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SP500 Intraday Peak Review

Investors had a bit of downtime on Monday but the SP500 peaked out on Friday, January 18th.  Since then the SP500 has been slowly grinding down. The entire move since late 2018 sure fits into a 3 wave move which can be just a bear market rally.  On Sunday we also had a full moon which can act like a bull trap at certain times.  The world sad state of affairs will not get fixed with just a short correction as it will take years to unwind the deep debt that all governments are presently in.  At the 2680 price level, we also have a very tall H&S pattern being set-up which would be very bearish if the bear market rally is real.

The trend lines are there as it also looks like a rising wedge at this intraday level.  Not until the SP500 crashes well below the 2580 price level, can we still be in a bigger bullish phase?

The question I always have for the stock bulls is, “Where is this bullish phase going to”? Is the “bottom in”? Is it a bottom for a return to a multi-year bull market?  I’m looking for a bullish phase as well, but this is not it no matter how bearish the stock bears become.  Insiders would also be buying their own shares back and I don’t mean using shareholders money to try and manipulate their own stocks.  Buy-backs manipulate earnings with only a temporary effect even though they waste shareholders money. Companies that pay dividends or buy their own shares back are sending clear signals telling  you, ” We  have nothing better to do with investors money”.

Apple fits that description very well and once it started paying dividends under investors pressures, its innovations declined.  When we read countless stories about insider buying their own shares back then we might see a potential bottom for a big bullish move. Insiders did this on a massive scale in 2008, and they do not buy on a whim, and they most certainly don’t sell on a “Whim”.  A bottom with insider buying lasts much longer so if you were still bearish in March 2009 you will be left holding a wooden nickle like all the wave analysts did.  Thinking back to 2009 can give most investors brain cramps as researching that far back sounds too much like work. Talking about the market peaks in 2000 would be 18 year ancient history.

Solar Cycle #24 was underway by early 2009 yet all the wave analysts ignored this fact as in 2009 they all had very bearish wave counts. The wave analysts that are still chasing 5 waves down in Primary degree are living in La-La Land as they have learned nothing in the last 18 years!  Expert wave analysts are also telling us that 5th waves can extend 50 years or more which I think is impossible as 5th waves always contain the weakest fundamentals. Besides that, not a single 4th wave bottom in 1932 or 1974 have the markets ever retraced back to. The reason this has never happened is that 1932 was not a 4th wave bottom in SC degree.

2020-2021 could see the arrival of solar cycle #25 and being bearish when a solar cycle starts to crank-up will put investors right back into a bear trap much like early 2009!  Solar cycle studies were in the books of EWI, yet at that time they ignored solar cycles just like they ignored insider buying.

 

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Chinese Juan Offshore Elliott Wave Review

Since there is always news about the Chinese Juan, I thought I would look up its chart on bigcharts.com. USDCNH is offshore money much like US dollars are offshore as Eurodollars. If we start back at the 2014 low we can see what looks like the start to a fantastic 5 wave impulse.  The Juan’s bullish phase that ended in late 2016 sure works well as what followed was 7 wave decline. I don’t have exact dates for each bottom but many tops and bottoms happen spring and fall as well.  The bottom in early 2018 produced another fairly clean set of 5 waves which can work as my first 1-2 wave set if wave 3 is going to extend. If and when we see two more sets of 1-2 wave structures then as sure as I’m typing this, a wave 3 extension will happen.

2017-2018 we now have a great looking double top which is an H&S double top as well. In a bull market, H&S patterns are extremely bullish, so I wouldn’t be thinking bearish thoughts here as the Juan still has a long bull market ahead.  Unless I’m far too early with the Minor degree wave 2 bottom.  We should find out in about 3-5 months as I fully expect the Juan to break out in 2019!

 

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Euro Daily Chart Review

At this time I will keep counting like the January/February 2018 peak is a 4th wave peak. During the last 8-9 months, the EURO pattern produced a choppy pattern that contains an expanded pattern in a 4th wave position.  Since November 2018 the EURO rally was also very choppy which fits a bear market rally very well.  I can’t create a set of clean 5 waves up, so the EURO has the best chance of completely retracing its bearish rally.  All the experts in the world will give you reasons why the EURO goes up and down. I don’t need to regurgitate all the fundamental reasons for the EUROs up and down action because you can’t trade on fundamental reasons that change like the wind.

The bottom trend line would be an early warning that the bearish run is over but we have to keep alternates handy just in case.

 

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Canadian Dollar Weekly Chart Update.

Since the 2011 peak when all the experts were bullish on our Canadian Dollar, it turned and started to crash. Our CAD started a bearish trend that still has not finished. The 2011 peak matched the gold&silver peak as well so when the CAD crashed so did gold stock related asset classes. Since 2011 each counter rally has proven to be a bear market rally as record lows were continuously broken.

Since the 2016 bottom, the experts claim that the CAD is back in a bull market. From the December 2018 low our CAD exploded which really got the CAD bulls all excited again. The thing is no new record lows have been produced which has to happen for the markets to confirm a bear market rally is still in progress.  On this chart, the .68 cent price level would certainly confirm that a bear market rally has taken place.  Since the 2017 peak, the CAD declined in a choppy fashion which fits best as a diagonal set of 5 waves down.

None of the COT reports are of any use until the US government shutdown is resolved and even then we may get a surprise or two with a potential “COT Shock”.  As much as I’m still bearish on the CAD it doesn’t mean it will stop on a dime and head south again.

This sideways move has also produced a Golden Cross but now the  “Death Cross” is clearly visible. The CAD would have to switch back to a Golden Cross in order for the bullish leg to keep going.

 

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Palladium Daily Chart Record High Review

Since August 2018 Palladium finished a correction and then started to soar. Palladium produced decent corrections during this time. I believe we are coming to the end of this bullish cycle as on January 17 palladium peaked at $1430 and then proceeded into another correction. Many may think it will be a correction but a bigger bear market will push palladium prices much deeper than anyone can imagine at this time.

In January 2018 palladium also peaked and a 7-8 month bear market ensued.  The entire palladium Cycle degree Idealized wave count is diagonal, so another Primary degree zigzag bear market can happen and they happen when market players least expect.

If this wave 3-4-5 in Minor degree is true, then the 4th wave bottom in August 2018 will never hold.  Palladium might give us temporary support at $830 but bigger support would be closer to the $500-$600 price level.

You will read many stories about the palladium supply shortage with forecasts that prices will be much higher this year. I’ve heard all that “fundamental logic”  many times before in gold and oil, and still, the market in question crashed. All we need is for buyers to take a rest and all the protective sell stops can start to get hit.  All the bullish traders suddenly turn into palladium bears and the analysts will start telling us the change in fundamentals. Fundamentals are lagging indicators and you just have to be patient and the analysts will find you a reason why palladium is crashing.

The crowd loves to buy high, and they can get convinced to be “bullish” just when they should be very bearish. The COT reports are just about one month old, but commercials were net short in late December 2018 already. Not until the shut down is over and done with will the COT reports get updated.

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Crude Oil: Another Spike to the Upside!

 

Another crude oil spike this morning can be a sign that another correction is due or spikes can also be the end of the entire trend. It now looks like I have 5 waves up, which can be part of an expanded pattern. I kept the wave counts small but chances are good I may need to change it at a later date.  We could get a correction back down to the $49 price range but if crude oil travels.

Many times 5 waves like this make a run and we can get excited about another large leg up in oil. Many times we can get fooled especially in an expanded 5 waves.  A wild move that completely retraces the $42 price level will confirm that this move was just another bear market rally.  Going long at this point is a FOMO move and chances are good your bullish bet will get stopped out pretty quick.

The Gold/Ratio has also become more expensive as we are at 23.81:1 today. 17:1 will put us back to where oil would become extremely expensive again when compared to gold.  A large zigzag decline is not of the table but we will not know that for some time.  If the present Gold/Oil ratio stays the same for a few weeks then it could be hitting what I call the “Ratio Brickwall”

We also have a very convicing H&S being set-up at the $54-$55 price level so anything can still happen in the next few weeks.

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SPY Bull Market Update

SPY is very popular with investors and there is lots of liquidity until buyers take a rest. Being bullish in a vertical price move that seems it doesn’t want to stop, is exhausting.

This ETF will go a bit higher than what is posted, and there is still upside that we can take. Diagonal 4th waves can soar well into any part of the previous wave 2. Triple tops at the $280 price level would be close to my maximum what I would allow. Even before SPY gets near that $280 target price we should start seeing a strong correction.  The stock market sure doesn’t care about any government shutdown as it just keeps on trucking. Maybe the shock will come once the shutdown becomes history, as they will have to sort through tons of date just to catch up.

Nobody knows when the shutdown is going to end, but they believe that the stock market will soar once this trade war comes to an end.  Any COT reports have not been updated and when they resume posting traders positions we could see a mini “COT Shock”. We can’t tell until it happens as it could act just like a “Flash Crash”.

 

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IJH Mid-Cap ETF Update.

This Mid-Cap ETF is also a diagonal wave as IJH has now dipped into my wave 2 in Minor degree. IJH should resume its bearish trend and if this was a fake, or bear market rally then a 100% retracement must happen.

The biggest asset manager in the world (Blackrock) says the bottom is in and we are off and running into the next big bullish phase. Of course, they always have a fundamental reason,  that may derail the bull market.  The world’s problems are not going to get fixed in a short correction, as it will take much longer then most of us have the patience for.  We could get another zigzag decline that will look like 5 waves, or we can get an obvious zigzag that stands out like a sore thumb. Either way, a new record low will be a trigger to close off shorts positions and even look at going long.

I have a small short position with this ETF and once IJH drops below $175 it will turn my short position green.  Below $156 my short position will be closed off, as sure as “shit”, a counter rally will wipe out any gains we may have at that point.

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HDGE Crash Update

HDGE moves inversely to the SP500 but it doesn’t follow it in a perfect lock-step manner as the deep crash went deeper than expected. The only way HDGE can crash so deep into wave 2 in Minor degree is if it’s a diagonal wave structure. HDGE is now forming a double bottom with two spikes in a row. HDGE can take more downside but I see a bottom starting to develop.  One more bullish leg above the $9.00 price level would work well to complete this bullish run. That will not happen today or tomorrow as it could take well into February or even March before this run completes.

After that HDGE should suffer a much bigger correction and should also take much more time completing. We would be in a Primary degree world by then and heading down to a Primary degree “B” wave.  The VIX has also plunged in the same manner, so it’s not just one asset class that has displayed this bearish decline.

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SP500 Intraday Update

So far the SP500 is keeping its bullish trend while the VIX created a huge decline.  I have only one trend line which the SP500 is starting to cross or roll over. Any bigger dip will help confirm that the SP500 could be losing it’s power, as buyers take a rest. Markets are just big auction sales which always gets sold to the highest bidder and I see the markets reacting the same way.

I can’t get a correction out of the VIX as it looks like 5 waves down. I’m sure the VIX will crank up again as the VIX could be on a “C” wave decline.  All this might still take the rest of the week to play out, as little choppy waves stretch time. US government shutdown has killed any COT reports and once the government gets up and running again, we could get a COT “Data Shock”. My last report will be a month old by January 20th so positions could make dramatic shifts when it gets released again.

The Market Vane Report I still get is a private report, which shows that 47%-48% bulls were present all last week. There are still too many bulls around to keep fueling this bullish phase for another major leg up. Our 24 month high was 73% bulls, which is not as extreme as it can get, but enough to kill the stock bull. The basic logic is when the majority are bullish then who is left to get in. Is it a tribe that just came out of a cave or just another greater fool chasing a bull market? FOMO is a popular bull trap

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DJIA Intraday Bullish Phase Update

The markets keep pushing higher, chopping up all the bears into hamburger meat in the process. The DJIA has already gone sideways long enough to where it has broken the bigger trend line that started in 2018. I’m showing a wedge which some even call a bullish flag.  I see a wedge at this time but the DJIA can keep pushing north, but it can also suddenly reverse in a surprise bearish mood swing. Analysts will always find a reason why any asset class goes up and down but can we invest or trade with any single fundamental opinion.

Without a doubt, some analysts are very bullish when the markets are pointing up, and they become very bearish when the markets are pointing down. Only a few have the courage to be bullish when the markets make a big dip like in December of 2018. Most investors didn’t have a clue a market drop was coming in October 2018. To say that Apple didn’t see the slowdown coming is not being truthful as Tim Cook was the expert on China long before Steve Jobs passed away. Apple has a position in the DOW, so chances are slim that Apple will soar when the DJIA reverses its bullish trend.

The Gold/DJIA ratio and the Gold/Apple ratio give us a clue when an asset class becomes very expensive or cheap.

The record Gold/DJIA ratio to beat is 21:1 which happened a long time ago in August of 2018! Today we sit at 18.40:1 which still makes the DJIA expensive. Cheap would be 7:1 but that could be a pipe dream if you think it’s happening now.

I think options are due this Friday which can always cause some unwanted turmoil as well, and we will find out how committed the stock bulls really are. Usually, funds enter in January for income tax and retirement funding, and when the flow stops, stocks can make a huge plunge.  When the DJIA retraces the 21,500 price level then this rally will be confirmed that it was just a small bear market rally, in Minor degree. If any Minor degree rally can trap the bulls then any Primary degree bear market rally will trap many more.

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Hacked Email Account Problems

January 15, 2019

I apologize to my readers for inconsistent updates, but one of my personal email accounts has been hacked and spam mail has been flooding in for months already.  The threats of blackmail demanding Bitcoin payments have intensified and have also become more vicious.  I stopped into my provider’s office and showed him a printout. They also gave me an e-mail where I can send some of the worst threats to. In short, my private FaceBook Account has been hacked because the problems did not come from this blog. A friend is coming over this week and he has had the same problems including death threats. Needless to say, he had to delete his FB account which I might do as well. I have changed and increased my password strength, which is just one step I can take. It will take time to see if the spam mail slows down.  Phishing emails are pretty common and I report them as well. The writing is on the wall as I think it is time to reduce my digital footprint as much as possible.

This year other things have developed that further hinder any consistent postings which I will elaborate on in the future.

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Crude Oil: Big Dip Or A Little Dip?

Crude oil created a bottom on January 1-2 and then proceeded to make a bullish run that has now turned into a correction. If this entire bullish move is just a bear market rally then crude oil should still crash to new record lows below that $42.50 price level.  A bearish rally will slice the bottom trend line in two, but this correction can be the 4th wave as well.  We might get support at the $49 price level which may take several weeks before we find out. None of the COT reports are working while the US government is shut down.

Even my Gold/Oil ratio has not changed any recently, as we are now at 25.46:1, from a January 2, 2019, reading of 28.77:1. If the reading jumped back to a 17:1 ratio, then I sure would be very bearish on oil.

Crude oil sure developed a nice H&S pattern and if it fails and oil goes higher we know that the bullish trend might be real, at least for another leg up.

There are so much hype and BS regarding oil that the fundamentals can change over-night depending who you listen to. Saudia Arabia with it’s planned IPO is trying to come clean with its reserves which have been kept a secret for decades. Nobody will know unless independent sources verify their claims of all this new oil they have been hiding!

 

 

 

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Netflix, Impending Correction Or Crash Review!

Talk about going ballistic we have to look no further than this NFLX chart.  What Netflix is showing is more a diagonal move than an impulse move. Since the November 2018 bottom (Wave 3). Netflix created an expanded pattern which are more common than wave analysts give credit to. Our present day move has at least three open gaps which would not get closed until NFLX hits the $270 price level.  We could get another zigzag decline which could close that open gap we have back in January 2018. NFLX sure repelled from this gap, but there is still a small part of this gap open.  Ideally another new record low can happen, but we must be open to a bull trap before then.

I don’t have any  Gold/NFLX ratio database setup, but today we are sitting at a ratio of 3.81:1, which is only slightly cheaper then when NFLX was at $420 in June of 2018.

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GDX ETF Update

GDX is a gold stock related ETF, which has been in a bearish trend since about June/July 2016. The gold experts tell me I’m a dumb ass as they think gold prices are still going to the moon. They could all be right but gold stocks tell us a different story.  Since the June 2016 top, GDX traveled sideways and down while at the same time gold was pointing up. Other gold stock related ETFs are much worse than GDX.  Late summer 2018 is when our recent bull market started and GDX would have to play catch up to come close to what gold performed during the same time period.

Gold stocks have been lagging behind gold, which has been normal at most turnings.  In order for GDX to continue its so-called bullish trend, then that top trend line “Must” get breached by a long shot. The GDX $26 price range would be the minimum that GDX would have to retrace back up to.  If and when GDX moves below that 2016 low, then we know for sure that the entire move was just a big bear market rally.

Any gold stock move that is fear related or safe-haven related never lasts in the long run, because those are all emotional moves.

The Gold/GDX ratio is presently at 61:1, at 84:1 GDX would be pushing the extreme cheap side when compared to the price of gold.

Mark Hulbert also wrote a review showing how bullish gold stock investors have become. 

 

 

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SP500 E-Mini Daily Chart Update

I will stay with the big wave structure until this wave count shows me otherwise. Fast moves like this tend to never last that long as most moves like this are just emotional moves. FOMO or unstable algorithms producing flash crashes is part of the landscape that we can’t avoid. The SP500 is starting to flatten out a bit so it’s just a matter of time before some mentally unstable algorithms start to freak-out.  I’m just having a bit of fun here as algorithms are not human but very few people can tell the difference. Algorithms are created by humans just the same.  Traders can’t move as fast so spikes are produced which usually develop at turnings.

The bigger the spike the bigger or longer any counter rally will last. Since the 2018 January peak, we’ve had more spikes that we can count and each one produced a reversal.

In candlestick form, you would have to count all the “Hairs”, (Wicks) and always know the price of each “hair” tip.  If this rally is a bearish rally then a new low below 2040 should happen. Many analysts are very bullish at this point, but they were also bullish at every major top we’ve had so far.

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US Dollar Weekly Chart Review

Since the 2011 bottom, the USD turned bullish again which also matched the stock market bottoms of 2011. Stocks soared and gold-related assets started a major bear market.  I believe the bull market in the USD has a long way to go, but where we are in this bullish phase is the challenge we face. The COT reports are useless due to the government shutdown but my last readings from Dec, 20th the commercial speculators were very bearish.  This is a very bearish sign for the US dollar but the commercials were also very bearish on, silver, Gold, aluminum, palladium, and platinum.

During the late 2018 peak the US dollar produced a very complex pattern that may have finished on January 10 2019. During this USD decline gold gave us an impressive performance that has many convinced gold is going way above $1400.

The US dollar is on a 5 wave run in Primary degree. Take the Euro and invert it, and it would just about look like the US dollar. Only time will tell if the USD has bottomed but eventually the USD should go well above the 104 price level.

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DJIA Rally Daily Chart Update

The DJIA is now well within 2018 spring lows which can work as resistance for a bear market rally.  Any retracement back below the 21,700 price level will confirm that this rally was just another start to a fake bull market or bear market rally. I will leave the top as is for now, until this 5 wave sequence gets confirmed. In the long run, a wave “A” in Primary degree is in our future where we can get a decent chance at a longer sustained bear market rally.  From a Cycle degree perspective, this so-called”correction” is far from finished, if the markets have a Cycle degree wave 3 top.

If we start from the 2009 bottom the following bull market was about as choppy as they come, which is very typical in 5th waves. 5th waves are fundamentally much weaker than 3rd waves are, but the majority of wave analysts think 5th waves can extend 80 years or more.  Nobody has a real clue what degree we are in but if analysts keep chasing 5 waves down in Primary degree we know that the majority think they are in GSC degree already! That logic does not wash with me, because not a single wave analysts have ever confirmed any Primary degree 5 wave sequence since the peaks in 2000.

Albert Einstein: The definition of insanity is doing the same thing over and over and expecting different results.

This is the best way to describe what has been happening with the majority of wave analysts for the last 18 years.

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Nasdaq Bull Market Or Bear Rally?

So far the markets have refused to die, as they keep on ticking and heading higher. Many are convinced the correction is over and higher highs are coming. Dynamic bullish moves like this happen in bear market rallies frequently and most of the time they never last that long as well.  From a Cycle degree perspective, every bear market rally gets retraced which in the Nasdaq started from the 5900 price level.   Any move below this 5900 price level would confirm that our present rally was just another fake.

If investors are getting fooled with just a Minor degree bullish move then there is little hope in convincing anyone that there are Primary degree bear market rallies.

The SP500, DJIA and the Midcaps all seem to match this Nasdaq rally on the intraday scale, which I think is a bear market rally. The Nasdaq has dipped into the previous wave 2 which automatically makes it a diagonal pattern. The Nasdaq has already backed off but another short spike may still turn up.

The COT reports are unreliable until after the government goes back to work. This is when the gold ratio database is helpful how expensive or cheap the markets are when we always calculate using the futures gold cash price.  My new record for the Gold/Nasdaq ratio was 6.38:1, and today it is at 5.1:1. This is a bit cheaper but still on the extreme expensive side. Cheap was 1.18:1, so I would like to see a 3:1 or even a 2:1 ratio.

 

 

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DJIA Intraday Correction Update.

Last night the DJIA has started to back off from a wild bullish run which has convinced many to jump back into this so-called bull market. Wednesday is also a good turning day during a week!

Since December 2018 this move may not be finished yet if a bigger bullish move is still in progress, but if the zigzag rally is real then that December bottom of 2018 will not hold. (21,500). This move can be just a small bear market rally, and the best way to confirm that is if we see the DJIA completely retrace this bullish move.  This 2019 bullish move was a very fast move which is normal in a bear market rally but seldom can maintain the move in the long run.

This morning the  Gold/DJIA ratio was 18.40:1 which is an improvement but still not cheap enough by a long shot. I figure that at about 14:1 this market may be cheap enough to sustain another bullish phase, but at this time we are not even close. I have a Gold/DJIA ratio that made the DJIA “Cheap” when compared to gold, which was about 7.19:1.  One day in the future this 7.19:1 ratio could get beat again and if and when it does, I will turn extremely bullish.

With the shutdown no government COT reports have been issued so we only have Dec 20, 2018, as the last time the COT report has been published. At least the Gold/Ratios never shut down as they are always in effect.

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Crude Oil Bullish Review

So far oil has been having a very bullish January which started in December 2018. This February crude oil chart has now developed a very nice vertical spike to the upside. This is usually a setup for correction or the end of an entire bullish move. A correction and then a leg higher would add a 5th wave to this bullish phase but then oil is facing stiff resistance near the $55 price level. I’m biased to Fibonacci numbers and we are facing the 50-day MA which will also produce resistance. We have a long way to go with price and time before any Death Cross can happen.

We had a Gold/Oil ratio low of just under 30:1, but with this present rally kicking in we are not at a 25.17:1 ratio. Readings of 17:1 has caused an oil price crash several times already. We may never reach any 17:1 ratio this time, but gold/oil ratios could hit a brick wall just the same. The ratio could stall which I can’t see unless I check it several times per week. During November 2018 I had about 14 calculations.

Commercial traders are still net long with the government COT report being delayed due to the government shutdown. It’s kind of ironic when the government is shut down and the stock markets still go up. I’m still bullish on oil but I sure would not take a bullish position when the spike is visible.

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T-Bond Bull Market: Just A Correction!

Since the October 8th low T-Bonds have been on a wild bullish ride that is now going through a 4th wave correction in Minute degree.  The Oct 8th low is a 4th wave low in Intermediate degree.

T-Bonds have been in a bull market since 1981 and show no signs of a major reversal just yet. I’m sure we may see a “Bond War” in the future where several other countries dump US treasuries in an effort to kill the US dollar. From 1998 to 2000 T-Bonds imploded in a very fast move that resembles a crash. Since 2000 T-Bonds have been in a bullish phase that defies description as it is full of choppy waves which work best as diagonal wave structures.

T-Bonds are the only asset class that is in an SC degree bull market and if we are lucky any new record high could be pointing us to a Cycle degree wave 1 peak. This will not happen until all 5 waves in Minor degree have fully developed.

Tuesday’s Market Vane Report showed a high of 53% bulls present. That’s a far cry from the 83% 24-month reading we did come from.

The commercial traders still have healthy net long positions across many of the different maturity years. As I post T-Bonds are still acting bearish, but when it turns we should see another leg up.

At the 158 price level, T-Bonds will face some stiff resistance, which should also produce another correction.

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SP500 Rally To Keep Going?

The rally I was working has traveled further than what I would like to see, which makes the unthinkable of a new record high a real possibility.  This January rally being a small degree was enough to force a review starting back at the 2009 bear market bottom.  In this case, I looked at extending wave 3 in Intermediate degree. I’m sure this market rally has something to do with investors trying to top off their retirement accounts. That December 26th bottom left a big spike behind, which is one big clue that this bottom can hold for longer than the bears anticipate.

From the  September 2018 peak to the December bottom we also have a pretty good looking zigzag at this time. Any zigzag can get completely retraced but that could now take all of January to accomplish.  A run back up to the 2800 price level, could happen as this rally still seems to have more power behind it. The key will be that on the intraday scale higher corrective lows keep forming.

This 2018 peak will need more work, as the September peak can turn into a wave 3 as well. The Gold/SP500 ratio is about as expensive as I have seen so there is nothing cheap about this market just yet. Today we are at a 2:1 ratio with the record being about 2.41:1.  The cheap Gold/SP500 ratio is about .75:1, so there is a long way to go before this SP500 becomes cheap again when we compared the SP500 to the price of gold.

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I have not been able to update as much as I would like and it may not get any better at this time. I have some serious issues I have to deal with which cannot be resolved this spring or even this summer, so my postings will be far less than what I would like to post.

 

 

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DJIA Rally Update

Since December 26, 2018, the DJIA index started on a rally and has gone on a bit longer than what I expected.  We now have 2 lower lows which are the sign of a bear market in progress. A market plunge next week, followed by another bullish run, could already be wave 3-4 in Minor degree. Of course, we can blame it all on the Apple stock price crash.

Reporters and analysts will always find you a reason why the markets are crashing and if there are 100 analysts, you will find 100 different reasons as well. It’s worse if you are following other wave analysts with the DJIA. You can do an “Image” search, ” Elliott Wave DJIA”,  and you will find a different wave count each time.  Worse yet they will fill the chart with “W, X, Y” waves or leave 5th waves uncapped. Leaving any 5th wave uncapped anywhere clearly shows that the analysts have no clue what is supposed to cap any 5th wave.

At this time I’m going to explore the possibility that we could already be in Minor degree wave 4, which could extend any 5th wave we might still get.  We are still under a “Death Cross”  so my big bearish mood is still being played out. A little Minute degree move can fool the herd into jumping back into the markets as FOMO can produce powerful moves that might make little sense when they happen. Just because something looks “Cheap”  doesn’t mean a bull market is just around the corner.

The January Wave 3 peak in Cycle degree has arrived about 50 years later than what the majority of wave analysts are telling us, so when you change a small part of a cycle degree move, you are basically creating a “Time” jump or traveling in time on paper.  This is just a mild example of  EWP time travel as it gets worse the higher degree we think we are in.

The entire wave counting world is telling us that 5th waves can extend for generations, which is false and has never been confirmed. 5th waves are the weakest waves.

The 2009-2018 5th wave bull market was all produced by flooding the markets by dropping money from a helicopter.

I keep about 28 or so Gold ratios which are impossible for me to track in detail, but I have a good idea when something is cheap to the cash price of gold.  My old record of the Gold/DJIA expensive ratio was about 17.24:1. This record was broken in August 2018 with a new extreme reading of 21:1!

The cheap Gold/DJIA ratio is about 7.19:1 which means it only takes 7.19 Troy ounces to buy one unit of the DOW.  Today this ratio sits at 18.25:1 which is better, but still a far cry from being “Cheap”. The fluctuation of the gold price is irrelevant as the gold ratios are always present and are always being adjusted.

 

 

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Gold Daily Chart: Bullish Review

Since the August 2018 bottom of $1160, gold started to make its present-day run. This came close to $1300 with a total run length of about $140. In the last day or so gold has started to retreat a bit. This run was choppy as waves overlapped and destroyed any true impulse we may have had. The gold bulls are confident that gold will still travel much further, but they need for gold to break out above the $1400 price level just to confirm that gold is still in a bull market.  The only way I can see that gold will continue is if the $1160 bottom was a “B” wave in Intermediate degree.   The COT reports are old as the government shut down has not produced any reports since December 20, 2018.

This diagonal set of 5 waves has to produce a “Correction”, in order for gold to produce two more legs up. How deep this correction can go, can always fall back to the previous 4th wave of one lesser degree. Of course where this previous 4th wave of one lesser degree actually is, is just an opinion at best. Folks, gold can crash in a 60%-70% net move that could send gold back down to the $1200 price level. $1200 is a psychological number and if gold dropped down below $1200 the gold bugs would start to get pretty agitated.

We are still in the Death Cross zone with this daily chart, and gold would have to keep soaring in order for the Golden Cross to become real.  On A weekly chart, gold is now well above both MA lines with the 200-day MA support being at $1234. Sure gold stocks have moved up as well but, they sure are acting like they don’t care about the gold price surge.  We have one gap open below present prices, which should get closed once gold retraces below $1270.

This entire move could still be a bear market rally and a complete retracement of the $1160 price level would have to happen.  What the majority don’t understand is that the 2011 peak in the gold price was a gold and silver price mania/bubble that only comes along once every 30 years or so.  Gold peaks of 1920, 1950, 1980 and 2011 follow Cycle and Primary degree moves, with the next big top being closer to 2041 when Cycle degree wave 5 is also due.

Those that did not pay attention or record all the mania readings during 2010-2011, will think we are in a normal gold correction and a new leg up is in the “Bag”, so to speak.

Elliott Wave International (EWI) is very good at recording these moods and I will insert their gold chart below.

 

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Silver Daily Chart Review

When we look at the last 2 years we can see the angle of the pattern sloping down.  This is nothing like what gold has done as gold has a much more bullish angle to it. It’s gold that is brainwashing us while silver only saw it’s a new record low in November of 2018. That would make the silver bull market just about 6 weeks old.  The record low in silver sure looks like an expanded pattern, so technically we could see silvers retrace its entire bullish move.

The bullish side of silver has already started to back off, so now we wait and see how deep any correction may take us.  “Correction” is a loose term as the silver decline has to make a pattern that can show a decent counter-rally in the next month or so. Vertical moves like this cannot be maintained, especially if this also was a run to safe-haven. Fear moves rarely last that long as they can crash faster than they went up!   The huge gap that opened up is a big hint that silver could crash to close off this gap which could take all of January to happen.

This Friday we get new government COT reports but Decembers report had commercials still building short positions. I follow two sites as they both have a bit of difference but it shows the net short positions in a more visual.

The commercial bearish outlook sure doesn’t inspire me to get all warm and fuzzy about a bull market with no end!  Since 2018, the commercial hedgers only have had net long positions 6 times.

Silver has also sliced through the 200-day MA which it has done many times before, after which silver crashed each time. The 50-day MA is at the $14.50 price level and if the bearish move returns then the 50-day MA will provide little support. Any price drop below $13.88 would definitely confirm this bullish phase as one giant bull market fake or bear market rally. Any bear market rally always retraces back to the point of origin and the only difference is the degree. If the majority can get fooled with just a Minute degree bullish phase, then the larger degree bear market rallies can easily trap the bulls.

 

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Apple Crash Update

At this time my expanded top for Apple is a pattern I have to keep using until it no longer works. On the downward slope, I’m dealing with diagonal waves.  Recently support for Apple failed but it failed with a big gap still open. From here on things can go wild if we run into a short 5th wave in Minute degree. This important gap also happened close to the Fibonacci number $144. Between $130-$120 we have another huge open gap that could get closed on this run. The wave count layout might take a month or so, but then Apple should rally along with the general markets.

Smart analysts are still shaking their heads why Warren Buffet was buying AAPL stock at world record highs. Warren Buffet is now deep underwater with his Apple shares and it will be interesting to hear if he starts to sell any of his Apple holdings.

With this huge price chop, one would figure that the Gold/Apple ratio has improved. At 9.13:1 it has, but not nearly enough to get excited about. One extreme “cheap” Gold/Apple ratio is 21:1. I don’t think we will see the 21:1 ratio on this trip but I sure would like to see more than this recent 9.13:1 ratio we now have.

 

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Natural Gas Monthly Chart Review

Due to some downtime of this blog this I have just started posting.  I would say the NG crash we’ve had so far was pretty impressive! If I’m right we could be looking at a 5 wave run in Intermediate degree. Once I looked at it from a triangle perspective then, Natural Gas should see one more bear market low. The 200-day MA repelled the price of NG with little effort. Sure the “E” wave can fool us by still producing a fairly obvious correction. When NG hits the middle trend line then all support has failed already. I think NG cycles get attracted to0 or repelled by the solar cycles.  This could be a nice setup for solar cycle #25 propelling the price of NG north again. Commercial hedgers sure don’t see the bullish side of this story as they still have net short positions.

It’s still going to be a wild ride as any winter freeze scare could send NG flying. This can happen in the month of February which at times has been the coldest month of the year. The world economic activity is slowing down and a prime example is the iPhone sales slowdown in China and other countries.

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VIX : Fear Ready To Rise Again?

The VIX has so far made a nice decline that still looks very corrective and may have hit a low point this morning. Patterns are starting to overlap again which is pretty normal in diagonal wave structures. Either way, the VIX  bull party is far from finished, as we should see another record high develop in the next 3-5  weeks.  Any impending wave 3-4 in Minor degree is going to give us a problem as a triangle could develop. A triangle inside a diagonal wave structure can be a real nightmare to sort out so we have to give it time to work through that part of the VIX correction.

One more low could happen but that should be cleaned up by the end of the week.

Commercial hedgers are already building short positions while the trend chasers are still net long.   Once any Minor degree 5 waves are starting to complete then I will turn very bullish on stocks. This may still take a month or so with the exact time always being a challenge. March is a very popular month for turnings along with October as they reflect the yearly cycles.

Investors may stuff more money into funds in January to take advantage of any taxes they may want to avoid. Its when they stop, that the markets can crash again.

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S&P Midcap 400 Review

The markets have been bullish but any rally will still be a bear market rally. This S&P Midcap 400 index is important to keep as it could be acting a bit like a leading indicator. The 2015-2016 bearish phase had the world in a mini panic. Not much has changed as fears have returned with a temporary breach in the bearish action.   I have mentioned it many times how deep any market can fall and it all depends on what degree the bear market is supposed to be.  The 2015-2016 is not the previous 4th wave one lesser degree if we are looking at a Cycle degree bear market.

2015-2016 is only an Intermediate degree 4th wave. If the “C” wave ends towards the bottom range, it would only match Intermediate degree to another Intermediate degree bottom. This is a good thing as once this bottoms we are forced into a higher degree. The SP500 and the DJIA are still a long way away from doing the same thing. Comparing one Intermediate degree with another helps to keep us from bouncing into a higher degree before its time.  Many wave analysts are at a “B” wave cycle degree top so they require 5 waves down in Primary degree.

They will never find those mythical 5 waves in Primary degree even though this is the third time they will be trying since the 2000 peak. Some of the wave counting experts have already reached GSC status in 2000 which throws time into disarray.  The majority of “All” wave analysts have time-warped into the future by 50 years or more. Change a few more degree levels and we could time-warp for 90 years.  This may be hard to understand for readers, but flipping numbers and letters around with no respect for the time-warping that happens each time, has never worked.

The short version is that wave analysts working in higher degree levels are feeding us a mythical world that may still be 50-100 years away. GSC degree wave three might get close by 2071, not 2000!

The majority of wave analysts are showing you a mythical world which means nothing. My world is all in Cycle degree which every person on this planet will experience at least once maybe twice, in their entire lifetime.

Minor degree runs happen more frequently, with 5 waves in Intermediate degree, also being part of the landscape. I believe the markets are in a Cycle degree bear market which could take until after the 2020 elections are finished, with Solar Cycle #25 slated to start by then as well. If a market creates its 20% decline is that the top of a bear market, or is it the bottom?

Once this Cycle degree 4th wave bottom arrives, then we can dust-off the idealized 5 wave sequence in Primary degree.

If we go back to 1932 or 1974 and you see a 4th wave bottom in SC or Cycle degree then these analysts are telling us that 5th waves can extend 50-90 years or even longer. Nowhere in market history has this ever happen, as it is impossible for any 5th wave to last the time span of multiple generations.  The EWP is never about what you think we are seeing, but it’s all about how well we visualize what the real idealized impulse is supposed to look like.  The idealized pattern is the blueprint for market action and when we are wrong, we shouldn’t throw out the blueprints because we are too lazy to find our own mistakes.  I spent over a decade chasing GSC and SC degree wave positions and for 5 years have been working the markets from a Cycle degree perspective.

Every big bear market investors will ever face, can give us 3 simple corrections. Eliminating the least likely patterns first reduces our choices and what is left may be the right one.

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