Monthly Archives: May 2018

RSX Russia ETF Bear Market Review

The RSX tracks many oil related asset classes which all had a major top in mid 2008. This makes it easy to call a Cycle degree wave 3 peak, but what followed is another bear market, that looks like a zigzag, but has not finished.  We need at least two major lows with the 2016 low still not being low enough for a zigzag to be called finished.  Of course we’ve been told the exact opposite as oil is heading to $300 as one biased expert claims.

I want to stress the point that this is just a quick count. It takes years of baby sitting to build a reliable wave count that you can trade without using stops.  There are no reliable trend lines that I can use but the big bearish trend seems to be obvious at this time.  It may take the rest of this year before this RSX bear market rally clears up, as increased OPEC output has caused this market to turn bearish.

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NASDAQ Keeps Pushing Higher

This is the Nasdaq index and only moves during the day. It provides another wave count that may have seen another top this morning. It may still push a bit higher but the entire rally since the April bottom has been choppy as hell which usually tells us that this rally is going against the main trend.  A short term free fall may also happen if this top contains and expanded correction, with 6800 being a basic turning price level.  With so many different patterns to work with at this top, we can only track and record the different possible moves.  This can also be a set-up for a “B” wave top in Intermediate degree which would produce a long trailing “C” wave decline, which would have to stop at the “A” wave in Primary degree.

All the stock market Cycle degree bear markets are leaning towards being flats, while all commodity Cycle degree bear markets are Primary degree zigzags. There are 3 or 4 that also have triangles, but it seems pretty rare just the same.  Once the market is on the bearish side then good news will have limited impact, while bad news keeps driving the markets down. The reverse happens during a bullish phase when bad news has limited impact after which it just pushes higher again.  All trends eventually end as there is no such thing as a permanently high stock market.  Sooner or later the herd will panic as geopolitical issues and trade wars seem to be in the news these days.

About the only thing that may wake up the bulls is when that February low is completely retraced, until then anything can still happen.

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VIX Gyrations Update!

As much as I would like to see the VIX soar, I cannot ignore the gap that is still open directly below present VIX prices. This gap should still get closed off and even travel closer to the $10 price level. The VIX should not crash to new record lows, if what we have is a potential VIX, 3 wave correction.  Some traders were very well positioned to take advantage of the February spike with call options.  A trader named ’50 Cent’ made a huge bet and others did as well.  I’m sure that many others will see another VIX bullish set-up as this cycle keeps repeating itself.   Once the VIX starts another leg up, another spike to the upside can happen. It’s pretty hard to control our emotions to do the opposite of what the crowd is doing, but you have to remember that the ‘crowd’ can never benefit from the very same crowd.

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Gold Intraday $1300 Price Update

The $1300 price level seems to be the magic number at this time, like $1360 was way back in April. Will the $1300 price level hold? I doubt it as price has little meaning while pattern is everything. I have started into the next higher degree 5 wave sequence which may still have more to go. It’s not the only proability as another zigzag decline can also be in progress. Gold does not look like it wants to go ballistic like many gold bulls are hoping will happen. Gold refuses to play that game as it’s been grinding its way down for a few months already.   It all depends on what we believe our understanding of what a bear market rally is and how it acts.  Conventional wisdom allows any upside move to be called a bull market, but from an Elliott Wave perspective all bear market rallies get completley retraced.

These bear market rallies can only be Primary degree or less as my largest degree is Cycle degree. Oil is a great example how a big bullish phase can hoodwink all of us into believing a bullish trend can go on forever!  No trend lasts forever as they will always turn against the most skewed trade set-ups all the time.  Gold has been struggling to go higher since the December 2016 bottom, which usally means that gold has been in a rally against the main trend. Since the 2011 peak gold has been meandering down in what looks like a 5 wave sequence but until we look at this decline from a diagonal perspective, what I count out will make little sense.  The mass media attention to gold is blinding us from looking at silver and even gold related ETFs.

Any move in silver has been lethargic at best, and is still miles away from breaking out to a new record high. I’m not going to spew out the same retoric as the gold bulls are doing becuase if I do, we end up in the same trap as the majority. I follow about a dozen gold and silver stock related ETFs and they’ve all have been acting like they are hung over after a wild drinking party.

The US dollar has been correcting but that may have its limits. The Euro has been taking a beating at the same time, but for gold to soar, we need a huge bullish phase in the Euro, and other US dollar inverse related currencies. An Intermediate degree bear market rally is enough to fool the majority while even a simple Minor degree bear market rally will send bullish analysts of on a tangent.

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Crude Oil Intraday Rally Update

In the last 3-4 days crude oil has been in a small rally which sure has the pattern of a triangle. We are just finishing what looks like another zigzag “E” wave so anoterleg down should happen, followed by a bigger rally retracing any 5th wave we may get.  A triangle forces a degree change as well which could end up at a wave 1 in Minor degree.

All bullish oil news in a bear market will never turn a bear market into a bull market, as bear market rallies are all starts to a fake bull market. Many still believe that oil is going to $100 or even $300 as one biased expert claims.  Crazy bullish forecasts always get mentioned at the tips of bullish phases, after which the market crashes. It’s not any different this time, as the only thing that has changed, is we are in a different time period, after all were not in early 2008.  Any unexpected bearish move will force “all” bullish players to reconsider their positions.  They can do this by moving up their protective sell stops,  just below my wave 3 in Minute degree. Very few traders have the account to maintain a bullish position, besides the smart traders saw this oil crash coming.

The $66 price level will be a set-up for a downside breakout, with the potential for a diagonal 5th wave to develop. We have a long way to go, and it may take the rest of the year to play out.  All my commodity Cycle degree 4th waves are zigzags with a few triangles thrown in to keep us on our toes.

Figuring out where we are in this Cycle degree 4th wave is different between many commodities, and we are still far away for the “A” wave in Primary degree to arrive.

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Mini DJIA Intraday Chart Review

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These market gyrations have been going on long enough keeping any realistic wave counts in the dark. Short term anything can still happen as I’m not going to rule out anything until all the price support we see above, has been completely retraced.  When that happens then we know that the rallies in the last 3-4 months have been nothing but a bear market rally. I’m not too concerned about the bigger bear market,  as we still have plenty of time left for a Cycle degree 4th wave correction to play out.  In a bear market we get rallies alright, but they are at a smaller scale. They still fool the majority as every rally they think is the start of the next bull market.

I will be using some “cosmetic” wave counting in the short term which only involves going back to the January peak. I started another 5 wave decline which still has a long way to go.  This looks like it could be in a 4th/5th wave pattern, which should also produce new record lows.

I doubt it will complete buy the end of this month, as it’s a race. Wil the DJIA push to a new record high before it pushes to a new record low?  I think the DJIA has a lot less distance to travel  before all support prices have been retraced.

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US Dollar Daily Chart Rocket Bull Market Update

The US Dollar bull run just keeps on going. I hate to call any top at this moment because these types of moves  can extend dramatically. We do have a small vertical spike that seems to be forming, but again we could still be a bit early for a decent correction to take place. Troubles in Italy and the Euro in general, is helping to confirm the EURO bear market and this US dollar bull market.

I believe the US dollar crashed as an expanded wave 4 correction and if that is the case then the US dollar still has to score a new bull market record high.  It still may take the rest of this summer or into the fall before this bullish run starts to get near an end, but it will end. When that top arrives then another big US dollar bearish phase will ensue and gold related assets will enjoy another huge bullish phase. As long as the bullish presure remains in the US dollar, gold and gold stock ETFs will act subdued or very bearish.

In the 2008 crash gold stock ETFs also crashed along with oil and other related assets, so there is no reason why it can’t happen again. For now I started with the Minor degree wave count and it may look a bit small, but moves like this can soar once real extensions start to happen.

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Canadian Dollar Daily Chart Update: Crashing Along With Crude Oil prices.

Our Canadian Dollar is still crashing right along with crude oil prices as Canada has a real getting products to the market place. Short term I see no bright side  for our CAD to suddenly bottom and then turn into a great bull market. This is not going to happen as the CAD bull market fits best as an inverted zigzag, which are usally big bear market rallies.

From a Cycle degree perspective and calling it a bear market rally, you can always expect a complete retracement of the entire bullish phase. 4th wave rallies are all bear market rallies, and the higher degree the bigger the bear market rally will become. If an Intermedete degree bear market rally can fool the experts into believing a big bull market is in effect, then there is little hope for “Average Joe Trader” to know the difference as well.

Commercials are a bit net long already but those numbers can still get pushed to the extreme side, so at this time COT numbers have little meaning.  At .7618 our CAD may find some more price support, but that also has little meaning once this price level gets retraced.

In the monthly charts our CAD had two major peaks, one in 2007 and another lower high in 2011. The first peak matches up with the 2008 Oil peak, and the secondary CAD peak syncronizes well with the gold price peak.  You can’t get a better commodaties correlated currency, so our CAD is very important to follow if we want to be prepared for any Gold/ Oil bull market to come.  For gold to soar we need the CAD to soar as well, and at this time this looks highly unlikley. Despite what you may hear on the news Canada has some serious issues, all created by our own federal governmant. Carbon Tax, Massive minimum wage increases, all stiffle Canadian business.  Not until our smiling photo bomb expert wakes up to the problems he has created, it can’t get fixed.  Before too long Canada will be in a recession as more business start to move south. In BC our provincial government is controlled by the green party which wants no part of any oil pipeline projects.  It’s pretty sad to see a trade war errupt between two provinces, as we all lose when this happens.

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Crude Oil Intraday OPEC Bear Attack Update.

We all now know the reason for the oil crash as the blame is all about OPEC increasing their crude oil output. Bears always attack from the top down and this time it is not any different than what happened in any other bear attack that oil ever had. This July contract is already well below the $67 support price level, and my bet is that much more downside is to come.  A Minuette degree 4th wave rally is still in progress, so that needs to play out before another leg down can happen. Any next leg down will run into a new set of 5 waves, but this time it should be 5 waves in Minute degree.  If any oil analysts are  looking for price support, then they clearly don’t understand a potential bear market rally.

The majority don’t know the differnce between a bull market and a big bear market rally, which the EWP is supposed to tell us the difference. From an EWP perspective all bear market rallies get completley retraced. The crude oil move from the 2016, $28  bottom, oil moved a net amount of about $44!  Even just a simple net 50% correction would send oil down to the $50 price level. Oil still has a very big base at the $40-$45 price level, so anything can still happen during the rest of this summer. All the COT reports still  show the commercials in net short positions and until that changes dramatically, the oil bearish trend should continue.

The Gold/Oil ratio is starting to get very close to 20:1 which needs to expand much more as the oil price keeps declining in price.  Sooner or later the oil price will take the gold price with it, as the ratio keeps gold and oil locked together.

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Gold Monthly Chart 1980-2011 Primary Degree Review

I don’t like drawing trend lines most of the time because the trend lines do get abused to the point where they have lost their meaning and effectiveness. For well over a decade I counted all markets from a GSC degree perspective and thought little that the 1980 gold peak was nothing but a Cycle degree wave 3 peak. After all the 1980 gold crash produced a 20 year bear market, which many analysts called a secular bear market. Many GSC degree wave analysts never saw the 2000-2011 gold bull market coming as they were still bearish when gold hit $1000 in 2008.  They missed most of the gold bull market before they changed their minds and started an impulsive wave count.

There is no way that we should miss a gold bull market that was so big it took until 2011 to finish. This is when any Cycle degree wave 3-4 should have been thrown out but yet the majority of wave analysts still maintain gold as a Cycle degree wave 3-4, or worse SC degree wave 3-4. I have looked at gold with both degree sets but now look at gold from a Primary degree wave 3-4-5, for the 1980-2011 time period. This shifted the Cycle degree peak ahead by 21 years, and at the sane time-shifted any SC and GSC degree peaks much further into the future. Being out by just one degree, means the diffrenece between catching a major bull market or missing it entirely.

Reviewing this 1980-2011 time period and its wave count is very important to understand. I use the wording “Must” often and it has the same meaning as any basic EWP rule. EWP rules cannot be broken or ignored. Once I replaced the 2000 gold bottom with a Primary degree bottom then we know that 5 waves in Intermedeate degree must develop to complete the 5th wave in Primary degree. It was a very choppy ride with a big 2008 crash and correction that took most all other asset classes with it. Gold, oil, gold stocks and the general stock market imploded together.  The 2008 crash coincided well with the end to solar cycle #23 as well.

Of course many will never accept the idea of a Cycle degree peak in 2011, but I do. To confirm the gold market bearish phase it has to give us a very specific wave count. We always have 5 choices, but only 3 simple corrective patterns. Flats, Zigzags and Triangles make up this list. At this time we are looking at about 30 Cycle degree markets, with all the commodaties seeming to be in zigzag patterns in different stages.  There are a few that sure look like Cycle degree triangles, which is a rather rare pattern.

In 2016 we saw another bottom in the gold price at $1050, which many assume is the start of a new huge mega gold bull market. Sorry folks, ain’t going to happen on this trip, as the $1050 price is not nearly low enough to justify the completion of any 4th wave in Cycle degree. Our recent bullish phase may only be a 4th wave rally so until that clears up I will remain bearish in the shorter term.

It may take all summer for this pattern to clear up, after which another big gold counter rally will arrive, but it will be one degree higher. One degree can produce a 61% difference in price projections, and a quick calculation could send gold and gold stocks 61% above that mid-2016 peak. Once Cycle degree wave 4 is finished then I have no problem talking about a fuure $2300 gold price. If I mention that price too many times now, readers can make the mistake of thinking $2300 is just around the corrner.

Our recent Opec Oil bear attack slashed the oil price down to size, and sooner or later gold will not maintian its price. Gold to head north while oil heads south, is a poor excused to maintain a bullish gold forecast, as the Gold/Oil ratio will not allow for this to happen.

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Natural Gas Correction Review

Natural gas is another one of these asset classes that belong in the diagoanl world as it’s entire life seems to be diagoanl wave structures. So far the 2016 bottom is an 18 year bottom as well. I think there is a bigger bullish phase in progress, but our present move needs to clear up some more in the short term.  Commercial traders are long NG but not by any extreme.  Short term NG can still give us bearish signals but I think a bigger bullish phase is still due.

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Gasoline Blendstock New York Harbor 2012-2018 Cycle Degree Review

If you want to see an ugly bullish phase then you don’t have to look any further than the bull market from the 2016 bottom to our present 2018 peak.  This choppy rise fits best as a big bear market rally as this choppy gasoline wave patterns is much worse than crude oil ever was.  I see one big mother of a wedge which we would see in ending bull markets.

What the majority of analysts ignore is the fact that this gasoline chart has one huge open gap, which I have mentioned many times before. Gaps have a 90% chance of getting closed off, but it could take the rest of the year for us to be convinced that the big bullish phase has completed.  Gasoline charts have a good track record of creating major crashes, so to say it can’t happen again, means we are ignoring chart history. At the 2016 bottom gasoline didn’t even go as low as crude oil did, which does not complete any Cycle degree wave 4 crash bottom.  Having a fake bull market, (bear market rally) in gasoline and not in crude oil is mathematically impossible.

Very few people understand the difference between a true bull market and a high degree bear market rally as from their point of  view,  anything that goes up is a bull market. At about the $1.30 price level we could see some major support, but if the bigger bearish pattern is in effect then the $1.30 price level will just be a temporary rest stop.

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NASDAQ Intraday Rally Update

So far the Nasdaq keeps pushing higher and I would like to see it go a bit more and completley clear my previous wave 3 peak in Minuette degree. Any price above 7000 would help to complete this 5 wave run. After every 5 wave sequence a trend change is due, and how big the next move will be depends on what that 5 wave sequence is attached to. In this case the 5 wave sequence could be ending a wave 2 peak in Minor degree which would retrace the entire April/May bullish phase. All 2018  price support bottoms will get retraced,  if this rally is just another bear market rally.  All other indices are also gyrating and having difficulties in going higher.  With crude oil crashing, its just a matter of time before all the other markets start to join in. In 2008 everything crashed together including all the oil and gold-related assets, which sure seems to be the same set-up now happening in 2018.

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Crude Oil Intraday Crash Update.

Crude oil has a bit to go before all of the May rally is  completley retraced. It also means that the fundamentals reasons they used for the price rise were all bogus. They were baffling us with bull shit like they have done many times before. Breaking below the psychological $70 price level is very important as now the entire world of analysts will look for all the bearish fundamentals. The big question facing all participants regarding the oil bullish phase, is if it was a true bull market or just another  big fancy bear market rally?

Very few analysts know this and the emotional players know even less what a bear market rally is. From an Elliott Wave perspective every bear market rally gets completely retraced. All my work is done from a Cycle degree perspective and in the case for oil the big peak in 2008, is the Cycle degree wave three top. Since then oil has been in a huge bear market that still has not completed.  The initial 2008 crash was followed by a big bullish phase, which convinced many of the experts that oil will never fall below $100 again.

What followed was another oil crash that completley retraced the entire oil bullish phase. From the 2016 bottom to our present May top was an Intermediate degree move, while $110 at the 2011-2013 top was a Primary degree top. Our present top is only “one” degree lower, yet that represents about a $43 oil price difference. Some analysts flip degree levels around like flipping hamburgers, but they don’t realize that being out by only “ONE” degree does make a huge difference in forecasting any price changes. Prices pull fundamantals up and down like a big bull or bear will follow you around with a big ring stuck in it’s nose.  Forecasting a big price move also forecasts the new fundamantals when that price crash has arrived. Since I have labeled this an Intermediate degree move, I basically have a conundrum. If I make a one-degree change at this top then all wave counts going backwards must all be checked and recounted. Cosmetic wave counting will not do it, as it’s all about the structural changes that have to be made. Being out by one degree, we can be out by a minimum of 61%, which is the same as the (.618) Fibonacci ratio.

Now the guessing game will start at what price level oil will bottom. Bottom for what? A bottom that breeds a new bull market or a bottom that confirms this rally was just another big bear market rally?

If I use an Intermediate degree “A” wave peak for our present top, then I have just bumped all my oil wave counts into the SC degree world. Of course a one degree change in oil, would also put all 30 of my Cycle degree wave counts into question. Needless to say being out by just one degree is very important from my Cycle degree perspective.

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Intraday Crude Oil Crash Update.

This is the July intraday chart of WTI crude oil. In the last couple of days oil has been crashing which is pretty obvious,  as the media is all over it giving you an excuse or reason for every little twist and turn in the crude oil price.  The question is in how big this correction will be as every expert on the planet only sees upside in the price of crude.

There are very big counter rallies which majority can’t tell the difference. With them any thing that moves up seems to be a bull narket. In the EWP huge bear market rallies always retrace their entire bullish moves.  Once the bearish phase kicks in, nothwill stop it until it is time.  An intermedeate degree decline does not happen over-night as we need more evidence that  this decline has more staying power.  Some say  oil may only correct to $50 but that would not even put a dent into all the COT positions. $50 would be about a net 50% correction which I think is not nearly deep enought.

In between $40 and $45 crude oil would get much better support, if the big bull market is still in play.  But if we all are fooled as to the natureof this oil bull market then, that $40 price level will mean little. When commodities crash they can crash fast, as oil has demonstrated many times before. The longer it takes oil to create a new record high, the bigger the odds are that oil is in a bigger bearish phase than what the majority expect.

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US Dollar Intraday Bullish Phase Update

In late February I was calling for a US dollar counter rally, but as soon as it did charge up, the pattern was very impulsive looking which usally sends markets much higher than anyone expects at this time. The Euro is just inverse to the US dollar, which has been on a decline as well. It’s not just about one asset class as the US dollar bull market and bear market phases sends reverberations across many other asset classes as well.  The US dollar rally has been the reason why gold has been so lethargic. If a correction in this US  dollar bull market is due, then gold could see some bullish moves as well.  One little dip in the US dollar doesn’t turn gold into a massive bull market over night.

All commodaties I track are in a 4th wave in Cycle degree, and most of them are still far from being finished. With about 30 Cycle degree wave 3-4s in play, it may take until 2021 before many of them will be ending their respective 4th waves in Cycle degree. There are only a few asset classes that have seen a 4th wave bottoms, but in a few years time, many more will join the club. All these 4th wave endings will produce 5 wave waves up in Primary degree, but in commadaties, these 5 wave sequences can be extremely choppy as well.

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10-Year T-Note Intraday Rally Update

Since my last update the 10-Year T-Note traveled down a bit further and then started to reverse on May, 17.  I belive that this massive bull market in T-Notes has been running since the early 1980’s as an inverted Cycle degree 4th wave, and it’s still not finished.  All commodities show diagonal patterns for their entire Submillennium degree 5 wave sequence, so there is no way of getting away from counting diagonal patterns as conventional wave counting will not make any sense. This rally looks great, but it’s still very small and barely registers on any weekly chart.  Short term anything can still happen but hopefully, this rally has got some legs.

Market players could be running to T-Notes and cash as a place to hide from the potential bull market wreck in stocks.  In the long run another zigzag bull market with 3 waves in Minor degree can develop so we have to keep our mind open to this possiability all the time. The choice is simple enough if this bull market is not finished, as it must push to new record highs again. Mind you it may also take a few more years to play out.

 

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NASDAQ Mini Rally Update

The Nasdaq will always give us the gears as it seems to walk to a different drummer at times. The potential Cycle degree wave 3 peak did not peak until early March.  The recent pattern suggests another correction is in effect with a little 4th wave in Minuette degree just completing this morning. The markets could implode as well as it seems to be a Gold/Oil/ USD/stock connection running. In the 2008 crash everthing joined in the bearish decline, so there is nothing to stop it from happening again this year.

Buying on the dips will just get you killed, as the majority have no clue in how big this impending bear market will get. All price support to 6200 must get retraced and that is just to get us warmed up for the bigger bearish phase that still needs to follow. The majority are all in the bullish trap as they practice, “no sell high” strategy. Only a very small percentage of contrarians have this skill and experience of buying low and they need lots of time to put their capital to work. Until insiders show a clear track record of them buying their own shares back, this market will go down sooner than it shoots to new record highs again.  When companies practice a, “buy back” program then this is usally a bad sign as it throws away cash at extreme tops, and it’s a desperate attempt to keep their stock prices high. Buying their own shares back with company profits is also a clear sign they know not what to do with their company cash pile.  The same happens when they start paying dividends, paying dividends is also a sure sign that the company has no ideas or projects, and when the do pay dividends that company also starts to decline.  Only the rich can play this game, as they are the only ones that can afford these prices in the first place.  Any average Joe or Jane will get wipped out if they follow the herd and try and beat the markets.

If you play the same game as the majority do, then our end results will also be what the majority get.  The last greatest fool will be left holding paper that is falling in price, with many buyers nowhere near to be seen. Only the emotional traders are left playing this game, and they are the first to bail out when they start to see red in their invesment accounts.

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Mini Sp500 Intraday Update

The markets took a dip this morning but that does not insure anything at this time. I have different wave positions in most of the big indices I cover, so I have to practice a bit of cosmetic wave counting for the short term. I only have to keep going back to the January 2018 peak as at this time it could be pretty secure with a Cycle degree wave 3 peak. The patterns are ugly by any streach of the imagination, but they also have a tendency to smooth out over time.  We still need for this market to retrace “All” 2018 bottom support prices as that is what it will take to help us to decide if we are over into the bigger correction.

A simple little 20% correction will not do it folks. At a minimum the 1800 price level must get retraced, wiping out the entire 5th wave bullish phase in Intermedetae degree. Even then 1800 may only give us temporary support, so buying on the dips will still be far too early. Not until we reach any Primary degree “A” wave can we play a bullish phase, and even then you don’t want to make any big aggressive bullish moves at that time.

As long as the mass media talks about, “buying” the dips it tells me that they have no clue, to the size of this bear market to come.

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Crude Oil Intraday Record Highs Update.

This morning crude oil was trying for $73 with this June contract. We also have a very narrow run that can fit into an ending diagonal very well.  Gasoline has also been making new record highs, so crude oil is not alone in this. Oil keeps pushing higher as the world experts have all jumped on the oil bandwagon already.  This oil bull market is a top heavy trade by any stretch of the imagination.   A major correction must happen, or worse yet the entire bullish phase comes to an end and oil prices start to crash.  It’s hard to beleive that oil could crash but it has done this many times before and under much higher bullish conditions. Just review the 2008 peak when the experts were declaring a world oil shortage. Yet 5 months later we were in another complete oil glut. The world’s bullish oil analysts never saw the oil crash coming in mid 2008 and this time I see very little difference.

This morning the Gold/Oil ratio crashed below 18:1 which keeps making oil very expensive. All future bullish price forecasts become higher and higher, until that day when all the bullish buyers are already in.  Protective “sell” stops are piling up below present prices , but there is a $10 price limit where trading in oil my be stopped for the day.

Commercials do not support this bullish phase as it is the speculators that are chasing this bull market and they are in net long positions.  Bullish speculators leaving protective sell stops behind them, are sowing the seeds of their own destruction as sooner or later all trends trap the participants before they know it.

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Russian Ruble: Another Cycle Degree Bear Market? 2008-2018 Review

This is all the history I have of the Russian Ruble. A big location clue is the 2008 peak which matches the WTI oil Cycle degree peak in the same year.  I show a 5 wave decline in Intermediate degree, but this would no longer match oil.  I could switch this entire 5 wave decline into a single Primary degree zigzag decline, and then it would match oil very well.

I will create another wave count but turn it into a zigzag, the out-put when both  finishes would be drastically diffrent.  We should be able to tell if an impulse has started or another choppy rally. A choppy rally would throw up a red flag that another big bearish rally is in effect. In both wave counts, the present Intermediate degree wave 3-4 would not change. The 4th wave rally may not be completed just yet, so this would also have to clear up some more.

Every bear market rally gets retraced, so if this 4th wave rally position is true, then a new record low in the Russian Ruble will happen. I guess with all the bullish news out about oil shouldn’t the Ruble be soaring as well? Maybe it’s the Ruble that is telling us that oil is going to crash.

Commercials are net short the Russian Ruble, while the speculators are net long. Both parties can’t be right folks! Speculators are the ones chasing the bull market, and they are the first ones to get into a trap as well. Until these numbers start to switch, I have a bearish outlook for the rest of the year.

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Crude Oil 1980-2018 Monthly Chart Review: The Surplus Is Gone!

The story goes that the experts have now declared the world oil surplus over.    It took fundamentals close to 23 months to catch-up to the oil price.  Since 1980 we had about 4 major world oil gluts and each one was followed by a wild bullish phase. The exact opposite happens at every oil peak, crude oil shortages were declared, and as soon as concensus forecasting was unaminous, the oil price would crash.  All the takling heads agreed that oil prices were going much higher as inventories are starting to decline.

Storing oil is big business and the last thing smart money wants to do is store oil at high prices, so inventories are reduced. They can’t figure out why  the oil price would crash when inventories are declining. At the 2008 peak they were calling for a world oil shortage and price targets of $200-$300 a barrel were pretty common. In face of all that bullish oil news, within 6 months oil had crashed about $110.

Then again at the 2013-2014 oil peaks just above $110, they declared that oil would not fall below $100 again. Sure enough witnin two years oil had crashed from $115 to $28. Oil and commodities have a great track record of crashing when nobody expects them to crash. Oil has had no problem in moving $50-$60 at a crack, so another $40 oil crash would be a walk in the park. Now in 2018 we are faced yet with another major bullish scenario, as the fundamental forecasters are at it again. They don’t report the huge short positions commercials have in oil, they only brag about the long positions of the speculators.

With crude oil going vertical at about $72, two things are going to happen, one of them is another huge correction develops, and the other is an end to this entire bullish phase, which started in 2016. Very few can tell the difference between a bear market rally and a real bull market. A bear market rally “always” retraces its entire bullish phase, and we have to wait to see if this will start to happen in the next few months.  A turning will force all the players in the bullish direction, to switch or get out.

You can bet there are massive amounts of  protective “sell” stops below present crude oil prices, and once they get triggered, it can produce a cascading effect. There is a $10 limit to moves in oil futures but that rarely has been triggered. My “B” wave in Minor degree is sitting at about the $45 price level.  The public needs to switch to a very bearish mindset, before a major bullish move can happen again.  If oil is going to crash, there is no way that gold will go vertical heading the opposite way. It’s the Gold/Oil ratio that ties oil and gold together, and it’s just a bit above 18:1 as I post. During the 2013 oil peak the Gold/Oil ratio compressed to 17:1 before it crashed, so 18:1 makes a great fit at this time.

If I’m wrong about this impending decline in oil prices then oil “must” produce a clear corrective pattern in Intermediate degree. This corrective pattern must not create a new world record low price,  but it must produce another higher low. Think of “must” have as a hard EWP  “Rule”,  not a guideline.  Another 3 wave Minor degree move will not happen overnight, as it would take many months and even longer to fully correct.  Some little dip in the oil price will not even come close to force a change in direction onto the  bullish speculators.  As I post oil is getting closer to $72 again, so this will keep many of the bullish players locked in their positions for now. Buying low and then selling high is not the concept practiced today as even in commodaties they love to chase a bull market forcing higher and higher prices on us. Bullish moves have come to abrupt halts in the past, so I’m sure this big bullish phase will also end.

I could be faced with a degree change but making one change up or down would throw “all” my other wave counts out as well, by at least 61% or more.

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CA:HEP Horizons Enhanced Income Gold Producers ETF Review

This is an income fund in Canada started back in 2010. 2011 was my Cycle degree wave 3 peak and what followed was a grinding bear market that looks like an impulse but in reality it is just another diagonal 5 wave sequence. All this may be hard to swallow for those staunch gold stock bulls foaming at the mouth, but I’m not here to make those emotional traders happy, as I will always try to supply an alternate idea about bear market rallies.

I call them fake runs at times, and the biggest and most important thing to know, is that all bear market rallies retrace themselves by 100%.  In mid 2016 I called for a correction in what I though was a bigger bull market still to come. What followed was another grinding sideways movement that seems to be going nowhere. All bullish corrections during that time had failed. When we apply a wedge to this section, HEP is getting bunched up inside the cone, and it must be forced to break-out. Break-out in what direction? Slice the top line first or slice the bottom line first?

Our choice comes down to two basic chart directions, up or down!  This pays a small dividend but I still would not touch this ETF with a 10-foot pole.  I do not give any specific buy or sell calls, as I can only forecast up or down my idealized wave structures. I may still be a bear now but I will turn very bullish when the time comes. There is always a chance that I can be wrong, but then the bull market will have to leave without me, as I refuse to jump into a trade in the fear of missing out. In 2008 most markets crashed together as gold/silver/gold stocks/oil and all the big markets headed south. If it happened once before, it sure can happen again. It would cost you about $2300 to find out!

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Russell 2000 New Record High Review.

This is the June contract daily chart and it is the main reason why it does not fill out. I started with the weekly chart and it seems the entire 5th wave in Intermediate degree is a diagonal with this part being a zigzag traveling to new record highs.  Apple is just completing the exact same type of zigzag which tends to be the finish of a diagonal 5 wave run.

I did check it again from the 2015 bottom, which is best done with the weekly chart. Many may  start counting this as potential new leg up, but if that is the case then another two, 1-2 wave structures would have to form.  The VIX is also apporaching record lows again so a big bullish move in the Russell 2000 is highly unlikely this time.

When a market goes vertical, it’s always a good time for a correction, or it can mean the end of a big bullish phase.

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Cotton Monthly Chart: Triangle Still In Progress?

I have been keeping my eye on cotton for some time but as you can see it is such a wild diagonal market. I believe cotton is in a triangle but the exact location is a best guess at this time. I have records going back to the 1970s and without a doubt choppy wave strutures is the dominate theme.  From the 2001 bottom a wild zigzag occured topping in 2011 right along with gold and gold stocks. I do have a very big Submillennium chart of commodities, and the entire general theme is diagoanl in nature. This did not smooth out until a bit until after the GSC degree crash in the mid 1800s. My Submillennium wave two ended in the Little Ice Age about 1500 CE. (Common Era)

This does not mean the entire Submillennium run is a 5th wave extension as it is just the nature of the beast in commodity land.  You have to be very good at looking for, and identifying diagoal wave structures,  as they will sneak up on us when all we can do is count impulse waves everywhere.

The commercials are short cottom by a wide margin so persuing a bullish wave count at this time is a lose-lose situation.  I can’t pass up following any potential triangle as it is a very rare treat and excelent experience.  This is the first attempt at counting out the cotton triangle so anything can still happen in the short term. The small “A,B” in Minor degree is an expanded pattern which eventually always get retraced.

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SIL Silver Miners ETF Update

All the attention is focused on gold which I think is painting us a very bullish picture which is not confirmed by silver or many other ETFs. SIL launched a wild run that  dipped well into the previous wave two of the “same” degree, which makes the entire decline a diagonal decline. Cycle degree wave 3 has completed at the 2011 peak and this bear market is far from finished.  The trend lines show that we can’t force wave patterns to stay in a channel.

I may be bearish on all this, but I assure you I will turn very bullish when the time comes.  Since that 2016 peak SIL has been in a bearish mood that sure looks like it has more to run.  It may take the rest of the summer to play out,  where it could produce a double bottom set-up. This would be a very bullish set-up that very few will take advantage of. Investors “hate” to buy low but the contrarians love it. Of course all this goes against the bullish mainstream media forecasts, but lately the bearish pressures are still showing up. From my perspecive attention to pattern is far more important than the Fricken barrage of fundamantals that the media uses to brainwash us.   Vertually nobody can tell the difference between a bull market and a big bear market rally, but the EWP is the perfect tool to use for this.  The problem is nobody has an acurate picture of where they are counting from, so wave counters can get caught in the same bull trap as the majority.

Forecasting the same trend as the majority do is not rocket science folks, as it takes much more time and effort to look at all moves from a contrarian perspective.

I called a bullish phase peak in 2016, but the correction sure has not confirm this just yet. The SIL trend is still down as I see it.

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NASDAQ Intraday Review

The Nasdaq had a very different time period for a major peak which was hidden or masked by the bearish attention to the DOW and SP500.   Any Nasdaq wave count is not clear at this point as we still have too many wild gyrations. Summer is coming on which can produce very bearish moves. We do have to respect the Nasdaq as it can keep on giving us the gears in the short term.

From late April the Nasdaq has now only produced a 3 wave run, as wave 4 is still missing from this action. I switched to line type chart but it also changes the wave patterns, producing different wave counts all the time. In the short term I will be doing some cosmetic wave counting, but eventually the trend will start to smooth out, and when it heads south it will help to confirm a bigger bearish phase is in effect. Recent Commercial trader report does not show an extreme bearish situation, but more of a small bullish situation. This could turn more bullish as the real decline shows it’s true colors.

It makes no sense to spend so much time in intraday scale as for long periods of time nothing can happen. Nobody can take advange of intraday scale wave counts. It might take a week before a new posting is read 4-5 times, by that time it’s to late to take advantage of it.  The big and best moves happen at the daily and weekly chart scales when the majority are all “forced”  to switch directions.

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The Euro Keeps On Crashing: Daily Chart Update.

The Euro counter rally did not last very long at all. We will see if this impulse decline has more power to it than most analysts are expecting. The 6 currencies that are inside the US dollar basket act inversley to the US dollar with this Euro being one of them. It also all realates back to gold as gold and the Euro have traveled together many times in the past.  The bullish phase in 2017  was a “C” wave bull market with 5 waves in Minute degree.  At 1.16 the Euro can put up some resistance to the decline but this should only be a temporary resting spot as everyone screams, “Support”.

Price support means little, but wave pattern support is everything, from my Cycle degree perspective.  I may have to adjust the wave count decline, as I’m starting this run as a wave 3 extension. We have an open gap below and this should get hit in this bearish decline.  Until the Euro decline has completely played out, gold will keep heading south. Gold has crashed $70 already and it’s not finished.  I’m sure the COT reports still show the commercials in a Euro short position, and until that starts to shift dramatically the Euro will keep declining. Most investors have no clue what the difference is between a real bull market and a bear market rally. “Every” bear market rally retraces itself by 100%. It’s the big bear market rallies in Primary and Intermedeate degree that fool us the most.

The Euro started it’s bear market in 2008 right along with oil, with both ending on Cycle degree wave 3 peaks. This makes it close to a 10 year bear market and we’re still counting, as “every” rally in the Euro has been completley retraced.

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SP500 Intraday Bullish Phase Update

So far this phase of the stock market has done nothing by soar in one direction and then move right back down again. Investors are having difficulty in finding a lasting trend. From the April low we could still be in a diagonal ‘C” wave rally. From the April peak, the SP500 crashed again but added a 3 wave zigzag move to a lower low.  This little 3 wave structure doesn’t fit unless it is part of an expanded pattern. If that is the case then this market could crash to the May lows, after which another shocking rally could soar past the March high.

I would have little room to spare if the next move happens, but final ending diagonal 5th waves can produce moves that will surprise many of us. There is nothing here that indicates that a bull market correction is already over. Any Cycle degree correction needs much more time and depth, before a new bull market will be ready to be unleashed.

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Crude Oil Intraday Record High Update

This bull market in oil keeps pushing higher and it still may not be finished. At this time it looks like and ending diagonal could be forming with a drop to the bottom trend line can still happen.

Higher and higher price forecasts for oil have flooded the internet and in the short term some of them may still get hit. The question always on my mind is “what is going to happen “after” thier price targets become true. In reality they have no clue as, and besides if they did, they might get fired for being bearish.  I have no such hang-ups in calling an oil bubble, but it is impossiableto define an exact top at this time. The big question is, “Is this bull market just a big bear market rally (fake bull market), or is it the real thing.

There is nothing wrong in playing any fake bull market, but then you really have to know when to sell or go short.

They all thought that the 2013 peak was a bull market yet another crash ensued producing a complete retracement. That was a Primary degree peak and at present we may be at an Intermediate degree peak.

Bear market rallies have a dubious reputation of  crashing with “complete 100% retracement”, even if it is retraced by only slimiest of margins. The EWP is still the best way of seeing bear market rallies depending on where we are counting from. My bearish wave counts come from the 2008 peak which is my Cycle degree wave 3 peak.

The entire oil bull market is so choppy that I find it hard to believe that oil prices are still going to the moon. Commercials have establish large short positions and the majority of experts are “all in”. The is a bullish top heavy trade set-up and it can only end badly. From a shortage to a glut it only took about 8 months in 2008, so this bull market can change dramaticly in a very short period of time.

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