Monthly Archives: May 2017

High Grade Copper, Cycle Degree Review

Copper has been a real challenge, to get even close to a realistic wave count.  This wave count starts far back in the 1960’s and  has been soaring since then with our last top in early 2011.  Copper then crashed into our 2016 low which has now been in a rally since. The exact dates do not work with Copper, but back when Primary degree wave 1-2 crashed, it contained an extremely good looking zigzag, containing a flat for the B3 Wave. Wave A5 and C5 alternated which is what I like to see all the time. 

Technically, our present rally should take us to new record highs, but can also produce a very short top or a double top.  Many might call any double top as a truncated 5th wave, but I prefer to look at other patterns before I ever call any pattern a truncated wave. 

Any new record price higher with the smallest of margins,  will work or help confirm a potential 5th wave up. In this case I would be looking for 5 waves up in Minor degree, but  at this time we are still well short of the first wave in Minor degree. 

I will be working new wave positions, replacing Cycle degree with an Intermediate degree count. This will put a different perspective on things, and will give us more choices in how high any commodity rally can still go. 

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E-Mini Sp500 Intraday Top Review

The SP500 sideways action or the last week or so, gives this SP500 a double or even triple top. Of course, those kinds of patterns can work just like another 4th wave, so we need the markets to show us some more downside.  We need more evidence to help confirm a bigger trend has just started. How many times has this happened before, when the declines or mini crashes just charged higher.  

This entire top has been the most problematic when we compared the other two peaks since 2000.  The 2000 and 2007 peaks were much easier to read, but they were coming off impulse wave runs. Since 2009 we have had a major bullish phase that every major expert wave analysts did not see coming in early 2009. 

I never though the markets would go this high again, but when they wouldn’t stop,  all other wave counts should have been trashed. I gave up hope on any GSC degree wave counts and started to count everything one degree lower in SC degree.  Of course that only lasted a few years before I had to reboot all my wave counts, in Cycle degree. 

Cycle degree is a full 2 degrees lower than what the majority of all wave analysts sees today.  In late 2008 Steven Jon Kaplan was already calling for the biggest bull market since the depression, while the experts were still playing around with a 5 wave decline. 

I’m not using Cycle degree just to be different, I use it because I count from a wave 2 base, and not from a 4th wave base like the majority do.  Since the 2000 peak in the markets not a single wave has developed, that can confirm any SC or GSC degree peak. 

Everything in stocks, wave 3 gets extended most of the time, and only rarely do the 5th waves extend. Then usually it is the last degree. 1987 to 2000 was a 5th wave extension, but only in Minor degree. For decades, they called the 1987 crash a Primary degree wave 3, which again is a full two degree levels higher than what I see and use.  

There may be no updates this Thursday morning, but I will post later in the day. 

 

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Nasdaq 100 E-Mini, Another Great Intraday Top

Early this morning, the Nasdaq created yet another spike to new record highs, before it slumped again. Until stocks start to show  a consistent declining pattern, we are never sure that this peak will hold.  I would love to see this market start heading much  lower during the rest of this week, as it is long overdue for at least another correction,  or the end of the big 8 year trend. 

Just like all the other indices, the Nasdaq should eventually peak at a Cycle degree wave 3 top as well.  Finding the exact wave that makes any top is very important as all other wave counts are based on it. Of course, those pesky expanded flats throw a monkey wrench into any wave count. 

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US Dollar Intraday Bear Market Update

We are one full trading day away from another month end, which can produce some wild moves and turning times. In this case the US dollar may have resumed its bearish trend already. I’m extending this decline, which means smaller degrees have to show up, as we may still be well short of any 1-2 wave in Minute degree. 

Right now my degree levels are scraping the bottom of the stack, with only one degree left, based on the degree list that the Little Blue Book provides us with.  I will not show any wave counts that are smaller than the 15 degrees shown in the book. This will tell us that all realistic wave degrees are being used up, which they all must eventually fit into the bigger sequence.

There is nothing to stop the US dollar from making yet another high, and dragging this correction  out for a longer period of time. 

This Friday will be the jobs report, so expect some wild moves in the short term. Sometimes nothing happens, but the Payroll report has a huge following, and it can move the markets. 

This Friday may not have any morning reports, but I will update later in the day, and a bit on Saturday.

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Mini DJIA Bouncing Around Record Highs

This DJIA chart is just starting to make another decline, which can still reverse and even soar. Even though it looks like a new record high, it could be a fake. The DJIA still has not exceeded the March, 1,2017 peak of 21,106.   We are down to the wire as one  little fast spike up would create a new record high, which would move any Cycle degree top over to a new location.

This would make it about a Minute degree of a difference, which I can live with, but being out by 2 or 3 degrees, would be unacceptable.

This market has produced many wild rides, combined with some stunning reversals.  This may continue for some time into the next bearish phase, so pretty impulse waves will be hard to find, except for some very small degree levels. The 2009-2017 has been a diagonal 5th wave bull market, or that’s what I see it as.

Not until this market creates an obvious decline that the majority of bullish investors, will not suspect that a bigger bearish phase is coming.  We are 5 months away from the 30 year anniversary date of the 1987 stock market crash. Usually  the media will call  it  a “Black Anyday” kind of an event, but by the time they may do that, the bearish phase will be over. Well, maybe the first stage of it, as the markets, even rallied in 1930 before they resumed any decline.

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Crude Oil Intraday Gyrations Review

Crude oil created a very nice rally in the last few days, but has now backed-off. If a bigger move is still to come, then this correction should stop soon, and then start to reverse again.   What, I don’t want to see happen is that crude oil just keeps charging south.

Any “A” wave bottom may also extend any correction that we may be in, so short term we may get the “B” and “C” wave. 

I’m in the process of eliminating the 2008 Cycle degree wave 3 positions, as this could have been a fake top,  if any part of the oil bull run was extended.  With 2008 being a potential wave 3 in Intermediate degree this would make the 2016 bottom the 4th wave bottom in intermediate degree. 

This does not mean some super 5th wave will appear, extending itself to untold price highs, as at best it may just produce a major double top. 

For now we have to keep getting corrections as this bull market and we have a few more choices to consider. 

The Gold/Oil ratio has spread a bit more which is what happens, when oil becomes a bit cheaper when compared to gold. 

This Gold/Oil ratio is sitting at 25.69:1 today, which is still far away from any extreme that we hope to see sometime in the future. 

With a potential 4th wave bottom in early 2016, we now have a few other choices of patterns that can emerge. From the 2008 top to the 2016 bottom, could also work as a flat, as the “C” wave looked a bit short to fit well into a zigzag.  Since the entire oil bull market can fit into a diagonal, a zigzag would be the better fitting wave structure. 

We have a long way to go, before we can confirm that 2008 top, so we have to look for corrections as those are the waves that will push a bull market higher. 

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Gold 2011-2016 Bear Market Review

Early on, in this bear market, I found it strange that the declining waves were a bit small to flow well from a Cycle degree wave 3 top.  Also that $1050 price low,  had no real meaning for a major Cycle degree bottom to be completed. 

As of now I will be working gold like the top is only an Intermediate degree top, which would give us a bear market just a few months shy of a 5 year decline.   Time wise an Intermediate degree bear market, would fit much better than a Cycle degree bear market. 

In the long run being out a full 2 degrees is not an option. Gold’s entire bull market fits closer to a bad impulse, more so than a pure diagonal. This would allow for 5 waves to form in our present bullish phase. 

Changing the bottom in 2016, would give us more room for this present bullish phase to travel.  I have to be aware of any early  degree failures, but gold should clear that $1375 price level with little problems. Breaking above any resistance will also help,  because if the bigger bullish phase is true, then all resistance price levels will be left in the dust.  

In the weeks to come I will be looking at all Cycle degree wave positions in all my commodities, which is impossible to do in a short time. All of the monthly charts will need to be reviewed and counted again.

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Silver Weekly Chart, Elliott Wave Count Review

It would be fantastic if commodities moved just like stocks do, but the sad fact is that they don’t.  Fear dominates everything in commodities, and the massive leverage all commodities have is one of the main drivers of this fear.  This fear creates the wild spikes that flip flop around, like a fish out of water.  

I have been reviewing my larger degree wave counts, as Cycle degree wave 3 for 2011 may have been too aggressive, and therefore too early with the Cycle degree top. The entire silver bull market, which started in 1993, is one of the best examples of a diagonal run that you can find at this time, which keeps any idealized 5 wave impulse on the endangered species list. 

2016 is now a potential diagonal 4th wave in Intermediate degree, and technically we should get another zigzag to new record highs. This is also when a double top could form with only marginal new highs. That scenario would still be far away, so we do have time before we need to make a major decision.   

With silver it will be a real challenge,  as I don’t think I can switch to 5 diagonal waves up in Minor degree at this time. Switching to a wave count that may be marginal, will help to eliminate it, as any far off wave count will surely fail.

These changes do not necessarily distort any long term bullish view I already have, which is a good thing.  Knocking a Cycle degree wave 3 top down to an Intermediate degree wave 3,  is a change of 2 degree levels.

The mid 2016 peak I show as a wave one in Minute degree, but I may have to change that to a Minor degree. Any time we put a wave count up, it is prone to fail sooner or later, but we have to run them until they no longer make sense. 

I may change gold and oil as well, as all my Cycle degree wave 3 positions regarding commodities, need reviewing. 

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The Bitcoin Mania: Has The Bubble Popped?

 

The Bitcoin Mania seems to have gone vertical, but has now backed off substantially. In no way, shape or form, would I agree with Bitcoin being an investment, as there are just too many things wrong with it. 21 million coins will not cut it for Bitcoin to go mainstream. There are many competitive E-currencies coming out which I think most of them will fail as well.

I do not have the time to create detailed wave counts for Bitcoin charts as  it is not an asset class, and has no real correlation to other assets. In May on about the 25th, Bitcoin peaked at about the $2766 price level, and has now proceeded to crash in what looks like a clean impulse wave at this time. Bitcoin prices seemed to move at extreme speeds, and it still has to fall well below $1600, before any bottom could happen. It would not surprise me if Bitcion eventually fell below that $1000 price level.

Since we  have no real Bitcoin coinage to touch and feel, you are paying the price of an invisible electronic dollar.

It is next to impossible to figure out if Bitcoin is cheap or expensive, and it would be a good idea to create a Gold/Bitcoin ratio. I have started one, but need to do more calculations to get a better picture.

In July, 2016 Bitcoin was low in price, when we could buy 2.74 Bitcoins with one gold Troy ounce.  With the recent top it took 2.74 Troy ounces of gold, just to buy one Bitcoin!  This is a very dramatic shift in the Gold/Bitcoin ratio.

Another interesting point I noticed, was that Bitcoin crashed exactly on the new moon date.

I only posted this because Bitcoin is in the news, and intense news usually can give us a major top. 

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US Dollar Bear Market Review

The US dollar has taken a pretty good hit so far, but last week it had started to rally.  I dropped my degree levels down by one,  as I think we would still be too early for any Minute degree wave 1 to be completed.  Besides that late April and early May rally looks too much like an expanded flat, which connects the zig and the zag together. Connecting zigzags is the name of the game when the markets move in a diagonal pattern.  Many times it can take a long time to figure out where in this diagonal wave structure,  we may actually be at.

Being on a wave 3-4 location, could take a little longer to play out, but I like to keep the options open, that the US dollar can resume its decline at any time.  Any single zigzag will always have alternating patterns between the A5 wave and the C5 wave, while the B3 wave can contain just about any simple or complex corrective waves.  Complex patterns are all part of the correction  process, but a single diagonal is part of the 5 wave impulse sequence.

A very smart wave analyst asked me at a face to face meeting,  if a wave 2 can be a diagonal? I didn’t have a good explanation at that time, but if I was asked the same question again, I would say, “No Way”. You can’t have a diagonal wave as a wave 2 correction. Wave 2 corrections require 3 wave patterns not a single 5 wave pattern, as diagonals are part of the 5 wave impulse wave structure.  

The little blue book makes this very clear, but what they only show us, is the ending diagonal. Every diagonal should be labeled, ABC1, ABC2, ABC3, ABC4, and ABC5, so to make it very clear that it is identified as a separate wave structure.

Diagonals cannot always be labeled like this, mainly due to space limitations at these small degree levels. A person could even get away with labeling diagonals with, W, X, Y, X and Z waves, but then the “W” wave must always start as a zigzag.  We can’t have a flat in the wave “W” position, just like we can’t have a flat in the first wave of a diagonal.  

 

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Mini DJIA Bull Market Review

Quick Notice

This blog has seen a record amount of pages read this month, with over 22,300 pages read already.  An average of 1 free member has been signing up per day as well. Thirty free members signing up per month, is what I would like to have as a base. 

I would like to thank all the long term readers in the Gold Club that have helped to support the costs of running this blog, as it seems new Gold Members are not finding value to want to sign up for the $59 lifetime access.  About a week ago the pages read per day at my free blog have crashed, but the traffic has seemed to pick up here.

Combining all the pages read between two blogs, we could hit a million pages being read later this year.

On most US and Canadian holidays, there will be reduced postings or even none at all, as I need to take downtime as well. I post more frequently during trading days in the week than most all other Elliott Wave sites do, which EWI has already told me was the reason they wanted to place ads on this blog in the first place.

 

At this time the March 2017 peak still seems to be holding, but by a slim margin.  I would rather see a clear cut pattern to break out to new record highs, but until that happens, I have to stay with the present wave count as being a bearish rally.  We still would end up with different stock index peaks for any Cycle degree wave 3. The Russell 2000 has also gone well past its peak  and it seems to be leading the pack at this time. 

All this DJIA chart has to do is fall below the May bottom, which then could be the start of the next leg down. All the record lows that have been established in the last three months or so, should all get retrace as well.  There are many protective sell stops below any vertical price moves, and with computerized high speed trading, humans have little time to react.  

The VIX is also approaching new record lows, which means that investors are about as complacent as they can be, and they see no storm clouds on the horizon.  

They don’t see the bears as well, but I know that the bears are just hiding in the forest, watching the stock bulls becoming more delusional, from the fumes of methane they have been sniffing from each others asses. 

 

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Crude Oil Crash Review

Crude oil has pushed south about as far as I would like to see for a wave 2 correction. It will be very important to see if oil does not keep acting impulsively, but starts to go sideways for too long, or turns very choppy too soon.  That would mean that the entire May rally could have been a fake, which would send oil to new record lows. This is my least favorite option but we have some time as another counter rally would get in the way.

The Gold/Oil ratio got better when I calculated it this morning, as it is pushing closer to 25.72:1.  This was the ratio level back in 1999, at the depths of the world oil glut. We all know what happened to oil after that, as it soared from around $10 to $147.

Back in early 2016 crude oil also started in a bull market right in the middle of a major world oil glut. Of course, all the experts were squabbling, how much lower crude oil would go. Again, oil proved the experts wrong, and when they believed that oil will never see $100 again, it will rally and go above $100, just to prove them wrong. 😛  “Groupthink” or consensus forecasting by the majority will never work. It doesn’t work with Elliott Wave and it sure does not work for climate change.

Anything that comes from the mouth of OPEC is never believable, as they can cheat and fake stats and find a way around Iranian sanctions. Does it make sense for Trump to want to sell oil reserves into a world oil glut? Talk about selling low?  

In the end, it would take very little disruption in world oil production or storage, to change the crude oil price dramatically.

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T-Bonds Weekly Chart: Head&Shoulder Review

It seems that I have been working on the T-Bond bull market off and on for decades, but the 35 year bull market was so choppy that impulse waves were next to impossible to find. It wasn’t until about 2013 that I started to focus on looking at the markets from a diagonal perspective. 

 Good impulse waves are next to impossible to find, in a diagonal bull market, but yet many experts count them like impulse waves.  They should be counted like zigzags connected together, with the ABC1, ABC2, ABC3, ABC4 and ABC5  labels. A diagonal sequence belongs to the 5 wave impulse sequence, and in the book they call it an ending diagonal. Triangles can act just like diagonals as well, but that still  may be much harder to confirm at this stage. I’m pretty sure that the T-Bond bull market is a Cycle degree, but at this time it is unclear if this was a triangle 4th wave rally or a 5th wave diagonal rally. Both options are just about always open. 

T-Bonds are sitting right at a H&S pattern, and they have started to rally. This bond top, sure looks like there is a potential expanded flat hiding in plain sight, and that the May crash bottom is just the start of a “C” wave bull market phase in Minor degree.

All I would have to do is drop the Minute degree start, down one degree level, and nothing else would need to be changed. Any potential start sure has been looking like pretty good impulse waves, so that would mean most all the other waves will follow along, until we run into 5th waves. This “C” wave sure would be a nice refresher for a change.

I labeled the potential peak above the new record high, but it can go much further  as “C” waves in a zigzags can stretch far out of proportion. Nothing is even in the waves of the real world, and the 1929-1932 crash is a clear example of how zigzags can get bent out of shape. 

The T-Bond bull market may not have died in 2016, and exploring the options would be the smart thing to do.  Either way a new record high would have to be achieved in the longer term. Short term we need 5 waves up in Minute degree, so we have a long  way to go before it is completed. 

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Crude Oil Intraday Crash Review

I was expecting a correction, but crude oil crash much further than what I was anticipating. When that happens then this forces an instant review, looking at it from a diagonal perspective.  Sharp crashes like this in a bull market, are very bullish corrections. It is when spikes reverse and they start to point up, when we can expect a decline. 

In a bull market, we always need higher lows, which are all made from any type of a 3 wave structure. Many of these market  spikes are more computer trading related actions,  as no human can panic this fast. Think of it as a small flash crash, as history shows that after a flash crash, the markets have pushed much higher.

Short term we are in some bearish action, but longer term oil has much further to go. The day will come when oil could cross the $100 price level again, just to prove all those experts that say oil will never go above $100 again. The markets have the ability to always prove the majority wrong as “Groupthink” does not work.

 

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Nasdaq Intraday Update: Soaring To New Record Highs!

The markets soar to new record highs one more time, which I can count as a pretty good impulse. I believe we had an expanded wave 3 peak, followed by a great 5 wave sequence crash. The best part about this it eliminates any double or triple top scenario making it easier to count from.  The VIX also crashed close to new record lows, setting up a potential bear trap in the VIX and a major bull trap for stocks.

To help and confirm this potential top the Nasdaq needs to retrace this entire 5th wave, and more to lock any top in place.  As I post the markets seem to have peaked, which looks promising.

Sooner or later the potential wave 3 in Cycle degree may find a permanent home, which will last forever. Many wave analysts are in SC and GSC degree already, but those high degrees, are far too insensitive to be of any use. Missing the biggest bull market since the depression is not a failure of the EWP, but a failure of the human condition called, “Groupthink”  or consensus wave counting. 

The new moon is today, which can give us great reversal times, followed by a holiday on Monday, may entice the stock bull riders to take profit.  Either way, another bull trap in stocks is being setup! 

Many times, markets can push higher as, hidden degrees can still show up. On the impulse above we would still have about 3 degrees left that can still show up. 

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Mini SP500 Intraday Review: Soaring To New World Record Highs!

The markets have answered a nagging question, as many of the indices have now given us an upside breakout. Traders have been brainwashed since the 70s to ride the breakout. In reality they are in a major bull trap, but do not see it that way. 

My main concern was that the markets will give us a very fuzzy double or triple top, which would create a real wave counting headache.  The markets are still soaring as I post, but with the new moon today and a holiday on Monday, the markets may decide to sell off and take profit. 

I will keep the commentary on the short side when the market moves violently, as there are just too many wave counts that I can cover myself.

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Markets Soar As The VIX Crashes: Another Bear Trap!

This month the VIX has made some violent moves, but this is the nature of the beast when, fear and leverage are combined. This chart is now showing us another great looking H&S pattern and at the same time setting up a great VIX bear trap.  Inversely, it would be setting up an SP500 bull trap. I have seen many of these and it always reminds me that the market gremlin is giving stock investors the middle finger salute.

All the stock indices soared to new record highs, except for the Russell 2000 which seems to be still leading the race down.

Last weeks COT report, had the commercials add VIX contracts with 9885  contracts, and at the same time removing 16,198 short contracts. Once combined, this is a very substantial shift in their positions, leaving room for only one direction to come, and that is up!   Shorting a position like the VIX is insane when we are at record lows already, but this is what traders love to do.

One little fast drop down, could be what it takes to force a reversal, but longer term the fear index will rise again, and cause all sorts of angst with investors.

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Silver Bull Market Intraday Update

I think we had a major bottom on May 9th after which it started another run heading north. Well, not exactly true north, but north east. This has a long way to go and we are not even at any wave one in Minute degree, as we have to build up to it. The first major hurdle that silver has to go above is the wave 1 top at about the $18.70 price level.

I’m sure that would produce some resistance, but if this bullish phase is as strong as I suspect, it should eventually break out and travel much further.  My wave degree will need some adjustment, but that is not a big deal. Eventually we have to review the daily charts to make sure everything still fits together on the bigger scale.

One thing about intraday scale charts is that they disappear, so we can never go back to recount the intraday scale a few years down the road.  I will not commit any logic that we may be thinking that silver is heading to the moon or some other ridiculous $200 price forecast, as this may all be part of a big “D” wave rally.  We have been in the “C” wave bullish phase for months already, and that should continue for the rest of this year.

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T-Bonds Intraday Bullish Review

For the last few days I have been looking at the huge T-Bond bull market which started way back in 1981. It was a bull market that was so choppy, that it can only work as a diagonal wave structure. In mid 2016 this huge bull market came to an abrupt halt, and then proceeded to crash. Bonds have been in a rally, which had a potential wave 1 top in Minute degree, and then crashed which sure counts out as a zigzag.  This zigzag crash gives us a clue that this T-Bond market will retrace all of wave 2. 

Following the wave 2 bottom, it sure looks like another impulse wave has started which could be in a 4th wave correction.  We still would need to add on a 5th wave. This 5th wave could extend, but would have to end on another wave 1 peak.  I can spend days on the big bull market and still not come up with a viable large degree wave count. I have to hunt up a very big historical chart,  as going back 36 years just doesn’t cut it.  

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Mini SP500 Down To The Wire Intraday Review

From the May 18 bottom this SP500 index just soared and is now just short of breaking to new record highs. Hopefully by the end of this week, this will all get cleared up. Not much I can report this morning until this potential bearish rally implodes. Those words may sound a bit harsh, but all the other indices are also on the borderline, of an upside breakout. 

The crash of the VIX has now closed the Mother Of All Gaps, so it can be ready to rally as there are open gaps above present VIX prices that need filling. 

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Crude Oil Bull Market, Intraday Potential Correction Review

 

Crude oil has been making a very impressive move, which still looks like a fairly clean impulse wave. So far I see a 1-2, 1-2 and another 1-2 wave count, which suggests that any wave 3 will be the extended wave.  Right now we are in a small correction, which would still have more to go before it is completed.  Crude oil could drop to the $50.60 price range before it cranks up again. 

After this correction, we would be at the start of a 5th wave, which in commodities have a tendency to extend dramatically.  Any wave count can fall apart very quickly, and that would happen if this correction crashed much deeper than what this potential impulse suggests.  Oil traders may read into the selling of government reserves as a price driver, and oil could suddenly crash. That will not kill a bull market, as it would take much more than one bit of bad fundamental news.

When the market recovers from any supply and demand worries, or it does nothing, it will just reinforce the bigger bullish phase. 

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Nasdaq Intraday Bull Market Update: Down To The Wire

Once again the Nasdaq is down to the wire before breaking to  a new record high. The sharp drop in May could have been part of an expanded pattern which, if it is true always sends the markets to newer highs. Apple, which is the big elephant in the room will not maintain its price no matter how many freaking iPhone 8 models that the experts figure it can sell. 

On this Thursday we are going to hit the new moon date, followed by a holiday on Monday. The new moon dates can produce dramatic reversals in stocks, plus we are getting closer to the end of the month as well.  If we reach a new record high, then the next correction should go much deeper, than what we have had so far. The entire rally that started back in mid April would also be completely retraced. Eventually the entire Trump rally will also be left in the dust, which the US dollar has already done.  

A new record high will force the Cycle degree wave 3 to be moved to a new home.  All my work on this blog is dedicated to tracking and confirming all the historical 5 wave sequences in Cycle degree.  My goal is to find a permanent home for Cycle degree waves 3-4-5, as without them no SC or GSC degree wave patterns can develop.

My work is at a minimum 2 degrees lower than what the majority of expert wave analyses is working with, and back in 2000 my wave count now is a minimum of 4 degree levels lower. 

 

 

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US Dollar Daily Chart, Bear Market Review

A bear market would not be the right description if the US dollar erases 8 years of upward progress. There is still a very high probability that the US dollar bull market was a big bear market rally itself, when we completed a “D” wave top in Primary degree.  I think I was too early with my Minute degree wave count, so I have started to extend our present pattern. The recent May crash could also be ending at another zigzag, so we may get a surprise fast move up. 

The US dollar is not going to jump back into a bull market for several more years, but we should see a rather large counter rally when we reach a potential “A” wave in Intermediate degree. This will correspond well with a potential strong top in gold.   The commercials are still net short, with the speculators net long. When all this reverses, then the US dollar would be in a position to produce a very strong rally. This should still be a long way off. 

Short term we may see a small rally, but longer term, my bearish outlook has not changed.  The stock mania regarding the US dollar has gone into hiding, but we could see it return with any good stock market rally. Many will be just short term moves. 

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Crude Oil Intraday Bull Market Update.

I have already switched to the July crude oil contract so this will give us different prices than what you will read about by the mainstream. Double checking that, it works out to about a 17 cent difference, between July and the cash price. This is miniscule in the big scope of things, and does not change any Gold/Oil ratio as well.

Crude oil has been a challenge to get a decent wave count on, but we know that there is still lots of upside to go.  In this case oil will still break out above the $58 price level, with the potential to hit $89-$115. It may even take until the spring of 2018, so these forecasts are not going to happen overnight.

Right now the Gold/Oil ratio is at 24.5:1 which is a bit more expensive, but nowhere near any extreme at this time. Any super bearish mood, opinions or bearish fundamental reasoning, will get trashed every time, which itself is an indicator that the bull market in oil is still alive and kicking.

Any bearish supply numbers mean very little in a bull market as those types of reports run off like water on a ducks back. Elliott waves work the opposite of fundamentals, as all oil bull markets started right in the middle of expert declare world gluts.

This bull market will not finish until the experts have declared that there is a shortage of oil in the world. As soon as the “Groupthink” is all warm and fuzzy declaring shortages, then the oil market will crash.

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Gold Intraday Bull Market Review

Since the May bottom gold has not disappointed the gold bulls as it has soared. At present,  gold is making a correction, and it will be important to see how deep this correction will actually go. I have counted this as an impulse, but keeping an open mind that we can be in another diagonal as well. Gold still has about $115 to travel before it gets close to that $1375 price level peak back in mid 2016. This $1375 price level is 1.618 times the 1980 price peak of $850, so it is an important number from my perspective.

There is a very good chance of gold heading to a potential “D” wave top in Primary degree, which still has a long way to go.  Any potential Primary degree “B” wave will not fit into a triangle anymore,  but would end up making an extra move. (3-3-5)  A single zigzag will only give us a 5-3-5 count. Again, we have lots of time before that call has to be made, as many contrarian indicators must also come in to support the end of a bull market.

Many traders don’t understand when the markets make higher lows, that it is in a bull market. Many times they can sell out exactly when they should be bullish. The majority does not understand the difference between a big bear rally and a bull market, as they only care that it keeps going up!

 

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Mini Sp500 Intraday Review

The markets are starting to look like they are in a correction. This is debatable as the markets could end up being short of achieving and new record highs.  We had a small H&S pattern which the markets just ignored and pushed higher.  The VIX has crashed all the way back down and now has closed off the big open gap, but has also opened a small gap above present prices.

This is a very close call, and I would not rule out that these markets can still push to new record highs. Fear will return, but it may take the rest of this week to find out. The markets have ignored most all bearish news, and have pushed higher after the fundamental bad news came out. 

The Nasdaq is ready to hit another potential extreme, but we are still a bit short of achieving that. The Russell 2000 is far advanced down a slippery slope, so these bullish moves by 3 indices are masking the bearish picture of the Russell 2000. 

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Canadian Dollar, A Look At The Weekly Charts

This weekly chart is  showing about 7 years of history. I believe our Canadian dollar also finished its Cycle degree wave three,  and that it has been in a bear market ever since.  In early 2016 that story changed as the CAD finally woke up and charged straight up.  At first glance I could turn this into a potential 5 wave sequence, and give you the idea that the CAD is heading to new world record highs. 

The problem is that fast starting moves like this is more likely to be an opening “A” wave, which have limited life spans. We had another potential bottom in early May, so that means the CAD eventually has to clear that Intermediate degree I’m showing. Any “C” wave bullish phases can turn into a diagonal with the C5 wave starting to get bigger.

When that happens, we can scratch our heads and ask what is happening, but from my perspective, this would be very normal as zigzags always alternate between the A5 and C5. It is the B3 wave that can give us all the problems. 

The CAD has lots of room to move up, but limited downside. Last weeks COT report had the commercial add a substantial amount of long contracts, increasing their already very strong net long positions. As usual the speculators are doing the opposite and have been adding short positions.   The CAD has much better odds of going up than it ever has of crashing to new record lows.

Combine that with the Market Vane report, the CAD is coming from an extreme low reading of only 6% bulls, which is an extreme reading by any definition.

When all these indicators have reversed their positions, then it will be time to make another wave count assessment.  For the next year or so, or until the CAD has a strong upside breakout, I will keep a bullish outlook for our dollar. 

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Apple Record High Update

Last week the Apple stock price once again broke a new world record at $156.65, but has now backed off a bit from this extreme high. In a fit of madness we could see another record high, but the odds of that happening are becoming less  and less. Apple is also close to a  potential Cycle degree wave three top, after which we should expect a 3 wave bear market, of some type. Flat, zigzag, or a triangle is always one of our three choices, for any correction, but we have to do some Sherlock Holmes deductive reasoning, figuring out which pattern will have the best odds of coming true. 

A triangle is my last option, and a flat would be my first option.  Since I view all the markets from a Cycle degree perspective, we have to look to the previous fourth wave of one lesser degree,  to find a potential bottom for a Cycle degree wave 4. 

The May 2016 low is not the previous 4th wave  of  one lesser degree as  it may be way back in mid 2013 that Apple stock,  may have to correct down to. This is centered around another huge open gap down at the $55 price level.  Even before Apple can ever reach those bearish extremes, it  still has to crash through two huge open gaps first.  Those gaps may provide some very good reversal positions for a “B” wave rally, but we will not know until we get close. 

Sure, I love Apple products and do all my work and play with them, but that does not stop me from being very bearish,  in the longer term. 

The Gold/Nasdaq ratios have been hitting extremes, with the  Gold/Apple ratio also bouncing around at the extremes.  The Gold/Apple ratio sits at 8.20:1, which is a bit cheaper now, but this ratio has a long way to go before Apple becomes cheaper to the point it can become a long term hold again.

We need a very obvious mood change with this Apple chart,  and that happens when Apple makes an obvious move, pointing south.  

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Mini SP500, End Of The Week Review

For the last few days last week, the markets soared, which produced a small spike, before this SP500 started to back off by the end of the trading day.   This also completed a potential H&S pattern, which at extreme tops can be very bearish indicators.   We are running into the same situation, where the horizontal line  acts like a line drawn in the sand.   As much as I would like to keep this bearish wave count alive, I know how easily this market can still soar, and add on another 4th wave type pattern.   Until any big bearish move becomes more clear, I would expect violent moves in both directions to continue.

It’s not just the SP500 that can be ending a bearish rally, but the other indices are following along, with the Russell 2000 leading the pack.

The VIX has also crashed right down to the opening gap, so we have to see if that gap will still get closed off, next week.

There may only be a few updates on Monday, as I try to take some downtime on any US or Canadian holiday.

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Crude Oil Intraday, End of The Week Bullish Review

Crude oil has performed very well since its bottom in early May. I’m starting out with a very small degree wave positions, in Submicro and Micro degree, which I show starting as a diagonal count as well.   So far this rally  can also work very well as an impulse, but there are no real extensions just yet.   We need more evidence before this entire bull market can be counted as a part of an extended wave 3. The exact same wave pattern can be counted as a start to a 1-2, 1-2, and 1-2 wave count. 

The last little zigzag has travelled  just about as far as it can go before, before it no longer works as a zigzag. Either way,  starts to big diagonal runs can always trick us into thinking it is just another correction, when in reality we can be in a much bigger bull market.   This June contract shows that we eventually need oil to exceed $57.50, but in the long term still could reach that $89 to $115 price range.

The Gold/Oil ratio reached a 24.83:1 reading, which is a bit more expensive when we use gold as money, but it is still in the realm of reality.   Market Vane also shows that we had 31% bulls counted last week, which is still extremely respectable as well.  There is lots of room left for many bulls to jump back on this oil bandwagon.

Last month they were worried about inventory levels, and now they question if global demand has surpassed supply?

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