Monthly Archives: February 2018

Mini SP500 Intraday Gyrations Review

The SP500 is far from breaking new record highs. It is only the Nasdaq that is getting close to breaking out into new world record highs.

Just incase I have beaten the Cycle degree flat drum too long, the above chart would be the beginnings of a zigzag in Cycle degree.  The markets would have to show us another 5 waves down in Minute degree which would then end up at wave 1 in Intermediate degree.

Any top trend line is worthless to use and any invisible bottom trend line is still a bit away from getting hit.  Another Shock&Awe move would help to confirm the bigger bearish phase, but I would throw this wave count out the window in a flash, if these markets do not perform like a bearish phase should.

Dow tumbles nearly 300 points on new Fed chair’s comments | New York Post

Jerome Powell is the new man in charge and the mass of investors, listen to his every word, when they want to!  They didn’t care that much when Janet Yellen was raising rates, but now they seemed to care. If rates are not an issue just yet, then this market could still soar.

If good news no longer pushes the markets up,  then we are over on the big bearish side already. Tomorrow is the full moon and employment numbers should come out on Frida as well. These reports can send the markets into a tizzy, but other times they get completely ignored.

Hits: 7

Crude Oil Intraday Crash Review

Since the mid February bottom, crude oil charged up producing a wild pattern that just will not work as a simple impulse wave structure. Rallies this choppy usually retraces the entire move, but we need oil to dip much further to help confirm my suspicions. As I post, a small rally is taking place, so anything can still happen. Inventory levels are being drained, and many large oil fields will be losing their production capabilities in the next few years. Crude oil inventory levels mean little if the stock market is going to enter into a recession.

In the 2008 crash even gold and oil plunged with the markets, so any event that has happened in the past can happen again. Commercial traders are net short crude oil but not with any real screaming bearish numbers. A quick calculation puts the net short ratio at about 1.35:1 which is not an extreme position.

If this bullish run is over then the $58 price level would be the next main price target to get hit. I’m looking for the big move to look like a correction has completed, but at this point I still can’t jump on the crude oil bullish bandwagon.

The Gold/Oil ratio hit 21.17:1 today, which has been pretty normal in the last month or so. Any fast move which compresses the Gold/Oil ratio very quickly can mean, a much bigger decline is just around the corner.

Hits: 4

Euro Intraday Bearish Phase Update

Since the January bottom the Euro has made a great 5 wave run.  This morning the Euro broke that 1.22 price level, which could have been a base for another small run of 5 waves.  The Euro is in the US dollar basket, which runs inversely to the US dollar. The US dollar basket is destined to be changed as some currencies will be removed but other main trading partner currencies will be added.  The changes in the US dollar basket are just opinions right now, but it will be interesting to see if my big US dollar wave count will be threatened.

Besides the potential for a wave 1 peak in Minor degree, we could be at an “A” wave in Minor degree just as easily. It could mean a 60-80% wave 2 correction can happen, and it won’t stop at the obvious previous 4th wave in Minute degree. Commercials are net short the Euro, and until that changes dramatically, the chance of a super Euro bull run may just be a pipe dream.

Still, we need to keep our options open, as no wave count is etched in stone. Only the idealized charts are etched in stone.  😀

Hits: 4

US Dollar Intraday Bullish Phase Review

Since the January bottom the US dollar roared up in a zigzag fashion and then plunged down with what looks like a set of 5 waves down. I have an extra bounce during the early part of February which can also work as part of a diagonal. Sooner or later the US dollar should complete any bullish moves, but can still frustrate us to no end,  in the short term.

Investors love to see the US dollar soar with the stock markets, as it seems that investors are still infected with the “Stock Mania Virus”.  Stocks and the US dollar, soaring, caused gold to crash this afternoon.  We may see more upside with the USD but eventually it will resume its bearish trend.  We could still more upside, but last weeks COT report, the commercial traders are net short the USD.

US dollar investors have to get to a stage where they are extremely bearish towards the US dollar, and the commercial traders are piled in with huge net long positions.  Short term the USD bull may still dominate, but long term I’m bearish on the US dollar. (2-3 years)

I’m sure that once solar cycle #25 starts, the US dollar can turn and soar once again.

Hits: 8

DJIA Intraday Bullish Phase Update

The secondary bottom on the 9th of February is a bit truncated or short of breaking new lows while all other indices I cover did travel to a new low. I’m allowing the 4th wave to dip into my wave 1 in Minute degree at this time, but may have to change that at a later date.

Right now we have a small correction in progress, so it sure looks like another leg up can still happen during the rest of this month. The DJIA is about 1200 points away from hitting another world record high, which can be easily achieved once the DJIA moves “vertical” again.

On the first Friday of every month, the employment reports come out which can bring bearish news or very bullish news. Any bullish news that does not push the DJIA much higher would be a bearish indicator, as this bullish phase could run out of steam in the next week or so.

Hits: 8

Gold Intraday Gyrations Update

Since mid January gold still has not pushed higher, but has gone sideways with some wild counter rally moves.  This alone suggests that gold is still in a bigger bullish phase.  In the last few days, we had a move that could fit better into a potential 4th wave, but could still see a rally before pushing lower one more time. A gold push below $1300 can still happen, but the bullish moves of the US dollar have kept gold from breaking out. I’m getting close to spending all my degree levels with only one degree left, and when that starts to happen, I’m forced to review all my Minor degrees and higher wave counts.

In the last few months the pattern has been so choppy that it still fits into a bigger corrective pattern. Eventually that $1375 price level should get completely retraced, but any vertical type of a move, could set gold up for another big correction. As much as the gold pattern looks like the footsteps of a drunk in the snow, gold can become the hedge for safe-haven buying.

Gold seems to be reacting a bit after the end of a month, so it may take until the first week in March before gold is ready to turn again. At the $1304 price level, gold would be finishing a H&S pattern which can produce a double bottom base for gold.

There may be more short term downside moves in gold, but in the longer term I’m still bullish, as I have no intention of selling any of my gold stock/ETFs.

When the gold charts are pointing down, investors are in a panic to sell, but in the real world smart money is buying bullion. It’s the dumb money that is running to the gold dealers to sell gold and silver to buy Bitcoins. In the future Bitcoins may go from zero and right back to zero, but gold will still be here. Gold and silver have served as a medium of exchange for thousands of years, which no other medium of exchange can ever claim.

Hits: 11

Nasdaq Intraday Bull Market Update

Since the Nasdaq bottom on February, 9th the Nasdaq turned in a very bullish performance, that has gone above and beyond any wave 2 rally. The Nasdaq is now about 100 points away from breaking a new record high, so until this proves otherwise, I have to keep an open mind that a wild spike could still push the Nasdaq higher.

I’m confident that the 2015 correction, was an Intermediate degree wave 3-4, (Expanded). Wave 5 in Intermediate degree did extend  which makes it about even with wave 3 in Intermediate degree. Only 2 out of 3 sets of 5 waves can extend, with wave 1 always been one of the shortest. If it looks like wave 1 is long and or extended then chances are extremely high that it is just an “A” wave.

From the bottom of wave 4 in early 2016 I can fit the entire bull run into a diagonal but I had to move wave 3 in Minor degree up.

All the other indices I cover have to play catch up to the Nasdaq, but we know that they have done this in the past. If something has happened once, then I look for and use these moves with all degree levels. We only have 3 trading days left before the end of the month, and on the 1st we also have a full moon! Any moon cycles can be turnings, but they are unreliable in the direction they want to turn.

The longer any  bullish phase carries on, the shorter our time period to the end of solar cycle #24 will be. This could happen in late 2020 or 2021.  Overall, we could still get a 3 year bear market, but anything shorter is not a problem. What has to happen is that the scientists that track the solar cycles tell us, that solar cycle #25 is poking through in the northern latitudes parts of the sun. Solar cycle bottoms are bear market and wave count “Terminators”, and it will happen again with the start of solar cycle #25. The solar poles are not flipped until the magnetic polarity of the sunspots also change.

Hits: 14

DJIA Index Bullish Rally: Just Keeps On Trucking!

Each one of the 5 indices I cover, has slightly different wave patterns for this bullish run.  From the bottom, this rally can now fit into an impulse, (slightly Truncated).  One more wild spike to the upside and this market could break yet another new record high. One other little thing I haven’t mentioned, is that at the top we have a big open gap that one day will still get close off.

Any sudden move to the downside may produce another double bottom type of a move, which would be followed with a potential bullish “C” wave.  Yes, the decline looks like a set of 5 waves, but these 5 waves could be part of an expanded correction still linked to the bull market.

The Nasdaq is the one index that is closer to new record highs than all the others, and the other 4 would have to play a bit of catch-up!  We know that has happened before, so anything that has happened once in any degree level, can happen again.  One minute a SC correction can take 3 years, (1929-1932) and then 5 years later a Cycle degree correction takes 5 years. (1937-1942).  How long something can take to correct is influenced by the solar cycles. The 2008 bottom is a clear example of how our sun can dramatically change the direction of the stock markets.

Betting on bearish cycles to continue after any new solar cycle starts is doomed to fail. All the bearish wave counts of 2009 failed due to solar cycle #24 turning up!  The last thing I want to see is that we learn nothing from the late 2008 solar cycle turning, but I’m very confident that investors will be oblivious to this fact, and stock market history will repeat itself.  Any person that has an interest in the solar cycles should be watching the progression on a weekly basis. Once solar cycle #25 arrives, you will witness a profound change from a bear market to a bull market.

Hits: 14

Crude Oil Rally Is There More To Come?

This crude oil rally has gone higher than what I would like to see. I’am pushing my luck if I keep calling this a 4th wave rally, but when dealing with diagonals we can have some stunning moves and then make equally stunning reversals.  I can’t fit this rally into a clean impulse at all, so I have to look at it from a diagonal wave perspective.

These ugly bullish moves can be fake moves, and we have to wait until this run breaks to new record highs, or crude oil heads south below $58! I read reports about Asian oil field production levels are on the decline in the next few years, as big oil fields start to lose their production capacity.

Combine declining oil field production and lack of finding new oil fields sure could put a crimp on future oil supplies.  The real reason that oil is going up could be because of winter demand, and the coldest time of the year!

US map reveals the coldest days of the year across the United States | Daily Mail Online

Hits: 5

T-Notes Intraday Crash Update

This chart I show is at another very low point of T-Notes.  As long as these 10 Year T-Notes keep crashing chances are good that interest rates are going to keep going up.  The entire 10-Year T-Note bull market is a big diagonal bull market.  I’m pushing my luck if I think that we can hit a major bottom soon so these intraday wave counts can be off by a mile.

The media is freaking out about the bond crash so a reversal would be nice. This diagonal 4th wave bottom should produce 5 waves back up in Minor degree which can turn into a zigzag. They say that three more rate increases are coming this year, but they will only come if the free market allows them to do it.

The 30-day Fed Funds rate also controls what the Fed can do, or has to do. Commercials are net long the T-Notes but not by a large extreme. Even that can produce a short bear market rally that many may thing is heading back into a bull market.

The need for safety in T-Notes could also send T-Notes soaring so the investors that are dumping right now can flip on a dime and chase yet another bullish phase.  If this rally starts to distort too much or go sideways with a questionable pattern, then this big bearish move may not be finished.

 

When we look across the top we can see a big flat where they practically were giving the money away for close to 6-7 years. How deep this 30-Day fund rate can crash down to is just pure speculation at this time, but we could start to see a flat bottom form when it finishes  going down.

Setting any moving averages 90 and 30 days will show the “Death Crosses” and “Golden Crosses” sooner than later. The last “Death Cross” happen at the top about 2 years ago, so eventually we would have to see the “Golden Cross”, after this chart turns north again.

Hits: 5

DJIA Index Update

This is the DJIA index, which does not move during the night sessions, but only moves during the day. Todays decline does not match the Mini DJIA, but it sure is forming waves that are  better to count out.  The commercial traders are net short the DJIA but not to anything I would consider extreme.  If commercials are net short the DJIA then this does not give us confidence in thinking that some super bull market is about to take off!

Ultimately, this February rally should get completely retraced, then we may have more analysts turn bearish.  Sure, we may not hear about the fundamentals that are causing this decline, but I’m sure the media will find the reasons and then they will all sound like parrots  regurgitating the fundamentals why this market has trashed.  Any, 10%, 20%, 30%, 40%, 50% or even a 60% correction may not complete a Cycle degree correction.  Price is sure not going to help, as we would need to see a very big corrective wave structure completing first. In my world, pattern dominates price any day of the year.

Death Cross

With this particular chart and settings, the “Death Cross” happened at the 25,500 price level, which is far too late to do much with it. I looked for other potential “Death Crosses” in other indices, but was hard pressed to find any that would show up reliably.  Any “Golden Cross” is very bullish but it too happens on the late side.

Hits: 11

Canadian Dollar Daily Chart Review

The commercial traders are net short our Canadian Dollar which sure doesn’t motivate me to look for bullish wave counts.  Commercial traders were net long back at the May 2017 bottom, after which the CAD roared with a blistering bullish move. All good things must come to an end and our CAD has been taking a beating in the last little while.

The rally in early 2018 has now turned into a bust. This move sure looks like an inverted zigzag or it  could also work as a flat.  Either way  an inverted corrective always calls for a complete retracement, unless we’re part of a diagonal move.

In this case the Canadian Dollar would have to fall below the,  .775 cent price level, and then completely retrace that, . 725 cent  price bottom, as well.   I’m sure anything can still go wrong, but as long as the commercial stay very bearish I can’t see a super bull market in our CAD anytime soon.

Hits: 4

Euro Daily Chart Update

What sure looks like a good impulse run seems to have come to a screeching halt. Once it breaks the 1.22 price level, it would trash another small run higher.  At the same time the US dollar also seems to have a shortened 5th wave and it is still soaring as I post.

The commercial traders are net short the Euro so until that situation switches, the Euro could make a deep plunge. If a wave 1 in Minor degree has completed, will the Euro fall back to the previous 4th wave of one lesser degree? The Euro may not stop at the 4th wave above because first waves can crash 61% of the entire net move. This could send the Euro down to the 1.12 price range before it’s ready to turn again.

On top of that we must see a decent physically sized correction, completing as well.  What could be worse yet, is if this entire rally, was a “C” wave bull market.

Hits: 8

Crude Oil Intraday Rally Review

Crude oil soared after what looks like a double bottom. There is a strong probability that crude oil is completing a 4th wave rally due to its choppy rally.  There is a chance that crude oil can still break higher, but then we would also be getting very close to the bottom of my wave one in Minute degree.  We may have to wait out all of February for this move to clear up, but otherwise it could turn into a wave 2 in Minor degree.

I have nothing better at this time, but oil could still see downward pressure along with the general stock markets. Oil certainly rallied also with stocks, but stocks may still have upside left in the next few days.  The Gold/Oil ratio is hovering around 21.63:1 but this should expand if crude oil resumes its southerly direction.

I’m not going to turn bullish except for short term bullish runs. Until I see that a clear cut correction of sufficient physical size has completed, I can’t turn bullish for the longer term.

Hits: 24

Nasdaq Intraday Bullish Phase Review

This so called rally has gone on long enough and should have topped some time ago. The 21st of each month can provide turning dates, but so does the end of the month.  This is starting to look more like an impulse type move with the market crash just being part of an expanded wave 4 pattern. Some of these spikes we see can be ignored once they are double check by switching to line type settings.

This wave count may get trashed in a blink of an eye, if it does not soar to new record high. We have a little over 118 points of  upside room left before the Nasdaq completely trashes my wave 2 wave count. All other indices I cover could catch up to where they can all be part of an expanded 4th wave in Minor degree.

I’m not going to spend too much time on this wave count, because it can change faster than we can imagine. There may not be any updates on Friday, but I will post some on the weekend when I can. Markets may be very lethargic on Thursday as well, so it could be a really slow time period in the next few days or so.

Hits: 6

Mini SP500 Intraday Rally Update

The Mini SP500 created a peak and now has started to back off. This doesn’t mean the stock party is over as another small leg up can still happen.  This rally has turned right at a small bear market rally peak, creating a potential H&S pattern. No sooner had investors injected record amounts into stocks in January, and as soon as the markets dipped, they started pulling out record funds.

Stock-market tumble sends investors fleeing equity funds – MarketWatch

They will always find someone or something to blame for the intraday crash, and the VIX is a prime scapegoat. It’s never the fault of crazy investors who get themselves in a trap situation. They also start to cry that manipulation is bringing this market down. Just about anything that goes down, they will blame on market manipulation.  These guys that believe in market manipulation, figure that markets should never crash.  All trends eventually come to an end, but only a very small amount of contrarians know this fact instinctively.

Insiders are long gone out of this market and only the emotional investors remain. My method of operation, is to always build the wave counts down when stocks are pointing up, and then build the wave count going up once the bear market has shown itself to the rest of the world.

I think it is far more important to catch a major stock market low as only a very small percentage of traders can take advantage of a decline by betting short in the market.  Besides smart short players do not need any wave counts to tell them how to bet short. By late 2008 the markets already signalled that a reversal was coming. The VIX had already peaked at 90 and was about to implode.

As I post the markets are still pushing higher, so this peak so far may not hold. There are spikes that show up, but they have more to do with high speed computer algorithms than human clicks of the mouse. “Algorithms Gone Wild” is more like it. One thing that is always certain and that is, large amounts of protective sell stop orders are piling up below present prices. Eventually they will all get triggered sending the markets to a new record low.

Hits: 7

Cobe Bitcoin Futures Closing in on $12,000

In the last two weeks the Bitcoin bears have been slaughtered and shredded by the bulls sharp horns. Technically speaking, if Bitcoins are in a true bull market, then it “must” break that magic $20,000 price level again. Why “must” Bitcoins break that $20,000 price level?  Because that’s what bull markets do, and what the EWP teaches us is supposed to happen.

I have drawn 3 conventional trend lines, and which line will get sliced first? At close to $12,000 Bitcoin futures are running into potential resistance created in the 2017 decline.

Anonymous Cryptocurrency Trader Buys $400 Million in Bitcoin | Investopedia

Maybe this Bitcoin price rise is all about the mysterious trader that bought $400 million of Bitcoins when Bitcoins slumped in price. News like that can get all the Crypto fans excited. Bitcoin fever is very infectious, so I had to buy a bunch of fake Bitcoins to touch and hold. I ordered them in from China and show them to people. The reaction on peoples faces when they see the coin is priceless!

I showed the coins to my friends and they all wanted 1 or 2 right away. Anyways, I will be getting more Bitcoin collector rounds. I fully understand that any physical Bitcoins we may see are fakes, but they sure can become great collectors items. The Bitcoins I have contain one Troy ounce of pure copper, (99.99%) plated with a thin layer of gold. How much gold plating that are on these coins is unknown, and they may need to get x-rayed to find out.

Ethereum chief warns cryptocurrencies could ‘drop to near-zero at any time’ – MarketWatch

Any of these Cryptos can go to zero, so a physical fake Bitcoin will look nice up on your wall. The Crypto universe is still growing with about 1548 ICO’s on the list.  So far the total capitalization of the Cryptos peaked at about $512 billion this morning, which was the highest in all of February.

The Gold/Bitcoin ratio is at 8.63:1 this morning from a peak of over 15:1.

The commercials have not opened a single position long or short since Bitcoin futures started to trade. This tells me there is no interest from the commercial trader’s perspective.  Only the trend chasers are chasing Bitcoins down with their net short positions.

Hits: 15

Canadian Dollar 2011-2018 Review

Since 2011 our Canadian dollar peaked out and then proceeded to crash right along with gold. Then in early 2016 the CAD crashed to its lowest point and then proceeded to charge up in what can fit into a perfect inverted zigzag. I only see a 5-3-5 regardless how short the C% wave may be. Technically speaking an inverted zigzag is a bear market rally, and bear market rallies always retrace their entire bullish moves.

We also know that zigzags can lead into the first part of a bigger flat. A Minor degree zigzag could lead into the first part of an Intermediate degree flat. The commercial traders are net short the CAD by a bit less than a 2:1 ratio, while the speculators are net long by about a 2:1 ratio.  I would still be bullish on our CAD if the commercials were all shifted to a net long position, but they’re not.

Our present little CAD rally looks like a fake attempt, but we need more evidence to help confirm this. I’m looking for any decline to show us that another correction has completed, because that is the only way when our CAD can soar again.

It’s not that simple as a diagonal 5th wave can also contain another zigzag as it finishes the 5th wave decline.  Any potential flat correction cannot fall to new record lows and could send the CAD into a wild “C” wave bull market in Intermediate degree.

It may take several months for any corrective decline to get cleared up or confirmed, and then I would like to see the commercial traders become extremely net long towards our CAD as well.

At $.72  our CAD could run into some very strong support, so anything can still happen.

Hits: 6

US Dollar 1980-2018 Update

 

Way back in 1980 the US dollar bottomed and then soared in an insane vertical move which I think ended with a wave 3 in Cycle degree. We can say that Regan was responsible for that rocket move. 1980 was also the peak of solar cycle #21, so the US dollar repelled up from  the sc#21 peak.

Then from the 1996 sc#22 bottom, the US dollar did the opposite thing and soared again until the peak of sc#23 in 2000. From this sc#23 peak the US dollar repelled in a big move south that didn’t end until sc#23 bottomed in late 2008! For about 8 years the US dollar rallied with the run up of sc#24, but then the USD also repelled from the SC#24 top in 2014.Now the US dollar is heading south as sc#24 is also heading south.

By 2020 or so sc#24 will end and then we start up in sc#25. SC#25 could be a huge bullish setup for the US dollar. The big thing is that the US dollar, solar cycle action, always seems to alternate. This alternation action doesn’t happen in the main stock indices, as the solar cycle bottoms can produce real wild bull markets. These bull markets can also be maintained right through the entire solar cycle decline which it has done on this sc#24 decline. A few of my contrarian indicators also have to be lined up, when it’s the right time.

We do have a few years time before extreme indicators show themselves. The majority must hate the US dollar first, but right now you are lucky if the crowd even suspects that a US dollar bear market is in progress. Conventional meanings of bear markets and bull market corrections, mean very little to me as commodities, mainly run on leveraged fear. Fear has nothing to do with logical! A 61% crash can just be a wave 2 correction, and many 4th waves can see a 40% drop. Both moves would still be a bull market correction from an Elliott Wave perspective.

I also see a potential huge wedge being setup so that sure could send the US dollar soaring as well. This will not happen next week or even next year, but looking a few years ahead should be our constant focus.

Hits: 8

SP500 Index 2000-2018 Review

For many years I counted everything using Supercycle degree (SC) and Grand Supercycle (GSC) degree wave counting methods. The 2000 and 2007 peaks were relatively easy to track even with my degree levels being from another planet. The bottoms never inspired  the confidence to make extremely bullish calls.

The entire planet works on price, but price is only a small part of what has happened. You can see there are no prices in the chart above, but the majority of wave analysts include, every conceivable price you can imagine! Still the majority of all wave analysts did not see the bull market coming in late 2008. Since 2000 we have seen three sets of wave 3 peaks with the 2007 peak being a bit subdued compared to other ones. This is ok as it still broke higher than the 2000 peak.

The reason that the SP500 has three sets of wave 3 peaks is because none of the wave 3s of the past has ever been extended. The entire wave counting world is working from a 4th wave base. I’m working from a wave two base, all the time. Thinking that all the extensions are 5th waves, will always put us into a much higher degree level, than we actually are.

From the 2009 bottom to our present top is one move, but subdivided into 5 moves in Intermediate degree. Once 5 waves in any degree level are completed a correction must happen. How big the dip may turn out to be, is entirely related to what degree level our present top is going to be. If Cycle degree wave 3 is the real target, then a Cycle degree 4th wave correction must happen, otherwise it’s back to the drawing board playing with our paint by numbers set. This is just a cosmetic wave counting method, and in reality you have to go back a minimum of 100 years and start a completely new wave count each time. I’ve done it 1000’s of times hunting each time for those missed wave three extensions.

Going back 100 years sounds too much like work, so it never gets done, which causes false degree levels to be perpetuated into the future. From my perspective and in sequential order, SC degree wave 3, GSC degree wave 3 and Submillenniun wave 3, are still far into our futures.

If we’re lucky we might hit a SC degree wave three, by 2029, and GSC degree wave 3 by the 2129 time period.

While all the analysts are busy forecasting an ever increasing rosy future, I’m busy looking at and building the alternate future.

I have two lines in the chart above, with the first one at the 1800 price level, which would retrace the entire 5th wave in Intermediate degree. The 2009 bottom fell well below the previous 4th wave of one lesser degree, which was in late 2002. Not quite 2 years for an Intermediate degree correction. It only took 3 years for a SC degree correction from 1929-1932, so a Cycle degree 4th wave correction might only last three years as well. We sure are “not” going to get some 600 year, GSC degree bear market.

At 1800, the SP500 would not even get close to any required previous 4th wave of one lesser degree, but anything below the SP500 1000 price level would. All the smart technical analysts will draw the megaphone bottom, which points to the SP500 price level around 500.   Everybody on the planet will see the same thing, which usually means that it will never happen. The markets will pull out all the stops to try and fool us a again, and it may do that by “Not” falling below those 2009 lows.

Just because the SP500 may have dipped 10% does not mean that the correction is finished. Like I said, price has little to do with it, but the pattern is everything. Only one completed set of 5 waves in Minute degree does not complete a correction. You can wish hope and pray all you want, but you can’t turn a single 5 wave sequence into a completed correction.

Sure, all the 5 indices I covered soared again late last week, but that can all be due to short covering. Many traders are trying to short DIA and SPY ETFs already, to a point where no more DIA can be borrowed.

Protective sell stops are stacked up below present prices, and once they start to get triggered, we could get the next leg down. All the SP500 has to do is fall below 2530 again, which will help to confirm that, “The Big Dip”,  is in progress.

Hits: 15

Mini SP500 Index Review

This is just the index chart of the SP500 and only moves during trading hours. It does not move at night like the real contracts do.  Some of the wave patterns come out more defined that those wild contracts that many investors trade with.  This chart shows much better the record low with no truncation or double bottom like it shows with the mini contracts that I normally use. There is no way I can ignore this index to double check in helping to confirm any wave count.

The SP500 index soared from the 9th bottom with only one main correction so far. This is a sign of a zigzag that may have just topped out.   Stock bulls are thrilled with this run as they think the 10% bull market correction is over!  Maybe so, but this move is too vertical and a correction must happen.

The fast decline from the top does not suggest that a correction has even taken place.  I would have to see a completed correction like a full fledged flat or zigzag, in order for me to call it a correction.  Just because this index dropped 340 points does not mean a correction has taken place.   The majority of all investors work on price, they care little about the pattern that has actually developed.

I believe that a Cycle degree 4th wave bear market is coming which I call “The Big Dip”, 😉 . All those that think they are buying into the little dips have no clue that this market has a long way to crash.

Steven Jon Kaplan has sent me a very detailed description of what’s coming in the next few years, and I am the last guy on this planet that will argue with him. EWI also thinks a major top is in and they are pretty good at picking tops. Picking the bottoms by wave analysts needs to be improved dramatically. If the younger investing crowd has no desire to learn what happens at bottoms, then they are following a strategy that the majority practice.

Most investors also ignore the sun cycles, even though the sun cycles control all action on earth. The switch from sc#24 to sc#25 may happen anytime close to the 2021 time period, and when sc#25  does start up,  all our bearish thoughts, bearish wave counts, and opinions will get trashed.

Hits: 4

DJIA Intraday Bullish Phase Update.

These futures charts do not produce the same wave structures as most of the ETF’s do, as there are far more intraday spikes created in futures than any other asset class. Many of these spikes happen so fast that I know or suspect many of them are computer generated spikes. In line type many spikes disappear, and when they do, I count the bar charts bypassing the spikes.

We had a truncated 5th wave just before the DJIA charged back up again, even leaving the previous 4th wave peak in the dust. I cover 5 indices and only the DJIA and the SP500 have made shortened 5th waves.

The rally since the 9th fits into a zigzag so if this market were to charge much higher, I would need 2 more full zigzag patterns for wave 3 and then wave 5. Waves 2 and 4 can just about be anything.

We’ll see if this rally lasts to the end of the day, but my take on this at this time, is that a new record high will not happen. Besides the wave count being false, the Gold/DJIA ratio had been bouncing off the 21:1 range many times. In order for this super bull to actually continue this 21:1 ratio would have to keep on expanding. It will take more and more gold ounces to buy one unit of the DJIA.

Recent reports mention that  Warren Buffet has been buying into Apple stock at record highs! Wow, even Warren Buffet is buying into this historic stock market peak. This is not what a true contrarian would ever do, but they will wait until the insiders start to buy again.


I thought I would add the DJIA big picture showing that Warren Buffett has been buying into the tops of  this historic bull market.

Warren Buffett more than doubled his holdings in Apple in 2017

Apple board members receive $262K in restricted stock


Buying into anything following Warren Buffet has produced serious downside moves in the past. Warren Buffet has lots of cash sitting around so he can buy something just because he likes it. Every major investor loves Apple stock, as it is one of the most widely held stock by institutions. Apple is in the DJIA and it will suffer in price once the “Big Dip” reveals itself again. Think that it’s a good time to invest as the DJIA records a record spike to the upside?

From the 2009 bottom the markets create 5 waves up in Intermediate degree. Not 5 waves in Minor degree and not 5 waves in Primary degree. If this record bull market has another super leg to go, then at a very minimum, the DJIA would still have to correct down to 15,000.  5th waves are never fundamentally strong like 3d waves are, so we will not get multi generations of 5th wave extensions. This has never happened in the past and it sure is not going to happen this time.

Hits: 10

US Dollar Intraday Crash And Rally Update!

The US dollar has resumed its downward path recently while the Euro charged up. This is the great inverse relationship that also influences the price of gold in US dollar terms. As long as the US dollar remains bearish over all, the gold price should keep on benefiting.  It also works the other way, when the US Dollar is set to rally, then it usually crushes the price of gold as well.

The gold price got crushed in 2011 as stocks took off  and the US dollar charged up during that time.  The US Dollar hit another record low this morning  before it reversed and charged back up  ending with another small spike to the upside.

To finish the 5th wave down I need 5 waves down in Minuette. Since it’s a 5th wave decline, this 5th wave can extend dramatically so there still could be some downside left in the short term.  Sooner or later we  may end at a wave 1 in Minor degree and then a strong US dollar rally should happen.  It could be a slow move or a violent wave 2 counter rally, but in the long run the US dollar should resume its bearish trend.

A rally does not make a bull market, but a rally big enough sure can fool the crowd. The easiest crowd to fool are the speculators as they always get themselves into a trap. Recognizing that a trap has formed or is forming, allows us to get out of or into positions,  that otherwise very few people can ever execute.

In order for the US Dollar to turn back into a real bull market, we need the commercials to switch into an extremely skewed net long position. They are net long already, but not nearly enough for a super bull to materialize. The bearish phase can still last until the end of the month, so until I see all 5 waves down being completed, this bearish phase is still active.

If we are approaching a higher degree wave 1, we could get some very choppy declining patterns indicating that diagonal waves are starting to dominate again.

Hits: 4

Bitcoin Is The Bear Market Over?

Has the Bitcoin decline stopped and has now returned to a bull market.?  I doubt it, as this present rally is not producing the impulse waves required. Bitcoin definaly sliced through the top trend line so that alone will bump the degree level up by at least one degree.

Iceland to use more energy mining bitcoin than powering its homes | Metro News

Bitcoin mining takes up a massive amounts of electricity and computing power,  where the miners in Iceland consume more power than the entire Icelandic grid needs to run its homes. Many miners are moving to places that have the lowest electricity rates like Quebec.

Even though this rally looks impressive I think Bitcoin can still fall well below $3000 per coin. Of course, this rally could just be coinciding with the stock market rally,  so we will see how long this rally will last once the markets resume their bearish trend. After all it was the Nasdaq bull market that spawned this Bitcoin Mania so Bitcoin Mania can also keep dying right along with the Nasdaq.  A $4000 rally does not make a bull market, but it sure gets the bullish investors excited again,  with the injection of “Hope”. Hope that Bitcoins keep going up in price.

The Gold/Bitcoin ratio touched 7.48:1 this afternoon, which is about a 50% crash from its high ratio of 15:1.

The amount of new Cryptos seems to keep going and now registers 1533 ICO’s,  with a total capital base of $467 billion US dollars.

Investors think they can hide Bitcoin gains from the government, but I think this is a big mistake in their thinking. Bitcoins are unstable at best and nobody in their right mind will hold Bitcoins when they start crashing again. Imagine buying a house with the price of $20,000 for a single Bitcoin,  and as soon as you get these Bitcoins they start to crash to $6000 in little more than a month. Bitcoins will crash faster than any real-estate will, so your Bitcoin windfall can turn into a disaster very quickly.

Hits: 12

Crude Oil Explosive Rally Update!

 

I was expecting a 4th wave rally and the markets did not disappoint us. There was a strong small counter rally that may put a crimp into this wave count, but eventually the crude oil should resume it’s southerly path to what could be a new wave 1 but in Minor degree.

So far the Gold/Oil ratio of 22:1 has been improving, but it will be a slow process. I constantly look at the daily and weekly oil charts, but switching  from a daily chart to a weekly chart will dramatically change the wave counts. Until all the oil bears have come out of their caves and sliced every oil bull in the process will we be in a position when oil can start another huge leg up. Maybe crude oil can turn back into a glut when the US government sells off its reserves.

Fundamentals are lagging indicators so if the experts see that an oil glut has arrived, chances are good the glut is over and a new bullish phase will start.  The markets will always do the opposite of what fundamental reasoning suggests, as the biggest gluts produced the biggest oil bull markets.

Until I see a great looking corrective oil crash playing out, I can’t turn bullish for the longer term.

Hits: 6

The VIX Crash Daily Chart Update

The VIX spiked up to 50 after which it turned south with a vengeance.  It was an ugly correction and if I’m right,  then another leg up in the VIX will happen. We can see that the VIX  developed a “wedge”  which every technical analyst is taught to recognize, yet they never saw this explosive VIX rally coming.  Everybody on this planet was betting against volatility, but in doing so the VIX bears painted themselves into a bear trap.

Yes the commercial traders ended up becoming net short the VIX, but that can all change dramatically in a very short period of time.

One thing we can always depend on and that is investors can easily get into a trap, and recognizing this fact before it reverses is very important. The VIX is a world full of diagonal wave structures so don’t expect some perfectly formed impulse waves to develop. It isn’t going to happen,  no matter how much we wish any pray for it to happen.

In late 2008 the VIX had already peaked out at 90, yet the bears persisted in forecasting lower lows in stocks.

Insiders were buying stocks in late 2008 already, so the VIX bull market was doomed at that time. Will this happen again?, of course it will, nothing will stop it. When the public and the VIX are in general agreement, then the VIX will see a dramatic reversal. This will not be easy to catch as the VIX may have to score 100+ before a big reversal becomes a reality.

Hits: 3

Mini Nasdaq Comes Back From the Dead.

The Nasdaq plunged to record lows on the 9th of February but came alive and then soared in a stunning rally.  Today is a new moon date, which in the past have produced some stunning reversals. There is never any guarantee of a reversal as it has never been reliable enough, to use on a constant basis.

What the media calls a 10% correction is just a Minor degree move in the language of Elliott Wave. That’s just a “Little Dip”  in a world where the “The Big Dip” can show up. A Cycle degree “Big Dip” can still take a few years, but many time markets have crashed just before the bottom when solar cycles arrive. This may take until 2020 or even 2021 but it sure will not be some obscure 600 year bear market.

Until all the 5 waves in Cycle degree are found and confirmed, there will be “NO” SC or GSC degree bear market. It is sequential and mathematically impossible to be in a SC or GSC degree wave count, without all the Cycle degree peaks being found first.

Yes, the Nasdaq has a few quirks that produced a different pattern, but we can still use it as a 5 wave count since the 2009 bottom.

The counter rally was very powerful but most of that came from protective buy stops that were in place. Protective sell stops are piling up below present prices, and they sure are not “buying the dip orders”.

We could still see the markets rally a bit further, but sooner or later investors running with the bulls will become tired and drop out of the race. If they don’t drop out,  I’m sure the sharp horns of the bulls may change their minds.

Any counter rally like we are in, would get completely retraced, if the big bear market is going to come back and haunt us.

Hits: 0

Mini SP500 Intraday Bullish Phase Update

Is the stock rally running out of steam or is it going to soar to the moon with another super leg up?  Many experts say that this is just a healthy 10% correct and that this bull market will return and soar once again.

Blame Ontario Minimum Wage Hike for Canada Job Plunge. Or Not. – Bloomberg

The experts see no recession on the horizon in the US markets, but in Ontario, where they voted themselves a minimum pay increase  massive amounts of layoffs were announced. I doubt it very much that the USA will skirt a recession while Canadian fundamentals implode.

Fundamentals are lagging indicators, not leading indicators. It took 9 years for the fundamentals to change from horrible in late 2008 to great in early 2018. When the markets start to turn down again, you can bet that the experts will come up with all sorts of fundamental reasons why the markets are going down. The second deep plunge in February sure looks like a nice declining impulse, but in reality it counts out much better as a diagonal making it a potential 5th wave.

Today is also a new moon date, which in the past has produce some dramatic or very energetic reversals.  The February double bottom will never hold if the “Dip” so far, is actually just the start of the  “Big Dip” in Cycle degree.  The blame game will continue as they always need a scapegoat to blame stock market losses on. It’s never about stupid investors or stupid money managers that always get into a trap, but they will blame computer trading as part of the reason. The fact is behind every computer trade is a human with an itchy finger sending Algorithms crazy.

Below todays present prices, the protective “Sell stops” are piling up, and we don’t need any fancy computer to figure that out. Traders have been brainwashed to move protective stops up, which will easily get triggered once the “Big Dip” resumes. “Big Dip” I mean a Cycle degree 4th wave dip, not some pussy Minor degree correction that we are presently in.

They had a “Big Dip” from 1929 to 1932 as well, which was a Supercycle degree dip. That only took 3 years to play out. I’m sure any Cycle degree “dip” will not take any longer.  In the long run solar cycle #25 will put a screeching halt to any bearish wave counts or bearish fundamentals that we can dream up.  Solar Cycle #24 also destroyed all the bears by early 2009, so never underestimate the power of the sun on human affairs on earth.

The Gold/SP500 ratio has been hitting 2:1 on the expensive side from a (.75:1) ratio on the cheap side.  When the bearish mood returns, then this 2:1 ratio will never be exceeded for many years.

Hits: 2

DJIA Bullish Phase Update And The Gold/DJIA Ratio!

Once I realized that this decline is not running as smooth as a 5 wave impulse decline should, I looked for an alternate. Yes, I labeled it a truncated 5th wave, but the other 4 indicies I cover do not contain any obvious truncation.

The majority are still in an extremely bullish mood to a point that they are foaming at the mouth. Running with the bulls will only last so long, but sooner or later the bigger bearish trend will take over again. Over and over we hear the experts constantly issuing bullish statements, which basically tell us that this bull market has a long way to go.

Hate to break it to you folks, but the experts have said the same thing at every major top since 2000. Those experts that are preaching the stock bull market are easy to spot as they get front page billing most of the time, or they may be looking for “value”.  In Canada, we had our employment meltdown, and are heading for a recession, so are US stocks going to soar while our TSE keeps imploding? Some wave analysts only cover one or two indicies, but I cover at least 5 of them, so I will be right or wrong on 5 indices.

I recently saw a DJIA wave count from EWI and they are also extremely bearish on the stock market. They are good at picking tops, but that only serves a very small percentage of traders. The biggest thing is to catch a big bearish bottom early enough, to take action to deploy more funds. The last thing we would want is to end up with a small token position,  because we had no confidence that a major bottom was approaching in 2009. The bear market was already over in November of 2008, well before the real bottom in early March 2009.

Overall the DJIA gained about 410% in about 9 years and they think it’s just getting started. The Gold/DJIA ratio sure does not confirm any part of this bullish rhetoric as it peaked at about a 21:1 ratio. It took 21 ounces to buy a single unit of the DJIA, the highest amount I have ever calculated. In order for this super bull to charge much higher this ratio “must” also keep spreading wider. 21:1 is a far cry from the 7:1 ratio in early 2009.  I believe this DJIA will return to a single digit ratio again. Yesterday’s ratio was 18.48:1 which is compressing  from 21:1 not expanding.

Since Apple is in the DJIA it will not be safe to buy the DJIA until Al Gore buys a bunch of Apple stock again. 😀 Just kidding folks, but you get the picture.  Insiders have sold out a long time ago, so until we hear of massive insider buying again, this bearish phase is still ongoing.

In most part, the commercial traders are net short most of the indices, so until those numbers obviously change the big bull market is not going to materialize.

Hits: 2

Gasoline Crash Update

This is the April gasoline contract with a daily chart setting. Since about June 2017 this contract charged up, in what looks like a pretty good looking impulse wave structure. Gasoline topped out on January, 26th and then proceeded to nose dive. So far gasoline has completely retraced below what could be the previous 4th wave of one lesser degree, but it’s far from being finished.

I can switch this daily chart to a weekly chart and you will never see this pattern to help confirm it. When I turn it to a weekly chart setting,  gasoline fits better as a single inverted zigzag, in Minor degree.

An inverted zigzag can mean that a 100% retracement of the entire bullish phase can happen. The little double top in gasoline did not happen like it did in crude oil,  which is a good thing. At this time gasoline is making a 5 wave declining run, but we should get a 4th wave rally for the next few weeks or so.

Not until I see a clear cut correction completing,  can I turn bullish on gasoline,  so be prepared for a long ride south bound. Well below this June bottom is the mother of all gaps which has never been closed off.  This gap is one of the largest in any futures contract I have ever seen. Open gaps work like magnets, but can also repel prices once the “Big Gap” is closed.

Even after this Minute degree 5 wave decline plays out, we could be looking at another 5 waves down in Minor degree. I may need to adjust this bearish phase degree level, down by one degree, but I will do that once this set of 5 waves is completed.

Hits: 4