Monthly Archives: April 2018

Canadian Dollar Daily Chart Update: Another 4th Wave Top!

I have posted a few charts using weekly and monthly charts. This is a daily chart as the back end is not affected. I like my bearish wave count better, even though commercials have net long positions. The big crash turned into a decent 5 wave decline which created a pretty good pattern. Now we are in a 5th wave decline and 5th waves are guaranteed to dish up surprises.

Yes, I would need 5 waves down in Minor degree, but this decline is not going to be some easy impulse decline, but it has started out as another fricken  diagonal. Compared to others this diagonal decline has been pretty clean so hopefully that will continue at least until we get to the last 5th wave decline in Minor degree.  Even though my countdown has started, I still like to see the first levels of support get completely retraced. Since we should be heading down another wave three, we need another zigzag crash to take place.

Sooner or later that “B” wave bottom in Minor degree will get get completely retraced, so expect the mainstream media to focus on this support level when we get close.

My hunt for all things Cycle degree is making progress, as my list has about 16 Cycle degree wave 3s that I’m working.  I’m sure that there will be a few more, but It’s impossible for me to get them all. Some analysts cover just a few indices, but I’m looking at over 16 main asset classes already and I can’t give intraday reports on most of them.

This year is going to be interesting to say the least as huge trends are about to change.

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GBP, British Pound 1980-2018 Cycle Degree Review

I have a large following from Britain, so this wave count is just for you. With it comes a warning, as I had little time to really work on the big picture. 1980 is as far back as I could go. I had to manipulate this June contract to keep that 1980 peak in view. It takes a very long time to build a good wave count as you have to go over it hundreds of times before you might see a pattern that is recognizable. Then you have to count it all out to try and confirm what you think you are seeing.

Wave counting is a secondary act, as we have to see the pattern first, before you can count it.  If this wave count doesn’t work, but the Pound keeps soaring much higher then this wave count must be trashed and the entire thing has to be counted again.

One wrong move in Minor degree is enough to instantly start a review going back as far as we have to. In this case the 1980 peak could be the location for a Cycle degree wave 3 top and what followed was an implosion where you can only see very small wave patterns. We are looking at a potential zigzag bear market in a Cycle degree 4th wave correction, that is still far away from completing. Mind you the speed at which the Pound has crashed in the past, sure can speed up the final move. The British Pound also made a strong peak in 2008, but that only matches up a Primary Degree “B” wave top. The little move in Minute degree can be removed as it can be part of the diagonal bullish cycle leading up to it.

Between 1992 and the 2008 peak we had another huge H&S which end up being a very bearish H&S. Since the 1985 bottom the Pound would be in the mother of all Head and Shoulder patterns that would be extremely bullish, even if the Pound crashes below that 1985 bottom again.

A big zigzag crash can have a very steep “A5” wave, but then the declining “C5” wave turns into a wild 5 wave run including a triangle in the 4th wave position. In flats this is usually reversed where the “C5” wave crashes dramatically.

The commercials are short the British Pound so that just adds to the bearish outlook. There are many asset classes with this type of a 4th wave, so something rather big is going to happen during the rest of this year, which will force a major reversal onto all the investors that are leveraged in the wrong direction.

So far I have a rough list of about 16 asset classes that can have Cycle degree peaks already completed or still in progress.

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Euro Weekly Chart: Impending Bull Or Bear Market?

I had called for just a correction in a bullish phase, but the small April pattern looks very impulse to the downside already. The US dollar is doing the same thing, except it is heading in the opposite direction. We now have 3 huge peaks to connect,  all showing a downward bias. We had two huge H&S patterns which both proved to be very bearish as the right shoulder refused to push higher. It is obvious that the Euro is in a bear market, but putting a wave count to it, is not so obvious. One main reason is that it’s a diagonal decline, where wave patterns can and do go wild with regularity.

The Euro would not necessarily need another zigzag, but we would definitely have to keep a look out  for a wandering impulse. The previous 4th wave low I have will not hold the Euro as this dip could be much larger than we think.

This picture looks very bearish as it sits right now, and we might have a Minute degree start already.  A Minute degree or Minor degree start, that does not fit a bigger bullish move, instantly forces a review.

Ideally, there should be little to no lag time in forcing us to go back to find a better fit.  Yes, I’m guilty of cosmetic wave counting at times, but we always pay for that in the long run, by missing bear or bull markets. I don’t like to miss any bull or bear market as it reverberates across all asset classes, especially gold!

The faster we recognize the fact that we are wrong or in the wrong position, the faster we will come up with a better fitting wave count. There is a very high probability that the Euro has already completed a Cycle degree wave 3 top in 2008 which matches the crude oil peak of 2008. Oil also fits well with a wave 3 in Cycle degree. Gold is off by about 3 years, but we should find more Cycle degree wave three peaks as time goes on. I will work on a small list of Cycle degree peaks in the commodities I cover, but it will not be all of them as I don’t have time to cover fringe commodities.

The dark red lines show short positions by the commercials, which makes chasing bullish wave counts a rather futile effort.

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Another Idealized Cycle Degree Bear Market Chart.

 

This is a third alternate for a Cycle degree bear market where the “A B” wave in Intermediate degree rides very high near the top, followed by 5 waves down in Minor degree, not Intermediate degree. The intermediate degree 5 waves down must only happen after the “B” wave top in Primary degree. In the end, a 3-3-5 pattern should emerge. This is a bit more complex than the other two corrections that I have posted, but I assure you other even more complex patterns might show themselves as well. Elliott Wave is what you perceive the idealized pattern should be, not what you see in the markets, specifically the DJIA. The EWP originates from the DOW so the best way to understand the EWP, tracking the DJIA is critical.

I visualize the idealized EWP as being one big impulse wave where wave 3 in Submillennium degree starts about 1500 CE (Common Era) Otherwise know as the Little Ice Age. The low social mo0d at that time coincided with the witch burnings and the plagues that swept Europe. There are market records going back that far once British markets are spliced it. I have a big commodity chart that goes back to 1100 CE so the wave 2 base in Submillennium degree is in 1500 CE. From this base all wave two bases must be found first.

About 1843 the wave 2 of GSC degree completed and from that point on, any wave two bases must be in declining order, where the 1932 bottom is my wave 2 bottom in Supercycle degree. When counting from a wave 2 base, we are always making sure that wave 3 is going to be the longest. From the 1932 base, we have modern day records that really show how the wave 3 took off. The next lower degree wave two would be in Cycle degree with the 1942 bottom.

There seems to be a real theme of wave 2 bottoms coinciding with years ending in 2. The next wave 1-2 must be in Primary degree, followed by 3 more sets of 1-2 waves at sequentially lower degree levels. From the last wave 2 in Minute degree, we need wave 3-4-5 to finish wave 3 in Minor degree at the 1987 peak.

From 1987 all future waves must end with wave 3 peaks, and they must all end with a wave three top. From 1987 and into the future all wave three peaks must be in ascending order, where the count would be 3-4-5 in Intermediate degree than wave 3-4-5 in Primary degree, and in 2018 we should look for wave 3-4-5 in Cycle degree. I have more than enough idealized charts up that show 5 waves up in a Primary degree which we will need once Cycle degree wave 4 has hit rock bottom!

Markets do not make patterns that are simple for us to follow, if they did every wave counter would be a billionaire. The market follows the idealized pattern  and it is our perception of this idealized pattern that needs a critical look. I’m dedicated to locating and tracking all 5 waves in Cycle degree first, as without all 5 waves in Cycle degree having secure tops, there cannot be any SC or GSC degree wave counts anywhere! At least not on this planet!

Think of it in visual form, where Cycle degree wave 3 is Mount Everest, SC degree wave three being the Moon and GSC degree being Mars! 😯

I count from a wave 2 base first, before I look for all wave 3s to peak. After 1987 and far into the future all peaks will end with ascending higher wave 3 degree levels.

The sad fact is that our modern day EWP is a biased description of GSC degree and many are growing up in this belief of a GSC degree super crash. Needless to say we will end up with an extreme forecast that will make no sense.

I can only forecast anything from a Cycle degree perspective and any SC or GSC degree commentary I make, is about the future not the present.

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E-Mini S&P MidCap 400 Index Review

I have different wave peaks and patterns between the 5 indices I cover and this S&P MidCap index is one of them. This chart only moves during the trading day and it can also give us a different perspective if we’re looking for them.  This rally still looks like it can fit into a diagonal 5 wave sequence, and it might not be finished as it is at a 4th wave bottom on Friday. This is a short term case scenario only, and since I have 5 waves down, from the January 24th peak, this market should not push to new record highs.

I have given you all sorts of  bearish scenarios  in idealized fashion, but this one would be a bit more complex, if the “A” wave in intermediate degree has already bottomed. Don’t let the small size fool you as this high “B” wave can produce very long tails with massive extensions.

The decline from mid March counts out as 7 waves. A 7 wave decline, can always be a correction and if that is true, then this S&P MidCap should exceed the “A” wave top in Minor degree.  If this is going to happen then the markets should push much higher in the next few weeks to come.

If I’m wrong, then the present bottom trend line will not hold the bears back, as they will rip that trend line to shreds if fear overwhelms them.

You can ignore any gaps on this chart as this index seems to be full of them, but I will watch a few of the big gaps to see if they have  an impact. There is an open gap near the top, so if this index turns there, then that might impress me.

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Crude Oil Weekly: Impending Oil Crash Review!

                      “Is This the Most Bullish Oil Market of All Time?”

The longs to shorts ratio in the six major petroleum contracts rose to record highs last week—a sign that hedge funds and other portfolio managers are certain that the direction for oil prices in the coming weeks is up.
In addition, over the past two weeks, options traders have boosted their bets on Brent rising to 80 U.S. dollars a barrel, and calls on Brent at 80 is the most crowded options trade on the ICE Futures Europe exchange, followed by call options on Brent at 70 a distant second.
Options traders hold nearly 137 million barrels worth of 80 Brent call options, a 37-percent jump from two weeks ago, Bloomberg reports.
In the six most important petroleum contracts, money managers held long to short positions in a ratio of nearly 14:1 last week, compared to a 12:1 ratio at January 23, [2018,] when portfolio managers held the record net long position in oil — 1.484 billion barrels, according to regulators and exchanges data compiled by Reuters market analyst John Kemp.
For the week to April 20, [2018,] money managers held a net long position of 1.411 billion barrels of Brent, NYMEX and ICE WTI, U.S. gasoline, U.S. heating oil, and European gasoil—close to the record net long position from January.
In Brent and WTI only, money managers held last week the most lopsided position ever, with 15 longs for every short.
Hedge funds’ ratio of long to short positions in Brent and WTI jumped to 15:1 from 13.2:1 the prior week, Kemp has calculated using exchanges and regulators data.
–Tsvetana Paraskova, “Is This the Most Bullish Oil Market of All Time?”, OilPrice.com, April 24, 2018.

The above research is priceless as it has nothing to do with ordinary crude oil fundamentals that the majority constantly use. Forecasting with fundamentals didn’t work at the peak in 2008 and it sure will not work at the peak in 2018! Sounds like a 10 year cycle between peaks to me.

Usually when the majority are all thinking the same then chances are good they are also wrong.

Oil has had a great run and right now all the experts/investors/traders are bullish. From the 2016 bottom crude oil started to rally, but it was in a very choppy pattern which is a clue that the rally is going against a bigger trend of at least one degree higher. I show a falling wedge with the two starting points starting from Primary degree points.  The bottom trend line does not need a degree in rocket science to see, as any kid with a ruler can connect them together, if they have the minimum skills of conventional technical analysis.

Fundamentals will always give us the wrong information at the extremes, and oil is a prime example of this. My wave count shows a 4th wave rally very close to completing, or already completed, on Friday.  The correction in this zigzag run was an expanded running flat which is a pretty popular pattern. No triangle   happened in this correction, but zigzags can contain triangles in the last “B” wave before the end.

In 2015 as oil was crashing the Gold/Oil ratio peaked at 17:1. We are presently hitting 19.41:1 which is one of 4 readings under 20:1 since the start of 2018!

The Gold/Oil ratio has been going nowhere fast, as it seems to have hit a ratio price brick wall. When crude oil starts to crash, this Gold/Oil ratio will start to spread again. When it hits the bearish, Gold/Oil Ratio brick wall, then that will be an early signal that crude oil may have bottomed.

How long do you think an oil decline will last without the Gold/Oil ratio getting all bent out of shape? Gold soaring and oil crashing is going to put a huge strain on the ratio. If we use the Fridays expensive ratio of 20:1 then the price of gold should be closer to $1600 with an $80 crude oil forecast.

Only time will tell what is going to happen next, but I will remain bearish until all these oil bulls stop spreading their bullshit everywhere they go. A good surprise bear attack will force the oil bulls to finally think twice, but by that time it’s too late already.

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10-Year T-Notes 2000-2018 Cycle Degree Review

The media have gone wild in reporting the bond market crash. When I read about intense bearish news about any asset, I usually look at the bond charts to see what, if the asset class is ready to reverse and go the other way.  This 10-Year T-Note pattern is one of the wildest I have tried to count out. The reason for that is because this T-Note chart is part of a giant Cycle degree wave 4 rally, which is a big bear market rally still going on since about 1981 or about 37 years.

I am tracking this bond market for close to 20 years now, as this bond market pattern seems to have hit a peak back in 2012 and has now been in about a 5 year bearish trend as no new record highs have been recorded. I have mentioned it before in that I don’t believe that this bull market is over yet, and what we had is more like a zigzag correction as the wave 2 correction in Intermediate degree only fits best as a flat.  A flat in a diagonal bull market? Yes, I have no problem with that as waves 1-3-5 should mostly be zigzags.

The 4th wave has come back into the peak of wave 1 which instantly throws it out as a nice high quality impulse. Friday I saw the T-Notes started to rally so the bottom could be in already.  One COT report has the commercials carrying their biggest long positions in the last year, which does not support a basic bear market for very long.

If you think that 10-Year notes can’t rally, then look what happened after the 2000 crash bottom. A “B” wave bottom in Primary degree. T-Notes soared as the markets crashed, as investors searched for safe-havens.  It might take a few years or more, but we could still see a major rally for the next several more years. From the 2000 bottom to a potential 2021 peak would fit well into the time cycle. We are witnessing a big bond bear trap in the making and once the stops start getting hit, it could start to accelerate it’s really.

I could draw you a nice Intermediate degree falling wedge as well, which I use for ending bearish trends.  I don’t have the time to keep updating Intraday reports on this, but I will try to get important turnings before they start to happen. Drawing in wedges after they are done is kind of silly as anyone can see the angles after they have completed. The only good wedge is the one we see before it happens not after.

Since we would be in a diagonal 5th wave we should expect a zigzag in Minor degree.

If you see the dark red lines  on the right side of this chart, you are looking at the commercial traders long positions. The light Magenta color is the short positions of the speculators (expert fund managers) Both in opposing views. There is no way I can keep supporting a bearish outlook as this could all turn around and surprise the entire world! It might be slow at first, but it should pick up steam as the bullish phase returns.

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Gold Daily Chart Review

Since December 2016 gold has displayed one ugly advance that only a mother could love! During the 2016 crash we could have a 3 wave crash, which allows the $1375 price peak to be broken to the upside this summer. If gold does breakout then the entire move,  would be called a “C” wave bull market in Minor degree.  At best this would allow gold to soar in the shorter term, but it still looks like a 4th wave rally to me, when counting from the late 2015 bottom.

This would keep money out of the markets, as I don’t chase bull markets when trading ETFs. I think the media focus on gold is blinding us to the potential for gold to finish a big bear market rally of Intermediate degree wave 4.

Just the fact I mention an Intermediate degree 5 wave pattern is a clear message to readers, that this blog has passed into the world of a Cycle degree 4th wave correction. I use a strict “rule” that no 5th wave should ever be left uncapped, and if you find one of my 5th waves uncapped, then send it to me and I will redo it. Actually capping the 5th wave is built into the EWP, I just emphasized it as a strict rule.

The big $1050 bottom has not even touched the previous 4th wave yet, so don’t get all cranked up about a $5000 or $10,000 gold price forecast coming soon!

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Quick US Dollar Intraday Rocket Ride update

This week we saw the remarkable rise in the US dollar, leaving behind one big gap as it surged closest to the previous peak of a wave 1. The wave 1 peak is the  resting place of the bullish trader as they love to jump on the upside bandwagon.  All this has to eventually wear out, but I’m hesitant to call a top just yet. We could get a quick short free fall, and then instantly resume this bullish trend. We can go much higher in the short term, but a correction is due.  We are on a potential wave 2 rally in Minor degree which will set the tone for the remainder of the bear market.

If the USD crashes in a big 3 wave fashion, then, this could signal that a triangle may be in play, but it would also mean that we are in a “B” wave counter rally in Minor degree which can contain the smaller triangle.

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Nasdaq 100 Index Daily Chart Review

This is the index chart for the Nasdaq, which does not trade during any night sessions but can also supply and alternate point of view. I’m showing that the Nasdaq has an expanded zigzag which I said might never happen, but I can’t ignore it at this time. This morning the Nasdaq created a spike to the upside so this may be critical to see if the Nasdaq still moves much higher. The Nasdaq is one index that refuses to march to the same band, so until I can completely kill this expanded top, I have to run this sequence for now.  I have three indices that conflict with each other as well.  Yes, we can get a trend line with lower highs showing, but that could be just a short term peak.

Longer term which could last into the fall of 2018, we should end up with 5 waves down in Minor degree, not Intermediate degree.  This would all bottom at the Primary degree  “A” wave.  The final low, should end up with 5 waves down in Intermediate degree, of which the 5th wave must be capped. Every 5th wave “Must” be capped at all degree levels. If I see any uncapped 5th wave anywhere on the internet, then I know they are just guessing or worse, they are “Baffling us with Bullshit” (BUWBS). You can laugh, but you need to have a sick sense of humor to go against the two mainstream wave counting groups.

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Mini DJIA Intraday Gyrations Review

Next month we will be starting out the 4th month of this so called correction.  Many are still calling to buy on the dips because this market is going to the moon. Oh Really? We’ve heard all that before.   All those that have the “Buy on The Dip” mentality have no clue how big the “Big Dip” will actually be.

The bulls are all looking for a support price which also tells me that they have little understanding about how big the dip will be. There is only one dip I want to see and that is the “dip” that starts a new bull market.  Another 8 year bull market to be exact.  The way this bear market has started, still leaves too many wave patterns unanswered.   Sure, we also have a declining trend line, but the test will be if that top down trend line will hold. We may need all of May before we find out, because so far the market is doing a good job in fooling most of the wave analysts.

Elliott Wave analysts travel in herds just like any real world animals do. Three main groups come to mind. The Supercycle degree herd and then the Grand Supercycle degree herd. Of course  the most popular wave counting group is the GSC degree group, which are very easy to identify. Both groups do leave many of their 5th waves “Uncapped”. Any uncapped 5th wave sends a clear signal to the readers that they have no clue where they really are with no concept of Wave 1-2, 1-2, base counting.  Every, 5th wave we will ever run into, in the future must be capped, by “one” higher degree. Otherwise the wave count is incomplete and the Elliott Wave sequence is broken. In my Cycle degree world you can’t leave a single 5th wave uncapped, ever!

I plan on posting a page that will explain the 1- 2 wave, base counting. I have gone back to 1500 CE,  (Little Ice Age) and have labelled 7 “sets” of 1-2 wave bottoms already. 1500 CE is my base for the Submillennium Degree wave 2 position.

In the short term this market could keep going sideways, and the next thing you know, we will be at a “B” wave top in Intermediate degree!  If that happened then, the “B” wave top paints a picture of the rest of the bear market.  We are at a critical point as all support must crumble, if the bigger bearish trend is already in effect!

There are still too many options at this stage of the game, but I have confidence that it can get it sorted out, as the starting waves to many bear markets, can always be very fuzzy.

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Gasoline Bull Run Update.

From my perspective, we are looking at a rising wedge in Minuette degree. The wide part spans 2 of the same degree levels so we understand that we are looking at a Subminuette degree rising wedge. Rising wedges are used in bull markets and their endings, while falling wedges are used for the ends of bear markets.  Right at the top we see a funny pattern that looks like the gasoline market is giving viewers the middle finger. I think it is flashing a signal to all the gasoline bulls presently driving this market nuts.

Do supply and demand pictures change that fast in such a short period of time to justify the wild gasoline swings? I doubt it as algorithms can’t figure out the fundamentals, yet the fundamentals is what is supposed to drive the markets. In the end no matter what if we think that this market is manipulated, they sure know how to manipulate it in Elliott Wave fashion. Wow, are those manipulators ever good if they can manipulate Elliott Waves at will.

The fact is they always blame “maniulation” when the markets go down, but use fundamentals as an excuse when it goes up!  Investors think that there should be no volatility in the markets, as they get scared when it starts to move violently. “Take a pill folks”, as this is the name of the game in commodities. “Fear” dominates the commodities markets and fundamentals are just lagging indicators not leading indicators.  It took 2 years for analyst’s to see the improving fundamentals, as the expert consensus is extremely bullish right now.

The biggest trend is not going to take gasoline prices to the moon, at least not on this trip!  The biggest gap in all my charts is open in this gasoline chart, so I think that gap will get closed first in the next few years.

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Euro Daily Chart Crash Update

The Euro acts inversely to the US dollar, most of the time but not always. At this time the Euro is acting the opposite way of the USD which is pretty normal.

If the Euro still has a big up cycle left, then this decline will come to a halt and then reverse again. The first horizontal line is the previous 4th wave of one lesser degree, but in a wave 2 decline, it does not have to make a picture perfect landing. It can do a belly flop at much lower prices.  For a wave 2, I like to see a 60-70% retracement as that sure would get the Euro bears excited.

We do have some sideways action that already suggests a correction is going to take place. I looked at the COT report and the commercials were skewed to the short side, and the speculators are still skewed to the long side. Two completely different sets of opinions!  We should understand that the speculators are the trend chasers. They will always get into a trap, be it a bull or a bear trap.

The media spouts what the speculators are doing, as they think that the speculator long positions is the smart money.

Be prepared that the Euro has more downside to go,  as this decline is not deep or long enough to have completed a wave 2 in Minor degree.

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US Dollar Daily Chart Bullish Phase Update.

It’s obvious that we see the US dollar in a bullish phase. Technically, it would be called a bear market rally if we believe that more downside is still to come.

Otherwise, we just assume that the US dollar bear market is over and the great USD bull market will resume. The horizontal line connects at least 7 points, which can give the US dollar rally reason to pause or even run out of power!  I will be looking for a wave 2 top in Minor degree with the trend line being well within the previous 4th wave of one lesser degree.  Any wave 2 rally is not limited by any means to stop dead at the trend line above as %60-%70 percent rallies can and do take place. In short, the general guideline for previous 4th wave reversal might not mean anything.

Fighting against the bigger trend can take more time than normal, so we have to have patience as I believe that the US dollar still has a huge bear market to show us. This USD rally is keeping a lid on gold and silver prices and it could still force a temporary drop in the price of gold and gold stocks.

The Euro is also crashing, and our CAD seems to want to take a rest from getting beat up.  US Dollar COT reports do not show that both types of traders are in radical positions which gives the US dollar a bit of flexibility how high it can go.

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December 2018 Crude Oil Review

When I looked over the crude oil December 2018 contract, I found an extra diagonal wave 1-2. With the June contract, no way would that fit as a 1-2 wave.

December is also a little less busy as the waves seem a little less jerky. Rising wedges happen in bull markets and this oil chart has a pretty good rising wedge right now.  Wave 3-4 in Subminuette degree,  are the two starting points which makes this a Subminuette degree rising wedge. I will always try to keep my wedges between two of the same degree levels at all degree levels. From the 4th wave bottom in Subminuette degree is a diagonal 5th wave, not an impulse 5th wave. If we count oblivious to the diagonal, then you end up with 7 waves. We need 5 diagonal waves before they finish and that is what I counted out.

This is also a very common diagonal and gives us big hints that we are in a 5th wave location. One of my own rules is that all 5th waves must always be capped by one degree higher. If there is no “cap”  then the Elliott Wave sequence has been broken and it can no longer be trusted.

I don’t have enough room to fill all the degree levels, but it’s not ending on a “5”.  🙄

I will be switching to this December chart form now on but it is $2.79 per barrel less than the June contract. This doesn’t  instill bullish fever from my perspective. Experts are not even looking that far ahead, otherwise they would be reporting it as well.

Does this change the Gold/Oil ratio? Not really, as we are at 20.14:1 today. It’s been around this average for over 3 months and does not seem like the ratio is dramatically changing.

Some are calling for $100 oil this year, but they forget about the gold/oil ratio as $100 oil would mean a $2000 gold price.

We could be at a fake top so oil would have to dip soon to help the bearish case.

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Quick Look At The Crude Oil Intraday Crash.

When we look at the Intraday oil chart, we can see violent moves in both directions.  If fundamentals make oil go up and down, then we should know exactly what news story created which move. The fact it’s next to impossible to forecast the price of oil with fundamental analysis. Even the experts couldn’t see an oil crash coming back in 2008 and they all used fundamentals to justify any price move. It is also very rare that you will find any oil bulls scream “sell” at a major top!  When markets are down, analysts give us a reason why it went down, and when this market goes up, they post all the good news about oil.

In a bearish trend any bullish news will have little impact on the overall bearish move, until one day bearish news keeps oil from going deeper, then we know that a reversal will be coming.  In 2015 massive news about the world oil glut, no longer had impact, after which oil turned and soared again.

Bull traps and bear traps happen all the time, but if we’re not looking for these traps, we will step in the trap ourselves. Raw human emotions drive the markets and leverage compounds our emotions.

So far,  this short term bearish move has not completed like what I would like to see, as oil is in a bit of a rally. If the bigger trend is real then oil has much further to fall if the 4th wave scenario holds true.

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SP500 Intraday Bearish Outlook.

My ending diagonal may not happen as the markets still have downside pressure today. I did change my degree level to an intermediate degree “B” wave top. Any decline has to be 5 waves in Minor degree, not Minute degree.  I have multiple different tops between 5 different indices and sorting them out will take time. This is my third bear market since the 2000 peak and I’m very stubborn in sorting out tops.  We need a long set of 5 waves in Minor degree, which could  land us directly on the “A” wave in Primary degree.  If this wave count has more validity to it, then it can stretch and extend dramatically. It sure would help to answer the question what type of a correction Cycle degree wave 4 will have. I think I can still put any Cycle degree triangle pattern back into my inventory as any Cycle degree correction should happen in much less time

If this continues, then all support below this chart will not hold.

We will be finishing the third month of this bearish phase and that is not nearly enough time to finish a big correction. We could be heading into the summer  where the winds start blowing from the NW  much stronger flipping our little “sailboats” upside down.

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Bitcoin Rally Update

I’m sure Bitcoin speculators are in 7th heaven as they grew richer by the day during this April rally. The rally  looks impressive, but I can also see a possible inverted zigzag that has developed.  Any inverted zigzag rally can be part of a bearish rally which I think could be just topping out. The horizontal line reaches all the way back where Bitcoin had turning points in four places.

We also have a H&S pattern in there and if we are in a bigger bullish phase, then this horizontal line will get lifted.  A huge majority of  the Cryptos have been lighting up green for the past several weeks, but if I’m right then the board will be turning to red soon. (Down)

I changed the degree level up by one degree level, so I have more degree levels to work with. We could see a 60-70% correction and Bitcoins could soar back, but then we are looking at a potential triangle.

If you have no way of an established and tested path to convert Bitcoins into US cash and then haul it back into your home account, then I wouldn’t  touch Bitcoins with a 10 foot pole.  I have created a few necklaces with my physical tokens and have been selling them off my neck for $20 Cad. Friends have no problem in buying Bitcoin tokens for $10 CAD each. The expression people have when I show them a token, is priceless.

 

 

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E-Mini SP500 Intraday Catching A Falling Knife?

The markets had an exciting afternoon, as it seems the bottom fell out! Don’t let that fool you because that drop has all the markings of a zigzag correction. I deliberately left all other wave counts bare until after this wave count fails. Folks, I’m showing what could be a diagonal 4th wave zigzag crash, and we could see a rocking bullish phase return.  It is clearly an ending diagonal at this time because wave 4 is well inside wave two parameters. Wave 2 and wave 4 zigzags look identical, but they are still very different as wave 4 subdivides much better.

With a potential rising wedge which is mostly used for bull markets. If we look to the start of the top wedge line, what the hell do we see?  Another H&S that helped to determine a top. If the market is still bullish then this top trend line could get lifted. Exceeding March highs would be nice, but the SP500 should not push to new record highs.

This diagonal which is in Minute degree also changes the entire degree I have been using since the wave 3 top. I mentioned that this market was in a pattern with not very smooth flowing moves. Plus, it was taking  too long to resume the bigger decline, so this impending little bear trap will answer more of my questions. I have run into many of these types of diagonals and they sure will not be the last that we will run into.

The more this market gyrates the more conflicting fundamentals we will read about. This will confuse the majority and we end up having no clue which direction this market is going.  This could all happen in a very short time ending close to the end of the month or early May.

If this decline clears below my wave 2, then this wave count is instantly trashed

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Mini DJIA Intraday Crash Review

The DJIA has finally succumbed to bearish pressure, but we could still see a violent counter rally at any time. The DJIA must trash all support price levels that you see on the chart above, if the decline is more serious than what the investing bulls thinks it is. This DJIA chart I am cheating a bit in that I’m also working it as a potential diagonal decline. This may smooth out once any decline starts to get recognized, but this is still too early to tell.

In the afternoon the DJIA dropped close to 700 points which is a pretty good vertical drop. Sure, we can draw a wedge from the bottom up and if this is as bearish as I think it will be that bottom invisible wedge line will not hold.  We do have 3 lower high peaks in this developing trend, and that indicates a bearish phase in progress.  I don’t want to abuse wedges and trend lines as they can be extremely biased most of the time. The DJIA saw its peak way back in January of 2o18 which may be the top for 2018 as well. Sooner or later investors will lose patience and when a group sees the same thing at the same time we get mini panic sell offs, like today.

At the top I have 3 sets of 5 waves that have terminated which “must” be stacked from the smallest to the largest, which in this case is Cycle degree wave 3.

My strict rule is that no 5th wave peak should be left uncapped, “EVER” because an uncapped 5th wave clearly tells me an analyst is just guessing or bluffing.

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Nasdaq Intraday Decline Update

The Nasdaq hit a major peak in March before it decided to crash again. I have conflicting tops between the Nasdaq and the other 4 major indices that I cover, but I think the Nasdaq top is the real deal, and the top is a good place to start a bearish count down from. Notice that I have a small H&S pattern already completed, and if we are still in the bullish phase, the Nasdaq will  lift the right side of the invisible horizontal line dramatically. I will still keep the present decline as a Minute degree declining 5 wave sequence,but will adjust later on if my degree level is too low.

If the bearish scenario is true, then all popular support levels will get trashed.  Those that are talking about buying the dips don’t realize how big, “The Big Dip” will get.  At a bare minimum the Nasdaq will retrace the 4000  price level, which also puts the Nasdaq into the previous 4th wave of one lesser degree.

One lesser degree in a Cycle degree correction is a Primary degree, not the Intermediate degree bottom at the 4000 price level.  We have a long way to go with many twists and turns, but sooner or later the fog will clear and the basic shape of 3 simple corrections will take place. The triangle is my last choice as the solar cycle #25 will not allow it to fully play out. When solar cycle #25 starts to crank up, then all stock bears and bearish wave counts will get terminated.

Sure the bottom may still be three years away (2021) and the investors at that bottom will be the ones that have lots of dry gunpowder ready. (Cash)

Buying low at a market bottom is rarely done by the average investor, as they will be wiped during the “Big Dip” decline.

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Silver Daily Chart: The Short Term Bearish Case Review

The mass media has been brainwashing us with gold bullish stories and some even have a $1550 gold price target like I had. Except for one problem and that is silver refuses to play along and has consistently lagged behind gold for the past year. Silver should have hit $20 if it joined the gold rush, but silver did not follow through.  The experts come up with the idea that silver is going to wake up and surprise us all, by playing “catch up” to gold.

The idea of silver catching up is a myth by any stretch of the imagination which has been used as an excuse why silver is lagging.  Back in 2011 they were waiting for gold stocks to “catch up ” to gold but they never did. Silver has a year long trend that has produced at least three sets of Head&Shoulder patterns, which are hard to ignore. If we were in a much bigger bullish phase, then each one of the right shoulders would lift the top trend line higher.

Silver has refused to do this as after each right shoulder the silver market has pushed down. This is the sign of a bear, not a bull. We also have a sideways wedge with silver getting very close to slicing the rising trend line in two. At $16.10 our present little rally will be confirmed as a bearish rally. Silver still has two very critical bottoms to retrace, and they are pretty close to each other. $15.50 and $15.20 could also get retraced. When silver retraces the $15.20 price level, then from my perspective silver jumps back into the unfinished bearish territory. From todays levels, silver still has to crash well below $14 which is only about $3 below present prices.

Silver has no problem crashing $3 at a crack so that could happen in rapid succession. $13 is also a great Fibonacci number. Below that $14 price level silver will have completely retraced its so called bull market, but then it would also be ready for a major new stronger bullish phase.

Sure, I’m a silver bull, but if the market is telling me that the bearish phase is not finished, I want to be aware of it. I’m also fully aware that I am going against the mainstream media bullish bias, but I have been in those situations many times before.

I was very bearish when experts were calling for a $200 silver price, from the 2011 peak, but their forecasts went south instead.

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10-Year T-Notes Intraday Crash Update!

The crashing bond market is in the news, as the rally up to the April peak was super choppy, and then decided to pack it in and crash to new lows. I believe we are declining from a 4th wave in Minute degree.  Starting the decline it looked diagonally like right away, so instantly we have to look for the connecting zigzags to confirm it. There may still be a bit of a downside, but I would be expecting a correction of another 4th wave rally in Minute degree.

This rally can go sideways and force us to pull out our hair, or it can soar right back up to the top trend line in short order. Either way it will shut the Bond Bear’s mouth for awhile.   So far this diagonal decline tells us it is a 5th wave down, as it’s any 5th wave where they can show up most frequently.

This is a classic move and a very common diagonal, as they can get so choppy where this pattern is much harder to see. In a diagonal I like to see that waves 1,3 and 5 are zigzags, with wave 2 and 4 being any regular correction, even a triangle. A triangle in a diagonal 4th wave is a real mouth full, which can produce super choppy waves that will defy logic. 4th waves are also warning us that a higher degree is going to be terminated on the 5th wave, before this decline is finished.  All 5th waves must be capped, which should be followed by another much larger bullish move.

Investors might be running away from the safety of bonds, but they could also come running back with a vengeance. I’m not certain enough to call bonds with a Cycle degree 4 peak as finished yet, but any bond rally will help to take the pressure off the Fed, from having to keep on raising interest rates.

How rallies act is always important, as a choppy rally will tell us that it’s just a little bear rally!  It may take longer than the end of the month to play out, but any counter rally correction needs time to fully develop.

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Crude Oil Rocket Rally Update

What a great vertical spike crude oil just had, but it also looks like an inverted expanded zigzag which I’m hesitant in labeling it as a wave 1-2.  Any decline could just be another set of 5 waves which would place us at a diagonal wave 1, one degree higher. One minute it’s all about the inventory, then the next it’s about the rig counts. Even the news of hijacked tankers could have made this spike. https://oilprice.com/Energy/Energy-General/19-Oil-Tankers-Held-Hostage-Off-Yemeni-Coast.html.   It matters little if the news is fake or real, but emotional traders will react. I”m sure that many stop lost buy orders were hit as well. If the story of the 19 tankers is false, then the oil price can crash right back down, and go much deeper adding on another leg down.

The violent move up in oil and a violent move down in gold made put crude oil back on the expensive side with a Gold/Oil ratio of 19.2:1.

I show a 4th wave top in Intermediate degree, but it is still a bit early to see if it will hold.  Analysts are still extremely bullish as talk of $100 seems to be increasing.  The oil experts were also telling us the same story at the top in 2008, and the only thing than has changed since then is  the price!

What ever happen to $200 oil?  If we use the 19:1 ratio and the $100 oil price this would translate to a $3800 gold price. All I can say is good luck with that $100 oil forecast,  as it’s not going to happen on this trip. Even Trump is trying to crash the oil price as he blames the Saudis (OPEC) for price manipulation.  Give me a break! Tweeting oils price destruction is not going to do it, as this has been going on for decades and will continue.

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US Dollar Bullish Spike Review

I’m working this rally as a Minor degree correction, which is not finished just yet, but this USD rally  has more to go, as another wave 3-4 should happen.

We had several gaps open up on the way down, so I was pretty confident that the US dollar still had to rally and close those 2 gaps. Now on the way up, a huge gap open up, which will get closed in the future. We know that the USD will eventually decline again, and close this gap completely.

Gold and silver both took hits as well, while oil soared this morning in a massive bullish move at the intraday scale.  I have full confidence that the US dollar is not going to the moon, but this rally could remain bullish in the shorter term.

I usually do not post on Mondays that much as most of the real action happens during the rest of the week.  The full moon is still about 5 trading sessions away so we will find out with the Sunday session if any reversal may happen.

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ZGD: BMO Equal Weight Global Gold Index ETF

This ZGD is a fairly new addition to Canadian ETFs, which is a bit over 5 years old. The invisible wave count previous to 2013 can be used from any other Canadian ETFs with some differences. It’s an equal weight ETF  and will produce different wave patterns, but in general they will react the same as most other ETFs.  I show Minor and Intermediate degree tops and bottoms with the Minor degree 5th wave being a diagonal. ZGD made its bottom in mid 2015 long before any other gold stock related ETFs did. Again, I could be wrong on this, but I have to call them the way I see it, even if it means missing out on the next leg.

I hate to miss out any any bullish phase, so this is a tough call.

Any price action “after” the 2015 bottom belongs to the bullish side as a potential expanded counter corrective move. The 2016 rally is what I call a “C” wave bullish phase, which peaked suddenly in mid 2016. $14.50 CAD seems to be the peak after which all gold stock related ETFs start a grinding bearish phase, with parts of it fitting into a falling wedge. Falling wedges are very bullish indeed, but any wedge can fool us, especially if it is a fairly small one.

ZGD is now poised to do one of two things, blast up, or keep falling! “It’s now or never”,  as I like to say. All ZGD needs to do is decline just a fraction below the 2015 low, and then this market will have confirmed, that a “complete”retracemet, has taken place.  In short, we may find out the hard way what a fake bull market can do. Way back at the 2013 lows we can see a gentle sloping decline between 4 points. This is a bullish pattern as the markets are starting to bunch up.

I only have one Gold/ZGD ratio from today, and it’s sitting at 146:1. I may get an expensive ratio reading from the Mid 2016 peak, but that still requires more homework.

Chances are good I will update this ZGD more frequently as it deserves far more attention at this critical stage.

With most gold stocks pointing down and gold pointing up, many analysts say that gold stocks will catch up! I don’t believe in this “catch up myth” as they were saying the same thing at the 2011 peak and it didn’t work.

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Bitcoin Update: X Marks The Spot!

This is the cash chart which only gets updated during the day. (BGY00) It also produces different wave patterns that are not the same as the actual April contract. The next available contract month is May and it has so little interest that it’s not worth posting.  I tried something different this time as I applied a custom moving average as 25 day and 100 day averages. This produces a quicker “Death Cross” or “Golden Cross”. We just had a golden cross just a few days from the unknown bottom, which is marketed “X”. Jokingly, “X” = “I don’t have a clue”. In this case X marks the spot to the start of a new wave count.

So far it works as a diagonal, but a pretty clean one I label with a 5 wave run in Minuette degree. There still is upside left, but we start running into resistance again at the $9000 price level, with the big resistance line at just below the $12,000 price level.  Sure, volume in the entire Crpto world has improved dramatically, but it can also be the smart money selling to the gullable dumb money.

The bearish history of Bitcoins is relatively short, and if the bigger trend is still down, then this run must end. This would only be one move, but we need three moves  to help confirm a bear market rally.   We do have  a huge double bottom from the February bottom,  and if you like, we can even draw a falling wedge. If this wedge means anything I would be surprised.

The total Crypto market cap has improved by about $100 billion, but still down close to $500 billion since the peak of the good times in December 2017.

We are getting close to finishing a 4 month bearish phase that the majority thinks is  just a correction in a bull market. Bear markets and even bear market rallies are not over in a few short months but can last many years.

My Bitcoin updates will be once a week unless I see some potential dramatic move being setup.

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SP500 Intraday Gyrations Update.

Since the January top it looks like a nice 5 wave decline, but it has not been flowing as nicely as I expect, from a 5 wave decline in Minor degree.  The DOW and the Nasdaq have both created wave peaks that just do not fit into the bigger picture very well. I did go back to the 2016 peak where the wave 1-2 in Minor degree sits, so instead of a Cycle degree peak it could be a Minor degree peak. The bottom trend line from wave two, can now fit with the bottom in early April.  Right now the markets are in a decline and it will be critical to see if it turns again and creates yet another higher high.

Any 5th wave can form a diagonal wave pattern so this could get very choppy in the short term.  Any new record lows will kill this wave count, but I have to run this wave count to eliminate it.  We are in a decline, but the SP500 could turn into a correction, and a mini bear trap.  Any dip below the diagonal wave 2, would also kill this bullish wave count, so many things can go wrong in a short period of time.

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Crude Oil Intraday Bearish Review

Yesterday, crude oil peaked with a small double top after which oil immediately reversed its trend and now looks like a new trend is forming.  Since my top could be a 4th wave top in intermediate degree. I know that my largest degree of this decline must only be Minor degree, so I sure do not want to start with a a degree far too high.  One 5 wave sequence in Micro degree has already started with two lower degrees also visible. I have used Miniscule degree which is the bottom from my list of 15 degree levels. I will adjust my degree levels once this decline starts to show its true colors.

It is also a good idea to look for bear traps at the earliest moments but that might happen when all the patterns start to get super choppy. We need more evidence that this move is part of a bigger bearish run, and until then we have to be aware that we can always be wrong.  The longer it takes for any new highs  to be reached again, the better I like.

The oil bullish peak came within 45 cents of the $70 price forecast, but that forecast is an easy call if we were at $65 already. As I post, this chart has already dipped much lower, but in the end only time will help how this progresses.

The Gold/Oil ratio has compressed a bit more which means crude is still hitting the ratio brick wall. The Gold/Oil ratio is at 19.71:1, but it’s supposed to go the other way. In relation to the last 3 month Gold/Oil ratio average this makes oil more expensive.

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Canadian Dollar Daily Chart Update

Since last August, 2017 our Canadian dollar has gone wild, with swings up followed by dramatic declines. As soon as our dollar went higher than the previous little bump, the bearish scenario was trashed at least temporary.  This can work as an expanded triangle and it looks big compared to any wave 1-2 that I have.

From the “D” wave top to the “E” wave bottom we only have a 7-wave count which works as a zigzag very well.  Any triangle pattern that we may have must not break below my 4th wave position because if it does, then chances are good my diagonal scenario gets reused. Market action has not forced me to change the bigger degree positions, but this little rally is either going to blow past the top trend line, or it will fail.

I have high confidence with my 4th wave scenario, but some of  the smaller moves  sure test my patience. Many times the CAD has also turned around close to months end, so it could take until May before this rally gets resolved.

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