Monthly Archives: October 2017

Crude Oil Intraday Highs Updtae

Crude Oil is struggling higher and is now creating another small spike to the upside. The October rally has been very choppy, and I don’t expect that to change anytime soon.  No real clean 5 wave impulse waves seem to last for very long, so any bullish phase can be part of a bigger bullish phase still to play out. When the markets are this wild, then sudden crashes can happen when we least expect them to. 

Crashes usually produce a new set of 3 wave declining patterns, which are just corrections in a bigger bull market still to play out.  Oil still has to cross that $58 price level, with this December contract. That would just confirm that what we did have since the 2017 peak, was a correction.  Switching between chart time periods does distort the charts, which distorts any wave count we can produce. 

Many times when the oil price does drop, many can get into a panic thinking it’s all over. It takes more than just a price drop to kill a bullish phase, as more bulls need to be on board pushing oil to a very expensive Gold/Oil ratio. This has not happened in any sense of the word, but could happen once crude oil breaks out and heads much higher. At 23.27:1, the Gold/Oil ratio is just not enough at this point, to help forecast another crude oil price crash. 9:1 and 17:1 where the two ratios that oil crashed from.

What it will take this time, is uncertain, but an average between the two extremes is about 13.5:1.  It still could take a full year for this to play out, and fund flows will show up when it does. Steven Jon Kaplan is very good at tracking fund flows, but the media will also report fund flows.  We will only know about it, if we are listening or paying attention to these contrarian indicators. 

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Mini Sp500 Intraday Record High Review

On Friday the SP500 peaked at 2580 which produced another world record stock market high. This market is trying to push higher and go for yet another record. I’m sure not going to get in the way of that, as this market is full of short term surprises.

I don’t think there is another 5th wave extension to come as wave 3 seems to be the main wave that has extended.

Long term this market is doomed for a severe correction as no trend lasts forever. What will trigger any correction is never that obvious before it happens otherwise the majority could take advantage of it and become wealthy. The majority has only become wealthy on paper, just like in any other boom cycle, but “On Paper” is where it usually stays.

Big name companies are going under in the US and Canada, erasing a massive amounts of shareholder value. Sears in Canada is history, and the crash of GE has already erased $100, billion of shareholder value.

When I checked this morning the VIX still has to close a gap at $9.80 so that could keep this bullish phase, going a bit longer.

In my local area fireworks were going off in the streets, and I wish everybody a safe and happy evening.

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US Dollar Intraday Peak Review

Last Friday the US dollar peaked and then started to decline. No real downside spike has formed so this could be the start of the next leg down. I have to keep an eye open for another decline that can be a fairly smooth declining impulse, but we could also get a drawn out zigzag decline.  The ultimate low to beat is the 91 price level,  as a complete retracement is about the only thing that will confirm that the entire October rally was just another bearish rally or part of one.

I started with Micro degree and will update the degree level as this bearish leg starts to play out. If a shorter zigzag forms, then another wave 4-5 could get added on, but this is the least of my favorite alternatives.  If the US dollar bearish mood returns too soon, then an early counter rally would be close at hand.  I will not emphasize the COT reports too much as they work best at the extremes.

Our Canadian dollar has also turned in the last day or so, but it eventually must reach a new high, if its bullish cycle is just a correction.

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Nasdaq Hits Another Record Intraday High!

We can now add 6250 as another new world record high to the Nasdaq long streak. It just keeps going and going just like the Energizer Bunny in commercials. 

Yes, there could be another record high, but each new high is also the time for another correction.  It looks like five waves have formed, but a long zigzag will also work at this time.   So many times, a decline has started after which it soared again that it is better to be cautious, than calling for an imminent crash. 

I will not be a happy camper until at least the October low is completely retraced.  Many turnings can happen at the end of the month as well, so late this week we may know more.

 Stock Market Optimism Approaches Days of Roman Empire | Elliott Wave International

Elliott Wave International also sees the very bullish mood which they compare to the heights of  the Roman Empire. I will not go that far as the degrees are very different. It suggests that EWI is thinking about any top higher than SC degree. I firmly believe that we are closer to a Cycle degree wave 3 top than any other degree we can come up with.

Once again, I’m sure any higher degree wave count will not give them a price bottom and they will miss the start to another major bull market. Any wave analyst that starts a wave count of 5 waves in Primary degree will be wrong, just like they were in the 2008-2009 market bottom.

Everybody loves stocks right now, which is a complete reversal from the bearish mood the majority had in 2009. It has now taken well over 8 years, but we are also at a 10 year peak to peak record high with all the other indexes except for the Nasdaq. The Nasdaq has major different tops which may be due to the fact that an invisible expanded top may have happened in 2000. 

Stocks have become more synchronized with each other so that makes for a good case for a worldwide stock decline.

This is a chart of the 6 biggest stock markets in the USA where 6 charts are used. Any major Cycle degree decline could push charts well below the 2011 lows. 

Any big bearish phase may last until the 2021 time period when sc#25 starts to crank up again. 

 

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Crude Oil, Powering Higher, With Gold/Oil Ratio Commentary


Crude oil has powered higher, and now contains a vertical move. Short term, there may be more to go, but if the zigzag bullish phase is close, then we could see a correction sooner than we think.   Crude oil is still far away from crossing that $58 price level of this December contract, so I won’t be a happy camper until it does so.

One thing that did happen this morning the Gold/Oil ratio shifted to the expensive side at 23.57:1. This is about the second most expensive time since the start of 2017 and it would have to beat 22:1 if it wants to make a new record ratio high.  This is nothing to get all worked up about as the Gold/Oil ratio would have to compress much more. Any correction may bring it to the 24:1 range again, which seems to be normal at this time.

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VIX Intraday Crash Review

The VIX shows how violently it can move in both directions. It may travel to new record lows, but it is best to keep alternate bottoms just in case no new lows develop.  It also shows has fast the VIX can drop once a vertical spike has developed. On the larger scale the VIX spiked in late 2008 well before the stock market hit bottom in early 2009.   Steven Jon Kaplan called the end of the VIX bull market in late 2008, and he was right on the money. 

There is a small gap that opened around the 11.30 price level, so we know that a VIX bounce is coming again. 

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Mini SP500 Powers To New Record Highs: Again!

I have made a few wave count changes as the Mini Sp500 powered up to a new record high today. It still may not be finished, but a correction is due. Just about every time a new record is broken, a correction will happen. How deep, is pretty hard to tell at this time, but a zigzag decline could get us another triple bottom at the 2445 price level.  To be over on the bearish side, this SP500 has to dip well below any October lows. Under the September lows would be better as then it may not have enough time to break another 2017 record high.  

So far the markets have not been scared of any bad fundamentals percolating from anywhere in the world. Investors see no fear even when many analysts are talking about taking caution. Like they are going to listen, as there is fear of being left behind with a market that can melt-up. After every meltup, a meltdown is certain to follow. We are at all time record highs in the entire history of stock markets, and what wave count this will end at will be critical. 

The SP500 is still on a tear as it keeps pushing higher as I post. 

This is the big chart going back to the early 1800s with now wave count labeled at this time. I already have many SP500 charts up that start with the 1929 peak as a wave 1-2 in SC degree.  I looked for all the extensions which eliminated the 70s bear market as a 4th wave in Cycle degree. The majority of all expert wave analysts counts the 5th waves as the extended wave, which is impossible for several reasons, 5th wave extensions do not travel across multiple generations or seasons. 5th waves are the shortest, most of the time,  and they can be loaded with diagonal waves as well. 

The move from the 2009 bottom to our present top has many waves that are best counted out as diagonal moves, not as pure impulse waves. 

I follow the same idealized pattern that I use for the DOW  and we should be approaching Cycle degree wave 3 this year. 

 

 

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Nasdaq Intraday New Record High: Going For The Moon!

Once again the Nasdaq soars to a new world record high. This morning the Nasdaq peaked at 6180 before it started to correct again. As we can see the Nasdaq has gone, “Vertical”  this morning.  These moves can never be maintained for very long, as a vertical move also represents speed. Besides that we have a 3 wave rally that has been pushed to new record highs.  It’s not 5 waves until waves 3-4-5 show up, and push it much higher one more time. 

Diagonal waves behave just like this so we have to wait it out to see if a 4th wave is going to form. Even bad trend lines will not help us very much as any 4th wave may find support at the 6120 price level.  We have about 3 trading sessions before the end of the month, so this market could still fool around by trying to go higher. If the last move is part of a zigzag, then a complete retracement can happen.

Do you think a bunch of traders were clicking “Buy Orders” this morning because they all reacted to some news all at the same time. Logic does not make the stock market go up and down, as raw emotions do. Even with computer trading and robot algorithms running the show, humans will interfere and usually screw things up. 

Besides a few scary intraday crashes, nothing became of  the 30 year 1987 crash anniversary date. Maybe Halloween will scare investors again, but it’s a pretty scary thought,  if this drags out until 2018.  What we are witnessing is a tech mania that can only end badly. The talking heads will use every excuse under the sun to ignore the fundamentals, and keep reminding us there is nothing to fear as we are in a secular bull market with many years left to go.

I doubt that can happen as insiders have left the “Building” in May of 2017. Only the emotional traders are left in this market, and they could be trapped, because they all can’t get out at the same time.   

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US Dollar Daily Chart Rally Review

What we have on the daily chart is a vertical move, that could be the exhaustion wave, of a counter rally. The question is, if another wave 3-4-5 will still happen or if the US dollar starts to head south again?  Our Canadian dollar also took a big swan dive in the last few days, which just confirms the inverse relationship to the US dollar.   When the US dollar decides to turn down, then our CAD should start to turn up.

Let’s say that I have at least 3 possible tops in the larger degree, and that a zigzag decline is still realistic. This 4th wave rally can turn, and produce yet another long extension, before we get to the “A” wave position.  It  would be great if the US dollar ends on wave 1 in Intermediate degree.  The big question is, if the US dollar is in a big bear market or in just another bull market correction? Not until the US dollar shows us, that a zigzag of a bigger degree has formed, can I turn bullish on the USD.

The extreme bullish sentiment that the public signaled to us, on that late 2016 peak has not matched any counter bearish feeling of the same intensity. In 2008 the majority hated the US dollar, and in 2016 they just loved it again, so we still have a missing time period when the majority hates the US dollar again.

Any bearish mood we’ve had recently, is not enough for a new bull market to bounce from. Markets always behaved the opposite of what fundamentals may be suggest at that time.  In the commodity world, swings are far more dramatic, due to the massive leverage built into them.   

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Gold Intraday Crash Update

Since October 16th, gold has been in a steady decline. In order for the top to be a wave one, gold cannot break below the $1261 price level. We are getting closer all the time as every bottom has not held, for very long. The waves are much bigger than the initial decline was, and they overlap each other. This suggests a zigzag decline which can also travel to a new bearish low.  If that happened then the wave 1 top will not work and a Potential “B” in Minute degree would have to replace it.  All the gold bears love this decline, but emotional traders can turn quickly if a surprise fundamental report comes out. 

Fundamentals cannot explain the choppy decline, and if you showed this chart to an expert they could not tell you what made the rallies. The US dollar is the wild card, as it broke to a new bullish high today, keeping the downward pressure on gold. I have another few wave counts available, but they are short term bearish as well.   Only the best wave counts survive as we constantly put the best wave counts on the chopping block.

In the long run there is still a huge bullish phase to come, but from today gold has to move well over $110,  just to get near that $1375 price level again. Until we do gold is still in a corrective state. Which will come first, the bearish $1050 bottom or the bullish $1375 top? 

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Mini SP500 Intraday Crash And Rally Update

From the October, 23 peak the markets crashed and did end up with a long single spike before it reversed. The SP500 has now been to a rally, and has recovered  some of its  losses. There is a good chance that diagonal waves are forming, as another inverted zigzag wave 2 in Micro degree. For the market to show what side it’s on (bull or bear side),  it only has two choices at this time.  Soar to new highs or soar to newer lows! 

Halloween is coming on the 31st, so maybe the markets are playing  Trick Or Treat” already with investors.  It would be nice for the markets show us what it’s going to do long before the end of the month, but we know how uncooperative markets can be.  This pattern is starting to bunch up again, but it is more important to see if it crosses these two situations as a 5 wave run or a 3 wave zigzag type run. 

We are looking at a top that may be the last of the record highs and it is very important to see the last wave of the bull market, so we know which wave we have to start the new count from.   If we are oblivious to this fact and expecting many more years of returns, investors will get a huge shock, as the markets start on another decline. 

Some of the tech stocks are getting hammered with news of bad earnings, or surprise bad earnings report.  Even as a small degree potential rally, it still has room to move up. Worst case scenario would be, a triangle is starting to form, and we are heading up to a “B” wave. Chances are good that this will not get resolved by closing time on Friday, so we have to keep an open mind until this move is confirmed.  

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DJIA Intraday Crash Update

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

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

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

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

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

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VIX Intraday Bullish Phase Update

The VIX has been reacting like it should, which is a visual representation of fear in the market place. Many don’t care about the VIX  as they think the lower it goes the higher the bull market will go.  It also means that more and more investors were caught in a VIX bear trap.  All gaps below have been closed off, and one big gap in early September has now been closed off as well.   Since today was a very steep rally we should expect a correction, but not break new record lows again. 

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Mini SP500 Intraday Crash Update

As much as this decline looks promising to a  start of a bearish phase decline, I would like to see a few of the first set  of 5 waves completed. I started this decline in Micro degree, which can always be adjusted as we climb up the degree stack for a bear market. Many will be looking and betting on a support price level, but a support level for what? 

Is this decline going to be just another blip on the radar screen or is there more to this decline than the majority expect. Markets go up and down all the time, but  it all depends on the degree level we are in. 

There is a big difference between a Cycle degree correction and Minor or Minute degree correction. Any 4th wave Cycle degree correction is not going to happen in just one day, as it could take 3-4 years to play out. The 1987 crash anniversary date, was just late by about 3 trading sessions, but it needs to travel much deeper for the rest of the year. 2577 seems to be the peak of this 2017 high. Was that the last high of the year? It could be, but has something to say about that.

I have described it in great detail what can happen in a Cycle degree correction. Many will try and buy on the dip, but that is a bull market mentality that will not work in a bear market.  Investors tried to find the dip in 2000 and 2007.   All those bullish rosy forecasts will vanish once any decline becomes obvious to the majority which is only a matter of time. 

A SC degree crash from 1929-1232 only took three years, so I don’t see a Cycle degree correction lasting 100’s of years. 

The VIX is also making good bullish progress with no gaps open below present prices.  

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Putting Out The Fire With Gasoline!

David Bowie – Putting out the fire (Gasoline).wmv – YouTube

                                As you can tell, I’m a big fan of David Bowie’s music, and when I create this gasoline chart this song always come to mind. 


Gasoline has been on a rampage, but with many overlapping wave positions that kill the generally accepted impulse wave formations. RBOB gas has charged to new record bull market highs, which still has a bit to go before another big correction could happen.  The gasoline pattern will be a bit different than crude oil as the added step of processing has a huge impact with any supply and demand situation.  

Once the bull market started in early 2016 a huge gap opened up which we can clearly see in the monthly charts. This mother of all gaps will get closed, but it may take until after this entire bullish cycle has completed. A small spike is starting to form, but that can also push a bit higher.

There are huge differences between daily and weekly charts. I use the standard 500 bars in a chart, but many times I do switch them to 1500 bars, which keeps the entire bullish phase in view.

At the $2 price level, we could run into stiff resistance, with the $3 price being a distant possibility.

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Crude Oil Intraday Bull Market Review

As choppy as these chart patterns show, it looks like the bullish phase still wants to move higher. Another zigzag looks like it has formed, so crude oil should break out to a new higher high.  Since the late 2015 bottom (daily chart), oil has been on one wild ride where most critical waves have overlapped. All these overlapping waves surely points to a potential zig zag bull market that should still take crude oil well above the $58 on the daily charts.

Since the June 2017 bottom crude oil is far more choppy that many other wave structures, so after oil breaks to a new high, it could implode again with a complete retracement of this June 2017 low of about $43. That would be the worst scenario in the short term.

The Gold/oil ratio has not really changed that much and is still sitting around the 24.32:1 ratio. I want this ratio to change in a big way by compressing this ratio towards the 20:1 ratio.  This will still take a long time before this happens and taking 2-3 calculations every few weeks, should give us an early warning, when oil starts getting expensive in real money terms. Gold is the real money, as all so called paper money is just an illusion. Paper money is just an electronic entry with only about 4% being real cash money that we can see and touch.

The crude oil chart started in 1860 and I’m working it is a big 5th wave extension for now. The 2008 top can work as a Cycle degree wave 3 position, but with a potential triangle still to play out.

Short term oil has to work through some price hurdles, that all need to get retraced until we see the last peaks in the rear view mirrors.

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DJIA New Record High: Chasing The Bull!

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

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

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Gold Intraday Rally Review

The decline to the October 6th low fits better as an impulse. Then the rally and another decline can give us a zigzag correction, but the ending “C” wave is rather short. I like to see deeper “C” waves, but then we have very little room to move lower, before that $1162 support is breached. I can also work this as a new set of declining 5 waves, so there could be some strong downside still to come.   Silver also reacted this morning, which has a different wave count than gold. 

From the December 2016 low of $1125, the rally was about as wild and choppy as we want to get which sure looks much like a triangle has completed at the $1355 price level.  Since that $1375 price level has not been exceeded, gold has been in a bearish phase ever since. One good thing is that from that mid, 2016 high, (daily chart) gold displayed a pretty good zigzag crash, which should eventually get completely retraced. 

The SP500 is still heading down as I post so we will find out if investors are going to run to safety in gold. Gold stocks have not really dipped as much as gold has, which is a bullish sign. Some will even suggest that gold stocks will play catch-up, but that has been a false assumption most of the time. 

It may take the rest of this week before we know if more gold bearish moves are coming. 

The latest gold forecast has been for gold to soar between $3000 and $5000 in the coming years, but how many times have we heard these wild forecasts before? Back in the late 70s the $2000 price forecast was constantly used, yet gold has never reached it. 

If the present gold/oil ratio stayed where it is then a $5000 gold forecast would mean a $200 barrel oil price.  

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Mini SP500 Intraday Record High Update

This morning the SP500 bounced around another record high, even showing a double top in Micro degree. The way these markets have been behaving, we could get a decline thinking that the stock bull market is over, but in the blink of an eye, they can come back and trash those bears as stops get hit. 

Leading up to the mid October crash, the pattern was super choppy, before it crashed. This was a 5th wave as most of the waves overlapped at critical times. On Oct, 19th  the markets delivered a crash all right, but it was a “Mini, Mini, Micro Mini degree” 1987 like crash. Translated it means very small!  :roll: 

Short term I will not spend so much time on stocks, trying to keep wave counts on 1/2 dozen stock indices, as I need to spend more time on my commodity wave counts.  At the beginning of the week things are a bit boring, but by the time mid Wednesday rolls around, things can dramatically change. 

At this time the peak of 2577 is still holding, but how long that will last is just a best guess scenario. The October 19th dip matched the new moon exactly, but never even lasted out the day. The next day the SP500 broke another record high. Some are even calling these sequences of record highs as, “Record, Of Record Highs”. Wall Street will always find some catchy name or slogan that the public just loves to repeat. 

It takes 2 gold ounces to buy one unit of the SP500,  which is one of the most expensive ratios that I have measured in the last few years. 

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US Dollar 2000-2017 Elliott Wave Count Review

When I get suspicious that a wave count is starting to act out another script, then this is always a signal to review the larger picture. This is a regular habit that I adapted with stocks when I was looking for all the extensions.  Back at the top in July 2001,  we had 3 tops very close together before the US dollar started to plunge.

The decline that followed sure looks like a 5 wave decline, including an expanded wave 4 correction.  Expanded patterns like this are very common in any asset class, and ignoring or not counting these expanded patterns, will throw any wave count into disarray.  I have worked this decline as a single zigzag and counted this crash as a 5 wave sequence in Primary degree as well. In the end, 5 waves down in Intermediate degree makes a much better fit.

At that 2001-2002 peak, the 5 wave decline matched gold very well, as gold started its bull market at about he same time. Solar cycle #23 also peaked, so we can say that this solar cycle peak, repelled the US dollar. The majority were very bullish towards the US dollar and stocks,  as the stock mania was still in full force in 2000. Gold was a hated asset class and the experts were constantly warning us to stay away from gold as an investment.

Being out by one degree with this set of 5 waves determines if we think that we are in SC degree or still just Cycle degree.  This important 5 wave decline has a location which can fit very well as a “C” wave decline of a flat. A Primary degree flat! All trends come to an end, and by the time we reached 2008, the world was so bearish towards the US dollar that all the experts were screaming to stay in gold as gold was forecast to go to $5000.

I knew the US dollar bear market would end, but as usual we were early. For now I will use this 2008 bottom as a Cycle degree wave 4 and technically we should get 5 waves up in Primary degree. Many times, 5th waves are diagonal wave sequences, which the US dollar has in abundance.

I think there is more downside to come with the US dollar as many contrarian indicators must also show up. What is also very important with that 2008 bottom, is the fact that the solar cycle was also in the process of switching to solar cycle #24. At this point the US dollar was repulsed by a solar cycle low, which was the opposite of what happen at the 2000 peak.  These events seem to alternate, so by the time we reach the end of solar cycle #24, the US dollar could be ready to soar again or just continue to soar.

Since the 2008 bottom a single zigzag could have finished at the 2016 top, putting us into a diagonal wave two in Primary degree. If this is the case, then we have a wild ride ahead of us, as this correction is still far from over. In this case I posted the weakest wave count, so as to eliminate it as soon as possible.

At this time a small degree 5th wave decline should happen, after which another US dollar counter rally should ensue.

I base my US dollar wave counts on a chart going back to 1792 and the Civil War, which I will post below, but without wave positions.

 

The 1985 peak may be a Cycle degree wave 3 position, followed by a flat or a zigzag in Primary degree. 

 

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VIX Intraday Review: Gaps Closed!

The bullish move of the VIX in October has now reversed, and looks like it may still go lower. Any inverted zigzag can completely retrace itself, except if it’s starting a set of 5 diagonal bullish waves.  Stocks are starting to correct again as I post, so this could give the VIX a little kick. We need a big bullish move with the VIX, to give investors a wake up call.  Of course most investors don’t care about any VIX, as all they care about is that markets keep going up. 

The commercials are still net long, so until those positions reverse, the threat of the VIX eventually heading back up is real. The big open gap we did have, has now been closed, so any gap to the downside would be a welcome sign.  Even a spike to a new record low would also be very bullish for the VIX. 

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Gold Intraday Review: Still Heading Down?

At this time gold seems to not care about any violent moves in the stock markets, but still seems to be wandering down. Gold is just a little bit away from making another low, and if the expanded pattern I think I have,  then gold must still  fall well below $1260. This would give us very little room before the $1205 price level gets breached.  Any breach of that July 2017 $1205  low, would instantly turn Minor degree wave 1 into a Minor degree “D” wave top.

In the last month any bullish wave counts have failed in the short term, so I have to keep bearish wave counts as alternates.  Gold stocks have also been sluggish at best, so they may also have some more correcting to do. 

With gold, a potential Intermediate degree zigzag could be in progress, ending at a Primary Degree “B” wave top. Even oil and silver have had lethargic price moves, which  still can bring us lower prices in the short term.  

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Mini SP500 Intraday 4th Wave Violent Market Action

The markets tried hard to play the repeat of the 1987 crash, but in the end it was just a token move, as the early bears were caught in a trap. Options expiration dates probably had more to do with this crash than any other logical reason. If the market crashes more than 7% in one day, the exchanges would shut down and give pause to any emotional moves. 

I don’t think any safeguards are fool proof as computer trading can create a lot of damage in the short term. It looks like it was a  wave three crash alright, but not even close to the degree that the 1987 crash was.  This crash was at least 5 degrees lower than what the majority of the SC and GSC degree wave analysts use.  This is a massive difference in opinion between forecasters, and until that gets fixed we will make forecasts that will never happen. 

As I post there is still some bullish life left in this party, so another small degree 4th wave may be in progress. 

Any violent move like this is not going to give us a clear wave count,  as spikes in the charts  were created that do not show up in line mode.

Continuously breaking new record highs is becoming old and boring news. The 5th wave I have in Intermediate degree is extended, and from a monthly chart view, it is virtually a straight up pattern. No vertical move will last forever, and when it starts in another bearish phase, this huge spike will be clearly visible for years to come.  

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Mini DJIA Intraday, Crash, Bang, Boom Review

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

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

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

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

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Crude Oil Intraday Review

For the last few months, the oil rally has been about as choppy as anyone can have. This makes trend picking much more difficult as any downside move can seem like the onslaught of an oil bear market. Yes, some have been calling for a bear market heading back down to $10.

Half A Million Bpd At Risk From Geopolitical Firestorm | OilPrice.com

There is the potential for a civil war to break out in Kurdistan, which has landlocked oil fields which must be pumped out through Turkey. Any stoppage of oil flow from this area could severely restrict the buildup of oil inventories.  

Oh the horror of it all, if they start yapping about an impending world oil shortage!  Some even say that the era of gasoline cars is disappearing fast, but the world runs on about 80% fossil fuels just to generate electricity.  The electric grid can be very unstable due to solar storms, so as we use more and more electricity, solar flares can and do have a huge impact on the earth. 

The worst would be that oil crashes much lower from the highs of today, or if oil keeps struggling  just trying to break out to higher highs. 

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Nasdaq Crash Review

After an over night plunge the markets are heading back up as I post. Most of the time the Nasdaq can provide alternate wave counts, and in this case there are no double or triple tops that  we have to content with.  Markets are put on this earth to fool the majority as much as they can, as we know it is mathematically impossible for the majority to get rich.  Paper wealth is not real money as I’m sure a few billion went up in electronic smoke this morning.

I will keep the updates a bit short this morning as the counter rally has been very strong. Until this market keeps pushing south, we are not certain of any wave count we may come up with. Either way it’s a 1987 30 year cycle,  stock market reaction. Don’t get too wrapped up about this 30 year anniversary date, as markets are always changing. Also, there are many controls built into the markets where they would halt trading if panic ensues.

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Mini SP500 Intraday Crash Update With VIX Commentary

Finally, The markets have reacted to the October, 19, 1987 stock market crash. It’s not any yearly anniversary date that the markets might react to,  but it’s the 30 year anniversary date that is the important time period. 

We do need more evidence that this decline has more downside legs to go, as any initial reaction can be still part of the bullish cycle. It is important that I find the last bullish wave otherwise, any wave count will have little meaning. Since the initial decline was rather steep, we could be looking at the start of,  diagonal wave structure as well. 

The spike to the upside is not a good bullish signal, but the markets are still struggling trying to head back up. Any analyst can give us support price forecasts, but when they do, they think they are just in another correction. The only real support we will find is the final one of a bear market low, as all others will just be temporary stops. 

That’s not going to happen anytime soon, if a potential Cycle degree peak has just completed. I’m looking for the top that will hold, as these record breaking highs may have come to an end.  Until this market is firmly controlled by bears, the risk of another bull attack are always present. 

The VIX has also soared, but created a few open gaps as it surged.

This VIX cash chart is very different from any November or December contracts. So far we have the potential for a zigzag to be completed, but that can always be the start of a diagonal set of waves as well.

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DOW 23,000 You Got To Be Kidding!

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

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

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

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Copper Weekly Chart Review: Is it Ready For A Correction?

Copper sure is having a great run, but all great runs must come to an end sooner or later. In this case copper can still push higher, but I think a correction is due soon. The wave pattern looks like a great set of 5 waves up, but it just about looks too perfect which is very rare.  If a wave 4 correction is coming then the 2.50 price level could give the copper price support. 

Last weeks commercial traders were still in a net short position and growing. This ratio is about 1.57:1 while the speculators have the opposite positions. They are chasing the bull market, but could find themselves in a short term bull trap.  Commercials have already been net short for some time, and don’t consider them as speculators but more like hedgers. 

I think early  2011 could be the Cycle degree wave 3 position and we are in the “B” wave rally of a Primary degree bear market rally. What if copper still soars to new record highs?  Then this copper rally could turn into a “C” wave bull market, but for now we have to take one wave at a time as copper is a very choppy and wild market.  

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Mini DJIA Intraday New Record High Update

I’m not happy with this DJIA intraday wave count as I’m using cosmetic wave counting methods. Either way we are looking at diagonal waves where critical wave structures constantly overlap. So far the entire month of October has been this way, but not nearly as flat as what the SP500 is developing. It all fits into the diagonal wave structure bordering on being an ending diagonal as well. 

Today the DJIA created another little spike to the upside pushing to the 22,946 price level. How many times this has happened, I’m not sure, but we know that’s also breaking records. In the long run, we are headed for a Cycle degree wave 3 top, and to correct a Cycle degree bull market we have a choice of 3 simple patterns, and these patterns must have a specific wave count based on an idealized pattern. 

Of course, if our perception of an idealized pattern is not clear we can create any wave counts we think that we see. Expert wave analysts thought they saw a wave 1 in Primary degree back in 2009, but were proven to be completely wrong.  Can this happen again at the next market crash bottom? It sure can as many think we are in SC degree or even GSC degree.  

It is medically impossible for markets to be in SC degree, without finding “ALL” the 5 waves in Cycle degree first. It may take 2-3 years or so, but when the big bearish bottom arrives, nobody will be ready for it. Only the seasoned contrarians will be ready and that only makes up 3-4% of the investors. 

As I post the markets are charging higher once more so I expect a new set of record highs will be created again. 

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