Daily Archives: June 9, 2017

Mini Nasdaq Intraday Crash Review On A Full Moon!

This morning the markets peaked and then proceeded to decline with gusto and a sense of purpose. It is still declining as I post so hopefully we will get more than just another simple correction.   Until we see a clearly defined sequence, all options are still open.   From here on it will be important to follow the intraday patterns to figure out early if we are heading down with diagonal wave structures.

The top was more like a pure diagonal 5th wave slightly extended. Hopefully we have a long anticipated new trend to look forward to, as this so called bull market is getting pretty boring. I love bear markets as they are a real challenge and the thought of a Cycle degree 4th wave correction will keep us busy in finding the turnings, in a market that can have 3 variables. A zigzag, flat or a triangle, are the simple choices with the triangle being the very last pattern I would expect.  It make take a while, but Cycle degree wave 3 should be our new largest degree top. 

We are not in SC or even GSC degree as those wave counts are based on 4th wave bottoms which are all 5th wave extensions. All my Elliott Wave work is on a wave 2 base. In other words wave threes must be the longest wave in the general stock market. 

Besides 5th waves are always the weakest an only rarely does the 5th wave extend. 1987 to the 2000 peak was a 5th wave extension in Minor degree. 

I looked at the date and saw that today is the full moon, which is usually bullish for stocks. This time the full moon gave us an exact turning day. This does not happen consistently, but the moon dates sure can give us potential reversals.  

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Gold Intraday Crash Review: When Will It End?

For close to 3 days gold has been on a steady decline which I believe is just a correction in a bigger bull market still to come. One more small downside wave may still happen, which may take by early next week to clear up.   We are also coming to another potential right shoulder with the head peaking on the 6th of June.  Gold has come back down very close to the previous bull market correction bottom, so this looks an ideal time to turn as well. 

At $1295 gold ran into resistance which also produced another H&S pattern. If the bullish phase is alive, then this $1295 barrier will get trashed and left in the dust. Preaferly, the gold dust variety.  

The chances are good that in late 2015 gold landed on a 4th wave bottom but in Intermediate degree. This does not mean a super duper 5th wave extension,  as we already have wave 3 as the extended wave.   It would be something if gold soared to just $1929, just barley passing old record highs, before it crashed once again. That will not happen anytime soon, as we have a long way to go before it can get confirmed. 

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VIX Daily Chart New Record Low Review

The VIX has now broken to the downside, creating a new record low in the process. The crude wave count that I do have, is all about diagonal wave structures as there are only a few great looking impulse waves between the zigzags. The entire VIX pattern is diagonal all the way, so if you want lots of practice looking for diagonals waves, then the VIX is one great place to start with.

Stocks have now backed off a bit so we could see a rise in the VIX  or a complete bullish phase that will impress us, once it gets going.   A bear trap in the VIX is a bull trap in stocks so they really don’t travel without each other moving inversely to each other. 

Many consider the VIX a pile of bullshit, but don’t tell that to the contrarians the called  the bottom of the 2009 crash, followed by the peak in the VIX in late 2008.  I show the 2015 peak as a wave 4 in  Intermediate degree which was a much smaller peak than the peak of late 2008.

Now we have to see if it all holds and the VIX starts to make another run north.  

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Mini SP500 Intraday New Record High Review

Since early May this SP500 chart and others, have pushed north constantly breaking new high records along the way. This time I am counting it out as a potential diagonal 5th wave, which is a pattern that can contain very choppy and overlapping waves that just do not fit into impulse waves. This has been the theme since the great bull market began back in March 2009. 

About the only good thing right now is that we don’t have any double or triple tops to worry about. In other words, if we are lucky we may end up with just one peak to count from,  instead of many that we could end up with.

 If I talk about a single top as a good thing, I have to be careful that the Market Gremlin doesn’t hear me, as it will do everything in its power to screw us up, by giving us many multiple tops. 😎

This morning the Mini-SP500 reached 2445  before it backed off a bit. Even now we could get another little extension that will kill every attempt at a bearish wave count. Resistance is futile and all we can do is track the small waves, and wait until this run terminates. 

We need a peak that will hold for the rest of the year, after which the markets could start a real bearish trend. The DJIA has joined the SP500 in breaking new record highs, with the Nasdaq ending a bit short of a new record high. 

Both VIX indicators have pushed complacency to new record lows, creating the perfect bear trap in the VIX. A bear trap in the VIX, means a bull trap in stocks so I remain bearish regardless how long this bullish insanity lasts.

Of course, all the experts will remind us how logical and sane that this stock market is, to justify such a high stock market.   Participants know they may be in a bubble, but they think they can get out just in time. Good luck with that!

 

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