Monthly Archives: January 2018

DOW 30 1984-2018 Review

Since early 2016 we had a massive move to the upside where we can hardly make out any wave corrections. This is a classic 5th wave extension, which we’ve had before. From late 1987 to 2000 was nearly a 13 year Minor degree 5th wave extension which makes our present two year run look kind of mundane.

What is dramatically different between the two sets of 5th wave extensions is our present 5th wave in Intermediate degree is in a near vertical position which I have never counted out before even when we go back 200 years or so.  The difference in angles is dramatic, but wave analysts are ignoring this fact as many of them keep adding higher and higher degree levels.

From my 4th wave Intermediate degree bottom, we would still have 7 smaller degree levels that can come out of  hiding. After the wave 4 bottom in Minor degree, (2017) we still would have 6 hidden degree levels, that could come out. I had  to use the remaining 6 hidden degree levels, and during the last degree, we run out of visible 4th waves.

Elliott wave is much more than making simple mindless trade setups, as it is our perception what the Idealized pattern looks like that is the problem. Those pretty impulse waves they show us in the EWP don’t exist. You can search for them all your life and you will not find them. Why? Because all waves are never even.  Until we go back to 1929 and start a fresh wave count will we ever fix this problem of missing bull markets or even bear markets using the EWP.

Missing a bull market should never happen, and frankly the contrarians do a much better job of reading tops and bottoms. The short version is, when our wave counts, are still bearish after reports of insider buying are all over the news, (like 2008), then our wave counts will get trashed. This happened at ever major bottom of 2002 and 2008 leaving the wave counter with nothing but token positions, if that.

In the next few years, chances are good we could hear about DOW 5000, 3000 or even 1000, but don’t believe that as solar cycle #25 will certainly destroy those price forecasts.

I gave up on all high degree wave counting when I saw EWI still being bearish on gold when gold was at $1000.

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Nasdaq Bubble Deflating?

After a little rally the Nasdaq has now turned down again. I’m looking for this trend to continue if we switched over to the bearish side.already. The majority are looking just for a correction as they have no clue on what is going to happen in the next few years. Bull market tops are the breeding grounds for bear markets, so it is very important that we have a single top that we can count from.  I will always start using Submicro or Micro degree as it is easier to change to a higher degree when we need to. After a few months or so the small degrees will go back into hiding and you would need an electron scanning microscope to see them.

Folks, the higher the index goes they start to extend and all the smaller degree levels start to show. The hobby and expert wave counters do the exact opposite as they keep adding higher and higher degree levels. Some still have Primary degree wave 3 ahead, which means they are about as bullish on the markets as they can get. 2015 was a 4th wave correction in Intermediate degree, which means there was one move left in Minor degree.

As long as they give you some long drawn out complex wave structure they can flip wave counts around with no consequences. They can turn the worst wave count in the world, to another new and improved version and claim to be right.  Flipping numbers and letters around with no idea what they mean is “cosmetic” wave counting which the majority of all wave analysts practice.

We could get a big Primary degree crash, and I bet the experts will still show you a bearish wave count, when in fact an “ABC” crash is about as bullish as I can get.

Over the years the EWP has turned into a short term trade setup tool which is useless for the serious millionaire contrarians in the world today. If any wave count causes us to miss the biggest bull market since the depression, then this wave count has to be tossed out as soon as possible.

Sure the Nasdaq has a different pattern, but in the end it will also end at a Cycle degree wave 3 top.

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DJIA Record High Review And the Fast Tumble

Some have no clue why the markets are crashing when all the fundamentals are running on all cylinders. Sort of. Besides the fact that the DJIA has made a near vertical move on weekly and monthly charts, this market is running out of steam. It could still take weeks before the herd has a slogan it can use.

The DJIA sliced right through the bottom trend line and it was exactly what I hoped would happen. If our wave counts start off too big then eventually we become too insensitive to major turnings. This happened in late 2008 with expert wave analysts calling for a DJIA crash down to 1000.  The expert wave analysts missed the biggest bull market since the depression and they have done nothing to fix that problem. Making cosmetic adjustments are easy, but if we don’t know the idealized wave structure we can flip numbers and letters around like a guy flipping hamburgers and they will have little meaning.

I would love to give this move more time for further downside.  We don’t have a double top to contend with, so our bear market starting point is clear “At this time” I never said the wave count is “clear” only the peak is clear!   😉

It will be tricky to catch any intraday counter rallies, especially this early in the game.

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Bitcoin Bear Market And Robberies Continue!

 

Japan Gets Tougher On All Crypto Exchanges After Coincheck Hack

Masked Gunmen Steal ‘Fortune’ in Bitcoin in UK Robbery – Bitcoinist.com

Coincheck Confirms Crypto Hack Loss Larger than Mt Gox – CoinDesk

Bitcoin – Millennials Fake Gold | Vitaliy Katsenelson Contrarian Edge

 

The news about Bitcoin has not been kind as the real state of Crypto coins revels itself.  All these new Bitcoin billionaires are painting a bulls eye on their faces when they openly brag about their wealth they think they have. Bitcoin has been going sideways, and it still can swing in both directions before it decides on a new trend, or to finish an old trend.

Either way it doesn’t look like Bitcoin is going to go “Vertical” any time soon due to the fact that major groups are stealing Bitcoins by hacking, or now home invasions. From my perspective, this Crypto market is the Wild West, where there is no town marshal. Nobody is responsible for what they do so 100’s of millions USD valued Bitcoins have already gone missing, and many more will still disappear.

I visited my bullion dealer who was very open about the fact that gold owners were coming in and dumping their gold holdings to buy Bitcoins. Dumping gold to buy Bitcoins is like chasing Fool’s Gold thinking its real gold.

There are many fake physical Bitcoins being stamped and sold on the open market as my bullion dealer showed me one. I had to have one, so I ordered 6 fake Bitcoin rounds online, which I will use to see the reactions on peoples faces. These fake Bitcoins have a 99.999% pure gold plating on it and I will find someone to get it tested once I take physical possession of the Bitcoins.

This may not happen for several more weeks, but my gut feeling is that I should have ordered twice as many.  I think people love them as novelty items and I want to show them to people before I think about ordering more. My landed cost for a single fake Bitcoin will be about $4 CAD.

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Marijuana ETF, HMMJ Update And The Supply Surge!

 

Legal Marijuana Prices Are Plunging in Colorado, but Not for the Reason You’d Expect — The Motley Fool

Pot wholesale prices dive as growers flood market

The coming marijuana crash | Vancouver Sun

Wholesale pot prices hit new low as legal weed market sees surge in supply – Washington Times

 

The landscape of our new budding industry is turning at the wholesale price levels. It’s the price per gram or the price per pound that has been crashing since 2016. This means that the legal supply is catching up to the legal demand, faster than we thought would happen.

This also means that any producer who is not the lowest cost grower will have little chance of making it big, if they survive at all.  Once the government forces packaging regulations on growers, then the cost of growing marijuana increase as well. Electricity costs are a major factor where growers will set up operations. Much like Bitcoin mining, indoor hemp farming takes up just as much power where you grow 24/7.

This wholesale price crash is far from over, but really has not translated into lower retail prices. It was scary the first time I saw this HMMJ ETF and that hasn’t changed any when I look at it now.

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Midcap 400, ETF Review

 

Fools rush in where wise men fear to tread, means nothing to the emotional investor. News of funds pouring into the stock markets is also a contrarian bearish signal. Markets seem to crash after buyers take a break.  I thought I would add this ETF, as it will be useful at the next bear market bottom.

The bull market from the 2009 bottom has gained 500%. Investors left those gains on the table before they decided it was a good time to jump in. They love stocks when they are pointing up, but will come to hate them once Cycle degree wave 4 arrives, and stocks are pointing down again.  Most bullish phases will be 5 or 8 years long where 300-400% gains are pretty normal. The 5th wave gain from 2002 to 2007 was only a 236% gain with 5 waves in Minor degree. 2009-2018 was a 500% gain and this was 5 waves in Intermediate degree.   In the future we will get 5 waves up in Primary degree so I’m sure we will get 500% or more gains at that time as well.

Around the $40 price level a second bottom was created in 2008 which has become a very powerful base to build from.  The EWP is not all about counting waves, but it also has to include counting our idealized waves for each successive 5th wave bull market. We had a 5 wave run in Minor degree and then a 5 wave run in Intermediate degree, with the next single 5th wave run being in Primary degree. (2021-2029) After 2032 we should run into 5 waves in Cycle degree.

My Cycle degree wave counting method came about because the majority of expert SC and GSC degree wave counts come from 4th wave bases.

This can’t happen folks, because there is no such thing as a multi generational 5th wave extension. Maybe when we get into the 5 waves in Cycle degree, we could see that it might be two seasons long. One season can be as long as it takes the solar cycle to flip completely from a top to bottom, and then back up to the top and then down again. (2000-2021)

Of course, all those forecast into the future will be beyond my time, and for it to get confirmed others would have to carry on the work.

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DJIA Record Intraday Bull Trap Update

For the last little while I have been counting the patterns between my trend lines as an ending diagonal, many waves critically overlap, during this 5th wave so an impulse wave count is out of the question. On weekly and monthly charts the 4th wave bottom produced a massive single spike. Most ignore this fact as the expert wave analysts keep adjusting the markets, introducing higher and higher degree levels, when in fact it’s doing the exact opposite. One wave count I saw had the 2015 4th wave as wave 1-2 in Cycle degree.  Another had the 2009 bottom as a SC degree wave 2! What a pile of crap.

Above, the wave count is one degree shy of hitting rock bottom as the 4th wave extended dramatically. I have never counted a more vertical 5th wave move than any other 5th wave. These spikes do not end well, yet money flows have been heading into the markets this spring.

Investors love to buy high and then sell out at a panic low, so investors have learned little in the last 18 years. With the top of 26,684 at this time, this gave the entire bull market a 410% gain 2009-2018.  Getting in “after” 400% gains has already happened is a crazy idea from a contrarian perspective, and I’m sure the contrarians  will agree.  Smart money is building cash positions so they have lots of dry powder once this stock market crash gets seriously over-sold.  That won’t happen, until the majority hate stocks again, so we still have a wild ride ahead of us.

The Gold/DJIA Ratio has not changed much as it takes 19.9 gold ounces to buy one unit of the DJIA. It only took 8 ounces of gold to buy the DJIA at the 2009 bottom, so we’ve had a massive shift since then.

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SP500 Intraday Record High Bull Trap Update

Late last night the SP500 started to top out after achieving another record high at 2878. Every top could be the last top, but we never have insurances of that until it happens.  When the new trend slices through my bottom trend line by a wide margin, then we may have a correction bigger than what the majority expect. A deep dip past the 2650 price level would be a big help in locking in the new record high. Until that happens, we can always get a fast moving counter rally that would trash any bearish mood rather quickly.

What will happen is that this entire bull market that started in early 2009 will end, followed by a Cycle degree 4th wave bear market.

I have looked at 3-5 expert wave counts recently and they are about as bullish as they can make them. Building a wave count that is in sympathy with the crowd will never work. The markets will always do the opposite of what the herd thinks it’s supposed to do.  Since 2000 every major peak was followed by a crash.

It seems that the higher this market is going the higher degree levels they will start to make. This is the furthest from reality in what happens in extensions, as it is the smaller degree levels that come out from years of hiding. Look what happened after the 1987 stock market crash, which produced a Minor degree 5th wave extension, lasting 13 years. All the wave counting in the world will not help if  we are not prepared for what’s to come. It will be worse when this market does hit the next major bottom, because I’m sure wave analysts will be calling for the SP500 to fall to 500 or some other ridiculous number like SP500 300. Investors will be ill prepared if the SP500 stops at 700 or 750 and then soars to 3400 by 2029.

Contrarians do a far better job in reading the markets than any wave analysts can, so if they have tricks of the trade, then I want to use them as well. In late 2008 Steven Jon Kaplan was forecasting the biggest bull market since the depression, yet expert wave analysts were calling for a wave 1 in Primary degree at that time. A wave 1 bottom in Primary degree is about as bearish as a wave count, that we can ever have, so when it turned, wave followers were left holding a bag of wooden nickels. Nothing has changed as they are still pushing the unconfirmed SC and GSC degree wave counts. Make a few cosmetic changes, and they come up with a “New and Improved” wave count.  Sorry folks, but cosmetic wave counting never works because once it fails, we have to do it all over again, starting with the 1929 peak.

Sure, I practice some “Cosmetic wave counting”, at the intraday level, but for the last 5 years I have not had to change any of the three tops starting with 2000!

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S&P Midcap E-Mini 2000-2018 Cycle Degree Review

I spent several hours looking at 3-4 very popular wave analysts, to see what their largest degree is that they are working.  This is always a very painful experience for me because they practice, “Cosmetic Elliott Wave Counting methods”.  They smear the charts with all sorts of price and wave positions to a point it seems like they are conducting a Smoke and Mirrors operation.

They can make a few cosmetic changes and they will always come out being right. Sure, I don’t always know what positions we may be at any one time, but I sure do know what doesn’t fit. Without a doubt they are very bullish with one wave count showing Cycle degree wave 1-2 for the 2015 correction.

One wave analysts have the 2009 bottom, as a wave 2 in SC degree???  Not on your life,  as there was a SC degree wave 1-2 crash and bear market in 1929-1932 already.

Just because it’s a big and tall bull market, does not mean we should jack up the degree levels. We have to do the exact opposite.

When markets extend either in the wave 3 or wave 5 positions, it’s always the smaller degree levels that come out of hiding, not the big degree levels.

All the wave counting with mini or micro mini degree levels, is useless if we miss the biggest bull market since the depression. Any wave count that is in sympathy with the bullish herd at these extremes will never work.

This Midcap chart has a very good wave formation, producing a tall 2007 peak. Also the 2009 bottom never went as deep as the SP500 and the DJIA did. At the 400 price level, we have what would be a massive base, that could last one hundred years into the future. Markets love to fool analysts so just to prove me wrong, the Midcaps will go lower than 400.

Everybody on this planet already knows that stocks are at record highs, what they don’t know is how big and long the impending bear market in stocks can be.

One of the worst SC degree declines in stock market history only took 3 years to play out, so it sure is not going to take sum mythical 600 years this time. The start of solar cycle #25 will make sure another bull market will come. Betting against the power of the sun, or creating super bearish wave counts with the start of any Solar cycle will never work.

Wave counts from the past have all started from a 4th wave base which can’t really happen, as a multi generational 5th wave will never exist for that long.  Any 5th wave is always fundamentally much weaker than any wave 3 of the same 5 wave sets.

I’m anticipating a Cycle degree bear market which will unfold in stages. For starters, this Midcap chart will decline/crash to the 1200 price range first. After that, the 700 price level would be the next price target for the impending Cycle degree 4th wave.

The Gold/Midcap ratio is sitting at 1.48:1 which is on the extreme side of things already.

Investors are pouring record amounts of money into stocks

Average investors are pouring money into record high stock markets, which is actually a contrarian bearish signal. Investors love to buy “High” because they sure weren’t  buying low in 2009. They were selling low in a panic to get out, which I’m very sure will happen over and over at every major low we will ever run across.

Investors pouring into stocks is not smart money moving in, as smart money has already moved out with insider selling.  Fool’s rushing in where wise men fear to tread is very normal. Buying on the 5% dips will not work if we get a 70% correction. We could end up with the mother of all dips, yet very few will ever take advantage of a crash bottom.

 

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Great Bitcoin Robbery V2.0

The cryptocurrency market just suffered a theft worse than Mt. Gox – MarketWatch

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Gold 2011-2018 Review

Once the late 2011 gold peak ended, we had one difficult decline, which at this time could be a 4th wave decline in Intermediate degree. This big bull market started in 2000-2001 with a set of very small 5 waves.  Yes, the bull market was very choppy, which was followed by a very choppy bear market as well. By late 2015 gold had a bottom of 1050 before gold charged up again, which I can only fit into a diagonal. Since I have 5 waves up in 2001, then any present 5th wave should also give us another set of 5 waves up.

Any 5th wave can be a diagonal 5 waves as well, so I will use this wave count until it fails. Running this wave count is the only sure way of eliminating it as it takes time for key patterns to materialize.  I’m expecting a gold correction, so how far this decline goes could trash  this wave count sooner than what we think. By constantly eliminating wave counts that don’t work,  we end up with a wave count that may work. Elliott Wave is about consistently eliminating wave counts that don’t work.  Any move specific to the degree always has 5 options, so we constantly have to eliminate 3 choices to narrow it down.

Any higher degree top for 2011 and the $1050 bottom is not nearly deep enough to call  it a completed Cycle degree bottom.  Too high of a degree also makes us less sensitive to the bearish mood, so this can freeze us into always waiting for lower lows, when contrarian indicators tell us to do the exact opposite.

When gold stock insiders have bought or are buying their own stocks back, we know that a new bullish phase will start to happen. Insiders buy early and they buy as their company stock prices are tumbling. One thing is certain insiders do not buy on a whim nor do they ever sell out on a whim. Any bearish wave count under those conditions will never survive.

On Friday I walked into my favorite gold dealer to buy one of those 150 year Canadian anniversary silver coins. They are gorgeous coins and I bought a couple of them last week. This is not a big deal, but what the proprietor told me was, many gold coin owners came in last week to sell their gold ounces so they can buy Bitcoins!

I really had a good laugh when he called “Bitcoins” Bitchcoin!  He even showed me a physical Bitcoin which I instantly called a fake which both of us knew. Shit, I wanted that coin just for a laugh to show other people. In the bigger picture you should never touch a real Bitcoin as they don’t exist and never will.

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DJIA Monster 5th Wave Extension And Impending Bear Market.

 One of the main reasons I always review the big picture, is to check if the wave counts still fit in the big sequence I think I’m working in. From the 2009 bottom to our present top we have what I call “One move”, but it is subdivided into 5 waves in Intermediate degree.  The 2000 peak also ended with a wave 3 in Intermediate degree, but it was the 5th wave in Minor degree that extended at that time. 2002 ended with a wave 4 in Intermediate degree just like a 4th wave in Intermediate degree ended in early 2016.

Folks, it’s the last 5th wave that has dramatically extended, and to be honest, I have never counted or seen such a 5th wave extension anywhere in stock market history. It is a near vertical move that even the 5th wave from 1921-1929 couldn’t match. Due to the fact that our present 5th wave is vertical on weekly and monthly charts means that this rally cannot continue.

Investors are pouring record amounts of money into stocks

The bulls are enticing many to invest at record highs, and some of the recent money flows suggests huge inflows. Buying high and then selling low in a crash is what the general public loves to do, as investors have done this on every major peak since 2000. They call them investors, but investors should not be confused with “Smart Money”.

It’s all emotional money as investors chase a bull market. As long as it keeps going up, everybody is happy, but as soon as these buyers start to take a rest, this market could start on the “Big Dip”.  Besides the potential for a Cycle degree decline that can fall below 2011 lows, this present 5th wave will get completely retraced.  It’s all about smoke and mirrors as the consensus paints us a rosy picture of the future.

Every major peak in history, the talking heads painted us a rosy picture, but what followed had no rosy ending. In late 2008 investors were fleeing the stock market in record numbers, yet the market did the exact opposite thing as the biggest bull market since the depression unfolded. The bull market in 2009 unfolded with a very “big” push from the sun, as solar cycle #24 started.

No little 20% correction will do it, as it might be a 70% correction instead, depending where we count from and if we use a gross or net calculation.

In the bigger scope of things this is not going to end well, as the markets will put those emotional investors through a meat grinder.  Slice, Dice, Hack and Slash will chop all the stock bulls up and get them ready for the fridge.

There is no chance in hell that I will turn into a super stock bull, just because it hasn’t started its bear market yet. If the DOW reaches 7000 or so and the talking heads tell us the DOW is falling to 5000 or even 1000, then I will make a call for the DJIA to roar to 34,000 + by 2029.

From 2009 to present,  we’ve had a 400% run in the DJIA  chart,  so I’m pretty sure the DJIA could make a 500% run up into the  2029 time period.

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Crude Oil Bull Market Update

Recently, analysts have been painting us a very bullish picture, as  “$ 100” oil is coming.  Just like in true style the $70 per barrel has been changed to a $100 price forecast.  It’s just amazing how analysts once were calling for $10 oil, now suddenly see “$100” oil in our future. If these forecasts are believable, so why can’t they tell us  what price level oil can crash too, once or if  crude oil hits $100 per barrel.

We’ve had a long skinny bull market, which can’t continue forever. If only a short correction is coming, then the $55 price level could get hit, but if a bigger correction is due crude oil could fall towards the $45 price range.  In 2008 Oil crashed with stocks before, so there is no reason why it can’t do again.

The Gold/Oil ratio is just a bit above 20:1 but in 2014 oil crashed from a 17:1 ratio. Sudden compression moves in the Gold/Oil ratio usually produced a decline in oil prices, but I have not noticed that happen at this time.

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US Dollar Intraday Crash Update

Trump Expresses Support For Strong U.S. Dollar 2018.01.25 (en)

Trump Supports the US Dollar are the recent reasons why the US dollar has rallied. Does that mean the US dollar crash is going to stop and miraculously turn into a bull market?  No, not on this planet! The only way that a true bull market can form is if the US dollar has completed an “ABC” crash already. The US dollar was due to rally already and the only question is how high?

The US dollar doesn’t even have to go very high as it can go sideways for weeks, before another leg down might happen. There is a very good chance that another 4th wave bullish phase is in progress in Minuette degree.  We need this impending wave 3-4 rally to play out and then we may be getting close to a potential wave 1 in Minor degree.

Presidents can try and jawbone the US dollar up, but debt holders like China and Russia can throw a monkey wrench into that plan anytime they want.  I think we still may have 3-5 weeks left, before we can expect a Minor degree wave 2 counter rally. The US dollar is just a bit below the Fibonacci number of 89 where it can build a base, with many very short 5th waves.

In Greenspand days analysts watched the size of his suitcase to try and figure out how much paper work was in it about a rate change. Next month we will get a new Fed and even then, can a single man turn 100’s of trillion dollars of declining value to increase in value?

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Mini DJIA New Record High Update.

There is always a good chance that I may still be too early, but what I can say is that this recent bullish pattern is choppy as hell and would make a perfect ending diagonal. Any diagonal wave structures are can be found in any 5th wave and even can extend dramatically, which they don’t teach us in the EWP, which I call the “Little Blue Book”.  As soon as any wave does not follow a very high quality impulse wave, I switch and start looking for diagonal wave positions.

This could remain bullish for the rest of this month as month end, seems to be a popular reversal time period.  I’m sure that one day 2-3 years into the future this DOW could be heading to 8 or 7, 000, with many calling for much lower DJIA  market prices.  When that day arrives, you can bet I will be calling for the DJIA to charge back up to 34,000 which the majority will think is insane. This will never happen until we reach another massive bearish situation, and a 500% gain is just a bit more than the majority of 5 or 8 years 5th waves have done.  We are at a bit above a  400% gain in a 5th wave bull market already, so a 500% gain is not that wild of an idea. Especially if we are going to get the, “Roaring 2020’s in Primary degree.

Everybody hates stocks back in late 2008, and when stocks are at the extremes they love stocks. The herd will never change as it is also mathematically impossible for the majority to take money from the majority. Only a very small minority invests like the seasoned contrarians do, even though many brag about being contrarian. I consider insiders as contrarians and SEC rules require insiders to declare their trades. This is public information,  and  the majority chose to ignore this data.  Any bearish wave counts and bearish outlook after insider reports come out will have their opinions crushed, as the markets will always do the opposite of what the majority want it to do.

One main reason why this market is so extended is because we are coming to a  Cycle degree top. This is one degree lower than the 2007 peak and a full two degrees higher than the 2000 peak.  All three peaks since 2000 are wave three peaks which must all develop in sequence.  Sure, I’m working the SC degree wave 3 just like GSC and wave 3 in Submillennium degree. If we’re lucky we might reach SC degree wave three by 2029 and GSC could still be 100 years away!

The Gold/DJIA ratio is at 19.44:1 which it has done 3-4 times already. The ratio seems to have hit a brick wall which is very bearish from my Cycle degree perspective.

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Mini SP500 Update Another Record To Break

Yesterday the SP500 pushed to another record high at 2855. That record high was followed by another wild downward move, that can be another zigzag. I extended the wave count a bit more, which may only take a few hours before the bottom trend line gets hit again. I want the SP500 to slice through the bottom trend line with conviction, as a bigger correction is long overdue. The bullish phase from January the 16th sure is not an impulse, but it fits a diagonal pattern much better.

The good thing is that we don’t have a double top situation as the secondary peak is lower. Not sorting out the last wave from the bull market and the first wave of a bear market makes any declining wave count very difficult to count out effectively. Eventually the fog will lift even if it’s only for a short period of time.

February is when the new FED is sworn in,  who can have an unknown impact on the markets. It seems this market is in a generational trend with the analysts painting us a perfect picture of the future.

Analysts are constantly directing your thinking, (brainwashing technique) to higher and higher market forecasts. Do you feel safe investing with the herd?  Market participants only care about one thing and that is that the bull market continues. When the markets turn south, they can panic as a rush to the exits can happen.

Nothing has changed for the impending bear market, even when the greater fools are jumping in. The last players in this market are always the weakest, so it will take very little to scare them right back out again.

The intense media attention to this bull market works like a big speaker horn. When that happens, I always ask myself, “Who’s left to come in”?  When a market is priced for perfection, then this market has no choice but to eventually turn into a big bear market, big enough to catch the majority of participants by surprise. We have 15 sets of degree levels all in order from the largest down to the smallest, so guessing at what the big degree level is, is not an option.

I like to be very specific which largest degree level  I’m using, so it is easier to track down any mistakes as soon as possible. I believe a Cycle degree 4th wave bear market is still coming, so preservation of capital is extremely important. Sure we can play this cat and mouse game as any correction may not last very long.

We are coming up to months end, when things have a nasty habit of making surprise reversals. To give this market some credit, it seems to keep going and going and going, just like the Energizer Bunny.

Even though the markets keep breaking higher I will not abandon my Cycle degree top, as extensions are part of the landscape and as wave analysts we have to deal with it. I will remain bearish until such a time this market shows us what it wants to do. I will say one thing and that is at a bare minimum the SP500 has to hit the 1800 price level, which can give us a support  but only for a short while.

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Bitcoin Futures Intraday Update:

In my last post I showed an Intermediate degree “W” wave. Well, We could be in another one.   The one main problem I have with counting it as a zigzag pattern is that the A5 and B5 waves are very close to being the same angle.  Real zigzags are far more violent and contain far more diagonals wave structures as well, so for now I will bury the idea of a zigzag.

I believe we could be starting another new set of 5 waves down in Intermediate degree, but he only way that can even start to get confirmed is when a new Bitcoin low is reached. In other words Bitcoin patterns have to act the part of an impulse.

Markets have a nasty habit of trashing wave counts and opinions, so when this impending wave count goes off the rails, then most of the wave count has to be instantly trashed. The worst thing we can do is carry garbage wave counts with us into the future. The wave patterns should take a little longer to play out, so we have to have a bit more patience as this bear market starts to get serious.

There are now 1491 Cryptos competing to take money from gullible investors, with the total capitalization back up at about 565 billion US dollars.  These numbers shift dramatically and can swing, many billions in just hours. The Gold/Bitcoin ratio is still  compressed at 8.5:1 and based on that ratio Bitcoins are extremely cheap. Don’t trust this for Bitcoin use, as we could be facing a new decline, but I will still post the Gold/Bitcoin ratio when I can.

They also have a COT report on Bitcoin futures traders positions, and so far not a single commercial trader has taken a single position in any short or long positions.

This speaks volumes as they show no interest in taking any side. The only traders playing with these futures contracts are the speculators which are net short now as they were in the beginning. Even their numbers will not be any help if Bitcoin prices start to flat line.

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US Dollar Daily Chart Bear Market Update

As the US dollar crashes the Euro rallies. It seems the stock market is also ignoring the crashing US dollar, but for how much longer, I’m not sure.  The US dollar has definitely added some extra push in the price of gold, but that can also kill the price of gold when the US dollar decline reverses.

At the very top I have dropped down one degree and temporarily trashed my “D” wave top in Primary degree. It’s not that it’s thrown out completely, it just goes back into inventory for now.  I use 5 of the simple patterns over and over which we can be adapted for any degree that I may be working on. Complex wave structures are just combinations of simple patterns, which can confound us to no end, especially if we don’t know where we are counting from.

I have always mentioned that the US dollar bull market could just be a big bear market rally, which means 100% retracement must eventually happen. In order for any wave 4 top in Intermediate degree to be confirmed we must have 5 waves down in Minor degree.  The difference between a potential “E” wave decline and  5 waves in Minor degree is the 4th wave.  Any “ABC” decline  can look just like a “1,2,3” decline for most of the time, until wave “C” or wave “3” has ended.

We still have time left before we get close to a wave 1 in Minor degree, because a 5th wave can extend dramatically. The commercials are still net short but that would have to change to a net long position once we get closer to any wave 1 in Minor degree.

95 was the previous 4th wave of one lesser degree, so any US dollar Minor degree wave 2 rally can charge back up into this price range. We still have 2 sets of 4th waves that need to play out, so until that happens, there is no sense in turning bullish on the US dollar too early.

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Euro Bull Market Review

I spent a couple of hours looking back to 1985 which was a major Deutschmark crash bottom, around the time that the cold war ended and the 1989 Berlin Wall crashed. Shortly after the DM crashed it started to soar again. The DM then crashed once more ending in 1999-2000 at about the 85 cent price level. From the peak in 2008 the Euro crashed until early 2017. From this ugly bottom the Euro has enjoyed a bullish phase now starting its second year. In 2016 I knew a bullish phase was coming, but hell if I could find a decent wave count that I could publish.

Our present bull market sure looks like a high quality set of impulse waves, which are pointers to a new trend that should keep on compounding. Provided it’s not part of a “C” wave bull market. If the Euro was part of a “C” wave bull market, then this pattern would contain far more diagonal wave structures.

So far there are only a few diagonal wave structures that have developed in their proper locations. The Euro would need to show us 5 waves up in Minor degree, but we’re still working the first 5 waves in Minute degree. Wave 1 in Minor degree could still be a few months  away, after which we could see a horrific wave 2 Euro crash. If the Euro crashes, then the US dollar will rally, sending gold into a major correction as well.

We have a November 2017 Euro bottom, ($1.05 US) so if this wave 2 Euro crash is coming then, this is where we should look for major support and a reversal. The Euro should then transform into wave 3 in Minor degree. Once wave 2 in Minor degree has completed then I will look for three sets of 1-2 waves, which would be an extended wave 3. I “always” start off counting, as if  wave three is going to extend, but will dump it as soon as they don’t materialize.

From my perspective,  Elliott Wave analysis is all about the process of constantly trying to eliminate 4 out of the 5 simple wave patterns we work with. Of course, this is all specific to the degree that we think we are working in. 99.9999% 🙄  of the time we’re not in the degree that we think we’re in.

Even now, the commercials are already net short the Euro with the spread getting wider. The Euro is in the US dollar basket, so all the other currencies that run inverse to the US dollar should also have major reversals. The speculators are betting the exact opposite way, as they are net long by more than a 2:1 ratio.  Sooner or later the speculators will get themselves into a “big”  bull trap.

This potential wave count is very speculative, but the only way to help confirm it, is by running it. I will still need to tweak this wave count all the time, as I’m sure we will get a few more surprise extensions yet. At about the $1.27- $1.28 price range, we could run into some serious resistance, so we still have some upside room left.

This would also kill my”E” wave decline that I have with the US dollar wave count, so this wave count will be doing double duty. I’m still early on this and I don’t expect it to happen in what’s left of January.

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Nasdaq Intraday Record Highs Update: Still Going To The Moon!

This morning the stock bulls must have been hit with a tazer, as the markets jumped a bit. Well, this has been going for the full Month of January already, and it may last until the end of the month. I changed the wave count to a big zigzag, with what I show containing a long wave 1. I normally never count it his way, but in diagonal waves this could work as an ending diagonal as well.

The Nasdaq is just a bit short of 6980 which would be the number to beat. That could happen as soon as I post, but we should be setting up for another correction. We need this market to leave a nice vertical spike in the daily cash charts, as the weekly and monthly charts already have these huge spikes very visible.

We need a correction big enough so it can never come back and soar to record highs this year. The media will always focus on how much higher this market will go, but only a few talk about how low it can go.  Any 20% correction is the public definition of a bear market, but I know markets can correct 40% and 60%.

The Gold/Nasdaq ratio is at a bit over 5.22:1 which means it takes 5.22 gold ounces to buy one unit of the Nasdaq. This 5:1 range has not changed all that much as it may be double topping as well.  One day this Gold/Nasdaq ratio will shift again where it could reach a 1:1 ratio. This still could take a few years, but until it does this market is overbought and very expensive.

If you’re not a contrarian then be prepared for the stock bulls to trample you as they run for the exits yelling,” Fire”

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SP500 Intraday Record High Update

All the 5 indices I cover, have been pushing to new record highs and has even formed a very small double top. In this market that little double top has no real importance as it can get exceeded by the time I finish posting.   There is no fundamental logic to all of this even when the government shuts down. The threat of a government shutdown has been going on for decades, and I have ignored all of them most of the time. It seems like the government is just showboating more than any real attempt to balance the books.

It is the changing of the FED that is more important, Trump Announces Jerome Powell as New Fed Chairman – The New York Times. I will keep working the Decenber move as a 4th wave, but wave 3-4 can be an “AB” move as well. At this stage of the game anything can happen. After 2 years with this 5th wave extension,  there have only been very small corrections, which cannot be maintained.  We need a big correction, and falling back to the December sideways move is the bare minimum we would need, if another super leg up were still to happen. In the long run the SP500 will crash or turn into a big bear market. The higher these markets go the bigger and deeper these markets will head down to.

Every contrarian, I respect knows what’s coming as they track fund flows and insider buying and selling. Some say not to worry about insider selling as they are just taking profits. What a pile of crap this logic is, as insiders don’t do the same thing as the public does. They buy and sell their own stocks because they understand the big picture of the business cycle very well.

Sure, this could go on an on for some time yet, but markets have a nasty habit of surprising as many participants as it can. Since 2000 we’ve had two major bear markets or crashes, and a third is on its way, yet the majority of participants are not any smarter. The fourth big peak may not happen until 2029 and the 5th one  could take until 2129.

Once the race for the lifeboats starts, there will be a panic situation when they realize there are not enough lifeboats available to get everybody out. They key is capital preservation and the majority has never been good at doing that.  Only the majority is dumb enough to invest in an extreme top, when the probabilities of a crash are more likely to happen.

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VIX Intraday Update: Another Leg Up?

Since early January 2018 the VIX has created a bottom after which the VIX charged up.  There is a high probability that the VIX correction is over, and it should add on another leg up. I will stay with the diagonal wave count as that is the main pattern of the VIX as well. The commercial traders are still net long by a long shot, and if the VIX continues north than this ratio should start to change as well. That won’t happen overnight, but we are assured of some violent moves in both directions.

We do have 2 open gaps below present prices, but they may not get closed on this trip. Even though the SP500 is still breaking new records,  fear is creeping back into the markets.  Right now the $14 price level could give us some stiff resistance, but if the bigger run is in the cards, then that $14 price level well get retraced by a wide margin. The $17 and $21 price levels, should be next to get hit if this run has any legs at all.

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Bitcoin Takes A Beating Again.

The majority of all Cryptos took another big hit this morning and Bitcoin was no exception. In order for Bitcoin to be in a massive bull market the price eventually has to exceed over $20,000 again.   So far, nothing has indicated that Bitcoin is ready to soar one more time. Yeah, right!  All Cryptocurrencies started from zero, so they can always end up at zero again.  At one time the total capitalization charged up to $736 billion, which has never been breached since. This morning the total capitalization of Cryptos was at $501 billion US dollars.

They took a brief rest during the holidays, but have resumed creating ICOs  at about the same pace. 1465 Cryptocurrenceies are out at this time, with a Gold/Bicoin ratio of 7.86:1. This is close to a rock bottom ratio already, but I must warn readers that the Gold/Bitcoin ratio may not mean anything in the long run. 3:1 is closer to rock bottom, but even than the Gold/Bitcoin ratio may not mean anything.

I see this all more like a Wild, Wild West show as we have Bitcoin bank robberies, Bitcoin Miner wallet robberies and massive denial of service attacks.

I’m sure that the Crypto coders also have accidental errors in the code to where each Crypto currency can be hacked. The massive Meltdown and Specter chip vulnerability issue just adds to the problems.

Mt. Gox Bitcoin Missing In relation to Mysterious Death of Exchange CEO – Crypto-Faucets.in

They are still hunting the Bitcoins from the “Great Mt Gox Robbery” where I had my Bitcoins at. Their exchange got hacked and Bitcoins disappeared into thin air.

The investors that think that they are investing in Bitcoins must be smoking something, as I would not invest in anything that has so much fraud associated with it.

 

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Gasoline Futures Update

Since late June 2017 gasoline futures have soared.  At first glance we can see 5 waves up, but that doesn’t tell us much if we don’t know what degree this one leg is in.   There is a very good chance a correction is coming, but how long and how deep this impending correction can go is directly related to the degree we may be finishing.   Since the late 2016 start  both crude oil and gasoline futures had an extremely choppy start, which fits best into a diagonal 5 waves.

When I look at this with a weekly chart, the pattern changes and it looks nothing like what we have. I can turn this into a “C” wave bullish move which would allow a better  looking impulse wave, because of the alternation.  Gasoline is more connected to the fundamentals, so if a slowdown were to show itself  gasoline and crude oil can start to take a hit.

Oil sure crashed along with stocks in 2008 so it’s not like it has never happened before.  Gasoline is still heading up as I post, so it may take until the end of the month before it reacts.

The entire decline can be retraced, by a net move of 60% or more (. 618) The forward momentum has also slowed with all the waves getting smaller.

What I will be looking for is to identify the correction when I can see another zigzag or flat type of pattern correction.

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Palladium Daily Chart Bull Market Review

Every trend comes to an end eventually. Palladium sure started out with a decent impulse wave structure, but that started to fall apart starting in early 2017. From then on Palladium converged in a wedge like pattern, with smaller and smaller wave structures.   The waves also started to overlap about the same time, which suggests a diagonal 5th wave, or a “C” wave bull market is in progress.

There could be more upside, but  I think a big correction is coming, and this entire bullish phase could get retraced.  The previous 4th wave of one lesser degree could take Palladium back to the $660 price range. Palladium prices may be  linked more to the economy than investing demand so if there is an economic slowdown, then Palladium prices could take a big hit.

Palladium seems to have rolled over a bit already, but this could be just a little flat.

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Crude Oil Intraday Update

Like gold, crude oil also had an impressive rally, but the oil price has now started to back off. Any normal correction could fall back down to the previous 4th wave of one lesser degree. This would be close to the $58-$56 price range. Of course, if a bigger degree decline is going to happen, then that $56 price level will not hold.  Either way the oil price could decline along with the stock markets. At times the oil price correlates with stocks as oil crashed just before stocks hit a major bottom.

This happening again is a very high probability situation and can’t be ignored. Even though it may not happen, a previous major low in oil could be down between the $48-$44 price levels.

Last weeks Oil COT report had the commercials net short by a wide margin, with the speculators doing the exact opposite thing. It’s the speculators that always chase a trend, as they are adding to their net long positions as the oil market is pointing up. Speculators added 20,444 long positions last week,  just before oil started to suffer a correction. The mass media reports using the speculators numbers, as they think fund managers is the smart money.

I was hoping for more of a compressed Gold/Oil ratio than this present 21:1 ratio. Even before the 2014-2015 oil crash started, crude oil had a 17:1 ratio, which ultimately ended with a 44:1 ratio. On any oil decline, we will eventually see the Gold/Oil ratio start to spread again. This ratio may hit 25 or 30:1, so we have to be aware of this when it happens.

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Gold Intraday Gyrations Update

After a great run, gold has now started to back off.  Any top trend line I could use is useless as it would be a race to see which trend line will get sliced first.

Sure, gold can keep right on trucking, but there could be a bigger correction than what the majority is anticipating. A “Flash Crash”,  type of a move would be the perfect outcome. The markets always love to try and fool as many experts as it can and gold is no different.

On other occasions we could see a %61 net crash of a single wave 1 which would be a pretty normal correction. This would be closer to the $1278 price level. It may never happen, but corrections can go very deep with commodities. On the positive side gold can just keep grinding higher, brushing all the corrections to the side until a really big gold correction surprises us all.

When all the gold bulls are making bullish calls, then that’s when the gold market can start a reversal. There may be a bit of a gut move by day’s end, which only gives us until the end of the month for a turning window to show up.

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Mini DJIA Intraday Double Top Review

Yesterday morning the DJIA produced another record high of 26,149, after which the mini started a decline. From the beginning of January we’ve had a single move containing 5 waves in Subminuette degree. Subminuette degree is 4 degree levels above the rocky bottom of my degree list, which I cut off at Miniscule degree.   Not using a lower set of degree levels helps to judge potential extensions, and keeps me from wandering into a higher degree, before its time.

Recently the Mini DJIA topped at 26,149 with a square looking top that. I’m not jumping up and down with joy at the thoughts of a small double or even triple top wave structure. It’s the nature of the beast and I have to use several different wave peaks to count from.

It sure would be nice if the DJIA doesn’t break another world record, which the analysts are so good at counting and reporting back to the mainstream.  All I can say is, “Enough already” as we can only listen to the constant squawking parrots for so long.  “Who are all these analysts broadcasting to”? Day in and day out they broadcast to the world looking for the secret group to invest in these markets at record highs.

In reality, there is no secret group, as they are called, ” Retail investors”  which always buy in at the top.  There is something about this group that has bought in at every record high since the 2000 peak.

FUND FLOWS: Concerns Over Frothy Markets Not Stopping Investors

Doing the same thing as the herd will get you the same results as what they are going to get. The, “High Buying” retail crowd, doesn’t have the stomach and the account “headroom”,  (net cash),  to survive even a medium correction, nevermind a Cycle degree correction.  All the DJIA Titanic has to do is list to its side and the retail investor will start to panic and pull monies out again. The professional contrarian and insiders are long gone, this market, only the emotional investors are left to jump in.

In the last 17 years, investors have learned nothing about buying low and selling high as no amount of broadcasting has taught them anything.  Constantly trying to forecast how much higher this market can go, is all Smoke and Mirrors. They have no clue how deep a Cycle degree bear market can go down to but when it does, these same experts will claim how much deeper the markets can crash.

I’m very bearish on all the 5 main stock market indexes, that I cover, but we may have to put up with these intraday gyrations for a bit longer.

At a very minimum the entire Trump rally will get completely wiped out which may only be an Intermediate degree correction, nevermind the Cycle degree correction that we are supposed to get.

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Bitcoin Intraday Rally Update

This is the February contract. There is so little interest any any of these futures contracts that I may come to a point where I no longer can provide decent wave counts. If this doesn’t improve soon I may be forced to stop wave analysis on these charts. In the last day or so, the total Cryptocurrency capitalization base has  gained back about $156 billion. The total Crypto ICOs are sitting at 1448  with no change today.

You may have noticed I used a “W” wave in Intermediate degree, which I will use just as a temporary unknown position. I want to stress the fact that when I use any WXY thinking, then the “W” wave I use has a very strict rule. This rule is that any first “W” wave we think we see “Must” be a single zigzag!  It can’t be a flat,  as a flat would tell us that we are somewhere in a diagonal wave structure.

The Gold/Bitcoin ratio also crashed in a spectacular fashion, making Bitcoins very cheap when we use the gold cash price to compare to. Just the shear fact that this Gold/Bitcoin ratio crashed is sending Bitcoin prices northward, at least in the short term.  Will we get another zigzag type bullish phase?  This is very uncertain at this time. In the bigger scope of things the Crypto meltdown is what happens when a perceived asset class gets out of control.

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Mini SP500 Intraday Record High Update

The SP500 is now developing a small degree double top which I can fit into a diagonal 5th wave.  Even now another spike to the upside can still happen.  A correction is coming and it will be bigger than the majority are expecting.  The “Market Gremlin” will raise a shit storm in the next few years as a financial earthquake is coming.  All those pretty “Green”  numbers in a bull market,  turn to “Red” in a bear market.  If you think that a few $300-$400 billion going up in smoke in the Cryptos is a big deal then, you haven’t seen nothing yet as $20-$30 trillion will go up in smoke once the markets hit the “Real” bottom.

Just for starters the entire 2018 rally has to get retraced, followed by retracing the entire Trump rally as well. Two years worth of gains will disappear in a blink of an eye, so don’t fall asleep being complacent with the majority. Investing with the majority will get you the same results as the majority get when the “Big Bear”comes a knocking. The real bears are not going to be so nice, as there will be no knock as they will just smash through the front door.

In this world you are a contrarian or you become the victim, so you do have a choice.

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