Daily Archives: February 9, 2018

S&P E-Mini Midcap Stocks Update

All the January 2018 gains this market has made, have now been wiped out,  joining all the other electronic bits and bytes in the great digital graveyard 6 feet under.  Of course, many Bitcoin remnants are down there as well. What the majority once thought was real money,  has now started to evaporate.

You can bet that a big cluster of sell stop orders are congregating,  just below present prices and they will get triggered on the next leg down. Buying on the dips is a one way trip if the little expected dip turns into the, “Big Dip”, like 2002 or 2008.

This market has broken many records on the way up, and I’m sure it will break many records on the way down. One record saw the biggest one day point drop in history.

At the very minimum this Midcap chart should fall below 1200 which will take out my entire 5th wave which Trump takes credit for. He will also get the blame for any stock market crash that will come down the pike in the next few years.

If this is to come true, then my bottom trend line will get sliced in two, sooner than later.  It’s not rocket science to draw trend lines that everybody can clearly already see, because if you don’t see 2 or 3 points to connect, you are in the wrong world. Trend lines are so abused by the majority, that they look like a bunch of kids playing with rulers. Trend lines sure did not help in seeing the biggest bull market in history coming, so it sure will not help now in seeing the biggest bear market since the depression.

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Gold, To Die Or Not To Die Is The Question?

Gold has executed a pretty choppy decline, which I see as a good thing. Choppy declines can just be part of bigger corrections, and this gold decline has no shortage of choppy declining wave structures.  I would rather see a nice spike to the downside and then the reversal, so more downside may still be the order of the day. Gold reacts more to the US dollar than any other economic fundamentals, like oil might do, so I remain bullish on gold in the longer term.  Short term anything can still happen, so we have to remain open minded for more downside to come.

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US Dollar Bullish Cycle Still In Progress.

There still is a threat of the US dollar to head a bit higher as sideways movements can’t be trusted for very long. We could add on a wild little spike to the upside, which can always produce fantastic reversals. From my perspective, this is a 3-3-5 move which means its an inverted flat and a fake.

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Nasdaq Intraday Downside Breakout!

The Nasdaq decline, we’ve had in the last few days, not longer fits as an impulse very well. I started to get some 3 wave moves, that work better as zigzags, so it’s better to switch to diagonal wave counting for now. There is the potential for a downside breakout situation to end at another “A” wave in Minute degree. We may have to wait until next week before this starts to play out, but there are many sell orders being stacked up below present prices, especially at any potential double bottom.

When the market has switched to the bearish side, then bad news should keep forcing the markets lower. Over time the “Bad news” will no longer work driving the markets down, but instead they will start to recover shortly after the “Bad news” comes out. This usually means we are going to be switching back to a bullish cycle.

With this market crash, fundamental analysts see no change in the fundamentals at all, so they remain very bullish on this market. Fundamentals don’t drive prices, but prices change fundamentals.

Predict a price crash when great fundamentals exist, and you will see the economic fundamentals change after the price change.  The fear of rate increases could be the new “fundamental problem”,  even though they already have known about the higher rates for months already. The biggest fundamental change is that Janet Yellen is “out” and Jerome Powell is “in” which happened on February, 5th, 2018

The Fed – Jerome H. Powell, Chairman

The markets had already started to crash as Jerome Powell stepped in,  so maybe the markets will hate what the new “Fed” still thinks it has to do.

All that money that was dumped into the markets in January 2018, has now been wiped out! Sent to a digital graveyard, in a puff of electronic smoke. The majority has no clue what’s going to happen in the next 2-3 years as they think just a simple 10% correction is going to happen and then the bull market will continue on its merry way.

Good luck with that, as in order for that to happen, we need the majority to hate stocks again. The public is still, “in love” with stocks so we are far away from any meaningful correction being completed. At a very minimum the Nasdaq should travel well below the 4000 price level,  and that’s just to get warmed up, as some simple minded 10% or 20% correction will not do it.

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