Daily Archives: June 7, 2018

Bitcoin Bear Market Review

This is the general Bitcoin index and only moves during the day. Back in February 2018 Bitcoin bottomed and then rallied to just about $12,000. That didn’t last too long before Bitcoin prices started to head south again. Bitcoin bottomed again in April before it rallied back up in early May. Since then Bitcoin seems to have started another decline that sure looks like it’s not finished. My wedge may not mean much but what are the chances that Bitcoin will cross the bottom wedge line before it ever crosses the top wedge line?

I think Bitcoin has to fall well below the $6000 price level and even then there is only a slim chance that Bitcoin could morph into a huge bull market anytime soon. At $5000 Bitcoin would be close to about a 71% decline which a pretty normal bear market decline. That still doesn’t mean much, as Bitcoin could flatline driving all investors away due to boredom.

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GDXJ Gold Stock 2011-2018 Review

 

It took me a long time to count out the GDXJ bear market, but only until I concentrated on diagonal wave structures did it start to make sense.  I thought we would get a zigzag bull market but that has no materilzed by any streach of the imagination.  The fast 2016 move up  has been followed by a bearish phase that looks nothing like a correction that has finished.  Many of the Gold stock ETFs I track had new record lows in early 2018. This is well over a year where gold stocks are out of sync with each other.

In the 2008 gold stock crash, they were not this far out of sync as they are now. Even though gold has shot up a bit in the last few days, these ETFs have been rather subdude.

The big question is if the 2016 rally, is not just another bear market rally!  Gold analysts have been very bullish but yet gold stocks seemed to be ignoring the bullish rhetoric.

One undeniable fact is that all bear market rallies get completley retraced, and about the only way we can confirm this is when it happens. Support means little as it’s always a question, “Support for what?” Support for the next leg up, or just temporay support before the next trip down?

The straight move up from the 2016 bottom is typical for a bear market rally so until this proves out I will remain bearish on gold stock ETFs.  I own one gold stock and a gold stock fund that pays some dividends which I will keep, otherwise I have been short several CAD gold stock ETFs and have no plans on closing them off.

From what I see may happen, is once this new low materilizes then we will be swamped with good buying opportunities, so those that have a bit of cash might be lucky enought to take advantage of it. I think we should end on a Primary degree “A” wave, which should be followed by another huge bullish move in 2019.

What this gold stock rally has done, is get more people excited and involved so when the next bullish phase comes along these added investors will push the markets much further north than anticipated.

The Gold/Gdxj ratio is sitting at 39.36:1 which has been about the same for most of April and May 2018. I would rather see it get closer to 49:1 before GDXJ may look cheap again.

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Intraday Crude Oil Rally Update

Declining inventories is the reason why oil has rallied. Does the news automatically reverse a bearish phase? Highly unlikely as even President Trump  wants OPEC to increase its production.  This rally has all the charatristicsof an inverted zigzag which could be just another 1-2 wave.  There may be one more higher high but then we should see another reversal happening soon.  I’ve moved my degree level up again by one degree, and only time will tell if I have to adjust again.

Many experts are gungho on oil prices, but only when the price of oil goes up. When the price of oil starts to dip again, the analysts will bring out all the news why they think oil prices will go lower.  Analysts go with the flow, but in reality this is worthless information when we see the action in the charts.

Until oil shows a very good sizable correction then I may turn bullish. This may not happen until oil falls well below $50. $40-$45 would be a very good base for a turning or just a long resting spot.  The entire oil move since the 2015 bottom looks like one wild inverted zigzag, which are bear market rallies. This happens at all degree of trends with the above chart being a small example what small bear market rallies look like.  We had a Primary degree bear market rally which fooled the majority thinking it’s going to $200 again, yet the oil market crashed from $115 to $28. In just a few short years, the entire bullish phase was retraced. Sure oil created an “A,B,C” move but I think the Cycle degree dip has not finished by a long shot.

This morning the Gold/Oil ratio sits at 19:1 which is not all that cheap when we use gold as money. We want this ratio number to reverse and expand where oil can buy many barrels of oil.

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Mini SP500 Intraday Bullish Phase Update

While a few of the other indices have scored new record highs, the DJIA and SP500 have been lagging, It’s not that I’m looking for the SP500 to catch up, but if the Nasdaq and Russell 2000 correct the SP500 would also correct. Since April the SP500 has been in choppy rise that has little to do with an impulse, but it can still work as a “C” wave bullish  move.  Short term I’m not happy with any wave count I might come up with in the indices, so I don’t fill out all the little waves as the bigger degree level is more important.

Since February this bullish phase is starting to last longer than what I would expect out of a minor degree move, but that is what we have to deal with.  The VIX has also crushed to new lows with  some analsyts being so bullish on stocks they sound like the VIX is going to zero.  All this could still carry on until the March peak has been exceeded. When it ends all support will break down, but investors just love to buy high and then sell lower in a panic to get out. Buyers keep coming out of the woodwork, and investing into the peak of  world record high stock markets. FOMO is the big reason but being bullish when the planet is bullish will just give us the same results as the majority get.

A short term bearish move is not enough for a Cycle degree correction to be completed, and markets never stay at “Permanent highs”. Sooner or later the BS, (Bullish Sentiment) will hit the fan as bears always attack from above and it usually comes as a surprise.  Bull markets are the breeding grounds for bear markets, so I see it as just a matter of time before  any bullish phase is finishing.

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