Daily Archives: May 3, 2018

XEG Canadian Energy ETF Review

I’m looking at other energy related ETFs in the Canadian market to see if it is still on the bearish side or the bullish side.  Some of my bullish friends don’t agree at all, but I can’t ignore what I see. The bottom trend line points to another potential bearish bottom, but that only matters if you have a bearish outlook in the short term.  Most energy related major peaks happened in 2008 which is my Cycle degree wave 3 peak.

Without a doubt the bear market is a diagonal decline  and many say the bear market was over in 2016.  In wave 3-4 correction, we can have expanded patterns that are very normal and plentiful, and if we miss them expanded corrections wreck havoc on our wave counts. A diagonal “C” wave decline is what I’m looking at and I don’t think it’s finished already.

When the planet is bullish on any asset class, then I “always” start looking for the bearish move. Sure, this pattern can be obnoxious and fool around much longer, but it could drop perciptiously as well.  Any Cycle degree bear market should be confirmed with a minimum of three lower degree levels in Primary, Intermediate and Minor degree positions. If I see 5 waves down in Primary degree, then I know instantly that they think they are in Supercycle degree.

Stand in line folks as Cycle degree wave 4 and 5 come first before any SC degree wave even gets close. With the COT reports on crude oil being so bearish,  this market has little chance of a continuing in a northerly direction. Oil soared this afternoon, but this energy ETF only moved a small amount. I don’t believe in the “catch-up” theory at all, as XEG is more like a leading indicator for oil.

This ETF still needs work, but a bearish drop will also give us another fantastic buying opportunity. Only a small majority can take advantage of buying low  as the majority of investors only love to buy “high”. Right now there is a 10 year difference between oil’s Cycle degree wave 3 peak and the indices Cycle degree wave three peaks. This can lead to an early Cycle degree wave 4 bottom. Gold and Silver peaks happened 3 years later, so they could also take 3 years longer to hit a Cycle degree 4th wave bottom.

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Gasoline Intraday Price Action Update

 

https://www.ctvnews.ca/canada/gas-prices-in-vancouver-hit-another-all-time-high-this-week-1.3907415

Here in BC, Canada, we have the highest gasoline prices at the pumps in North America!  These high gas prices will be high for the rest of the year or until the futures gasoline prices also crash.  At major record tops, I always ask, “Who is left to get in?” When every expert fund manager, futures trader and guru specialist have already taken bullish positions, “Who is left?” Only the emotional  people are in as they believe all the fundamental hype broadcast to us on a daily basis. Even $300 oil is on the table.  When forecasting the oil price you can’t forget the Gold/Oil ratio is also at work, so a $300 oil price would give us a $6000 gold price!  That will never happen in todays world, so it is pretty easy to throw out the very biased forecast altogether.

Gasoline may have reached a peak in April, and was followed by a nasty little decline. Degree wise it is a very small move, which can still reverse dramatically if the bull market is not finished.  Gasoline has one of the biggest gaps on the planet well below present day prices, and sooner or later the open gap will get closed shut.  Is oil in a big bear rally or are prices going to keep soaring? If this is a big fake run, then without a doubt that huge gap will get closed!

Gold has also enjoyed a bit of a surge this morning, but it would still have a long way to go to break new record highs.

This is the COT report for crude oil! Short positions are on the bottom while long positions are at the top. The light color bars are the speculators and hedge fund managers with massive long positions, while the commercials are  building a massive short position!  Does this look like a healthy picture for the oil bull market to continue? Not from my perspective, it’s not!

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