Daily Archives: January 8, 2018

Cocoa and The Impending Shortage of Chocolate.

Stories  are wild about another Cocoa shortage looming in the world today. Oh, the horror of it all, if this world runs out sweet chocolate again.

Big Chocolate Makers Drop $1 Billion to Head Off Worldwide Cocoa Shortage – Eater

With cocoa charts still pointing down, it’s hard to imagine a supply problem is actually here. There is the potential for another flat in the ending  stage, which could still produce a massive spike to the upside. Supply has been devastated due to crop diseases, with Ebolaalso  killing off many of the cocoa farmers.  They also blame global warming for the sad state of cocoa production.

I posted cocoa with a best estimated wave count, but I assure you that any wave structures in cocoa are diagonal in nature. If this is to be confirmed in the future, then any impending rally should contain an inverted zigzag.

This is not going to happen overnight, as the probabilities of more short-term downside still exist.  Even Coffee is reported to be in a shortage. Withdrawal from sugar and coffee, could send investors wild without another fix!  😀

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Nasdaq Intraday New Record High Update

This morning stocks surged up again, as the Nasdaq touched 6690 at its highest point. This small degree 5th wave has widely overlapping moves, that suggest another diagonal 5th wave is developing. It ended with a small spike so we will have to wait latter in the week to see if this peak holds. Sooner or later this January 5 wave sequence, has to correct.  Eventually, it should retrace the entire January rally, before another strong leg up can occur.

There isn’t that much action in the early part of the week, but I would expect things to change by Wenesday.

I have posted most of the 5 indices I cover with my largest degree wave count, and have the idealized version up as well. The bull market, we are tracking started in early 2009 and since then has been on a huge bullish phase that must also come to an end.

At this time any new record high will illicit a counter rally containing a set of 3 waves. Unless, we are ending a bigger degree phase, where stocks can move down with 5 wave patterns.  Longer term I’m very bearish even if another leg gets added on, as the smart money is not entering this stock market price bubble.

The longer the general markets take to pop, our time window to a 2021 bottom becomes shorter as well. Somewhere we would need to get a very steep drop to help speed the process up.

Stunning market declines produce equally stunning bull markets as this Nasdaq has generated about a 640% gain since the 2009 lows. Of course, if we were waiting for the Nasdaq to go much deeper in early 2009, then the bull market started without us. This was barely enough time to take a token position, never mind trying to disperse a larger net worth position that smart money has available. The EWP has turned into a short term trade setup tool, that long term contrarians would never use. Big cycles are a fact of life and choosing to ignore them will be detrimental to our investment accounts.

Solar Cycles drive the business and expansion cycles on earth, and it wasn’t until solar cycle #23 ended until stocks turned and headed north again. By 2021 we should have started solar cycle #25, which will produce another 8 year bull market. Anyone caught with a bearish wave count at that time will get their wave counts shredded, leaving the surprised empty handed again as a new leg starts back up.

It matters little how bearish of a price bottom we may get by 2021 but the next big bull market will leave that Nasdaq 6690 price level in the dust.

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Bitcoin Intraday Swan Dive Update.

After a near perfect double top, Bitcoin succumbed to the bears and proceeded to implode. How deep Bitcoin can crash down on this trip remains to be seen, but if the inverted flat has any teeth to it, then the $11, 500 price level will not provide any long term support. All these Cryptos are used for speculation, and it’s only extreme leverage why these Cryptos make such wild moves. I’m not against any speculation, but when markets go down, they produce all sorts of fears. When fear dominates, then irrational decisions become obvious.

Last year saw a massive explosion of different Cryptos coming online, but early in 2018 it seems like new ICOs issues have hit a brick wall.  The last number to beat is 1385, related coin offerings. It will remain to be seen if 2018 remains bullish with many more ICO offerings, but sooner or later the weeding out process will start.

It’s still far too early, for any Gold/Bitcoin ratio calculations to be taken seriously, but spot checking the ratio every few weeks will help.

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S&P/TSX Composite Index (INDEX) Update

This TSX chart represents our main Canadian stock index. In the last few weeks and filled with bullish fundamental news flashes, this market has gone virtually nowhere, struggling trying to go higher. The bull market since the 2009 bottom can’t work as an impulse, but fits the pattern of a diagonal 5th wave pretty well.

Wave 4 crashed well into the previous wave 2 position, which has come close to its maximum retracement level. I haven’t developed good large degree wave positions this time,  as the 2009-2018 bullish phase could be a “B” wave triangle top! That could only happen if the 2007 peak was an expanded pattern. The TSX contains a wide spectrum of different sectors, so it’s wave count is going to be elusive.

Our main index is not going to go through a USA stock bear market, where we can expect our stock market to not be influenced by what is happening south of the border. TSX 11,000 and 7500,  are going to be two major support levels that could get retraced, but just getting past the 11,000 price level will be an achievement.

It’s not my top priority to keep detailed wave counts of our TSX index, but I will try and catch some of the bigger degree turns.

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