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US Dollar Intraday Update: Is The Bottom In?

 

This morning the US dollar spiked to the downside and then instantly turned back up. Now we have to see if we keep getting higher lows, as that is one sign of a bullish phase cranking back up.

One thing I like to stress is that the commercial hedgers are net short by a wide margin, but I have also witnessed them make dramatic changes from one week to the next. Besides those commercials are net short in the precious metals which I think could have far more power than one single asset class. Commercial traders don’t have the same agenda as non-commercials do as they work inside or with the people closest to the industry.

Many Gold investors may wish and pray for the US dollar to implode but that is highly unlikely this time. The 2008 low in the US dollar was a.”Major” low that I documented very well. The US dollar also produced a giant falling wedge, about 23 years long. By itself, this type of wedge is extremely bullish, so it’s not just about any single wave count.

I spent years looking at the US dollar as a big bear market rally but every bearish wave count I came up with would never last for very long.

A new record high will help to confirm that the bullish scenario is alive and well!

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Palladium 1980-2018 Review

If you have never seen a wild and choppy bull market then here’s one. Not until I applied diagonal wave counting to all my commodities did this pattern make any sense. We just hit a new record high at about $1178, and Palladium has backed off a bit this morning since then.

All the peaks are connected with zigzags, except for the 2008 bottom which ended up being a running flat, with a near picture perfect zigzag crash into the 2003 bottom. From the 2008 bottom, another zigzag bull market developed with an expanded pattern for its “B” wave correction.

Any Cycle degree bear market will crush this Palladium chart and initially, Palladium could reach my previous “B” wave bottom in Intermediate degree. This would be close to the $832 price level, but it’s still not the end of any bear market.

I never apply conventional market correction calculations, as commodities are in a different world. Soaring to extremes and then crashing down to an extreme is pretty normal. Commodities are in a Submillennium degree wave 3 diagonal wave structure that started way back in the Little Ice Age.

It was the Roaring 1920’s when it all changed as that was the first time that ordinary investors got the investing bug and they also invented new types of assets during that time period. This is very obvious if you look at the charts before 1920.

Technically speaking, another zigzag should develop but it will be one degree higher as a zigzag in Primary degree.

Commercial hedgers are net short by a wide margin, which should start to turn as a Palladium bear market becomes more obvious to the talking heads.  It’s the non-commercial traders that always get caught in a trap as they seem to love chasing bull and bear markets.

 

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Mini SP500 2016-2018 Review

 

I’m sure the entire planet is trying to figure out how far or how deep this bear market will go. Most of the time markets will come to a grinding halt at some previous bull market support. In this case that would be the 2016 low. (2000-1800).

I will also keep my expanded pattern alive as it is already telling me that one day, all the markets that have this pattern will get retraced in another bull market, but it may take 10 years or more before a new record SP500 high will ever get recorded.

I have mentioned many times that all the President Trump market gains will burn up in a puff of electronic smoke.

From the 2016 bottom we had a 2-year run to complete a move in Intermediate degree, so when the market retraces back to those levels, they would have retraced an Intermediate degree move. Since it would end with a run of 5, I always have to cap it. If I see “any” 5th wave uncapped, then I know those wave counters don’t have a clue where they really are!

This would be the “A” wave in Primary degree and “A” waves are usually “Buy” signals, but they are not the starting waves of a new bull market.

Any “B” wave in Primary degree will also be very choppy, which will be the first clue that it’s just another bear market rally.

It may sound crazy that the SP500 will crash down to the 1800 price level, but we are dealing with a Cycle degree bear market, the likes we have not seen since the 2009 lows.

Tech companies inside the SP500 are imploding with Facebook, Apple, and Nvidia leading the way. This should not be a surprise to any serious market observer as this is starting to happen for the third time since the 2000 tech bubble. Three bull market peaks have blessed the smart market timer, but those party days are over, at least until after 2022.

Solar Cycle #25 should kick in so the younger investors will enjoy the power of the sun. In 2008 it was Solar Cycle #24 that kicked in and it supercharged the markets until January 2018.

The Gold/Sp500 ratio has changed little and is on the expensive side of 2.2:1.

Some say there is no place to hide from this turmoil, but we also “always” have a choice. Any investors that are getting close to retirement should be extra cautious, as my generation got hit hard, and escaping into cash would have at least saved some capital gains.

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DJIA Intraday Downside Resumes!

This is a quick update and it may be the last one before I switch to the March 2019 contract. They run 3 months at a time but the volume is still a bit light in the March 2019 contract. Since Sunday night the DJIA has started to resume its decline after the Minute degree wave 2 completed.  In this case, it is impossible to give any price support forecast, as you have to ask “Support for what”?  The support that will make the DJIA soar to new extremes, or just temporary support that might last a few weeks or so?

If my 5 wave sequence is real then wave [i] support will never hold. Any bear market rally like this always retraces its entire bullish move, and I expect nothing less.

I checked the Gold/DJIA ratio this morning and it was one of the most expensive readings yet! It takes over 20 ounces of gold to buy one unit of the DJIA, from a max reading of 17:1. Cheap would be closer to 7:1, but that will not happen any time soon.

Longer term I think the markets will crash at an “A” wave in Primary degree but that won’t happen until Minor degree waves 3-4-5 has fully played out.  I would need another 3-4-5 wave as Minute degree also needs to play out.

There still hasn’t been an extension to speak of, but I’m sure it will show up one day. This type of 1-2, 1-2 wave count can be the setup for an extended run, but the last 5th wave could extend as well.

The 2018 January peak is the real peak and the third bull market peak since 2000. Each bear market since 2000 has been worse as each bear market bottom was also one degree higher.

This bear market is going to be much bigger than the 2007-2009 bear market was even though the markets may never break below 2009 lows.  This Cycle degree bear market will be a bit longer than what 2008 was. The 1929 bear market only took 3 years, but this decline could take a total of 4 years. 2018-2022.

I can see it already when the talking heads are calling for DOW 5500, you can come back and I will have a DOW 34,000 forecast.

 

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FXB: Invesco Currency Shares British Pound Sterling Trust (ETF)

This FXB chart is an ETF that seems to act very well to the regular futures charts I use. There are little differences but not enough to impact major changes from the British Pound futures charts.

The big thing is that this ETF follows as close as possible to the futures charts, not like all those leveraged funds do. It also shows the late 2007 peak which matches the oil peak. Markets started to crash 2007-8 and this ETF crashed right along with the stock markets as well. Gold also imploded as the US dollar exploded in price from 2007 to 2009.

For well over 5 years the FXB went sideways with many rallies and crashes. From 2009 to 2014 that sideways market has been confirmed to be just a big bear market rally as the 2016-2017 crash bottom, completely retracing back to the start of origin, which was the early 2009 bottom.

When some gold experts tell me some forecast where the FXB is going to jump out of the US dollar basket, then they are forgetting the inverse relationship that’s always present

That brings us to our November 16th bottom as I was bullish but it is not responding as bullish as it should, so I have to look at this as a good chance that more downside is still to come.

There is so little price cushion to spare, so any day next week we could see support just melt away!

There could be a new downside to come and it will not be the over or end until a new BP record low is achieved. The way I see it at this time is that the British Pound can land at the same Primary degree “A” wave bottom as all the USA stock indices, silver, Cad, Euro, and gold. I’m sure there are a few more I missed to mention. It’s not about one asset class that may turn, it’s the majority as they are all connected.

In the long run, the BP could be a flat and this bear market is just the zigzag intro. We could get another zigzag bullish phase but once that has been completed, the 5 waves down in Intermediate degree show happen. That’s one thing zigzags and flats have in common they have same 5 waves down their “C” wave slope.

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Gold Daily Chart Rally Update!

I’m sure that gold investors are jumping up and down with glee this morning as gold made a great looking vertical move to the $1224 price level. I take it as another gold bear market rally as gold has to impress me by the 50-Day MA line becoming support. Silver moved as well but silver is just getting close to the 50-Day MA.

The Platinum chart looks like this daily chart except it went sideways and flat before it crashed to new record lows.

The speed of the rally should give us a clue that it could be an emotional rally, not the start of a real trend.  Emotional buying for FOMO reasons never last. The US dollar would have to keep imploding like it did this morning.

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British Pound Crash Update!

All this looks very bearish as the British Pound futures imploded this morning again. Sure the GBP can still crash and if this is just a bear market rally, then the 2017 bottom will never hold. The commercials do not support the public bearish view as they have very large long positions open with the GBP.

It would be something if the pattern is a 1-2, 1-2, 1-2 wave count. This wave pattern can produce an impulse move that is pretty rare and one more small 1-2 wave structure should appear. 3 sets of 1-2 wave counts after the wave 2 in Intermediate, is about the maximum that we can see, as they will be pretty small after Minuette degree. Either way betting against the commercial hedgers is a futile activity, as it would only give out short-term gains at best.

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T-Bond Bullish Review!

So far the October low in T-Bonds has held and T-Bonds have been in a bullish rally since. We also have a higher low which is also a very bullish sign.  The Fed is already making it very clear that a “Pause” in rate hikes is coming in 2019! Rate hikes have drained the markets of liquidity and are killing the stock market bull run at the same time.

https://www.bloomberg.com/news/articles/2018-11-16/fed-rate-pause-possible-in-2019-as-powell-highlights-headwinds

The Fed may not talk about the falling stock market, but it will do everything in its power to stop the markets from imploding.  China has also made it pretty clear that they will do everything in their power to save their stock markets from crashing. This is nothing new, but dropping rates in the 2007-2009 crash pushed stocks lower, as investors just wanted out at that time, and I’m sure this will happen again as T-Bonds can keep right on soaring.

I may have to change my bottom wave count in the future, but for now, a bullish phase is what I’m looking at. I want to see more evidence this T-Bond rally is serious, as diagonal runs look and even act like bear market rallies. TLT touched a new record low and it has started to rally as well.

T-Bonds have been in a bull market since 1981 and T-Bonds have a 120-Year cycle to them that can also divide into 60-year cycles as they did from 1861 to 1981. When bonds rise in price then this takes the pressure off the Fed to keep raising rates.

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Natural Gas: Impending Correction Review?

The vertical move in the last day or so cannot be maintained as past historic spikes have obviously confirmed.  I understand a cold spell may have set this off, but what else is new. It’s the vertical move that could be the end of a run and not the beginning.

I also have an “A” wave peak in Intermediate degree but I have other choices as well. This bullish phase has been running since 2016, and since looks like an inverted zigzag I have look at it like’s a bear market rally as well. If this is a bear market rally, then a complete retracement of this NG bullish phase.

We’ve had three bear market rallies which all were completely retraced, so who says we can’t get the 5th bottom?

With my “A” wave peak then chances are good no new record low will happen but a good corrective wave has to form to convince me otherwise. Natural Gas is another prime example of diagonal wave structures, as there is nothing but overlapping wave structures everywhere.

For a correction, NG could drop well below the “B” wave bottom I show, and it would take time to play out. FOMO is also always part of any move, but so is fear of losing.

The commercial traders are short Natural Gas, but not by that much.  My Market Vane report this week showed about 77% bullish which is pretty high, but may not go to an extreme. Anything above 90% bulls, we are entering the extreme side of prices after which they can implode.

 

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US Dollar Intraday Bullish Review!

The US dollar may not be finished just yet, as one more plunge can also still happen. The small open gap is now closed off and a small H&S pattern is also forming. Higher lows is a sign of a bull market, and so far the US dollar index is still creating them. The idea that the US dollar is in a bull market sounds impossible to comprehend by many, but everybody on the planet hated the US dollar in 2008 but yet the US dollar turned and then soared. I spent years counting the US rally as a bear market rally, but my wave counts were trashed many times.

2008 was such an extreme bottom for US dollar which most people are not aware of.  I remember it very well as I had the USD 2008 bottom extremely well documented. 2008 was also the ending of a huge falling wedge, which if they are ignored can produce very violent reversals. We are getting close to a 10-year US dollar bull market where 5 waves up in Primary degree are in effect. Wave 3 in Primary degree would still be in our future as that would represent the increasing “Buying Power” of the US dollar. The Fed action of raising rates is draining liquidity out of the markets which is exactly what raising rates are designed to do in the first place. When markets crash then trillions of dollars will go up in smoke in rapid fashion.

At that rate, money will be destroyed and it would take a 2000 horsepower turbocharged engine driving the printing presses to build it all backup!  When the world is choking on debt then no matter how low rates may go they no longer have the stomach to take on more debt.

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S&P Midcap Death Cross Update

Investors already got a good taste of what a Death Crossing can bring. The 50-day MA has crossed the 200-day MA in this daily chart, which they call a “Death Cross”. Many have no clue how damaging a death cross can be, but we have plenty of examples of real-world bear markets imploding after the death cross. If the wave 2 in Minor degree has completed then the wave 1 price support at 1769, will definitely not hold.

Looking for 5 waves down is my first choice but we are still a long way off, before wave 3-4 in Minor degree arrives.

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Crude Oil Crash And Rally Update.

Crude oil created a fast move to the downside which usually happens just before another turning. On the daily chart this left a nice spike and the potential for a turning as oil bears could be in a small bear trap. Crude oil stopped dead at $54.90 and has now been in a rally that may not be finished. We could have  landed at a potential “A” wave in Minor degree, but we need time to help confirm this.

Any “B” wave can be a flat type with the first move being a zigzag. Two zigzags back to back and then 5 waves up in Minute degree could finish this rally. That’s if we were in a perfect world, as oil could drag out going sideways in a triangle nightmare as well.

What I really noticed shortly after the oil bottom on the 13th, was that the amount of bearish news just exploded and became, “Intense”. Opec is freaking out as they try to cut production again. The oil world is in such a turmoil state that fundamentals can change very fast from one week to the next.

https://www.cnn.com/2018/11/14/business/oil-prices-opec-what-next/index.html

One announcer called it the end of a 10-year bull market in oil! What? It was early 2016 when we had our last world oil glut which is not even a 3-year bull market.

The Gold/Ratio got a little better but is only a bit over 22:1,  which is nowhere near any extreme at this time.

Crude oil could also slip to a new low but then reverse just as fast, as an expanded bottom can still happen as well.

 

 

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Apple Stock Crash Update.

This is for the people that must have trend lines, so I added a few lines that are important from my perspective. Most of the time I draw all these lines offline, but I don’t always publish them.  I went back to the 2015-2016 bull market which is where most indices also corrected with the same wave count.  The news that Apple and Amazon are hooking up destroyed this stock as all the mall stores will lose customers.

If Apple retraced back down to the bottom bullish trendline, then this would only get us closer to a single Primary degree bottom. Apple stock imploding from the Fibonacci $233 price level is not a surprise, as stocks also implode from the $55 Fibonacci price levels.

Every Fibonacci price drop is a 61% crash which we might get two of them.  The entire Apple wave count has always displayed diagonal wave structures, this is why I have no Primary degree wave 5 peak labeled. It’s a Primary degree “C” wave.

Without a doubt, this Apple stock was in a mania blow-off in Cycle degree. Any mania does not end with an 18 or 20% correction, as most of the time markets fall back to the previous 4th wave of one lesser degree.  That would get us closer to that $89 price level.

Apple was in a Cycle degree peak so, at a minimum, we have to see another Cycle degree bottom. 3 waves in Primary degree is what I will be looking for, which could also take until 2022 to play out.

Investors are going to learn what the real price value of Apple’s stock is in the next few years.

There is also a minimum of 3 gaps still open below present prices and I bet at least two of them will get filled.

The most extreme Gold/Apple ratio registered at about 5.27:1 on September 10th. It has been hitting the ratio brick wall and has now started to spread again. Still at a 6.34:1 ratio this morning, Apple stock is still extremely expensive to the price of gold. Cheap may come closer to the 21:1 range but that is only a reference. The gold ratio price brick wall would get hit first.

Some will never believe that Apple stock can even crash, but the size of this Apple bear market all depends on what degree this 2018 mania peak was!

 

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TLRY: Marijuana Mania Crash Review!

Smart investing is all about being in the right place at the right time, so do you think TLRY was a good buy when it hit $300?  This move is all about FOMO and it has nothing to do with fundamentals. Who in their right mind would buy into a vertical move like this?  Who was that greatest fool, thinking that the $300 price is a good deal?

The market punished these fools, with close to a 70% price crash below the $90 price level. My main interest is about the mania that has been surrounding a new industry, but some of these investors could have been sampling the product when they hit the “Buy” button when TLRY hit $300.

I do not give any investment advice on any single stocks that I post, and I have no holdings in pot-related companies at this time. I’ve had people ask me if it’s time to invest in pot stocks, and my simple answer is in the form of a question, “Do you have a trading account or investment account open”?  The answer is usally, “No”. This just shows how insane any mania can get when people what to invest, that have never bought or sold any stock in their life!

I guess TLRY is in a bear market when it hit a 70% decline. Stories about pot shortages did not happen in Vancouver.  Most of those dispenseries never missed a beat as they were open under municiple by-laws, not federal laws.

 

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Crude Oil Daily Chart Crash Update.

It could be a bit early, but I think a reversal is coming as crude oil is forming a great looking spike with this daily chart.

WTI crude oil price is also approaching the Fibonacci $55 price level and potential support going back to early 2017.  It could be a violent reversal as some fundamental news will come out and get the oil bulls all excited again. The $56 price level is a far cry from the $100+ price forecasts they did have. The Gold/Oil ratio improved nicely and is now sitting at the 21.42:1 ratio. Oil still has a long way to go before this ratio turns extreme, but in the short-term, a rally should ensue.

They have already declared oil in a conventional bear market, but from an EWP perspective, the entire bull market could be a bear market rally. Using stock market descriptions in the commodities markets is like mixing oil and water, they will not work if we don’t understand how big bear market rallies can actually get!

How high the counter rally could go is just the best guess, but $60-$67 will start to give crude oil some resistance. Wave 1-2 rally or a “B” wave rally in Minor degree would also work.

The crude oil price is still crashing as I post, so trying to catch a Falling Knife, will put you in the read very quickly.

Any choppy counter rally that we do run into would be a small version of a “Bear market rally”. The 200-day MA is at the $64 price level after which the Death Cross on a daily chart could also happen.

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US Dollar Bull Market Correction Update

Since the top of the September in stocks, this US dollar chart has also been on a bullish phase that the contrarians said will never happen. Well this USD bull market just keeps on going, and going  even though the commercials were net short by a large margin. I was pleasantly surprised last week as the commercials added to the bullish side and they removed  some contracts from the bearish side.  The 2008 bottom with the USD was an extreme the likes that only comes along once every 30 years. The USD bull market is only 10 years old, but it sure looks like it’s running a set of 5 waves in Primary degree. Wave 3 in the Primary degree is still ahead of us. Wave 3 peak would coincide with my “A” wave bottom in my Gold wave counts.

This correction could still make some twists and turns as this correction may not be finished today.

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Silver 1980-2018 Monthly Chart Review

 

I spent years counting out this big silver chart, with idealized counting methods. This never made sense until I accepted the fact that commodities run under a different idealized pattern. Why did the 2011 peak barely break to a new record high while gold soared well above its 1980 peak?

They are all diagonal waves structures which defy EW accepted logic but when we accept them as being normal wave structures of the diagonal kind, then it’s a different ball game. They are all connected with zigzags and they run in 30-year cycles which tracks the Cycle degree peaks and valleys. The entire wave 3 in Submillennium degree is a diagonal wave structure, so this silver chart will not smooth out any time soon.

Counting backward 60 years from the 2011 peak gives us another Cycle degree peak in 1950-1951! Count backward another 30 years to 1920 and that would be close to SC degree wave 1-2. 2011 to our present 2018 low is not 30 years no matter how much we try to twist the math. Supercycle degree wave three in metals will not arrive until 2041.

Silver has not finished any major bear market, as last week the COT reports sure did not favor silver and most of the other precious metals as well.

 

With the commercials turning net short on silver, there would be little hope for some huge silver bull market to materialize until these COT numbers start to shift into net long positions.

The worst thing we can see is the Kiss Of Death between the 50-day and 200-day moving averages is going to give us another “Death Cross”!

Silver is only 50 cents away from breaking a new bear market low! How does that work? Silver makes a new bear market low while gold is going to soar? NOT!

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GE 18-Year Bear Market Review

 

When markets crash they create the headlines and GE is no exception. Hedge funds are dumping stock (selling low) as they panic to get out of their long positions. I will not keep detailed wave counts on GE, but it sure looks like it has been close to an 18-year bear market. Every attempt to go higher was trashed and GE resumed its decline. This is just a quick look at the GE stock and I do have alternate wave positions as this double zigzag could also be a diagonal set of 5 waves. Either way, a new bear market record low should happen. Below $5 would be my obvious choice which could also be the “A” wave in Primary degree, that I’m after. If that is the case then any substantial rally should give us another rocky bullish trend.

I had no Gold/GE ratio database started, so I checked a few of the extremes to see how expensive GE was when compared to the gold futures cash price.

Starting back at the top in 2000 the Gold/GE ratio hit 5:1, that was an extreme just about matching the 2018 Apple peak. Then from the 2000 peak, GE crashed into the 2009 bottom along with the general markets, and the Gold/GE ratio exploded to 100:1. Then the bull market that ended the Great Recession compressed the Gold/GE ratio back to about 41:1.

In early 2016 the bottom fell out of the GE price as support seemed to be non-existent. Today this Gold/GE ratio is sitting at 150:1 which makes it cheaper than the 2009 bottom already! I’m sure the spreading of the Gold/GE ratio is not finished. One would just about have to take weekly ratio readings, to catch it when the Gold/GE ratio starts hitting a price brickwall.

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Canadian Dollar Daily Chart Update

 

With COT charts like this, we just look at what is above and below the line and by the looks of it, there seems to be little interest on the commercial hedger’s side to build long positions. I’d rather see extremes first before I turn into a CAD bull and so far we are far from it.

Since the 2017 peak our CAD has been grinding down and all the gold investors need for our Canadian Dollar to soar!  That has not happened, and it even seems like a new record low is still to materialize. From July to about September the CAD was on a rally with some insane overlapping wave structures. Short term Bear market rallies behave just like this and “ALL” bear market rallies retrace themselves sooner or later. This small bear market rally will be retracted when the CAD hits below that .75 price level.

What the public calls a bull or bear market is not even close to what I use as we can get a 61% correction in a wave 2, and get a 40% decline for a 4th wave bottom. I’m sure nobody called the end to the CAD bear market rally in 2017, but we know the majority were all very bullish. Since the 2017 peak two support price levels are retraced and now we are going to face the 3rd one in a few weeks or so.

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Euro Daily Chart: Death Cross Review!

 

This is the Euro daily chart which had its last major peak February, 16th, 2018 at the 1.22 price level. Since then the Euro is showing its bearish side as the Euro slides and creates a Death Cross as well. A Death Cross is about as bearish of a situation that we can run into, but most analysts ignore them.

On the weekly chart settings, the Euro is sitting close to the 200-day MA and has dropped below it a bit.

I’m sure analysts will not be screaming, “20%”, bear market territory anytime soon, because the Euro bear market started back in 2008, about 10 years ago. 2008 was also the oil bubble peak!

Any Euro wave count is basically an inverted version of the USD, and early this morning Euro support crumbled sending the Euro to a new bearish low. I will be the last guy to tell you where support is because you also have to ask support for what? Is the Euro going to pull off a miracle turning on some bullish news flash? News can give us short-term moves, but it takes much more than just some fundamental news report to turn a trend.

Trying to stop a trend with a news release is like trying to stop a semi truck by jumping in front of it with a big flash card! The COT report below shows little interest in building long positions on the commercial hedger’s side. The 1.03 price level can give us support, but that may just be the 4th wave support which I’m looking for.

Remember, all those gold bull investors foaming at the mouth? They need the Euro to sail north, not south like it has been doing.

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US Dollar Scores Another Bull Market High!

 

The last post I showed that the US dollar was in a correction. This has now been confirmed with the US dollar completely retracing the zigzag and pushing to a new high. I’ve made some wave position adjustments with wave 1 in Minor degree already being completed, and another 1-2, 1-2,  impulse type waves could be in play. Tonight the US dollar has gone vertical, even leaving a small open gap in its wake.

There can be a fast correction by closing the gap and then resuming its bullish trend. The intraday price action is not acting like a bear would as we keep getting higher lows and higher highs as well. This price action came with the commercials already having large net short positions in the US dollar, and to make matters worse, they added long positions last week. Even the commercial hedgers turned bearish on silver, gold, platinum, and palladium last week as their short bets also increased.

The Euro and our CAD also reacted by going down, so all this does not support a gold bull market anytime soon.

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Nasdaq 100 Daily Chart Update

 

On this daily chart, the Death Cross is still going to happen as the Nasdaq wanted nothing to do with the 50-day MA, and could not find support above the 200-day MA!  If the big bearish trend is true, then no amount of jaw-boning will turn the tide, even with the COT report below showing a small net long position. The bears will show us if they are in-control by taking out my wave 1 position Minor degree which still could happen this month.

My last Gold/Nasdaq ratio calculation was in early September 2018 what at that time registered the most expensive ratio of 6.38:1. It takes 6.38 gold ounces to but just one unit of the Nasdaq which blows the old record of 4.94 gold ounces by a long shot.  Cheap would be 1.18, so there is a long way to go before this Nasdaq becomes cheap again. The Gold/Nasdaq ratio has been hitting a brick wall a the 6:1 range, so that is a usually a big clue that this market is far too expensive to be a good long-term investment at this time.

This is only a very small net long position with this COT report, which is nothing to get excited about especially when this is one of the only long indices I have.

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Russell 2000 Daily Chart And The Death Cross

 

While many of the talking heads are bullish towards the stock market as the “Buy on the dip” battle cry, still seems to be a common theme. We are looking at a daily chart with the 50-day MA getting close to kissing the 200-day MA line, and when it does, it turns into a Death Cross. A Death Cross on a daily chart forecasts a bearish move that will devastate all those smart bulls that have been brainwashed to stay invested for the longer term. Maybe the younger investors can recoup years down the road, but if my boomer generation is still “invested” then they will never have the time to recoup any market losses. Many boomers lost their retirement investments with the 2008 crash. Even older Gen-X investors may not recover from this next bear market downturn.

When I switch this to a weekly chart setting, then the 200-day Death Cross is at the 1360 price level, so a wild ride is surely coming!

Just about all COT reports regarding the different indices, show commercials still having net short positions. I will not turn bullish on stocks until all their short positions start to reverse!

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Bloomberg Commodities Bearish COT Report Review

 

I Looked through the COT  Reports and this Bloomberg report does “not” look good for the so-called commodity bull market that the talking heads keep telling us about.  Commercial hedgers increased their net short positions by 11,964 contracts and removed 700 contracts from their long positions. This shows the hedgers closest to the industry having a very bearish outlook which will not change until these numbers start to shift the other way again.

When you look at the non-commercial reports they are net long by a wide margin. Both parties can’t be right and the great majority of the time the speculators always get into a trap of some type or another!

Even silver, gold, platinum, palladium, all showed increases in commercial short positions. None of the readings I looked at support a potential big bull market reversal in the works.  All this just confirms the idea not to waste my time, chasing bullish wave counts at this time.

Copper was the exception, but that was not a big shift to long positions. Even the commercials in the USD COT report took some short positions away, but they still have a large net short position to fight with.

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Weekly Chart Crude Oil Crash Update. In A Bear Market Already?

 

One oil expert has declared that oil is in a bear market already!  The oil rout became a bear market pretty quick. With all the oil bear market experts hitting the front pages of news blogs, I wonder if they will tell us that the next rally is a bear market rally or not?  Close to a 3-year bullish phase sure had them convinced that oil was going much higher, but as usual, the markets seemed to behave the opposite of the herd! Every ridiculous extreme bullish oil price forecast was tossed around, yet what did the oil price do? It Crashed!

Since gold also crashed below short-term support, you would figure the Gold/Oil ratio would change. This morning the Gold/Oil ratio jumped back to a bit above 17:1, which still makes oil very expensive when compared to gold. This rapid change is nothing new, only that it’s hard to catch if you don’t take readings more frequently. When there is a fast move, then I use that event as a trigger to quickly take another Gold/Oil ratio reading.

What happened this morning, happened in 2014 as well, with the same ratio, just before crude oil prices imploded. That was a bit less than a 2-year crash when oil imploded from $105 down to about $28 USD.

There is a lot more crude oil downside that has to happen before we even get close when oil becomes cheap again. The only question is what pattern has the most likely chance of showing up to this bear party?  I have to keep 2-3 versions active at the same time. Even Crammer got into the oil forecasting business as he says oil still could drop to $40 before we see good support.

The big question is if this decline produces a zigzag, so common in commodities, or a set of 5 waves continue to develop.

No amount of bullish jawboning will change the trend once it takes hold or resumes, so keeping an eye on the COT reports or the Gold/Oil ratio is a more objective look at the oil markets.

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Mini SP500 Intraday Rally Update

 

Obviously, the bullish crowd sees the midterm elections as a positive thing, otherwise, the markets would have tanked far sooner. Wild bullish charts like this virtually look vertical on a daily chart, so a correction should be near. If the bigger trend is bearish then a complete retracement of the October bottom will happen. We also have the potential for an H&S top, which the SP500 is running up against. This is a classic textbook retracement move, but we have to see if it’s real!

This is the E-Mini SP500 COT report that shows the commercials having a bearish outlook, while the speculators are in a typical inverse position. Speculators or managed money always seem to get trapped as they are not the smart money crowd that media makes out to be.

 

On A different note, the pages read on this blog have exploded dramatically in the last 3 days, as over 6000 pages were view in a 24 hour period. I was set-back by these numbers but it may be just due to many people being off work and voting. It’s nice to see these numbers, but only time will tell if it’s not just a freaky one of a kind type of move.

I will not post on Remembrance Day for obvious reasons as I take that day very seriously.

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2-Year T-Note Weekly Chart Bearish Review

 

This is the 2-year T-Note crash and is the driver of any rate increase that the Fed may still implement. The Fed may start to pause, or start giving the impression it might slow down in increasing the rates.  Higher rates are not designed to take liquidity from the markets, but in the end, that is exactly what is happening.  Who wants to jump into real estate when the majority can no longer afford to take out a loan, or their wages can no longer keep up. Slowly squeezing the lifeblood out of the markets has been happening since the 2000 peaks and they start to drop rates once the markets have obviously started to pop!

We can see how the Death Cross on the weekly chart forecast a major decline, and once this chart starts to reverse, then a Golden Cross will happen.  This could still take months but it is something to watch for.

Virtually every T-Note related COT report shows that the commercials are extremely bullish and this 2-Year T-Note report shows how bullish they really are. This COT report will change as we head from one extreme and then reverse back to another extreme.

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British Pound Weekly Chart Bullish Update

 

When markets go down, bearish fundamental stories come out. I look at it from a contrary perspective and when I read bearish stories on the British Pound, I quickly flip to the COT reports to see if the COT report supports any of the bearish rhetoric. Take a quick look below and as the commercial traders see a rosy picture, while the speculators follow the crowd and believe the bearish BS!  In early 2017 the British Pound hit a major bottom and has since been holding. It sure looks like a wave 2 correction has completed, with the next wave 1-2 also completed.

This is also where I use the 1-2 wave count and since I’m at an Intermediate degree bottom, I can only have 2 lower degree extensions. It might be a bit early for Minor degree wave 1-2 to be completed, but that can be easily adjusted.  I’m sure some diagonal wave structures will be thrown in to keep us guessing, but when this bullish phase does something different, it will force a review each and every time.

 

This is the simple British Pind COT report where  the commercials sure are looking bullish to me. Those are net long positions, while the speculators are bearish. Speculators are chasing the perceived trend and always get into a trap. Look into the past and we can see major shifts in positions and I would not look for a bearish wave count until the commercials start to turn net short again, or at least close to it. Are the COT reports classified as “Fundamentals”?  With the EWP, all sentiment readings are important as they make charts go up and down.

The mainstream media always quote the speculators like they are the experts, but the commercial hedgers are a different group, as they deal more with people closest to the industry.

To help confirm this bullish trend, then higher highs, and higher lows must form.

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SPX: Flying High This Morning

 

This SPX chart is flying high but it also left 2 gaps in its wake.  I’m sure those two gaps will get filled, but I can’t give a time frame when they will get closed. Even the futures charts have gaps, so  those two gaps will keep me in a long-term bearish mood. I made some position changes with the DJIA, but left them off the September peak, due to space limitations.

The Market Vane Report on the SP500 was pretty boring as they ranged between 53% and 55% bulls present. That is not even enough to get out of bed in the mornings for, as those readings are just middle of the road. If the big bearish picture is still in effect, then no new record highs should happen. The VIX has crashed acting inversely to the SPX, so in this case, the VIX is acting correctly.

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DJIA Intraday Rally Update

 

I looked at all the peaks of the markets that I cover and there is a good case that can be made that the expanded flat was just a diagonal wave 3-4-5 in Minor degree.  Sooner or later the markets will head in the direction it wants, but it should not soar to new record highs. Bullish moves this fast have nothing to do with fundamentals as it is more likely that the “Fear Of Missing Out” and buy stops getting hit is the main cause.

With a new location of the Cycle degree peak Wave 3, we would be starting a new set of impulse waves as well. There is no Market Vane Report for the DJIA but they do have the SP500 and the Nasdaq. Those reports are not at any extreme, and matter of fact is one of the most boring reports I have seen. Even the previous Market Vane Report was starting to get boring. Extreme readings is what I’m looking for, and I didn’t see any at this time.

Most commercial hedger readings were net short but I suspect they added to their long positions in the last few days.  I will not find out until Friday nights reports are published.

I’m still bearish long term but in the short term, the markets can still go up!

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