Monthly Archives: June 2018

Gold Weekly Chart: Waiting For the Death Cross!

I believe gold is giving us a hard time because it was just in a bear market rally, and not on some other path that has gold prices going to the moon.  Gold $1600-$1900 is going to the moon. I have a problem with that as Death Crosses are a serious lagging indicator. It took just about 3 years for the Death Cross to show in this weekly gold chart, which makes the Death Crosses a lagging indicator. Now the Golden Cross has completed a year after a good buying bottom has arrived. This is far too late to be any use to wave analysis as trades should be executed long before them.  The 200-50 day moving average only confirms a bear or bullish mood after the fact. The EWP will forecast any impending Death or Golden Crosses, as there seems to be two Death Crosses that show up in a 5 wave decline.

One more gold Death Cross with this weekly chart will happen, even if it takes 6 months. Gold bugs don’t know that gold is in a bearish rally as they force turning a bear market rally into a bull market. Wow, they can make those little numbers and letters fly and turn a choppy rally into a impulse bull market.  Nobody knows what a bear market rally is and what has to happen to confirm that a bear rally did happen. Every bear market rally always retraces its entire bullish phase from the point of orgin. This is the gold $1047 price level. I can just hear the shrieks that the gold price would crash, but there is absolutely nothing down at that $1047 price level that supports the end of any bear market. Price never dictates when a bear market comes to an end. It’s the pattern that dictates where any price level can land at, not some preconceived price stopping point.

Nobody knows what wave count that the 2011 gold peak really is, so it’s impossible to figure out what type of bear market we are going to get.  I spent the last 10 years trying to figure that out, and found out the hard way, where a Cycle degree wave 3 peak could find a new home.  Commodities are “ALL” in the diagonal famaily, while the big stock markets are in the clean version of impulse patterns.  Ignoring the 2011 peak is a big mistake as that is where all wave analysts should be counting from.

From the 2011 peak, I’m working a Cycle degree zigzag that will be about the third of the way through this Cycle degree zigzag correction. Gold is going to make some wild moves beyond anything the gold bugs are expecting where as a price free fall could land gold at the $750 price level. Gold $800 is where the real support is as $1047 just doesn’t cut it.

Gold will never protect you in deflation, it can only protect you from inflation, if you buy gold low enough. To say that gold is still going to soar don’t realize a massive capital destructive hurricane is on it’s way. It could erase $100 trillion in world assets. Money distruction on a scale far worse than anything in 2007. Money distruction means deflation, not inflation.

The US dollar is in better shape than the Euro, Japan or China so the US dollar is acting out it’s safe-haven status. Escaping from the Euro destruction will send the USD soaring.

When gold crashes to $800 at least we have one potential base line. From this $750 base,  gold would soar once again. It will be at least one degree bigger than what we had. This too will be just another gold bear market rally, but gold could still soar to the $1800 price level first.

I did not fill in any of the little wave positions this time, as I have online records of doing that already. Gold is just a bit more than $200 away from crashing the $1045 price level, which it can do in a blink of an eye. (Silver about $2 away) Nobody tells you that gold crashed $300 back in 2008, so they think it can’t happen again. GDX got crushed in its price, so expect more of the same this time around.  All the currencies that support the price of gold are imploding folks, as Death Crosses show up on thier daily charts. If you don’t know how bad a Death Cross can be, then we’re  going to find out the hard way. I have some gold stock ETF short positions that I’m holding, so a rapid switch will have to take place when the ETFs hit bottom.

Only those people that are prepared to buy into a bottom, or catch a falling knife will benefit, as the majority of investors will hate gold stocks when they have been fire bombed.

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Quick Amazon Stock Chart Review

When you see someone try to wave count Facebook in great detail, then  you will find someone with too much time on their hands.  I try to stay away from all single stock wave counts, but it’s nice to record a potential wave 3 top in Cycle degree. FB is done for, as far as I’m concerned,  as the age of the internet is in an, s curve plateau. Two trend lines can give us a clue how deep FB can crash in the impending Cycle degree bear market.  The standard correction for a big bear market could be a 70-80% retracement.

It’s the top trend line that is important as that shows a long steady climb. That top line is duplicated in parallel fashion and then dragged down to the bottom.  This points to the $100 price level.  Face Book is in such a bubble that it may burst and never rise again. FB will become an electronic burial ground for all the dying boomers as deleting your own account after you die is very hard todo.  Dead people do not pay  ad revenues the last time I checked, unless you become an AI vertual robot and live on forever.

Folks, we are coming into a time where all asset classes are going to have convulsions so large that “Buy&Hold” will no longer work for the next three years. There is a time to buy and there is a time to run to the hills and hunker down. Wait out the financial storm that will hit us, as this planet will be forced to de-leverage.

To show how expensive FB is to gold I have calculation when it was cheap at 100:1. Yes, with one ounce of gold you could buy 100 shares back in 2012. Now you can only buy 6.44 shares with one ounce of gold. This is the most extreme Gold/FB ratio I have ever recorded, and blows all previous cheap ratios out of the water.

As you can guess, I’m very bearish on the markets and FB is just another elephant in a china shop.  The Buy&Hold strategy is dead, for the next 3 years as even “value” investors are having a hard time in finding “value”.  Being bullish in the biggest bull market in history puts you inside the bubble. Bubble players don’t think they are in a bubble, so they will go down once the markets hit another iceberg.

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Bitcoin: Death March of GBTC

 

This Bitcoin Mania is going to go down in history as just another bubble.  Most bubbles return to their point of orgin which in this case is about the $1 dollar range.  A complete 180! This Bitcoin fund may have to execute an inverse stock split, so that would devastate any asset base it’s trying to hang onto.  After that it could flat line and never rise again, languishing at the 1-2 dollar price level. Billions of US dollar value evaporated and were destroyed.  When $527 billion evaporates, that does not foster confidence of some huge bull market to come. The planets asset world is going to meltdown, destroying $100 Trillion in the process, so Bitcoin’s price can still get crushed. There is roughly about $300 Trillion of assets in the world in US dollars, so only a third of it might get wiped out.

How would you like it, if 30% of all your asset values suddenly disappeared? We would not be happy campers to say the least. Protecting your cash will be critical, as paper assets and stocks are going to deflate in the next 2-3 years and those who are left standing will become the winners!

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US Dollar Weekly Chart Golden Crosses Update.

 

In early 2018 the US dollar hit the 89 price target but at the exact same time an extension of the trend line was possiable. The US dollar is acting as a safe-haven go to currency which not to many gold investors are aware of.  With the US dollar still being in a bullish funk, two Golden Crosses have already formed. This is the very opposite of our CAD.

The problem is that all Death or Golden Crosses are lagging indicators at best, so I hardley use them. If the US dollar short term crash was just a correction, (Expanded).  Then the USD must prove this out by pushing to a new record high. Even if it only squeaks past the top by the smallest amount, the USD decline must get completley retraced from the point of orgin.

 

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Canadian Dollar Daily Chart Death Cross Update.

Death Crosses just keep on coming so I added our dollar to the club.  A Death Cross  is a serious indicator that a longer decline is still in progress. Our CAD is crashing and it will continue to crash until a new record low in the CAD is established. This is not hard to understand if you believe our CAD just came from an inverted wave count. This means a bear market rally has taken place. The markets must confirm this bear rally by retracing the entire bullish cycle, that started with the 2016 low. I switched the CAD to a weekly chart and I saw it contained two Death Crosses with this one being the second. Death Crosses are not short term phenomena, as they forecast longer and deeper moves to come.

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Euro Monthly, Daily Chart Death Cross Update

 

 

Gold had its Death Cross, so why can’t the Euro have one as well?  Using all the same parameters as with the gold chart, the Death Cross in the Euro also showed up. I normally don’t care about the moving averages, but the Death Cross helps to see that a bigger bearish trend of the Euro is going to happen. The Euro Death Cross supports my very bearish outlook of the Euro.

Most people don’t have a clue what a Death Cross is never mind figuring out what is going to happen next. The Death Cross in the Euro shows that the US dollar has become the safe-haven currency as Italy brings the Euro down.  Italy could make Greece look like a little garden party drinking tea and eating biscuits.

This is a quick monthly chart update that shows the Cycle degree wave 4 top in 2008. 2008 matches the crude oil peak as well as the US dollar bottom.  Potential gold investors will get hit hard as they need for the Euro and our Lonie to go up, not down the way it’s been going. All trends must end and in the case of the Euro, the bullish trend came to an end 4 times in a row.  The first three bear market rallies were all completley retraced, and now we are working on the 4th, then later we will get our 5th bear market rally.

Chances are very good that the Euro will hit the bottom trend line and create a new bear market record low. We are going to get some major market convulsions in the next 2-3 years, so asset and cash protection is going to be the key. The DAX will also implode along with China, Japan and every other major stock markets. 100 trillion dollars will get wiped of the face of the earth. Taking 100 trillion out of world asset prices will just about produce depression like symtoms, as it will become much worse than the Great Recession of 2008. A big recession is coming and it could be world wide.

I have mentioned this before but gold or silver will “not” protect you in deflationary times, no matter how much the experts believe it will. They’ve been feeding us this bullshit for decades, but I know protecting against inflation will only work “after” any metals crash, like 2000.

Just like the Euro has a long way to fall the USD still has a long way to go the opposite way. That spells out that deflationary pressures will mount. When stock markets imploded in 2008, the US dollar soared and gold crashed $300 in just 5-6 months.  To think that gold can’t crash $300 is very naive and short sighted thinking.

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SPY: The Bears Have Returned!

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SPY is a main popular ETF that tracks the SP500 index. We can get an alternate look at this bearish phase which has not recorded a new high since the January peak. Just by eye balling this potential wave 1-2 decline we can roughly judge that the 2016 low will never hold.  Add on an extended wave 3 and an extended wave 5 and this wave count would go below the bottom of the chart above.  (180). Now if a long skinny spike were to develop then the entire structure could turn into an Intermediate degree zigzag crash. In 2016 Brexit fears dominated and the big crash was forecast on all the blogs,  yet SPY turned and roared with a gain of 159% in just two years. Of course nobody can capture that move, as the planet is killing each other just for a 2-3 % return. This market should lose  2/3rds of its price in the next 3 years. This may sound depressing to most, but investors should chear when the end does arrive.

One thing I will boast about is that Elliottwave5.com is dedicated to all the Cycle degree wave structures ,which is the only blog of its kind on the Internet. With out a doubt, this blog has the most Cycle degree related wave counts anywhere.

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Russell 2000 Intraday Record High Update

Finally it looks like another major top is in and the first part of a decline is in progress. I started out using very small degree wave counts, but will adjust when the bigger trend has  impact on the daily chart.  The Gold/Russell 2000 ratio is 1.30:1 this morning which means that we can only buy 1.3 units of the Russell 200o with one ounce of gold.  As the Russell 2000 keeps crashing this ratio should expand as we are able to by more units with one ounce of gold. A Russell 2000 cheap ratio is 2.63:1, so we have a long way to go before the Russell 2000 becomes cheap again.

We are staring at world record highs, and depending on what we think what the largest wave count is, wave analysts need to cap this June peak. All my work tells me that a Cycle degree wave 3 top could have finished, then it is a simple a matter of what to expect by chossing one of three options, flat, zigzag or triangle. I favour the flat with the first move possiably being another zigzag before the “A” wave in Primary degree arrives. At this point it’s dangerous to try and catch a falling knife as a trade war is not going to get settled anytime soon. It could take years or a Cycle degree time period. When they find out that the trade wars are killing the economy and the whole trend will reverse, as they try to unwind all the damaged they have caused. A super bull market is coming, but not until a sufficient Cycle degree correction has  completed or is about ready to complete.

At a bare minimum the 960 price level will get hit. That would be normal for a bullish correction as well. In the end this 960 price level will not hold, as that is barely a bee sting in the big scope of things.  This is my third big bear market I will be tracking, but each one will contain a different pattern, with their own little quirks and surprises. Smart readers or participants must be prepared for that bottom when it arrives, otherwise they will miss this impending opportunity and will only get chicken feed for you efforts. Gen X is one of my main reader groups, and my friend who is also Gen X, will retire in 2029, so I have some convincing to do to get him mentally ready, for that anticipated 2021 market low.

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Crude Oil The Bull Market That Won’t stop!

 

This is the September month with oil just squeeking into a new high. The August contract scored a new high but all other contracts months are still far behind and lagging.  I believe an inverted zigzag is still in progress, as the wedge suggests. If we draw horizontal lines back to the bull market, then the $75-$80 price level is going to produce a stiff wall of resistance at the same time.  The $80 price level would also hit my wave 2 price range. In a pure impulse I would not allow that to happen, but in the diagonal world this happens on a regular basis. For over 500 years, Submillennium degree wave 3 has produced diagonal wave structures. Oil’s entire life span is also based on diagonals.  Modern wave analysts don’t care about diagoanls waves as they label everyting like simple impulse waves. Cheating in counting diagonal waves stands out like a sore thumb to me, and I reject any wave count that ignores diagonal wave structures.

Different contracts have different peaks, so this usually wrecks havoc with the wave count, at least in the short term.  Any “D” wave rally can look like this as well, and most of the time you will never know the difference, because the mood in a wave 1 and a “D” wave are much the same.  Every bear market rally we will ever run into, has a bullish mood attached to it. The majority will never learn what a bear market rally is, so we get sucked into thinking that every bull market is going to send prices to the moon.

At the 2011 peak everyone thought we were in a bull market, yet complete retracement ensued.  Gasoline futures are not following as they are lagging substantially. At about the 2014 peak the Gold/Oil ratio quickly jumped to 17:1 after which the oil price imploded. In the last few days this has happened again as oil pushed to 17.24:1 this morning.  If oil stayed in the same spot and gold keeps crashing, then oil would still get more expensive and it doesn’t even have to move.

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GBTC: Bitcoin Investors Are Jumping Ship From The Bitcoin Titanic!

All support has been obliterated, and now this GBTC fund is heading into new territory. I start by drawing the top trend line, and then 1 or 2 others to project the trend. Does the angle of decline look familiar? It should, as gold has the same angle of trend from its bubble peak. When a bearish trend takes hold, you can’t stop it until it comes to its ultimate conclusion.  This could even mean that Bitcoin will be buried in history, as just another social media phenomenon.

The only way this could come to an end, is if the decline steepens in its angle of decent. It would not suprise me if this fund even hit $4.

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DIA, Bull Or Bear? A Cycle Degree Perspective.

One thing I can say about this DIA ETF is that it’s far smoother than anything you will run into with the futures charts. DIA also matched the “A” peak with our present “C”wave peak.

About 5 months for a wave 2 bear market rally in Minor degree still sounds pretty good. In the end this DIA ETF will take out any price support that the public this is the end of the correction.  Sorry folks to burst your bullish bubble thinking.  The majority have no clue how big of a correction must happen if we are to confirm Cycle degree wave 3. All other indices are also jostling for the peak, which may have concluded just days ago. If you are  looking for some GSC and SC degree forecasts then I will give you one! Supercycle degree wave 3 will not arrive until about, 2029 so you have a long way to wait. Cycle degree supercedes SC degree which very few wavers understand. The big bull of wave 3 in Supercycle, GSC and Submillennium degree, are all active as well. It’s the Cycle degree world that is in the, “Here and Now” which can affect 3 generations of investors all the time.

I have a good X-Gen friend who will retire in 2029. If he buys in at the 2021 expected bottom, then he could ride the entire Cycle degree wave 5 into his retirement and live happily ever after.  Wild bear market moves like 2002, 2009 are not banished from the investment world but they will just get bigger and drag out a bit longer in time.

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Crude Oil Present Rally Will Run Out Of Gas!

I will make this December contract a perminate contract month as other months have some wild moves in them that have much higher spikes than what we see.  The September contract produce a very small gap which oil is in the process of closing off.  We still have the 4th wave peak and since May this peak has not been breached. Technically it should not get breached if the bigger bearish trend is already in progress.  Every counter rally to the bigger trend is a mini bear market rally, and any price support level will not hold, but for only a short time period.  From my perspective price never confirms a wave count, as price is a result of the type of pattern in progress. Did price help you see the oil crash coming? Or did price of the DOW in 2009, tell you that a 10-11 year bull market was coming?  Did the price level of gold tell you that a gold crash was coming?  As long as you use price as your only indicator, then you will get the same results as the majority do. In this game if your not a contrarian you become the victim.

We could be in a wave 2 rally in Minute degree so this rally should eventually die when the big oil bear returns. Commercials are very bearish in their positions, so until they switch, the pressure on oil will be to go down not up.  Most E-wavers ignore these types of contrarian indicators which can produce massive unexpected reversals. I’m confident that any Cycle degree correction in the commodities world will produce a zigzag with some producing triangles.

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VIX Intraday Calm After The Storm?

In the last few days the markets suffered a bear attack send the VIX to new intraday record highs. Two of my unfilled gaps were  filled in a hurry, but we have two big open gaps below present prices. All the markets need now is a little effort by the attacking bulls and this VIX could drop like a rock filling the two gaps below.  Any gap has a 90% chance of getting filled, with the only question remaining is, “when”. Sometimes a gap will remain open for years (like gasoline futures) but eventually they will get filled.

There was nothing impulsive with this VIX run as these are typical diagonal wave structures. We are also one day away from a full moon, which can at times be very bullish for stocks. Maybe some calm will return before the next fear storm hits. Both gaps could get filled first, before another leg up in the fear gauge may happen.  The bottom gap would also be a great support area as VIX reversals can be pretty violent.  The vertcal move that the VIX did make should always be respected, as it is impossible for the masses to keep fear levels permanently elevated.

Diagonal wave structures dominate the entire VIX life cycle, just like they dominated and still dominate  the entire  Submillennium degree wave 3 still running today.

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Death Cross In Gold?

https://www.marketwatch.com/story/death-cross-appears-in-gold-for-first-time-since-2016-even-as-stock-market-slumps-2018-06-25

I tried to capture the Death Cross on gold’s daily chart, and it clearly shows how lagging this information really is. The Head and Shoulder line gave us an early warning that this may happen. Having to wait a month or two after the perfect buying or selling time, is far too late to execute. The vertical spikes into the peaks are the best selling signals long before the trend creates a ‘Death Cross’. I’m sure we will get an unexpected short term reaction, but this decline is far from over.

Counting the 2017 rally as an impulse is breaking every rule in the Wave Principle. I have a wave count from another e-waver that has the 2016 low as a wave 2 in Intermediate degree.  Yikes! Turning a diagonal or even a triangle wave structure into an impulse, is truly a Wizard of OZ type of a trick.

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HUI 2000-2011: Another “C” Wave Bull Market?

 

This wave count is different than anything I have publish as I changed the 1980 peak and the 2000 bottom in the HUI is a Primary Degree “B” wave bottom. Before readers freak out and think this can’t happen, then you don’t know the diagonal wave structure. The entire commodity Submillennium wave 5 sequence is diagonal based. Evidence of that fact also shows up in the pre 1920’s of the DJIA as for 300 years or more the entire world was based on commodities, with coal being the main low cost energy source that built all early England and America. Of course the rest of the world also benifited. The Roaring  20s is when the stock markets invented other financial instruments to invest in, after which the DJIA no longer acted like a commodity.

I though long and hard already about the “C” wave bull market, and I’m very confident it will not do any damage to my present Cycle degree wave four bear market.

What it can change is wave 5 in Cycle degree as it may also be another huge zigzag bull market. The entire world of wave analysts are stuck in impulse mode, as they count everything that goes up as an impulse. Trying to force 5 waves into a bull market like all the experts do, goes against my grain of not forcing wave counts.

I will slowly switch all my gold and silver ETFs to a Primary degree “C” wave peak for 2011. If we do some quick math then this Primary degree zigzag was 31 years long.  I already made up a gold wave count containing a zigzag in Primary degree but I will not post it for a little while longer.  All my work is between Cycle degree wave positions, which is a minimum of two degrees lower than the rest of the waver herd in the rest of the world. Cycle degree comes before any SC degree can happen, so if I’m wrong I will be the first to know about it as well.

I also calculated another Gold/Hui ratio today, which was about 7.3:1. This is only a little cheaper than the April, 1, 2018 ratio of 7.05:1.  A cheap Gold/Hui ratio would be around 10:1.

 

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US Dollar Daily Chart Update

Is this Head&Shoulder pattern a bullish or a bearish indicator?  Tecnically speaking we are at a previous high that still could fit a Minor degree rally and we should see a major decline to follow. If we look at this H&S pattern as a bullish sign then what has to happen, is the point on the right shoulder is going to be forced off.  The 89 price level is not just a lucky stop but it’s a Fibonacci number as well. 89 is also where the 2011 bottom meets perfectly with the bullish trend line.

Falling below this 89 price level, the US dollar would have to overcome major resistance to the downside. My bet is that the US dollar is in a much bigger bullish phase than what anyone can envision right now. Actually, the US dollar could be acting like a safe-haven place to hide, from the Euro storm that has been brewing for years.  The US dollar rally is keeping gold prices in check and as long as that scenario stays gold could crash much deeper than expected. Hoping of the return of the US dollar bear is just wishful thinking because this bullish move could last well into the fall. Commercials are net short the USD by a very wide margin and a bull market can keep fighting of the bears  for a very long time.

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Crude Oil Intraday Wild Ride Update

The trading in the June contract started to come to a halt and it never had enough trades in it to push it as high as the December contract.  When they roll over into the July contract then the July contract pushed much higher. It’s not good to stay late in a contract month, so I took the December contract. There was a 3 wave crash that took oil to a new low, but that lasted all of a few minutes before it retraced that entire “D” wave drop. I could count out the “E” wave a bit different.

When I see a triangle I also have to be prepared to jump one degree.  If I don’t know what higher degree I would get, then I need to scramble to make sure I get one by the time we get there. I’m a big fan of always trying to find a “better fitting” wave count, and not just change wave positions for the sake of having to do it.  The herd of bulls are  looking for higher oil prices as they think that fundamentals somehow dictate higher oil prices.  They freak out about every little move in inventory levels when reports come out that are above or below expectations.  At this rate the oil price will never crash if they can execute a balancing act in inventory levels.  So if the price of oil keeps crashing, does that mean all the tanks are going to be full all the time?  The last thing they want is their tanks full with high price oil, with no room to store cheaper oil in.

Oil storage is big business and smart oil traders have private tanks that go deep in the ground, where  inventory levels cannot be seen. All Trump has to do is announce a sale from government reserves and the price of oil would crash.  Having the faith that somehow OPEC doesn’t cheat with their production numbers is rather naive as well.

A recession is coming folks, and we know painfully well how fast the oil price did crash during the last recession. The oil bulls think that a trade war will have no impact on the price of oil. Commercials have an extreme short position in WTI crude, while the speculators are all geared to the long side. Both groups can’t be right, so something has to break this summer.

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Euro Weekly Chart Bear Market Update

 

Many may think that the Euro has nothing to do with the price of gold, but I think they are totally wrong with this type of thinking. Just go back to the 2011 Euro peak, match it up to the 2011 gold peak, and we have some very good correlation.  The Euro had no problem in joining the bear party at that time, but recently the experts were very bullish on the Euro as well.  When we look at the big trend line, nothing suggests a big Euro bull market is coming.  Participants don’t know what a bear market rally is, as they get excited by any rally at all.

A bear market rally always retraces its entire bullish sequence, from it’s point of orgin.  It only needs to do this by the slimmest of margins to turn the bull market, into just another bear market rally.

If we look back up we can count 4 bear market rallies that have all been retraced, trapping all the bulls each time. Ignoring this large trend line is a huge mistake, which I don’t like to get trapped in.

I don’t think any serious trader wants to get caught in a big bull trap, but the speculators have a natural knack for this kind of a trap. Elliott wave experts have a bullish mood towards gold, but the Euro and the USD refuses to play ball. Overlapping declining waves are diagonal wave patterns which are present in all commodities. Even my 4th wave rally has dipped into wave 2 in Intermediate degree, and worse yet, it also dipped into wave 2 in Primary degree.

If you think that the Euro cannot sink dramatically, then just look at the year long decline in 2014. This also matched the crude oil and gold crashes. It’s hard to except the idea to be bearish, when the herd is bullish, but this is what the EWP is supposed to be good for. It might take the rest of the year, but when this Euro breaks to a new record lows, we should expect another massive bullish phase. This will also be another big bear market rally. To say that gold and oil are going to soar with increasing trade war tensions, are ignoring the historical facts. A recession is coming and it’s only a matter of time before the greater “herd” see it as well. When a large part of the herd suddenly realize, or see the same thing, then usually a mini panic ensues.

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A Look At The Bitcoin Investment Trust (GBTC)

I’m not an investment advisor so my commentary is strictly based on my personal opinions about bubbles and manias. This is not an ETF but just a fund. Calling it a  “Bitcoin Investment Trust” is a real play on words as this sure does not look like a good investment, nor is anything trustworthy when it concerns Bitcoins. The “X” top is not a wave position,  but I use “X” mostly as an unknown factor!  To put it bluntly, “X” means, ” I don’t have a fricken clue what the 2017 peak is.”  If we don’t know what a major top like this is, then chances are slim that any wave count can last more than several weeks before it moves in unexpected directions.  There is lots of volume in this fund, but investing in it will cause nothing but grief, as Bitcoin itself is unstable. Bitcoin also has no track record of consistent cycles like any other commodities have, so this makes it doubly hard to see any realistic wave structures that we can build trust on.

The trend line should be enough to scare anyone away but as usual, manias can be hard to kill off!  GBTC is just pennies away before it reaches a new record low. It’s stitting on the $10 base which sure can produce downside breakouts. I have always said that Bitcoin would have to fall well below the first crash bottom, and I’m sure it will do so soon.  Another 50% drop will get us to the $5 price level, which is the price range that funds and ETFs,  are known to initiate inverse stock splits. Inverse stock splits can have a huge negative impact on investors, so these are just a few other reasons why it’s a good idea to stay away from investing in this specific fund. Investors have been enticed (sucked in) thinking there is a “Pot Of Gold” under the Bitcoin rainbow. Good luck with the treasure hunt, because the end of  the rainbow always moves, taking the treasure with it.

Don’t expect my opinions to be serious as they call this the “New Era”of investing. The world has seen claims of a new era many times, but yet history shows that when a new era arrives, it crashes shortly after.

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Brent Crude Oil Weekly Chart: 2012-2018 Review

 

This is the August Brent crude oil weekly chart. In the future I may switch to the December contract as it’s also very busy. I made this chart up for those who are addicted to trend lines. 🙄 I try to use trend lines sparingly with posted charts, but before I put a single mark on the chart, I work 2 or 3 sets of trend lines with my editor. The wave count I’m showing started at the July, 2008 peak when Brent peaked at $148. This is 4 dollars off, from the Fibonacci number of 144. I place a great deal of importance to all the even Fibonacci numbers as they encompass so many caclulations in the stock markets, and all of life as well. Today Brent peaked at $80 after which it started to back off.

Since a corretion seems to be initiated, the top trend line may hold. The brother to the top trend line is at the bottom. The entire 2011-2014 top gave the majority the good bullish feelings and forecasts that oil will never gold below $100 again was a popular theme. Oil rallied to $125 and then started to turn down until it crashed into the 2016 bottom.

This peak was a bear market rally and the market confirmed this with complete retracement of the entire bull market that started in Decenber of 2008. Technically, it looks like a Primary degree zigzag has completed, and we should be off in another 5 waves in Primary degree.

There are some huge loopholes in that thinking because gasoline futures do not confirm new record lows in 2016, unless you want to call it a running flat! That does not fit as well if WTI is a zigzag and Brent being a flat. Ain’t going to happen folks. From the 2016 bottom we have a fantasic rising wedge, which is a very bearish signal that most analysts ignore.

Every Elliott Wave student knows what an inverted zigzag is, but yet they conjure up a bull market just the same. At this pace, the majority got fooled by a Primary degree bullish phase, and now even an Intermediate degreee bullish phase has them convinced that much higher oil prices are on the way. There is no support for a bear market rally once it starts its reversal. The only support may be at the $40-$45 price level if the actual decline produces a zigzag 5th wave.

The majority think that oil can’t crash due to some fundamental reports, but oil has a reputation of doing just that. I have deep respect for oils ability to execute fantastic swan dives. How did the 2014 crash work out? How about the big crash into the 2008 bottom? That 2008 crash hardly showed any subdivisions that you could count. This 2008 crash was extremely steep and is acually a “big” clue that it’s a zigzag and not a flat. With most flat crashes, this pattern is mostly reversed, where the “C” wave part is the steepest. Many may not suspect that a 4th wave rally can go this high, but in my experience they sure can, especially in commodities.

To decide if our present bullish phase is a bear market rally or not, is critical to know and understand.

Another indicator is the Gold/Brent ratio. I have only one reading and todays reading hit a ratio of 16.79:1. In May it was 17:1. This has change little and I would consider that on the expensive side when compared to US dollar gold. In 2014 oil reached a 17:1 ratio before it started to crash down to $28 or so. I would have to do some back checking to find the ratio for the 2016 bottom, but we can use the WTI ratios for Brent as well.

I haven’t found a good Brent COT report yet, but with WTI the commercials are shifted to the short side. This doesn’t get me all excited, about some super oil bull market to suddenly erupt.

The speculators that are chasing this trend are all commited to the long side, the exact opposite of the commercials. Who is the smart money here?  When you get such a high degree of investors all committed to the long side, who is left to jump in? Who is going to jump in thinking oil is cheap at $80? Below our present “C” wave bullish phase, all the protective “SELL” stops accumulate, and when they get hit all the bulls instantly turn into bears.

While everybody turns extremely bullish on oil, I turn bearish as I see a huge downside move coming.

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Russell 2000 5th Wave Bull Market Review

It always pays to look at charts from a different perspective, especially going back to any major low. Back in 2009 the 4th wave in Primary degree died and a new 5th wave was born. The majority of wave analysts were extremely bearish at that time as they all saw wave 1 in Primary degree heading up to a wave 2 in Primary degree.  But an amazing thing happened, the markets ignored all the bear market rally cries and kept right on pushing higher. Even by 2011 bearish wave counts flooded the internet.

Smart money already knew that the bear market was over in late 2008, as commodities had already bottomed and insiders had been buying for months already. Stock market insiders don’t buy on a whim nor do they sell on whim, so when we do read about general insider buying reports, then we know that a sustained bullish phase is coming.

The majority of investors always miss these great opportunities, because they don’t expect them to happen and usally they are wiped out and have no stomach to buy low. They only love the markets when it is high and going higher.

They are also never prepared for when the bull market comes to an end. So far, the Russell 2000 has continued to push to new extremes, but it did so with a very choppy pattern.   We can abuse any trend lines, but 5th waves can be infested with diagonal wave structures, so we want to be careful as diagonals also forecast the endings of trends.

If there was an expanded pattern involved, then I think this 5th wave would be far more violent than what has happen. An ending diagonal, in a diagonal 5th wave, now there is a wild combination indeed. This last diagoanl 5th wave in Intermediate degree is impressive all the same.

This Ruessll 2000 is going to a Cycle degree wave 3 peak, but as usual it can frusturate us to no end when it keeps pushing higher. Every trend will fail, but trying to figure out when, is a crap shoot at best. Nobody is ready for a Cycle degree bear market in stocks, as the majority are always late to any party.

You will constantly hear about analysts looking for a “correction” bottom! This is a big clue they have no idea how big of a dip we’re going to get. It’s an analysts job to look at the risks as investors seem to ignore them and just keep buying into world record peaks. One of the worst bear markets in history only took three years to play out and I don’t expect the next one to take much longer.  Solar cycle #25 is going to kill any remaining stock bears,  just like solar cycle #24 killed the stock bears in 2009!

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Gold Crash Daily Chart Update

Many do not expect a bigger decline in gold and gold stocks, but that is always the case when prices have been pointing up.  Where we think gold is going too means little if we don’t understand bear market rallies.  The sooner that we except that this rally is just a bear market rally, then the sooner we could have taken evasive action. Like, close off long trades and even switch to a downside bearish position. Of curse that is already getting to be on the late side, because if we to short now this market will come back hard and force you out of the trade.

I show two arrows one long one and one very small arrow in October and November of 2017.  This small November bullish move is much the same as in the long arrow but it’s a small “C” wave, as for the big one it’s a triangle in a “B” wave.  That small “C” wave crashed right into December, completely retracing the entire “C” wave bullish phase.

What happens once in the charts, I use it at all degree levels. I see no reason why something at a very small scale, should not happen on a bigger scale.  To count this out as a bull market while being oblivious to diagonal wave counting, is a huge mistake which I try my best to avoid.

From late 2016 this bullish phase has been very choppy, and now gold has started to confirm my suspcions.  A triangle in a 5th wave decline can only happen in a  5th wave diagonal zigzag decline. This triangle is actually a very good long term sign as when it’s all over, then we should expect a much bigger bullish run by at least one degree higher. Patterns rule in the markets, not prices. Could you see the gold bull market coming when the price of gold hit $1050?  Did you see the recent crash coming when gold was at the $1360-$1375  price level? Not until someone suggests it and gives you adequate warning will it make anyone think twice.

Why should gold reach for the sky when oil is refusing to join in. If this scenerio is going to happen then my Gold/Oil ratio would go beserk. That ratio moves very little in short time periods, and it sure is not showing up in the Gold/Oil ratio I track.

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Canadian Dollar Daily Chart: Still Sinking Like Rock!

Our Canadian dollar has continued to implode, which has not disappointed my bearish outlook on our dollar. The June decline was a diagonal which can happen in 5th waves. They may look corrective which can fool the best of us, but diagonal waves are one of the best waves to give us a clue as to the location we are at. When I see wave analysts completley ignore diagonal wave counting, then I know that the analysts in question are just guessing at their positions.

Since we are getting close to ending this 5th wave, we should expect some type of a rally. How soon that will happen is always a flip of the coin as these 5th waves can extend beyond what we may think is normal. In commodities wild swings are very normal as fear is the main driver in commodaties.

If gold is supposed to go on this wild bull market then we need the CAD to fly as well. Clearly this is not happening. We need one more counter rally that is one degree smaller than the two showing and then after that all counter rallies will be 4th wave rallies. These 4th wave rallies will all end by one degree higher each time. This unfolds the same way if we started on a 5 wave bullish advance. This is wave 1-2 base counting, which always looks for wave 3 to extend first. The size of my wave 1-2 in Minor degree already hints that we may get a very short 5th wave when we get there. It’s also after the second set of 1-2 waves when extensions can really start to kick in.

Canada is heading into a recession if we like it or not, and it’s only a matter of degree how bad it can get. History has not been kind to Canada when trade wars erupt, even if it is mostly just hype.  When the worst does arrive, my contrarian instincts will turn very bullish as a new gold and oil bull market will grow from the depths of a price crash.

Markets will always move in the opposite direction of what the majority think is going to happen. If we get caught up in the same bullish rhetoric as the majority, we will end up suffering the same results as the majority do. In this world, if your not a contrarian you will end up becoming the victim!  You can only run with the bulls or bears for so long, before they all turn against the participants. Right now the bears are in firm control until all 5 waves have fully played out.

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Intraday Crude Oil Update: Wild Moves In Both Directions.

In the last 4 or 5 days crude oil prices have gone wild, soaring in both directions. This kind of action doesn’t send a clear signal confirming any trend in any direction.  Besides these wild swings I believe crude oil is back to its bearish trend. It all depends on our understanding of what a bear market rally really is. From the majority point of view anything that moves up, is in a bull market . Expert analysts jump on the same bandwagon and give us all sorts of fundamental reasons why oil is still going to the moon.

The entire oil bull market produced what can fit into an inverted zigzag with relative ease, and that means “bear market rally” in Elliott Wave speak.  The simple result of a bear market rally is the complete retracement of the entire bullish phase.  I cannot be any more direct about this, as staying invested at the top of a bear market rally can wipe you out in  short order.  As I post crude oil is still on a bullish run where this little wave count gets trashed as I post. What else is new as at these intraday levels, things can get pretty wild.

If oil still has a bearish phase to go through, then gold prices are not going to go to the moon. The Gold/Oil ratio keeps a mathmatical connection that doesn’t get broken or even expire. This morning the Gold/Oil ratio was 19.27:1 which is cheaper than what it has been, but by only a very small amount. In other words, the oil price can crash much further. Gold just crashed down to $1262 so gold is doing a good job of still confirming its bearish phase.

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HEP, Horizons Enhanced Income Gold Producers ETF

I keep looking at other gold stock related ETFs. This is a Canadian ETF, and pays some dividends.  The big question is, are gold stocks in a true bull market, or are they in just another bear market rally?  What looks pretty common on all of these ETFs is the sideways pattern during all of 2017.  This sideways pattern is the key as gold stock ETFs have to show us who is in control, the bulls or the gold bears.  I tell my friends that just becuase gold stocks are going up does not mean we are in a full blown gold stock bull market.

From my Elliott Wave perspective a bear market rally is always completely retraced. For over 4 years we had many little bear market rallies so there are many examples what happens after a bear rally.  Our bear market broke many impulse rules, so the entire decline is a great candidate for diagonal wave counting. The speed of the 2016 run is a clue that this could be a fake run so if that is true then one more low should be in our future.  Any bullish pattern that does not constantly produce higher lows, is not in a bull market.  Since the 2017  peak all we’ve had are lower lows which shows up in the angle of the top wedge line.

Zigzags make up diagonal wave structures so at present we could still be in a 5th wave zigzag decline.  I see these types of 5th waves all the time at much smaller degree levels, so if the bottom falls out, any “C” wave spike to the downside will send the emotional investor packing and running for the hills.  I could be wrong but this market is not acting the way a bull market correction typically should act.

Early gold stock investors may think we are in a bull market but markets are designed to fool all participants all the time.  If ever this ETF or any other Canadian and US gold stock ETF crosses to a new low by a penny or less, then this entire gold stock bull market will be confirmed as just another fake bull market.  There is nothing wrong in speculating in bear market rallies as they can produce fantastic bullish runs, but in this case it would have been smarter to unload in July 2016. I was calling for a correction at that time, but that theory would have little meaning once we plunge to a new record low.

If this turns out like I think it may, then a brand new bullish phase will start again, and this time it will go much higher than that 2017 ant hill!  The second start to a new bull market phase could send gold stocks back up and retrace 80% or more of the entire gold stock bear market. The 2016 run woke up gold stock investors, so another bullish run will wake up many more, producing a bigger bullish phase as well.

This could take all summer or even the rest of the year to play out, but September and October can be great reversal months. Those that are prepared and even have some cash to employ will end up being the winners.

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Quick Intraday DJIA Update

This is the September contract and in it we see far more violent moves than what the standard DJIA index will give us. By the looks of what I see is that the DJIA is still heading south, but it will also get closer to some key previous support price levels.  If there is more to this decline than meets the eye, then any support price has no hope of holding. The majority love to analyze everything using “Price”. Pattern pulls far more weight than any price forecast will do as the markets are controlled by the wave structure not by the price structure.

One example of this is, did the “price” of the bear market low in 2009 gave you a clear signal that a huge bull market was coming? Not a fricken chance folks. Even all the expert wave counters that always deal in the price of an asset class, didn’t see the big bull market coming.  So, are all the wave analysts going to see this next bear market coming? Sure a few will, but many still have super bullish wave counts. They will constantly flip numbers and letters around, add a bunch of question marks to the charts, and then they can always claim to be right. The Nasdaq has squeezed out another new record high while the DJIA is heading south. Talk about marching to a different drummer or what! It will clear up, but that still may take some time.

Buying on any “Dip” is going to be financial suicide if we don’t understand the size of the “Big Dip” that is coming.  Any market can correct back down to the previous 4th wave of one lesser degree, and can even go lower like the DJIA did in 2009.  The only so called safe trade would be if we catch wave “A” in Primary degree. By that time the DJIA bears will be in a trap and any rally will force them to change directions. There is nothing as powerful as when the entire herd has to change directions, as they scramble to get out of their short positions.

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SIL 2011-2018 Review: Bullish Or Bearish?

The majority are focusing their attention on gold or GLD. SIL is the ETF for silver miners.  From the 2011 peak SIL transformed into a bearish phase that very few people expected. In 2011 extreme silver optimisium forecast for a $200 silver price and all the analysts agreeded that much higher silver prices were still to come. This SIL market made liars out of all the experts as it didn’t care about any bullish analysts opinions.

Right from the 2011 top, wave structures did not fit well into any pure declining impulse pattern. At that time I was not very confident in counting down diagaonal wave structures. Also the 2011 peak was about as clear as Mississippi mud at that time as I was still counting everything in GSC and SC degree. Virtually every counter rally we see the media also turned bullish, yet it didn’t last and then it resumed its larger trend. Diagonals are counted just like the book says in the description for ending diagoanls, when room allows.

Of course the 2016 bullish phase changed all that. Or did it? SIL exploded and soared close to $55 and peaked in early August 2016. This fantastic bullish run came well within my wave 2, which is an instant confirmation that we are dealing with diagoanl wave structures.  All this matters little if we are not firm in the understanding what the wave position the 2011 peak really is. If we believe that 2011 is a Cycle degree wave three peak, then it is much easier to know what we’re supposed to look for. Since we are working 5 waves down in Intermediate degree, then we know that a Cycle degree zigzag will eventually have to form.

There is no way that the 2016 peak was a pure impulse, and even if it was, the correction to it would be far from over. During the bearish phase SIL has made two lower lows, while gold stock ETFs have only made one. Most analysts ignore all that but when you are counting out waves we have to look for these small differences all the time.

It’s a good time to run a couple of parallel trend lines and they point to a possible down side price target. If SIL so much as spikes a penny lower, than the 2016 low, then the entire  bull market will be confirmed as being nothing but a bear market rally. I call them fake bull markets as well. It’s the job of the markets to fool as many participants and observers as it can, with SIL doing a fantastic job. SIL also rolled around the $55, and $34 price levels which are Fibonacci numbers. The next Fibonacci numbers lower would be $21 and $13, with the $14.50 price level as being the record low to beat. Each single Fibonacci number is a 61% crash, so any expected decline still to come sure can chop our trading accounts down to size.

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Crude Oil Intraday Crash Update.

Since the peak last month nothing that has happened indicates a correction has taken place except for small counter rallies.  (Mini bear market rallies)  We have to understand any bear market rally is they will determine if we should hold a bullish position or get the hell out. There is nothing more horrifying than think about a bull market that some say is going to $300, but it turns and crashes to $40 or even lower. Bear market rallies in any degree always retrace themselves, so there is no sense in staying, as bear market rallies make for excelent short bets.  The trick is spotting a bear market rally before all others do and I will keep trying to do that as we all need that information early.

Most of the oil bulls do not understand the concept of a bear market rally as they treat anything that goes up as a real bull market. In commodaties and oil specifically is in a big Cycle degree wave 4 bear market, with most of them being giant zigzags. It may take the rest of the summer to play out so expect some wild counter rallies like we just had.

I switched mywave count to another wave 1-2 in Minute degree but ultimatley we need 5 waves down in Minor degree or one zigzag in Minor degree. Any zigzag could form where the “B”wave looks just like another 4th wave rally. These types of rallies would be very hard to spot if we’re not looking for them.  All this trade war rhetoric is just to much for the oil bulls to handle. Maybe $50 billion worth of duties, the markets could handle, but $200 billion, was just too much.

Fear drives the commodities, not some logical fundamental explanation why oil is going up or down.  Sure I can see another world oil glut coming up, but we know that oil gluts are very bullish for the price of oil. The last record oil bear market low was about $28, which technically should be breached again, if the 4th wave peak is on its true location.

My wave counts may make little sense to some, but my oil wave count starts with the 2008 peak. This makes the oil bear market about 10 years old so far. Thinking in 4-5-month steps, we could see September/October with another new record low.  I may be very bearish on oil, but I assure you I will turn very bullish after this 5th wave plays out.

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DJIA Daily Chart Update: Are The Bears Back In Control?

This DJIA chart has not produced any new record highs in well over 4 months and it even has a lower wave 2 then the SP500 has. I treat this low as a running zigzag as they do happen. I stay away from calling anything “truncated” but a low wave 2 means that the market is more bearish than the majority think. The big clue that the last few months is a bearish rally, is the very fact that the rally produced an extremely choppy pattern. This tells me the rally is going against a larger trend, which would be down.

The Cycle degree wave 3 peak is still holding and hopefully it will not be knocked off, as I want my Cycle degree sequences to last for the rest of stock market history.  Eventually, we will get a major stock market bottom that will be another fantastic buying opportunity. Of course the majority will never get it, as they will be ill prepared in what to do when it does hit a major low again.  Wave 3 can produce declines that will stun the majority like dear caught in the headlights. In this case its more like the “bulls” are caught in the headlights as the bears return to shred this bull market psychology once more.

Recently one of my DJIA posts has been published in Market Forum and this is the link to it. This is all very good exposure and I thank the author for posting it.

When this market goes down, many other asset classes will also get dragged down,  just like what happen in 2008. Needless to say I’m bearish until such a time a counter rally is going to be big enough, to force players to reverse their positions.  I’m sure that in the future we will get price forecasts claiming that the DJIA  is going to 5000, 3000 or even 1000.

When all the analysts are in concensus, then this is when the markets will turn and go in the opposite direction. When the DJIA 5000 price forecasts are broadcast far and wide, then it’s a pretty safe bet to call for DJIA to hit 45,000. Mind you it may take until 2029 to play out.

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SP500 Bull Market Or Bear Rally?

Getting tired of this so called “bull market” yet?  This market has been keeping us confused as to what direction it really wants to go. Price is never going to tell us anything useful  becuase if it did, every average Joe and Jane investor would have been buying everything in sight at the 2009 bottom.

Many think this is a bull market because its still  going up in price. The sad fact remains is that there are always bear market rallies at every degree level. If the experts don’t know the diffrenece with a Minor degree counter rally, then they sure are not going to know when a  Primary degree bear market rally is in progress.

The rally for the last 2 months has been frusturating to say the least, but what stands out is that this rally is going against the bigger trend.  I just had to draw in the wedge which is another very useful indicator when used at the right time.  A potential “C” wave bullish phase could be finishing off, so investors are going to find out the hard way about the effects of a bear market rally once it resumes its bigger trend.

There is always a chance one more dash to the upside will happen, but I think this market is running on fumes. The 2550 price level doesn’t have a chance of holding, as any wave 3 declince will just rip through that support range with ease. To confirm any Minor degree run be it up or down, this wave two peak needs 5 waves down in Minute degree to help us identify the location we think we are in.

Not until we get another push to the downside, investors will remain oblivious to the depth of this impending bear market.  If we don’t suspect that a Cycle degree correction is coming then all support forecasts will be useless to say the least. We have to be open to the fact that any opening zigzag requires a 5-3-5 run so we have a long way to go. Another 4 months or so will get us to a potential bottom by September or October. Any counter rally at that time will also produce another fake bull market.  It may seem a bit long in this counter rally but I have no doubt that this could all pick up in speed in a dramatic fashion.

As each stage happens then they all help in pointing us to where we are in the bigger picture. Talking about any move early is the key because after it happens, its pretty useless information. Fears of a depression will be in the news but markets do the opposite of fundamentals like they did in March of 2009.

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