Monthly Archives: March 2018

Crude Oil Intraday Gyrations Review

Last week, crude oil created a double top with the secondary peak being a bit lower. I show a starting 1-2, 1-2 count and a third 1-2 wave count might become visible due to the fact they are very small waves.  I show a “C” wave bullish move which I counted as a diagonal “C” wave. The Gold/Oil ratio has not changed that much, but this ratio at about 21:1 is running into a brick wall as it has been stuck around this ratio for some time.

There is a very good chance that crude oil will dip along with stocks, and when that becomes more obvious, then the Gold/Oil ratio should expand or get cheaper.

Commercials are net short WTI crude oil, but they are also net short the Europe Oil ICE futures. The speculators are in the exact opposite positions as they are the trend chasers and always get themselves in a trap. In this case speculators are caught in a bull trap. Until some of these numbers change I can’t see any extreme bullish oil scenario at this time.

The commercial traders deal much closer to the oil industry than any speculators do, so they carry a lot less risk than the speculators. Commercial traders are not going to store high price oil, because they make no money, but when the oil price crashes it is very profitable to store oil. They will pull out all the stops to make this happen when the price of oil crashes again. In one world oil glut, (2008) they had 25 tankers floating around the Mideast gulf region at that time. Low and behold all those tankers eventually disappeared. The same thing happened at the 2016 low, as they were stacking up oil carriers to deliver oil to China.

Not until I see that a huge corrective pattern has taken place can I turn bullish on WTI oil again.

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Gold Daily Chart Update: More Upside To Come!

Gold is making what looks like a correction, but with a bit more downside left to go next week.  Since the entire December 2016 low gold has created a choppy bullish phase that has been a real challenge to say the least. These choppy bullish moves also tell me that diagonal waves are involved, which develop in any degree “A”, “C”  in 5th waves. At this time the gold bullish phase is not finished, and that gold still has to break above the resistance price of $1375.

Bull markets don’t end when they are pointing down, they end when the charts are pointing up mostly in blow-off conditions. This blow-off condition should still happen which could push gold to $1400-$1600. At $1550 gold would run into the bottom of resistance, so gold has its short term bullish battle cut out for it.

The COT report has not been updated, but the previous week they added to their long positions in gold and silver even as they are still net short. With silver the commercials are just a bit shy of being even, which is a big change from what they used to have.

The US dollar bear market is far from finished and also has a bit more correcting to do. Also, as long as stocks are very bearish, then this alone could give gold a big boost! Some people are really hung up on the Gold/Silver ratio, which I think is irrelevant from a bygone era when silver was fixed to gold. Even though, I took a reading today, and the Gold/Silver ratio is at 81:1, which is the same ratio that happened with the 2016 bottom in gold. I will do a few more backward checks, but I don’t expect to find any Gold/Silver ratios helpful.

I use this gold futures cash chart for all my ratio calculations.

Gold stock ETFs  look like they are creeping down, but they can also still show us a good run. It is very common that gold can act much differently than gold stock ETFs can.

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Bitcoin And Ripple Bear Market Review

Yesterday Cryptos suffered another down day with all Cryptos seeing red! Last week the Bitcoin price level did not hold as the bears are still firmly in control.

The thing is you can’t blame the short sellers as you need a long established market to get that far which no Crypto has done yet. Since early January the Crypto world has been in a bear market  and there is no end in sight at this time. Bitcoin has a lot further to sink and soon we will be up against that magic $6000 number,  and another huge double bottom. The majority of investors doesn’t know what a bear market is and they sure don’t know the difference between investing and speculation. Bitcoin has no established cycle patterns except for one big move up and now close to a 3 month trip down.

Many Bitcoin investors think they are smart, but since when is the crowd smart enough to know how to invest in a crashing asset class?  By “April Fools Day”  Bitcoin will be starting its fourth month in a bear market. One metric I use to see this bear market, is by tracking the total capital space.  This peak capital base ended at about $814  billion USD! On Thursday this number dipped to $256 Billion. At this time $558 billion US of investors’ money, has evaporated into thin air! This is a clear signal that the majority of Crypto investors has been losing money since 2018 started.

One other metric I use is the amount and rate that new ICOs are being issued. In a full week, this works out to an average of just under 20 per week, and by early April we would have 1600 ICOs ready and willing to steal investors’ money!

College students are secretly mining bitcoin in their dorms: ‘On room check days, I have to put a blanket over it’ – MarketWatch

When investors lose money, then the first thing they do is point the finger of blame at anybody else except themselves. . It’s never the stupid investors buying at “Mania” tops that get the blame, but the experts can dig up all sorts of reasons why Cryptos have been crashing. Wall Street is good at inventing financial instruments, as the 2007-2009 market crash clearly demonstrated! Remember all the toxic mortgage investments they came up with during that time?

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Intraday Mini DJIA Update

For now I’m calling this a “truncated” “C” wave, which in reality can be part of a running zigzag. If it’s not, I know I will have to adjust my wave counts to include or exclude this secondary top. The Nasdaq has already pushed lower so I see no reason why the DJIA will not do the same.  I’m going to keep my updates shorter, but still want to cover the US dollar, Gold and oil.  The Gold ratios seem like many of them have been hitting a brick wall.  At 19:1 the Gold/DJIA ratio is about as expensive as we can get

This means it takes 19 gold ounces to buy one unit of the DOW from a record of 21:1 which is the highest that I have calculated. This ratio should compress in the years ahead until it no longer takes so many gold ounces to buy one unit of the DJIA.

For those traders that are looking for that mysterious “Support price”,  have to ask, “support for what?”  Support big enough to push the DJIA to 34,000, or just temporary support in an ongoing bear market?  By this time sell stops are piling up below present prices so any new downside will start to trigger them as well.

Yesterdays dark pattern in the chart looks like it was computer generated as the DJIA wasn’t the only futures contract where this happened. Among the 5 indices I cover, two of them are very different, so this will provide some unique wave counting challenges down the road. This has all happened before and only time can tell us if the bearish phase is going to carry on.  The start of solar cycle #25 will destroy all bearish wave counts, opinions and forecasts so I consider following the sun cycles extremely important. The sun cycles are responsible for the business cycle, as it sure was not the government that saved the markets in 2009, it was the start of solar cycle #24 that killed all the bears.

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Bitcoin Still Heading South, With Ethereum Commentary.

From a list of about 1594 Cryptos, Bitcoin, Ethereum and Ripple are the top three and in that order. So far Bitcoin shows no sign of slowing down as yesterdays double bottom did not hold. We may have to wait until the next ice age before we will ever find the support for the next major Bitcoin bull market to come.

Of course that day may never come except for some surprise rally that will run out of steam as well. Iv’e kept my wave count about the same, but started my 1-2, 1-2 wave count. To extend a 5th wave decline I would be looking for at least three sets of 1-2 moves.  They may be waking up to the fact that Cryptos are not that safe as even Ethererum is taking huge losses. I don’t think Bitcoin investors realize the fact, when a bull market is over. Even in stocks, some  analysts can sense that the bull market is over. Investing and speculation are two different strategies and I loath it when they are talking about “Investing In Bitcoin”, even after it crashed from $20,000 down to $6000.

Some “Bitcoin” investors think there should be no crashes as they cry about it when they get wiped out.  All Cryptos started from zero and they sure can head back to zero. One main reason is that Bitcoin has no “intristic” value.  Anybody that makes a comparison, calling Bitcoin a “gold”  replacement has  little gold history knowledge. Ten years from now the only Bitcoins you may find are the collectors tokens we can import from China. I made a necklace with one of my Bitcoin tokens and I sold it right off my neck in a restaurant for $20!

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Amazon Bull Trap?

 

This Amazon bull market can’t last forever, but it sure looks like it will keep soaring to the heavens, after all they are crushing brick and mortar stores consistently. I guess AMZN investors never heard about the trade wars that may be starting or is Amazon impervious to any trade war or recession?  The move in 2007, to late 2008 is a potential wave 3-4 in Primary degree, and what followed fits better into a diagonal wave count, but I have been using the simple count at this time.

If you notice how the horizontal lines get smaller as the bull market keeps running, then we know that just a little correction can send Amazon crashing hundreds of dollars in a very short distance. Just to get to the bottom trend line Amazon would hit the $600 price level.

One of the expensive Gold/AMZN ratios back in July 2017 was 1.16 and today we have about a 1.2:1 ratio. One ounce of gold will only buy 1.2 shares of  Amazon. I measured a cheap ratio of 25:1 at the 2002 bottom so I doubt we will ever see that ratio again. Amazon would vanish before that crazy low ratio will get hit again. In todays world anything can happen, so I never rule out anything even a 25:1 ratio.

We seem to be heading into a brick wall with our present ratios, and more than just a few times, so this can be a very bearish sign for Amazon.

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Nasdaq Intraday Crash: Showing Us The Way!

Do we still have lower highs since the peak of the Nasdaq?  That’s a trick question as we can get this in any decline! Because the Nasdaq broke to a new record low at bullet train speeds, We could get a violent reaction but 5 waves pointing in a direction is telling us there is more downside to come. The other indices will catch up, but small difference will happen, is when a big difference appears, then it always needs a second look. The Nasdaq  marched to a different drummer again, this time it was just to be the last index to top out.

There are only two trading days left this week, so more downside is an option, but wild swings will surprise us. This may all smooth out a bit more once the Nasdaq trend is more established.  Either way we are heading what the mainstream might call “critical support” will come at the 6300 price level. Critical support for what? A new phase in the stock bull market? I doubt it very much!

The only support important enough is the one just before stocks strike out into another 8 year bull market. Not until the majority hate stocks again will a new bull market hatch!  Now if only AMZN would crash! After a quick check  Amazon’s stock price peaked at $1617 and is now down $120. I will create an Amazon post, but also talk about the Gold/AMZN ratio.

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Gold Intraday Rally: Impending correction?

An inverted zigzag could have started in the first part of March and they can always get retraced by 100% or more so until this clarifies, I have to look at a short term potential bearish move in gold. Besides that I am starting to notice that I’m working into degree levels that are getting smaller and smaller. I only have two smaller degrees left from what I’m using which is not a good sign. It means I have to take another look on the daily charts to see if a higher degree is warranted.  Any move down to $1300 would accomplish a complete retracement, but diagonal waves can trash the bearish outlook easily.

The US dollar may have a short term bullish surprise for us and until that has played out, gold will see downward pressure.  Any moves in this commodities world can be very violent which many traders do not like! Get used to it because leverage is one of the main causes of violent moves. Bitching about violent swings or thinking commodities shouldn’t crash is a totally naive outlook. In commodities “fear” is the main driver of prices. In the general stock markets, it’s greed and hope that drive prices.  Fear comes into play when stocks start to correct or head down.

I think gold still has to go well above $1375 as the  bull market has consistently produced higher lows. If we don’t pay attention to higher lows then we will always get out before it’s time to do so. When gold makes a vertical move, then it may be a different story.

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Mini SP500 Intraday Rally Update!

 


 

The markets have started to correct, but for how long is arguable at this time.  I would love to see this wave structure finish and push south, but the fact remains, a diagonal wave structure could be starting so this market can still push much higher.  We need to see a small correction and then push higher again if the present bottom is going to hold for a little while longer.

Any bullish phase could head up forming a double top along the way as this market is trying to fool us again. Don’t get me wrong, this market can go south dramatically, but  that would be the easy thing to  expect. For this SP500 to leave us with a clear Cycle degree top, is just too simple or easy to accept at this time.

The small bullish move we’ve had in the last few days has to completely retrace itself, before it can be called a completed zigzag. My updates will be a bit short at times this week, as many other wave counts need attention as well.

For now we have to see if this rally has legs, but if it does not, then only a complete retracement of this move would be acceptable.

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Mini DJIA: Are The Bulls Returning?

I mentioned that the DJIA had  a move that would put it into Minute degree already. Another finished zigzag pointing down, can send the markets the opposite way, which looks like it already has started.  The DJIA counter rally has already gone far enough, so if this impulse goes ballistic chances are good, it’s in a “C” wave bull market. This would just lengthen the time this wave 2 can play out, but it’s that odd secondary peak that was out of place.

We are building a base for support, but this is only a temporary roadblock. It may take the rest of this month before this rally hangs in there and keeps soaring. March seems to be a popular month for reversals, but we’re also running short of time. If an inverted zigzag still needs to finish, it will still get retraced by 100% or more.

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Russell 2000 Intraday Update

The Russell 2000 did not travel to new record highs, but it came close to doing so. The tape also shows a great H&S pattern after which the Russell 2000 started to decline again. My main Plan “A”, (5 waves down in Minor degree) is the top contender at this time.  There is very little action trading the Russell 200o futures so I use line type settings so we can see this part better.

It’s not Elliott Wave rocket science to know what idealized 5 wave patterns are supposed to do, so when it deviates dramatically then we know we have to look for alternatives. Even now I’m looking for a 1-2, 1-2 count still to come, as we already have completed the first set of 1-2 waves.  We are not at wave 1-2 in Minute degree just yet so that would be the second 1-2 wave count, and then two more would show as well.

This would give us a wave 3 extension, but the last 5th wave could also extend, or short just like our present wave 1-2 in Minor degree. We just can’t have all three sets of waves extend at the same time. In this case we already know that the first 1-2 wave is going to be the shortest.  Once the third 1-2 wave has completed, then only sets of 3-4-5 waves will come in. This is exactly how I count the different 3 wave tops in the stock markets. The only difference is that we are in a set of 5 waves in Minor degree but heading south.

The Russell 2000 also has a huge base at the 2009 lows, which the Russell 2000 could head to.  The Russell 2000 would have to fall close to the 750 price level just to get into the price territory of the previous 4th wave of one lesser degree.  Sometimes  markets, even go lower than the previous 4th wave of one lesser degree. Any price retreat to the 550 price level would put the Russell 2000 just below the 2011 lows. Markets are born to disrupt the millionaires who are rich, on paper at this time, because in a bear market the millionaires will start to disappear along with some of these freshly minted billionaires.

It’s not just billions that will be lost when the markets go down, it will be trillions of dollars that will evaporate in a cloud of e-smoke.

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Peak Gasoline Intraday Update

You heard about Peak Oil back a long, long time ago in 2008. I’m sure most have already forgotten that time period as investors were told we were going to run out of oil. How wrong those experts were at that time as there were forecasting $200 or more oil prices to come.  What happened is that crude oil peaked at $147 and then proceeded to crash to about the $34 price level.

This gasoline chart is on the output side of refineries and could be mixed with other blends to get the desired fuel. Aviation fuel is part of it, but the yearly switching to and summer demand is starting to happen. Of course, if we have a stock market crash, then demand can falter. Gasoline did not go to a new record high like crude oil did, so gasoline will have to have a separate wave count as a potential bear market in gasoline could be looming.

Just below the 2017 low, gasoline has one of the biggest open gaps, that I have seen on in a futures chart. This mother of all gaps will get closed once the bearish picture shows itself to more of the gasoline traders.  For starters $1.84 must get retraced and then the $1.46 will also have to get retraced. That 2017 bottom would be a target price where a bear market can turn into a huge bull market again.

Any 4th wave bear market rally usually gets completely retraced, which means lows below 2015 should also happen. It will take some time before we can confirm anything. Commodities have the amazing ability to crash when the experts think it can never crash, so ample warning is prudent.

First this present wave 2 rally has to be retraced before we can jump up and down, looking for a 5 wave decline. Another full zigzag decline is also high on my list, which will need degree adjusting later on. (Minute degree wave 2).

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VIX: Another Leg Up?

So far it looks like the VIX wants to keep the bullish run alive, and I’m sure not the one to try and convince the VIX  into going the opposite direction.  We have a small gap above present prices, but we also have a bigger gap still open below, at the bottom trend line.  In the long term the peak $50 price level must get retraced if this VIX bullish run is to continue. Since the January bottom, the VIX has created higher lows which is encouraging that the VIX may have some running room left yet.

A small H&S pattern has been created, but this can be a very bullish sign as the VIX could be getting ready for another upside breakout.  Besides the VIX retracing the $50 price level, it should also break the $90 price level in the next few years. Vertical fear levels cannot be maintained over the long term as investors would fall dead from all the stress fear creates!

The entire VIX pattern is diagonal related so it’s next to impossible to pick out a good looking 5 wave impulse, except for very small ones.

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Intraday Bitcoin Review: There Is Only One Of 3 Ways it Can Go!

Any basic chart is a two dimensional thing and no 3-d or holograms will form. North, South or East are our only three choices. For all of March so far Bitcoins have been heading South, or South-East. Will it break out, slice the top trend line and head North again? My wave counts are very speculative and can get trashed as soon as they are posted.

I’m working a basic diagonal set of 5 waves heading down a potential 5th by one higher degree. This is a pretty deadly combination, as normally it would signal the end of a bearish phase. The problem with that is that Bitcoin has “NO” track record of establishing big cycles. Every asset class has huge cycles in it, but Bitcoin is only heading down?

From my Cycle degree perspective a true bull market will consistently leave old highs in the dust, but Bitcoin is no longer doing that. Bitcoin has been in a bearish phase for well over 3 months, (all of 2018) which could just be getting started.

To be in a real bull market, the $20,000 price level must be left in the dust! How long are those investors going to hang onto Bitcoins if it keeps falling in price? They will get pissed off and when they try to sell them, they find out they can’t get US dollar back into their checking accounts. The flow of US dollar cash has to flow into your home account smoother and faster than it goes into your Bitcoin trading account.

All the Bitcoins in the world will be no good, if there is no smooth flow of funds back to you. My personal guideline is, if you can’t get your money in less than 5 business days, then chances are good you don’t own it.

College students use financial aid money to invest in bitcoin – Business Sector

Warning, crypto investors: You must pay taxes on your bitcoin – MarketWatch

Most of the Bitcoin winners will find out the hard way when the IRS hounds them for not paying income tax on their Bitcoin sales.

The Gold/Bitcoin ratio has compressed from about 15:1 to a present 6.4:1. It now only takes 6.4 gold Troy ounces to buy one Bitcoin.

The 1987 crash was a computer driven crash, but Bitcoins have displayed no such sharp decline yet. Even if the Bitcoin prices crash like the 1987 crash, it does not mean that a bull market will kick in. In the long run Bitcoin prices could flat line and never recover. It is also interesting to note that the COT report shows no sign of the non-commercials playing the Bitcoin game. The Speculators are doing all the Bitcoin futures speculation. They are only net short Bitcoin by a ratio of 1.35:1, which is nothing in the big scope of things.  Even with the speculators I would like to see more of an extreme ratio, which could be a potential bear trap.

All the Cryptos capitalization is only about 329 billion today, which is also just a very small part of the market. Let’s put it this way, “any super Bitcoin crash will not take the general stock markets down, even though the Nasdaq could implode for different reasons.

I may only update Bitcoin charts once a week either on Sundays or early Mondays, as it is not at the top of my priority list.

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A Look At The Dow Jones Transportation Average Index!

Dow Theory

Since many are starting to talk about the “DOW theory”, I decided to look at the DJT index to see what has happened. In short the present bearish phase is not different than the DJIA I have been using. A recent correction in the DJT has also taken place at the same time as all other markets have been doing. So this just confirms, that the DOW theory may not be any help at all.

All my trend lines are based on the angle of the top trend line, with the middle line helping to determine the trend of at least one lower degree. At a minimum, we would enter Intermediate degree wave patterns when we get to the center line. At the 2000 price level, we have a huge base that would present  an extremely bullish setup in the future.  Any Cycle degree correction would have to slice through the bottom trend line, as all general markets I cover can go below 2011 bull market lows.

I’m not going to update the DJT on a regular basis, but it is another Index we can watch, to help determine the next big bearish bottom.

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Crude Oil Cash Chart: In A Bull Trap?

This is the crude oil cash chart, with monthly chart settings. None of it is labeled, but I wanted to highlight the move from the early 2016 bottom to our present March 2018 top. Last week, crude oil did break to a new record high, but only by about 50 cents so far.  This makes for a potential finish to a diagonal 5th wave zigzag at about $65.74. The correction that oil gave us  from mid 2010 to mid 2011 is best described as an expanded running flat in Minor degree.  No, it’s not a fancy new breed of patterns that has been born, because I have been using it for some time already.

Oil sure can go a bit higher early next week, but all I can say is that a true inverted zigzag, that is ending with a “C” wave, is usually a big bear market rally. (Fake Bull market)  The wave 3-4 as Intermediate degree, can only happen once it’s past a Cycle degree top. 2008 can be wave 3 in Cycle degree and we are going to finish a bigger bear market that has been going on for close to 10 years. The real big bear rally that ended in 2013 was completely retraced, so I don’t see why a much shorter 4th wave bearish rally cannot retrace by 100% as well.

In this case, crude oil could be finishing the 4th wave in Intermediate degree and a big reversal should start to happen. Another crude oil zigzag heading down can develop, and it would help to confirm the diagonal wave structure at the same time.  Crude oil has a very strong history in displaying fast unexpected long crashes that can stun all the crude oil bulls.

Even with the wild moves we’ve had the Gold/Oil ratio has not dramatically change, but it is having great difficulty in continuing to compress. ( More expensive) The Gold/Oil ratio is about 20.47:1 and it seems to be running into road blocks at this time. The ratio is not at an expensive extreme at this time, but it sure has been hitting a brick wall for many months already! A great oil decline will certainly start expanding that ratio again. A 5th wave decline  could produce another glut as oil is more profitable to store when it becomes cheap. Oil traders make no money if they are storing expensive crude oil, but they sure find lots of storage room when oil is cheap. Filling up all the available super oil tankers seems to be one of their favorite tricks.

Any bear market rally with oil can retrace that $28 low and even head to $21 a barrel. The solar cycle has a lot to do with the price of crude oil as the 2008 crash ended when solar cycle #24 was about to start. The oil price can crash right along with the general markets like it did during most of 2008.

This oil price is about the same as the June contract price, which tells me there are no real crude oil upward price pressures at this time. Now if the June or even December futures, were priced $2-$3 more, I then would remain very bullish on oil.

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US Dollar Another Downside Breakout!

The US dollar is under pressure and it is right on the wire at the 89.400 price level. That’s only a hope skip and jump away from the Fibonacci 89 price level. I could paint you a very bearish US dollar picture just by flipping my trend lines at a very steep angle.  I’m sure there is more downside, but once it reaches the bottom trend line, we could be finishing a flat type correction.  This could ignite a “C” wave bullish run in the US dollar, and before you know it it will be over as we may be in a wave 2 rally.

The US dollar could fall well below my bottom trend line, but that would only make for a shorter “C” wave move.  It can still take all of next week for the USD to show its true colors in the short term.

Longer term the US is going down until everybody starts to hate the US dollar again. Besides that the commercial traders reports will become skewed. This time it’s the speculators that have joined in on the bearish side as they too have become net short by about a 1:1 ratio. Nothing to get excited about, but those numbers will shift and until the speculators have pushed their short positions to the extreme, we’re not going to get a huge bull market.

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Canadian Dollar Daily Chart Review

Our Canadian dollar executed a swan dive that now has come to a bottom and has started to rally. At the same time we have a pattern that sure looks like a triangle. If this is the case, then the CAD can still soar much higher until another new record bear rally happens. This is the bullish scenario that still may play out, but all that means little if our CAD starts to break to the downside again.

We may need to give the CAD a bit more time to see if higher lows also start to develop. Higher lows at the intraday scale would not really help because the wild swings can slice through any trend line. In this potential triangle the first zigzag is missing so the very top can still stand as my “C” wave top.

It is the August 2017,  3 wave rally that can belong to the diagonal bullish phase. Our present move can still wobble around until the end of the month, so anything can still happen in the short term.

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Crude Oil Still Double Topping

This double top is so close to call that I switched back to a potential zigzag bullish phase that can work in a diagonal 5th wave. Gasoline is far from reaching any potential double top,  so we have a good divergence between the two types of commodities. There is not much we can add to the short term picture except that oil can head south right along with the stock market. The commercial traders don’t instill any great urgency to pile into this extended bullish push, as they have been net short for some time already. $65.50 is the price to beat with this very busy June contract. Once mid June rolls around, I will then switch to the December contract which is just as busy as this June contract is.

The December contract is also much lower in price by about $4. It would be far more bullish, if the December contract is higher in price!

The Gold/Oil ratio has not made any real dramatic moves as it has been averaging around the 20.5:1 ratio. This ratio must keep compressing otherwise it has a high probability of starting to spread. A spreading Gold/Oil ratio would then show us that oil is getting cheaper when we use the Troy gold ounce as a measuring tool.

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VIX Intraday Crash Update!

The VIX rocket move perfectly reflects the fear that was present in the SP500 and the fear gage is starting to dissipate for now. Of course, if the bigger bearish scenario is alive, then the VIX should find a bottom, followed by another leg up.  This leg up could produce another complete set of 5 waves up, but not before a good correction has taken place.  This may not happen until the VIX settles at the previous bottom of the 4th wave position.  Just below that is a big gap that is still open, so this open gap has a good chance of also getting filled with this trip down. Just under $15 would close the gap which can repel the VIX to soar again.

Higher lows also have to dominate as well to help confirm that the VIX is still in a bull market.

 

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Bitcoin Update Heading Down Again!

Last week Bitcoins made a move down that looks like a zigzag and part of a potential diagonal. I will keep my 4th wave top in Minor degree but, I’m also exploring that the 4th wave can turn into an “A” wave.  Any “B” wave decline from an “A” wave would contain a drop much steeper than anything we see at present.

Sure, I have a very bearish outlook on Bitcoins and all Cryptos but Bitcoins is in a bearish phase from which it may never recover from. I don’t think all those that love Bitcoin don’t even know what a bull market is?   A crash from $20,000 to $6000 in 5-6 weeks is not a bullish phase,  folks!  In order for any asset class to be even close to a bull market, they must consistently display higher lows. Do we see higher lows in the Bitcoin patterns? Not really because Bitcoin “has” to travel well above $20,000 to still be in a bull market.

Some have even declared the Bitcoin correction over, and if it’s over than higher lows show prevail. Since the major top of $20,000 Bitcoin has not created  higher lows that I can see.  They are still pumping out the new ICO’s and we were at 1578 as of this morning. Until that number slows down or even shrinks, then the Bitcoin Mania is still alive.

The total capitalization of the Crypto world is running at $325 billion, and not going anywhere fast. This works out close to about $490 billion that has gone up in smoke! The electrons that are left are buried in a digital graveyard somewhere.

I think Bitcoin will head well below $6000 and then we will run into cost of mining issues. Any analysts should know what happens when the cost of production is much higher than the product you are mining!  Sooner or later all the so called Bitcoin investors  will get tired of Bitcoins not going up and they could also sell out in disgust.

The markets are in turmoil and Bitcoin seems to be doing the same thing.

I may only have the time to look at Bitcoin once a week, because other markets are much more important. The Crypto world is just too small to take down the rest of the world.

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E-Mini SP500: Impending Rally Update?

Talk about a great downside breakout, but the angle of this present decline has been very steep.  Some counter rally is due, which could trigger all the “Buy” stops.   Usually the spikes get retraced, if a small 5th wave move has just completed. A fast move back up to the 2720 price level at the 4th wave peak, could also happen.  If this potential wave 2 rally happens, then we need wave 3-4-5 to play out.

That might get us to wave 1 in Minute degree. I will keep some of these updates rather short as when markets change directions, violence can ensue.

The US dollar would also see a rally, if stocks suddenly reversed on some “good”news. If any so called “good” news comes out and stocks hardly move, then any rally will be a fake and then die just as fast. Continuously getting lower highs, is just a bull market in reverse, at least for some of the 5 wave sequences.

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Nasdaq Also Having A Bad Hair Day!

The Nasdaq also carried on with its bearish decline which is dominated by the big four monsters called the” FANG” stocks.  FB is the worst and leading the way while FB, and GOOG may have completed their tops. AMZN is one stock that is still hanging on for dear life.

The Nasdaq is also on a different wave count, so out of the 5 I cover I have two wave counts that are dramatically different. In the end it may mean the difference of a few weeks when all indices start to bottom.  I have two downside breakout lines drawn out and each one can provide temporary support, but ultimately will not hold if the bigger bearish picture has taken hold. Total retracement below the 6200 price level would be required, but in a Cycle degree correction any bearish move will crush the markets. The majority will call it a bear market, but from a Cycle degree perspective, it’s just a correction, a “Big” correction.

Any market that has corrected in the past,  has always seen the markets push higher once the bull market resumes.

Ultimately the Nasdaq could fall below the 2011 lows, which is around the 2000 point level.

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Mini SP500: Having A Bad Hair Day!

For a brief time investors were indifferent to any rate increase, but they were already bearish well before the announcement on Wednesday. We also have a great looking H&S top which can give us a very ominous sign, that can also work as a brick wall. At very tops in bull markets H&S are not bullish indicators like they were during most of the 2009-2018 bull market. In a bull market the right shoulder would constantly break higher!

For the first part the February bottom must get completely retraced to kill the idea that this rally is not part of the bull market. It is the Mini DJIA that has a different count, but it will also do what all the other indices will do, and that is to head south!  What that means is that the SP500 can bottom a bit later than what the DJIA might do. This all could smooth out as any trend gets more established.

The love affair for big tech stocks is starting to wane, being anti Facebook is going to be the thing to do as privacy issues are a concern. Investors are finding out how those “FANG” stocks can get clawed to death by the market bears.

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Gasoline Intraday Update: Running On Empty!

The difference in the wave patterns between gasoline and crude oil charts is substantial. Well below the 2016 low, there is a huge open gap. The largest gap that I have, across all the commodities that I have looked at. This mother of all gaps, will get closed off in the years ahead, which will produce a bearish phase, that very few people will see coming.

Gasoline has created a choppy bullish phase that works better as an inverted zigzag 4th wave rally,  in Intermediate degree.  Our recent rally runs out of steam well before any upside breakout, which could be a wave 2 top in Minor degree.  We also have an inverted Head&Shoulder (H&S) with three support price levels that technically should not hold.

There are sell stops piling up below present prices, which work as landmines that can blow-up and wreck havoc with our wave counts.  Inverted “C” waves can produce some stunning moves, but they can also deposit a spike in the charts and then proceed to crash.

It may take well into April before we see a better picture, but I sure would not remain bullish with this type of pattern.

In both crude oil and gasoline COT numbers, the commercials have net short positions, and this alone can give the gasoline bulls a big headache!

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Crude Oil: Break Out, Or Bear Attack?

Once I had a look at the intraday chart I had to bump it up to 3500 bars from my normal 500.  This allows us to go back further, but still keep Intraday settings.  At the $65.36 price level crude oil could be hitting a brick wall, at least in the shorter term. We have a double top and a big obvious Head. In true bull markets, these types of H&S setups can be very bullish,  But if we are ending a bullish phase, then this H&S pattern can be an ominous warning.

It sure looks like a bullish zigzag but I do have choices depending what oil will do next, if it crashes with another zigzag, then a triangle will work, but if any decline looks more like a 5 wave sequence, then an expanded flat could be completed.

We could roll around the $56 price level for a little while, before oil turns and soars again. I think if another zigzag develops heading down, then we should get a big “b” wave counter rally.  I will give crude oil until the $55 price range, but after that the wave counts could get trashed rather quickly.

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Silver Daily Chart Update: Starting Another Bullish Phase?

Recently silver has been declining until today as silver woke up! This daily chart is vastly different than gold. Sure, they both do go up, but they are vastly different wave counts. From mid 2016 silver has pattern swings that overlap every wave next to it. To put it bluntly, there are only very small 5 wave sequences which turn into zigzags and then reverse trends.

For the correction down to July 20, 2017, a triangle is my favorite, but a very complex diagonal will also work. The last drop into mid 2017 has also ended with a clean zigzag, which happen in the diagonals as well as triangles.  Once we look carefully from the 2017 bottom, (B Wave) we had two higher lows which is the sign of a bull market or big bullish phase still in progress.

Higher lows are created by crashing flats or zigzags and in a bigger bullish phase zigzags retrace everything from where it started from. There is a big zigzag that has not been completely retraced as silver would have to go above $18.20 to do that. Above $20.80 would be the ultimate prize.

Even at $18.50 silver could head south again, but we will deal with that if and when the time arrives. In the last week I have handled a few of those new 10 ounce silver coins and they are some of the best looking coins I have seen. Silvers recent correction looks like it can contain an expanded flat, so I better start the count as the first stage to zigzag.

In order for that to get confirmed I would need silver to head to $17.80. On this daily chart, we have two major price hurdles to clear before any bullish move is completed. Sure, it all has been slow going, but when a “C” wave gets unleashed, the short players will get burned.

I’m not concerned about any rate increases that may still be coming this year as that is a sign of impending inflation, and it’s when gold and silver is supposed to shine. Sure silver and gold can fluctuate wildly in price, but it has an intrinsic value to it, where it can’t fall to zero like “any” paper  or  cyber tech asset can.

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Mini Sp500 Intraday Update

Nothing has changed radically in the last few days as the markets have not made a convincing move just yet. Any Fed announcement could still send the markets soaring. Any diagonal 4th wave bottom could still be developing.  We have a H&S top which does not inspire me to keep a very bullish outlook, but hopefully by the end of the week this mediocre movie will show its true colors.   Many analysts are calling for a correction with many different price projections being forecast.

My question is, “How Big Of A Correction”?  We have hundreds and even thousands of corrections in a bull market so knowing what degree of correction is critical. I’m looking for a Cycle degree correction, which could eventually take the SP500 back down to the 800 price level.  When the SP500 ever gets there, I’m sure all the experts will no longer call it a “correction”, but they will call it a full blown “bear market”.

We can have crashes without bear markets just like the 1987 crash. In 1930 the markets started a bear market that took two years to bottom so any comparable move could also take just a few years.  There is no logic to time when using degree levels as we had a Primary degree correction that took 4 years and a Supercycle correction that only took 3 years! All  my stock market wave counts are based on finding the 5 waves in Cycle degree because without them, we have no hope of of moving into the world of SC degree wave counting.  I spent years, counting the markets in SC degree, but when we were all missing huge bull markets then this raised some serious questions.

I switched to Cycle degree counting in 2013 and I have not found any need to switch again. We can dick around with wave position gymnastics  at the smallest degree level, but they mean nothing if we keep missing bull markets.

This market has to produce lower highs, and lower lows with all rallies having a limited life span. This is how conventional wisdom is called a bear market.

 

My updates are going to be sporadic this week as I have many other things that need my attention, but I will update when I can.

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Crude Oil 2009-2018 Weekly Chart Review

What the majority that called that crude oil was in a bull market didn’t pan out that well. The crash into the 2016 bottom made sure of that. Even now, many call this a bull market, but they are also waiting for a correction. With crude oil we have monthly contracts, but I always look ahead to see where the next busiest month is.

Without a shadow of doubt,  the June 2018 and December 2018 contracts are the two busiest months. This means when the June contract expires I will be going directly into the December 2018 contract month. There was a 25 cent difference between the April and June contracts which is nothing in the bigger scope of things which produced  little change in the Gold/Oil ratio. I will talk more about the Gold/Oil ratio at the bottom of this page.

The fact that I’m showing a Primary degree “B” wave top must make the July, 2008 peak a Cycle degree peak. At the early 2009 bottom, we have a bear market about 7-8  year’s long, plus another two years in our present rally. It would be something if crude oil ended up with a bear market lasting 13 years!  I don’t think we can get that lucky because the big question is if our present rally is a fake.

This could still take a few more years and we need something more solid to go on. During the 3 year, topping process oil created a classic wedge which gave us a clue that a down draft in the price of oil was coming. Flip this wedge in reverse and you would get an explosive rally, like what happened with the VIX.

 Analyzing Chart Patterns: The Wedge

The H&S pattern didn’t disappear or is no longer important, even with a higher right shoulder. The January 2018 peak finished at $65.52, but there is no guarantee it will hold in the short term.

Crude oil crashed along with stocks in 2008, but also recovered with the stock market in early 2009. What has happened once can happen again, so I sure don’t want to rule anything out.

Any 4th wave bullish phase should technically get completely retraced, which would be lower than $28 on a weekly crude oil chart.

America has become a giant oil exporting nation so they can pump as much as other countries are willing to buy. The supply may not be an issue, but demand could dry up and blow away. This is speculation based on a possible 4th wave scenario in Intermediate degree.

Why U.S. Oil Exports Are Surging | OilPrice.com

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HDGE Review: Has The Bull Market Arrived?

 

This HDGE ETF travels inversely to the stock markets. Due to its short history I’m not sure which index it follows the best. Either the DOW or SP500 will work.  We really don’t need all the history if the 2015 4th wave is at the correct position. If the stock bull market is to continue like once they all said it would, then the original HDGE decline would have to go much, much lower.

Until it hits $5! At $5, many ETFs can create an inverse stock split, of 4:1. At $8, and a 4:1 inverse split, this HDGE would then be $32.

Many ETFs can pivot around the even Fibonacci numbers like it is now doing at $8. When I count up by jumps of 1.618, we get $13, $21, and $34! I love the Fibonacci whole numbers as I use them to calculate time in years, between tops and bottoms and the lengths of many bullish moves.  Make the jump from 8 to $13 which gets you to the top of my 4th wave in Intermediate degree. (Red)

When HDGE gets close to that, I’m sure we are going to run into a serious correction, or some resistance. Then when HDGE starts getting close to the $21-$22 price level more resistance should be expected. The ultimate prize would be for HDGE to hit $34 in the next 2-3 years.

The lift off we have so far from the $7.43 bottom looked like it contained a perfect impulse pattern, but it was the correction that gives us a clue to what’s next.  This correction was “not” a zigzag but it counts out very well as an expanded flat. (3-3-5)

To many wave analysts think an expanded flat in the wave 2 position should not happen, but they do. Even if they just happen once, then I look for them all the time and allow flats or expanded flats in any wave 2 position, in any degree.

From 1970-1974 my wave 1-2 in Primary degree was also an expanded flat correction.  (3-3-5) No, it was not a triangle, like all the SC and GSC degree wave counters are still trying to tell us.

What it should mean is that the next move up could be very strong.

Tracking HDGE also helps us to judge when the big stock bear is finished. I will post HDGE a bit more often, but I will not post every micro mini, turn. All the detailed wave counting that we can dream up will mean nothing, if we keep missing bull markets that could gain over 400%.

I haven’t tracked the Gold/HDGE ratio that much, but I have enough to give us some information how skewed this ETF has become. As HDGE declined you could buy more and more shares with one Troy ounce of gold. Today we hit a 165:1 ratio. In 2011 which was the start of the stock mania phase, this ratio was at 63:1. We may not get close to that again, but we do have a target we can use for now.

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