Mini DJIA Intraday Record High Review

Even though this market is pushing all my buttons in the short term, my perspective from a Cycle degree point of view has not changed. We can use any excuse we can come up with to stay with the bullish herd of investors. Traveling as a group makes us feel safe, until they panic, and then it’s every man for himself!

Last night the DJIA topped at a new record of 23,557 after which the DJIA quickly reversed and plunged.  I’m looking for the last high of 2017 where it has to correct deep enough so there is no longer any time left to break another new record high. It could take a downside move for the rest of this month before we know for sure.  The low in October is the minimum just to retrace this potential diagonal 5th wave.  Some spikes don’t show in Line type so most of the time I will double check it.  If we get close to a double bottom with the chart above, then a small expanded 4th wave could also be finishing.

In February Janet Yellen is out, and Jerome Powell is nominated. The changing of the Fed chiefs can produce some uncertainty or unexpected changes in policy, which could just add to the uncertainty that already exists. As much I would like to see any deep correction this bull market can come back with a vengeance at any time.

Mini DJIA Intraday Gyrations Update And The DJIA 5000 Forecast

We had some wild moves in the last day or so and there is a chance that this chart can touch another record high before it is ready for another correction. 

The DJIA can also push our buttons and stop just short of a new high, in which it would be just another wave 2 rally. The spike did travel further, but it does not show with a line type setting.  Since the first October peak, choppy waves have made any impulse pattern as rare as a dinosaur.

These gyrations sure can fit into an ending triangle, but it will also work as an ending zigzag from a larger degree diagonal wave. Any new low below 23,200 without pushing to a new new record high would help to quash any bullish scenario I have right now.  Today there are no net gains since that mid October high and if this keeps up,  traders will no longer get their Dopamine rush!  

Hopefully by early next week, we will know more as the full moon is this Friday. Full moons can be very bullish but many times they also do the exact opposite and the markets plunge. 

Here comes Dow 5,000, warns the guy who’s been sounding the alarm for years – MarketWatch

The forecasts for a DJIA bottom are starting to come out, and in the article about we have a DJIA 5000 forecast. Nothing really new here as they have called for this a few years already. 5000 is an easy number if you draw a line across three bottoms.  Any 5000 calls would mean that the DJIA will have to fall through 2 major solar cycle bottoms of 1996 and 2009. This has never happened since the 1932 depression. I’m sure all high degree wave analysts will love this 5000 forecast as well, as they have moved the goalposts many times already. The markets job is to fool the majority all the time and this DJIA 5000 forecast as an easy group consensus they can feel safe with. 

The sad part about this DJIA 5000 forecast is if the market is already oversold  by the time it reaches 7000 or solar cycles #25 starts. If the DJIA does not reach its lowest point by 2020-2021 then the DOW 5000 forecast will never get hit. Waiting for DOW 5000 when it’s going to soar to 34,000 will leave the majority of investors holding wooden nickels again.  Waiting for a DOW 5000 wave count while insiders are buying like crazy or the Gold/DJIA ratio has exploded, will ill prepare us for the major bull market to follow.  

November, 1, 2017 Here We Go Again, Another Record High For The DJIA

From the November, 24th peak the pattern crashed with a zigzag, and then started another phase that also just looks like another zigzag. Diagonals can end like this as well, but I have to look at this top in the DJIA as a potential expanded pattern as well.  Any correction still in progress, can retrace my 4th wave support before it starts to crank up again.  

Only when any correction falls deeper than expected can we look for that last top ending wave. Every excuse is used to keep this bull market game going, but that can only last for so long. 

It’s still not safe to put up any Cycle degree wave 3, but that does not mean we ignore any impending Cycle degree correction. 

It will not be one big Cycle degree crash, as the 7% circuit breakers would kick in, (maybe)  :roll: Any panic is just the majority of participants all coming to the same conclusion at the same time, and we see that on a smaller degree scale many times.

Fear levels can never be maintained, for long, as stress will wear them out, or force them to drop out of the bull race. 


DJIA Intraday Crash Update

Since my post yesterday the DJIA only travelled a bit higher before it succumbed to another bearish decline. Yes, we have a steep decline this morning, but we do have very small degree counter rallies.  How many times have we tried this before, but failed.  In the last year or so there were no real healthy corrections of any degree size.which has produced a massive single spike in the DJIA charts.  There is a potential for an impulse decline, which have an extended wave 3. Any 5th wave can also extend so, we could get a double whammy.   We are not going to get an 87 like crash, as circuit breakers are supposed to kick in after a single 7% drop. 

That sure does not rule out any smaller fast moves down, like this morning. 

At any major top, it is a good idea to review the biggest degree level, so we don’t come up with a DJIA 1000 forecast. 

This is a linear chart posted October 8th, and it shows a very clear long spike trying to reach to the moon. The spike up top is the opposite of the long spike at the 2009 bottom, so buying on a dip is going to give you nothing but headaches. Yes, many will expect the markets to go below all 2009 lows. But I think the markets will try and fool the majority again, by doing something else. This bearish phase can stop well short of any 2009 lows between the 7000-8000 DJIA Price level. 

I have posted my simple idealized version of a Cycle degree correction, which contains a flat. Triangles are the last of my picks as we don’t have enough time in the next few years for a triangle to play out. After 2021, we could run into another 8 year bull market, which would have to be part of a triangle.  The last thing US markets are going to get is an eight year bear market rally. 

DJIA New Record High: Chasing The Bull!

One minute we think this stock party is over, it surprises us  and soars to a new record. The SP500 and the Nasdaq are lagging a bit so they may still surprise us as well.  Every new record high will also be the setup for another correction as emotional traders just love to chase a bull market. The last high was about 23,414, and it still may not be finished.  They really don’t care about fundamentals, as they only care about not being left behind. There is a mix of impulse and diagonal waves, but at this 30 minute intraday scale, there is little room to label them. 

How long this nonsense can keep on going, could stretch to the end of the month. Obviously, a simple single crash is not going to do it, because we need a more sustained decline to lock in any major top.  This market has gone much higher in the Elliott Wave sequence than the 2000 peak, followed by another higher peak in 2007. Each major peak is separated by one degree level, but they must all be kept in sequence as well. Just because this 2009-2017 sequence is much taller and longer than what the majority expected, does not mean we are jumping into a Supercycle degree world. This may not happen until 2029 when a 100 year cycle has completed. We sure are running out of time where we can say that years ending with a “7” are bearish years, but the same thing happened at the Oct 2007 peak. 

Mini DJIA Intraday, Crash, Bang, Boom Review

On the exact date of the 30 year 1987 crash, the markets did crash, but then turned around and soared to new record highs again. I’m sure that many market bears were already shorting the markets, but many of their stop loss orders were triggered. It seems pretty ironic that the markets moved the exact opposite way that many 1987 crash watchers were thinking.

I had to move my smallest degree levels up one degree which extends this insane market a bit more. Did we just have a mini violent 87′ crash? Maybe, but many 4th wave crashes also give us a warning, with the only difference being what degree level we think we are working in. Sure the 1987 crash was a big deal at that time, and most wave analysts called it a Primary degree 4th wave crash. If we look back in chart history the 87 crash looks like a little bump compared to what we have had since the peak of 2000.

Once all the markets have been extended, the 1987 crash was a  Minor degree wave 3-4 crash, which is a full 2 degrees lower than any Primary degree crash. A 2 degree difference,  can throw any wave count out by 2.618 times. Worst of all, the wrong count for the 1987 crash pushes us into SC and GSC degree wave counts much sooner than we should be.

After the 1987 crash the markets soared as a 5th wave extention, that turned into another stock market mania. As I post the markets are still pushing higher  so this rally still wants to head up.

DOW 23,000 You Got To Be Kidding!

I never thought that the DJIA could hit the top of the trend line for the third time, but sure enough it is close to doing just that. Three trend lines can give us a price level where we cross over to a higher degree than what the 5 diagonal waves were. Any decline below the middle trend line would push this market into the Primary degree world. 

Most trends like this also produce about the same angle, from the bottom left corner, to the top right corner. Any market that has a sustained bullish phase, can switch into a blow-off situation. Long tall skinny wave structures can do the trick, but this has been going on for some time already and it seems it’s not ready to die just yet. Of course, when the bearish crowd throws in the white towel and gives up, it turns and crashes. 

When the intraday charts are fuzzy then it is best to review the daily charts. In February of 2018 Donald Trump may bring in a new fed chief as Janet Yellen could be leaving her post. If and when it happens, this can bring turmoil into the markets and hasten any Cycle degree 4th wave decline.