Monthly Archives: August 2018

Euro Daily Chart Update.

 

The Euro is going the opposite direction from the US dollar, but with this chart we had a bit of a rally in the last 10-11 trading days. Last weeks COT report show that the speculators (hedge funds) and the commercial traders are both in a net short positions on the Euro. Not by that much but they are both definitely net short at this time. This does not support a big bullish move in the Euro which gold investors must get to keep the gold bullish dream alive.

The Death Cross on this daily chart has already happened, with the weekly chart Death Cross still ahead of us.  Dreaming of a mythical Euro bull market sitting on top of an impending weekly chart Death Cross, is not my idea of a bullish position I would take.

Market Vane (MV) report had about 48% bulls present in Tuesday’s report, which would still need to shrink as bulls keep disappearing! Any reading below 10% gives lots of room for a large group of Euro bulls to come back in.

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US Dollar Daily Chart Update!

 

During July and August the US dollar started to go sideways before it started another correction. There can always be a bit of downside to go, but a higher low seems to already  happened.  Since we have two spikes to draw a H&S line across, we see that this can be very bearish for the longer term.  If the US dollar is in a much bigger bull market, then any H&S reaction will blow the lid off the right sided shoulder.  When the US dollar breaks out it will help to confirm that the US dollar is far more bullish than we can imagine at this time.

A bull market in the US dollar is “deflation”, as it will also kill the price of gold. The $1200 gold price is a psychological even number, so when this $1200 no longer holds, then this will really upset the gold bulls. Without a doubt the US dollar will break out to new record highs, as the Euro implodes again. One main USD price high to beat is 107 or higher and then 122 will be another price peak that eventually gets hit as well. The first major breakout could happen by the end of this year, but that is still 4 months away.

Yes, the commercials are building up net short positions in the US dollar, but they can handle extremes as they are the closest to the industry and have far less risk that any of the hedge funds have. (speculators). Even my Market Vane report showed a high perentage of US dollar bulls present, which suggest that the US dollar could still implode.

Once the US dollar resumes its bullish trend, then the Euro will carry on with it’s bearish trend. Again, gold investors need for the Euro and our CAD to keep going up, as the CAD and the Euro are inside the US dollar basket.

The Euro will travel in the opposite direction than the US dollar, so wishing and praying for the Euro to soar is very unrealistic at this time.

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Gasoline Daily Chart Quick Update

 

Since the May 2018 peak gasoline blend stock has been going sideways which just about looks like a triangle.  I see a potential inverted zigzag that could be in progress, and once they drop then we should expect a Death Cross to happen. Death Crosses rarely happen very close to the top, and this chart would still have to dip deep for the 50-day MA to slice through the 200-day MA.

Yesterdays Market Vane report with Blendstock Gas and Heating oil showed close to 80% bulls present. 24 month bullish high has been around 80% as well, so these numbers tell me there is very little room left for traders to flock to the bullish side.

Markets have been pretty slow today, but this all could change as we count down into the fall.

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DJIA Mini Daily Chart Review.

 

I will be avoiding the actual contract months as much as possible as the real trades can distort wave patterns that are not real. Switching between bar and line mode will tell you that, as there are different wave counts between the two.  I try and always confirm my Cycle degree connections by 3 whole degrees lower, which is the same as being three steps ahead of the crowd.

This DJIA chart has not scored new record highs like the SP500 has done, so it still fits my expanded top very well. The rally that started in April is about as choppy as they come, and is usually an indication it’s fighting against a larger bearish trend.  Gold has done about the same pattern already!

The Gold/Dow ratio is at 21.56: but we  have to reverse this and think it takes over 21 gold ounces to buy one unit of the DOW. Expensive was over 17:1 and at 21:1 it is the most expensive ratio I have for 2018.

Investors around the world are in a government-created inflated record stock market high, all based on free money.  Governments are doing everything to keep this inflated bubble growing. It’s not the size of the bubble that’s really the issue, it’s the size of the “needle” that will prick it which will be the problem! Is Italy going to bring the entire world down or is it going be China or even Japan, as they have gone on a record money printing spree in their entire history. Deflation is in our future not inflation, as the US dollar is in a massive bull market that nobody even believes that it can happen.

Just watch the gold price for the next three years, and you will witness deflation first hand.

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Brent Crude Weekly Chart Update

 

Brent crude is struggling trying to break higher, and next month should tell us more if this so called bull market has any chance to soar higher. I see a rising wedge which is an extremely bearish pattern, which should never be ignored. The bullish phase that started in early 2016 is a bear market rally from my perspective and in order for that to get confirmed then Brent crude will completley retrace this bull market and crash to new record lows. Deflation is coming folks, where commodities also take big hits in prices.

Today the Gold/Brent ratio is sitting at 15.84:1 which makes Brent more expensive that I have records for. I will continue to calculate this ratio, so I have a better longer term data base to work from. In many respects the Gold/Brent ratio is the same as the Gold/WTI ratio is from which I have a huge data base of ratio records.  I have a pool of about 20 ratios that I keep and is one of my best in-house generated signals. Math doesn’t lie, only people do, so ratios are a good objective set of indicators to follow. Very few are willing to do this work, so out working the lazy analysts is a walk in the park.

You can tell any lazy wave analyst by all the detailed wave counts they always make. I always try to be 3 steps ahead of the crowd and confirm a wave count 3 degrees lower, which is also 3 steps ahead of the crowd. Being one step ahead of the crowd is not good enough in today’s world, when we make longer-term trading decisions. There is no way that gold will soar if the oils are going to crash as the Gold/Brent ratio will stop that silly thinking in a flash.  Any kid that knows how to track the Gold/Brent ratios can do a better job of forecasting the oil price than what the experts do.

At the extremes fundamentals will always tell us the wrong things as the 2008 peak was. The experts did not see the oil crash coming in 2008 as I had it documented very well.  You don’t even need extremes if you pay attention to the news headlines. When they all start to think alike, then chances are very high that they are also wrong.  It just about always justifies betting on the opposite direction when the herd starts to sound all the same!  In the gold sectors this works very well as it is made up of very emotional investors. Oil investors get a bit hostile when you mention that oil can crash to new record lows.

Just look at the nose dive that oil took in 2014 and 2015, so what has happened once before, can happen again.

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HMMJ: Another Wild Ride Up! Or Crash And Burn?

 

How do you like this wild ride so far? Well remember it well as it can disapear just as fast. If I had the free money to short this, I sure would try and do so. Vertical runs like these just don’t last, even the open gap tells us so. I don’t know if there is an options chain on this or not but I will look into it.  These wave positions are experimental as I applied diagonal wave counting methods to it, but on a much smaller scale. Gold could look like this sometime in 2019, so we sure don’t want to miss that party!

This has all the makings of a potential zigzag crash and HMMJ could start a long 5 wave decline and crash to major lows. If this happens, then I will try and be a buyer  as close to the bottom that I can. My priority are the gold stock ETFs and their larger trends.

I have to check in my records but my collection of any Gold/Hmmj ratio has just started. Today this ratio is 55.33:1 measured at a high point. If this ratio has any merit with HMMJ then we will find out, as this ratio should expand by a wide margin. I think demographics and  secure jobs can drive the Hemp industry cycles. Also it would be interesting to see if solar cycle #25 drives any marijuana price cycles.

The big wedge I show is it an illusion or is it real? I consider rising wedges extremeley bearish and third on my list of importance. No bottom trend line will hold against a big impending bearish move. Either way, it looks like a very interesting set-up to keep tabs on.

In reality I no longer have to fill out any wave counts until we get to the bottom.  If there is enough mainstream news coverage of a future hemp industry crash, then pay attention if they all start to think alike, then they are mostly likley to be wrong and we can bet against them. I bet against the bullish wave counters every time as they are projecting the same trend as what they think they are seeing.  Any crash can also take until the end of the year and then follow gold’s rebound as well.

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SP500 Daily Chart Update!

 

The talking heads have declared the correction over as new record highs are being broken. The problem with that thinking is that there are expanded patterns that constantly fool us thinking that the bull market is still alive.  These types of moves can turn very violent in a short period of time, so I have deep respect for expanded patterns. This would just be the opening pattern to what will be a Cycle degree flat bear market.  Up to the first “A” wave in Primary degree a flat and a zigzag are different, but then the counter rally bull market “B” wave and the following Primary degree “C” wave can be exactly the same.

We sure have a rising wedge in progress and they are about as bearish of a signal as they come.  The entire bull market in stocks has worked with printing money on a unprecedented scale, and when the markets crash then this is asset destruction on a grand scale. It’s like throwing money in a fire and watching it burn, far less money will be around in the future as 100 trillion in world asset values could disappear in a puff of electronic smoke!

This is what happened in 1929 and the only difference now is that the 1929 crash was a Supercycle degree wave 2 crash. In 2018-2021 we will be one degree lower.  It will be worse than the 2008 recession, but not quite as bad as the 1930’s depression.

Gold will crush all the old myths about protecting you when things get crazy but this a false believe as gold will not protect you in deflationary times. Buying this market on any dip is also a crazy idea if you don’t know that a big crash is coming.

Just like the markets crashed down into 2008-2009 we are faced with the same situation 10-11 years after the 2007 peak. If we take 1929 and add the Fibonacci number 89 in years, we get 2018. 89 is only one year off from 3-30 year cycles.

This 30 year cycles works best in the gold market as for he stock market I have to calculated it a bit different, mostley from different times.

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HEP: Gold Stock ETF Update

 

HEP is another ETF that tracks gold stocks and one of the reasons I track it, is that HEP is one of 3 ETFs that are closest to breaking to new record lows. Silver is another one, as it had about a $1.00 to go before it would rack up another new bear market lows.  I keep a ratio count on HEP as well, but need to establish a longer record. What I show is that an expensive Gold/Hep ratio hit about 20:1 with a 2015 low of about 61:1.

Today we have a 58:1 Gold/Hep ratio, which would be extreme when compared to the 61:1 low. There is nothing to stop it from hitting 100:1, so old ratio lows can be broken. Many ratios I keep have improved, in that they are getting cheaper when we use gold as purchasing power.  HEP is in my “Wave Pool” just as it is in my “Ratio Pool”, which are both in-house indicators that I use.

Markets are always bluffing us with a pair of two’s, so my main 8 indicators work like “4 Aces” in my hand, and another 4 up my sleeve, just to keep all bases covered. 🙄  If only one Ace lights up in my hand then this is not enough to take on any opposite bet.  Trading is an infinite game, where there are only dropouts. The only thing we have to beat is our own personal-best trade that we ever had.

Trying to beat the markets is a joke, as they will beat you up first, and then steal your money at the same time.

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Crude Oil Daily Chart Update: Bull Market Or Bear Market Rally?

 

This is the December Daily chart but it’s stretched to 1500 days back in time. I do this to always look for alternates that I may have missed. As far as I’m concerned the entire crude oil bullish phase is nothing but a big bear market rally. It’s an Intermediate degree bear market rally  and this low degree bear market rally is fooling all the hedge funds who at one point were so bullish that it was the most one side trade that good crude oil analysts have seen. It’s the emotional hedge funds that always get into a trap, not the commercial traders. Commercial traders work with the industry, while hedge funds think they are chasing performance, they are working themselves into a bull trap.

The Gold/Oil ratio has been bouncing around at 17:1 and it seems like this 17:1 ratio is hitting another price brick wall. In 2014 the ratio also hit 17:1 and that produced the 2015 oil crash. My entire “Ratio Pool” consists of about 20 ratios and I consider the ratios as in-house generated indicators or tool. Ratios always give us a reality check if they are calculated consistently.

When all the expert fundamental analysts all start to sound alike, then chances are extremely strong that they are wrong! They were wrong when they consistantly forecast $200-$500 oil prices which is what they were calling for at the 2008 peak. (3 years before gold)  At that time the Gold/Oil ratio was about 9:1 and oil had no choice but to crash.

Such a distortion will not clean up with a mere 10-20% correction, as it will take much longer for the markets to become even, and it usally gets oversold on the way down as well.

Of course oil investors are sitting on an impending Death Cross, but the 200-day MA is still at the $62.00 price level. The oil price has to crash below this $62 price level before the 50-day MA bends down and actually crosses. Gold  and silver are also sitting on a weekly chart Death Cross.  It’s not just about one crossing, as the entire investment world seems to be invested on top of impending Death Crosses.  We can also draw in a nice rising wedge in oil, which is another tool I use regularly even when I don’t post them. Oil could break to new record highs, but we’ll deal with that when the time comes.  Summer driving holidays are almost over and hurricane season has been pretty mild.

Trying to forecast where the price of oil is going with fundamentals has never work before and will not work this time as well. Markets always do the opposite of fundamentals as every glut ever produce, started a huge oil bullish phase.  The markets are never right, because the majority of investors cannot making money from the same majority they are mixed upwith.

There are only so many “Greater Fools” that can still arrive which my weekly Market Vane tracks.  Even at 50% bulls present, is still to many bulls. I would like to see less than 20% bulls present, so we still have some ways to go before that happens.

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GDX 2011-2018: 2018 Gold/Gdx Ratio Update!

 

 

When we are dazzled by the shine of the gold bull, we should be watching all gold shares and silver instead. The gold stocks will give us a bigger clue if we keep checking it up against gold. 30:1 was expensive with 84.67:1 being on the cheap side in late 2015. Today we are at a 63.7:1 Gold/GDX ratio, which is the cheapest GDX has been all year. This is a good thing but GDX, should still get much cheaper. I work about 20 ratios that I call my “Ratio Pool”, which are all in-house generated numbers.  My weekly Market Vane report is outside data, which reports only the percentage of bulls present. This still has some ways to go, as at 35%-40% bulls, still leaves to many bulls around. Low would be below 20% bulls or lower.

The hedge funds, non-commercials and speculators are all the same. The mass media thinks they are the smart money, which actually is the emotional dumb money. We can be gaurenteed that they will always get themselves in one trap or another, as they added more to their short positions in last weeks COT report. The bigger the hedge fund trap becomes, the bigger the ensuing rally will be, as they will be forced to close all their short positions, before they lose too much money. If we are lucky the commercials may even turn a bit net long in the process, which they have not done since the 1999 bottom.

The first leg down could still take all of 2018 to play out, but then it may also take all of 2019 for the counter rally to complete. This would make 2020 and 2021 two very bearish years, if we were to hit a major bottom by about 2021. Nobody is telling you that gold stocks and the general market could all end up getting closer together by the end of this year, as gold and the markets are at Cycle degree wave 3 peaks. This happened on a smaller scale with the 2008 crash, but now the entire world is sitting on some stage of a Death Cross!

Deflation is coming if we like it or not and the declining gold price is the biggest clue that deflation is on it’s way. Gold is already down over $700 since the 2011 mania peak. Every myth that gold investors have invented will not work, as gold will never protect you from deflation. The only way precious metals will protect you from impending inflation is when it is crushed in price, like what gold was in late 1999-2000. Gold assets do swing in both directions, but in the long run they will never hit zero like any crypto or paper based asset can. The gold market has about a 7.8 Trillion US dollar capital base, which is big enough for any trader to make a very good living with.

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SLV Wave Positions: “Garbage In, Garbage Out”

 

“Garbage In, Garbage Out”, is how it works with the EWP. Flipping numbers and letters around like they are hamburgers on a grill, just scrambles more of the garbage coming in, which in turn destroys every wave position we may think we have looking into the future. The majority of wave analysts and gurus focus on the gold price, and what the hedge funds are doing in gold. In most part they ignore silver and even ignore most of the gold stock ETFs as well. SLV follows the silver cash futures very well, so I know there are no options involved inside the SLV,  ETF.

The price support of $13 is the magic number that will confirm that silver was in just another bear market rally! Up top in 2012. we also had a bear market rally, as that entire bullish run was completely retraced. How can gold be in a bull market after SLV drops another $1 and falls below $13?  Market Vane in 2011 registered 96% silver bulls, one of the most extreme readings you will ever get and SLV imploded shortly after!

In 2011 SLV peaked before GLD by many months, so I think this theme will always be present, making Silver a very good leading indicator.  Gold investors think that the 2011 peak was just a peak in an on going bull market correction, but this is a “false assumption”.  2011 was a 30 year commodity mania peak and they do not correct in just 4-5 years. They also never end with a soft bottom like in late 2015. When I apply a 75-150-day MA, then we are sitting on a Death Cross right now! This is the worst bullish position we can find ourselves trapped in.

Those that are wishing and hoping for the return of the big silver bull, will have to wait until 2041 for a Supercycle degree wave III metals mania. At most during our life span, we can be part of two mania peaks and 2011 was my second mania peak.

The wave decline since 2011 has been a classic diagonal set of 5 waves, which I was not sure how to count when it happened. All commodities are about connecting big zigzags together which is why I include the “C” wave peak in Primary degree for 2011. Don’t get me wrong, as all of 2019 could be very bullish for the metals market which I plan to participate, to the fullest extent my real money account will allow!

Late 2011 also saw the first peak in solar cycle #24 much like what happened in 1980! In 1999 this flipped when the price of silver was propelled to the upside. This should happen again when solar cycle #24 ends.  The solar cycles are one of the most powerfull indicators for the starts and endings to bullish and bear cycles. Producing bearish wave counts when solar cycle #25 arrives will kill or trash every bearish wave count we can dream up, which should match my Cycle degree wave 4 bottom as well.

After this time period, there is a good chance that this blog will go “Dark” when “NO” more wave positions will be posted. This may even happen sooner, as in the last 2.4 years, no practicing wave analyst has expressed any real desire to work inside the Cycle degree parameters that I follow. If nobody is willing to devote their life to maintaining Cycle degree wave analysis, then all my work will end up getting buried in history, never to rise again. Modern wave analysts have destroyed the EWP, which all happened after the mania peak in 2000!  In the early days it was one on one, that kept the EWP going, as there was no internet at that time.

 

 

 

 

 

 

 

 

 

 

 

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Quick Gold Intraday Rally Update.

 

Gold followed through with a push above $1200 again. $1210 seems to be the peak this morning. Since I can count this rally like only 5 waves have developed, then chances are good this counter rally is not completed yet. We could see a severe drop in the price of gold, but then gold can come back hard one more time. Overall the big 2018 summer decline is one single move with 5 waves in Minute degree, which is the tail end of a diagonal Minor degree zigzag crash. It’s also the smallest 5 wave run that I will trade in.

I use GDX and GDXJ instead of gold but will add GLDM when the next big bullish phase comes. This may take all of 2019 as well.

 

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GDXJ, 2011-2018 Review

 

GDXJ is still on a bit of a rally like gold did today as well. With this chart I use the 50-100-day MA which works as well.  From the top we started with a Death Cross which no sane technical analysts should ignore but investors sure ignore this deadly indicator. Back in late 2017 we had another Death Cross so I remain bearish with my positions. I will not make it public how many positions I have in anything but will give a cash out capital base once all present short positions and PUTS have been closed off.  This could take the rest of 2018 to happen.

I have given my full trading account numbers to my friend so he can witness what I’m doing.

The Gold/GDXJ ratio this morning sits at 42.5:1 which is the cheapest it has been all year!  This is good, but I want this ratio to expand much more by the end of the year. A Gold/GDXJ ratio of 62:1 is very cheap, so we still have some ways to go. All my ratio calculations are in a “Pool” as well, as it is one of 8 core indicators that I use.

Maybe some people find the lack of wave counts unreal. I’m not a day trader or an investor, but more a positional trader, as finding the right position for a reversal requires a far better job at the analytics. I look for 5 wave moves in Minor degree or larger as I sure do not want to miss any 5 wave sequence again.

As far as I can see, my gold related wave positions will “Always” have real money behind them except for the short times that I may be in all cash.

“ALL” those pretty wave counts you see as counted by the majority, have “No” money behind them, as they show me they have nothing else better to do than flip numbers and letters around like they are hamburgers. Betting against all those gold bullish wave counts is a no-brainer for me.

The 2011 peak was a 30 year mania peak, which we will not see happen again until 2041, or at least I won’t see it, as I will be having coffee with RN Elliott by that time!

We get out of the EWP by what we design it for, and if flipping numbers is all you want to do then that is all you will get. I can never make any money based on any popular wave counts out today!

 

 

 

 

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HMMJ ETF Update

Here we go again, with another rally attempt with this marijuana ETF,  tracking the industry. Short term we are looking for a $21 resistance price level after which HMMJ can turn down again and produce a new bear market low. Any “B” wave can contain a triangle, but we know when we get one, that it will force a degree change once HMMJ bottoms.

Bare minimum its a one degree change, but others contain another higher degree level. I will not trade in this ETF as the gold markets have more natural leverage built in, besides that I want to preserve my cash when I get it.

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US Dollar Weekly Chart: Bull Market Or Bear Market Rally?

 

Some of the COT numbers for the US dollar have already been shifting as the commercial traders start to pile on short positions agains the US dollar. We also had a US dollar death cross, but during 2008-2011 we had many crossing. Another rally would turn the Death Cross back to a Golden Cross very fast.

Early 2018 the USD came to a screaching halt at 89 after which it started to crank up, push the price of gold downward. in the process. For those that are convinced that the US dollar will implode due to over printing, will be right at one point. The five waves down, since 2016 did send the gold price soaring, but the gold price refused to push higher after.

From about 1992, all the way up and then back down to early 2008 is just a correction in a US dollar bull market that very few understand.

A bear market is just a correction to a bigger bull market, and eventually this US dollar chart has to retrace the entire bear market, and travel above 2016 and 2001 highs as well.

Any bull market with the US dollar is deflation!  In 2011 the US dollar exploded, along with stocks and gold stocks took a major beating. This is a classic description of a stock mania that has happened many times before.

I know EWI has a very bullish US dollar wave count and I switched back and forth a few times myself. Any trend doesn’t just quit on some news as you can’t stop a trend before it’s time! The 2008 bottom was a prime example how bearish the entire world was towards the US dollar. Yet in face of all the overwhelming bearish news, the US dollar started to rally which still isn’t over.

Fundamentals will always tell us the wrong things at the extremes, as late 2007 was about as extreme as I ever recorded. Even my Market Vane (MV) report from Tuesday, has about 74% bulls present which is on the high range alright, but this extreme could also reach 96% or 98% before the US dollar implodes. Lumber had 98% bulls present, which is the most extreme I have ever seen. With the silver mania bubble peak in 2011, the MV extreme reach 96%. With those kind of odds, markets have no choice but to reverse.

 

 

 

 

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Nasdaq Daily Chart Impending Death Cross Update!

The odds that the main indices also contain an expanded pattern is to hard to ignore. The “C” wave decline can be very steep and it would travel faster as well. Again, protective sell stops are piling up underneath every price support, and a quick count tells us we have about 5 legs that have to get retraced.

We still have a long way to go before the Death Cross is made in the Nasdaq as the crossings all travel in alternating sequences. After a Golden Cross comes a Death Cross, which forecasts a long term bearish decline to come. I have an in-house “pool” of futures Death Crosses which is just one of my 8 main indicators or tools that I use. Another main in-house pool consisting of all my gold/ratios is also another one of the 8 indicators I use.  I call them my “aces” in my hand, and if I only have 1-2 aces that give a clear signal then this is not nearly enough to justify a move.  The Gold/Nasdaq ratio sits at 6.19:1 which is far more expensive than the 4.94:1 extreme that I once measured.

My Market Vane report is another “Ace” but this will run out soon. Market Vane shows that 76% bulls were present for last week. This has dropped down from a 24 month high of 91% bulls. 91% bulls is an extreme from any perspective, which means there is nobody left to get in.

Markets are twice as expensive now than they were in 2000 as the Warren Buffet indicator confirms. The entire world is sitting on impending Death Crosses so I only see downside potential for the rest of this year. It could take all of 2018, to show the damage that bears can cause but then all of 2019 coud be very bullish for stocks and gold again.

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S&P Midcap E-Mini Daily Chart Update.

This Midcap futures chart has recently pushed to new record highs. Just because we are seeing new record highs does not mean that the next leg up has started, but it could mean an expanded top is also in progress. The result can be a decline that will shock investors as it will go deeper than any correction we’ve had so far. Any further drop in the markets, and the Midcaps would be sitting on a Death Cross!

We can draw a rising wedge which is also an extremely bearish indicator so there is not too much to jump up and down for. Below virtually every support price (about 4 of them) there are sell stops being stacked up, so all those bulls turn to instant bears as soon as their sell stops get hit.

Not until the markets decline in an obvious fashion will the stock bulls on the wrong side start to panic. There is the also a very high probability that in the begining stages stocks may act a bit different than gold. They could sync up very well for any “B and C” wave in Primary degree. 2/3 of a zigzag and 2/3 of any flat can be virtually the same. This would be the most obvious demonstration by the markets, that a deflationary crash is going to happen.

Market fundamentals will always tell us the wrong things at the extremes. When all the stock bulls start to think alike then chances are good they are wrong and the opposite should be considered.

Even the DJIA may have peaked today, but again this has to get confirmed by recording a last high.

 

 

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Mini SP500 2000-2018 Review.

 

This market is still trying to break to new record highs, as this SP500 chart is just a few points away from establishing a new record high. All this has taken to long already so I have to explore the idea that an expanded pattern is forming in Intermediate degree. Once the main markets start to show a more ovious crash, then I expect gold to do much of the same. Gold finished a 30 year mania peak in 2011 that will not get repeated until 2041 when SC wave three should arrive.  The advantage of working in Cycle degree is that SC,GSC and Submillennium degree wave 3 are all ahead of us, as all others think we are in a GSC degree already. Flipping wave counts around like they are hamburgers  on a grill, is not what the EWP is all about. I don’t move any of my big wave positions around anymore, as from my perspective it’s more like a surgical procedure transplanting a heart!  Each move has output ramifications, attached to them, so we should be far more senstive when we flip Elliott Wave numbers around.

I don’t like the expression “wave counting” as from my perspective they are all “positions” of captured human emotions. Being out by just “ONE”  degree, will put us out by a mile or 61% or more.  An example would be 377 years, with one higher degree this would turn into 610 years long. One degree would throw us off a minimum of 144 years. My target for Submillennium degree wave 3 peak would be the year 2101!  That’s just for gold as the stock markets can be offset by many years.

WD Gann used the 60 year cycle a lot, but this 60 years, is just two 30 year cycles connected together. 3-30 year cycles is only 1 year off from the Fibonacci number 89, and I treat them as being the same.

The Death Cross, or the 200-day MA is at SP500 2300, but it will take more than that for the markets to complete any impending Death Cross. The world is siting on the most inflated markets in world history, and when they correct it will not be pretty.

At this time I’m just taking a best guess approach to the depth of an “A” wave in Primary degree, as it is still to early to make any better call.

 

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Mini DJIA 2007-2018 Review

Many are waiting for the DJIA to break out into new record highs as this correction in a bull market is just about over!  Any new record high can happen but this could also mean that a potential expanded pattern is at work.   When this turns then it can happend very quickly where there will be little time to react.

What we are looking at is a potential wave 3 peak in Cycle degree and the impending correction could still take 2-3 years to play out. Cycle degree in stocks and a Cycle degree in gold is pretty hard to understand but that is what we are facing in the next few years. President Trump is already peeved with the FED rate raising policy, and I  agree. The FED is fighting an old war taking data from lagging indicators, like they always do.

The big threat is deflation and not inflation. Gold, oil and the stock markets also crashed together in 2008 which was one of the first warnings that deflation is going to rear its ugly head. Back in 2008 the USD was hated by everyone as they could not run fast enough out of the US dollar. Of course the US dollar had other plans as it soared while everything else crashed.

If in the rest of 2018 stocks and gold sync up, then there is a very high proability that they can sync up for many years.  Nobody sees this starting to happen, but it has all happened before, in 1920-1932. The big difference between then and now is the level of degree. 1929-1932 was a SC degree wave 1-2 crash while in 2018 we are one degree lower at Cycle degree wave 3. Any deflationary pressures will not be as bad as the 30’s, but it should be worse than what the 2008 crash produced.

Warren Buffet keeps buying Apple stock at world record highs, and is single-handedly keeping the markets on a bullish path.

Only the rich can keep playing this game now, as they own 80% of all assets. Those that are sitting on static assets as the enjoy monthly gains, do no work to earn those gains. Real estate will be one of the biggest losers as high real estate prices serves no one. All it takes is a small liquidity crisis from anywhere in the world, and people will be forced to liquidate as they are all caught in a bull trap.

Stocks are now more than twice as expensive as they were in 2000 but most investors are oblivious to this fact. Investors playing with bubbles do not see themselves in a bubble, or worse yet, they think they can escape just in time.

At a minimum we should get back to 2015-2016 lows, where we may find temporary support as well. Ultimately the bottom support line will never hold as the markets could see a 70% or more crash.

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Gold Intraday Rally Update

Last week gold and gold stocks made a single spike to the downside. This is what may happen at a major bottom and is a signal to close some bearish positions. I closed off some PUTs as I plan to have a small group of options come due every month. That crazy decline sure seems to fit into a diagonal 5th wave. Just to get all the gold bulls excited again, it would not surprise me if gold closed above $1200 for a couple of days. At $1215 we have a road block when gold refused to go any higher.

The August sideways move is just a mini version of what gold looks like on a daily chart! If gold traveled up to $1215 then we woud  be looking at another Head&Shoulder bull trap! This run could also end with a spike, and it may take the rest of this week to play out. I would rather give this rally a bit more time than try to get perfect timing at this intraday scale.

The reason for golds rally is that the US dollar is also making a correction in its bull market. The next big downside price target to watch is that $1120 price, as then 3 legs of a 4 legged bar stool, have already cracked.

 

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SGDM Bear Market Plunge Update.

This is another gold stock tracking ETF and is acting much the same as all other gold stock ETFs I track.

Gold settles at lowest level in more than 1 ½ years in broad metals-sector rout

I bet this little crash surprised the gold investors as they will get very itchy trigger fingers, if gold stock ETFs don’t start turning around soon. SGDM only has about a $5 window to show us that a bull market is still coming. It’s just not going to happen, as SGDM still has to fall well below $11 US!  SGDM could also fall below $8, so I rule nothing out.

The 2011 peak was a 30 year mania peak in a wave 3 top in Cycle degree. Bubbles of this magnitude do not end well as declining gold and gold stocks is the sign of deflation.

This should all still take 3 years or so to play out and even the next bullish phase I expect will also be a bear market rally. Just in case nobody has told you the description of a bear market rally, then the basic “law” applies as all bear market rallies always retrace everything back down to and below the point of origin. Every wave two rally does the same thing, as an entire decline is made up with mini bear market rallies.

Vertical down moves like this usually dictate a potential bigger counter rally to come, but again time will settle that argument.

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DJIA Index Daily Chart Update:

This is just the DJIA index which still has not made any new record highs since the late January peak. Since about Marc/April 2018 the DJIA has created a real choppy rally which indicates that the DJIA is struggling against the larger trend which is still down.  It will take very little downside to push the 50-day MA into the 200-day MA and next thing you know the Death Cross has formed. A Death Cross indicates a long term decline, with the Death Cross still to happen on the weekly and monthly charts.

Gold is also crashing, so it’s just a matter of time before the markets join gold with it’s price crash.  Since this pattern could be part of a zigzag crash the DJIA could end up at the major “A” wave bottom in Primary degree together with gold.   After the “A” wave has bottomed, then any flat scenerio will act just like any zigzag. Gold and the DJIA “B” wave rally could sync up together, and both crash down to the 2021 Cycle degree wave IV bottom. Even after gold and the DJIA crash together, they could also rise together for another 8 or more year bull market. Gold investors will not figure this out when it happens, but the short story is, “Deflation” is coming and no amount of electronic money printing will stop it. It’s the world wide fertility crash that will case the deflation as the entire boomer genertion will be dying off by 2050.

The boomer generation will be permanent sellers of real estate (static asset) . The rich own 80% of all the wealth and most of that are static investemnts. Those hanging on to investment homes, expecting 5% or 10% a month rise to continue, are being very gready as they do not do the hard work to earn this rise.

No trend lasts forever as inflated home prices helps no one .

All this time the US dollar will be soaring as that represents deflation. Our Fed banks are fighting an old inflationary war when they raise the rates. According to the Warren Buffet indicator, the markets are twice as expensive as the time during the 2000. bubble top. Eventually, we could see the DJIA crash down to the 7000, (SP500 at 750) price level, before any real bottom will present its self to the majority.

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Brent Crude 2008-2018 Review

This is the September weekly chart with 1500 custom bar settings. The COT reports do not show any real extreme, but the Gold/Brent ratio does. Since May this ratio has been averaging 17:1 .Which is about the same as the Gold/WTI ratio is. They are still so very bullish on oil that recently they say that “$150” crude oil is coming. That will not work as gold and oil are linked via their respective ratios. At 17:1 any oil price can crash like WTI did in 2014.

No Death Cross on Brent has happened, on the daily, weekly and monthly charts! We had the Brent Death Cross at the top in 2014, and the Golden Cross just formed earlier this year. With a Golden Cross already done Brent crude should explode in price! The 50-day MA can bend down and slice right through the 200-day MA. Before you know it the Death Cross has formed and Brent Crude keeps heading south.

The hedge funds with WTI are still so bullish that they are net long by a ratio of 8.35:1. I consider 4:1 ratio to the extreme side while the commercials only have 1.89:1 net short position. The Brent crude COT reports are not that skewed at all, matter of fact it looks pretty boring. I’m very confident at this time, that the  impending Death Cross, has more power than any COT report, but I need to get more confirming evidence to have faith in what I’m reading.  Commercials can also make dramatic flip flops which I saw some of the currencies do.

No little $10-$20 correction will fix the problem. $40-$45 Brent crude could supply short term support but in the end the world is going to deflate and the Brent crude price will also crash. Fundamentals will “Allways” tell you the wrong things at the extremes, and when the analysts all sound the same, then it’s time to bet against them.

The gold price has been closing below $1200 which is not a good sign, as I expect gold and oil to still crash much more during the rest of this year. Brent crude will not standup to this, so it will crash as well. I will not trade any oil move with USO as it does not reflect pure oil very well at all. I closed my USO short position becuase it was so small of a position, I wanted a bit of extra margin space on my US dollar side.

Have patience as by the end of this year we could be facing a different energy landscape. Oil is being drawn to the solar cycle #24 bottom, but after that oil could soar one more time.

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Gold Intraday Bear Market Update!

Intraday updates might be important for day traders, but I assure readers that I’m not a day trader, nor an investor. In my Cycle degree world only 4 degree levels have any importance at all. Minor, Intermedeate, Primary and Cycle degree. It is any big 5 wave sequence in Minor degree or more where all the money is being made. We can’t make any money, as we can only work for it and earn it. Get real gains mixed up with any unrealized gains will not work as well. Any trade can be up 300%, but we don’t make a single dime until that position is close off.

Gold ended on a very nice little spike to the downside which was followed by a counter rally fairly quick. This rally may still have some to go, but eventually the bearish gold trend will return. Once a trend takes hold, nothing will stop that trend until it’s draws to its final conclusion. This Primary degree bottom in Gold could end up between $700-$800 USD, which puts gold at the same bottom as 2008 was. Even if gold hits $691 it would not be a problem, as that would give gold a little more than a $100 window to reverse in. It still would take the rest of the year or even to late November (21st) before we can expect a bottom in the gold price.

When gold declines this much then it is a “CLEAR” sign, that gold is telling us that deflation is happening. Gold has been deflating since the 30 year cycle peak in 2011, along with gold stock ETFs. It may not finish until after, or close to 2021! Of course a huge gold counter rally will get in the way, which I don’t intend on missing as I always work 3 steps ahead of the crowd. Sorry, but only working one step ahead is no longer good enough, as I work on much stricter parameters. I’m only short IAU with a token 100 shares, but all my biggest short positions are with GDX and as of this morning I added a some GDXJ PUTs. All my trading account short positions are in the green and I have no intention of covering any of them until GDX also has it’s downside breakout. Not until all my short positions have been closed off, will I know how much of a new capital base I have to work with. I know what my goals are and I document and even print out different stages of this gold bearish decline. I will give full trading account discloser to my buddy this week, as I have added options into the mix.

Options always expire and go to zero, but any PUT can go to zero the same day you execute! It just about happened to me this week, but it’s no reason to panic, as a week later all these PUTS I have are now in the green!  Green is good in any direction we bet on, but we gain nothing if we don’t execute and capture this “green” 🙂

One single PUT or Call represents 100 shares, so eventually I always want to carry 250 options in any direction. I’m far from that folks, but planning is the key as it has to fit into our capital base as well.

 

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US Dollar Monthly 1980-2018 Review

When we go back to the 1980 era we see the USD hit a peak in 1985 before it imploded and started to end in 2008. All this is great but forgetting or ignoring the pattern the USD made to that 2008 bottom, is the key. Back in 2008 the world hated the US dollar as the majority were all trying to get out of the US dollar by any means neccesary, so investing in gold was the most popular theme. I had that 2007-2008 time period very well documented as the contrarians at that time also said tha the US dollar is going on a bullish run. Commercials were net long while the speculators (hedge funds), all were on the US dollar bearish side of the trade. One thing I can “Always” count on is that these hedge funds  “Always” get in a trap. In 2008 the US dollar bears were in a bear trap, and there is only one way to get out of a trap and that is with a violent trend reversal.

The wedge is one of my most important tools that help to see big moves long before they happen. I though the USD was just in a big bear rally, but that $89 price level bottom early this year, changed my mind. I know that EWI has the USD as a bull market as well,  so I would just be confirming them from a Cycle degree perspective.

The rise in the US dollar is “deflation”, by any sense of the word, which is the cause of the imploding price of gold/oil and many other commodity prices. World wide asset prices have inflated so much which is all coming to an end when all asset prices start to deflate again.

The US dollar is in a major bull market that will not end in my lifetime as Supercycle (SC) degree wave 3 is still ahead of us, (2041) and Grand Supercycle degree wave 3 is at least another 30-years past that. (2071) I have what I call in-house developed indicators which I talk about,  but only my one on one clients get the detailed explanation. I have a “Wave Pool” which has a collection of 25 or so futures wave positions in it, with about another 25 ETF wave positions as well.

When some expert goes on a gold rant expecting $5000 gold then this forecast would instantly cause havoc with my wave counts when I’m wrong, but if my, “Wave Pool”, barely sends out a ripple, I know that this bullish gold forecast will never happen!

Fundamentals will always tell us the wrong things at the extremes, as the markets are always wrong. When the experts all start to sound the same, it always justifies taking the contrary position or point of view.

Any stock market herd of investors can never win, as markets will never allow the majority to take money from the same majroity of participants. The 80/20 Principle tells us that. (20% of the population owns 80% of all assets in the world)

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HUI 2011-2018 Bear Market Update!

The 2011 peak was a 30 year gold/silver mania peak that has still to finish the first set of 5 waves down in Intermediate degree. They are connected with zigzags  like “All” commodities are, with our last “B” wave in Minor degree already completed. The “C” crash bottom will be the last one when it finishes sometime towards the end of 2018!

It also means the angle of the decline will also increase as the HUI still has to fall below the 100 price level, to confirm that our present bullish phase was just a big bear market rally. It was only an Intermediate degree at the 2016 top, so any future “B” wave in Primary degree has to exceed the 2016 peak by a wide margin.

This anticipated “B” wave in Primary degree will be the last and final chance to unload all gold stock and bullion investments. I always work 3 steps ahead of the crowd, which I have been doing for decades already, as it is the quickest way for me to catch mistakes at the earliest time.

Those who are not ready by the end of September will be late, and as it takes major planning to reverse once the bottom is near!  I will use $5000 as my USD model account and have sacrificed about $500 CAD with 10 Puts on GDX (100 shares per PUT) which expire by September 18th. I will take any green offerd to me at that time but the pay back will all be on my CAD side.

This is all good as I also get to build up my CAD side as well as my USD side. As of this morning all my accounts are in the green! Which is a good thing, right?  🙂

 

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Gold Daily Chart: Fast Approaching $1120!

So far so good, as the gold price keeps heading south. I use the $1120 price level as the third leg of a bar stool, so when it gets retraced there will be no mistake or argument because of little chart differences. If I turn this into line mode, all new prices would appear and even some spikes disappear. I don’t need to fill out any of the intraday Minute degree patterns as I will never be a day trader. The most power comes from a 5 wave sequence rally or decline. In this gold bearish phase I do have a Minor degree move and that is my bare minimum to make it worthwhile to bet short or long on. Thinking that you are one step ahead of the herd, is not good enough in todays world, as I always think, draw and plan 3 steps ahead of the crowd. (A, B, C,) or (1-3-5).

Since the 2011 peak, the gold bear market is in a diagonal set of 5 waves in Intermediate degree, all consisting of connecting zigzags. At the $1360 peak I had a $15 gold window for the entire wave count to go wrong. These connecting zigzag moves must all be labelled, (ABC1, ABC2, ABC3, ABC4, and ABC5! ) There is hardly any difference between a diagoanl run and a triangle run except for their locations. In this case the triangle is in the gold Minor degree “B” wave, which also dictates the end, following the bearish 5 wave decline.  Modern wave analysts are calling this “B” wave as a bullish pattern, which is complete nonsense as far as I’m concerned.

When this gold crash ends I will be forced to look for the next higher degree, which will be a Primary degree “A” wave bottom. You never want to be left hanging in a short position when an “A” wave in Primary degree is completing. I have short positions out on GDX and IAU and have no intention of closing off and take early profits before it’s time.

The Death Cross in this daily chart happened at the $1300 price level and gold investors will find out how stupid it is to be invested at the top of a Death Cross! The Death Cross on the weekly chart is still ahead so there is a lot more pain coming for the gold investors.

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Euro 2001-2018 Review

Just like the US dollar is in a huge bull market so is the Euro as it makes up about 59% of the USD basket. Gold investors that think another huge leg up in gold is going to happen are ignoring the fact that the Euro was just in a bear market rally and new record lows will happen, by this fall. This would land us on a Primary degree wave 3, followed by yet another bear market rally before we bottom at a Supercycle degree “A” wave bottom sometime by 2041 or three years sooner. The Euro peak matches oils peak and not gold, so we have to be aware of this 3 year difference.  My last weeks Market Vane report only shows 46% bulls present which is still far from any extreme I may be expecting. Even gold is about the same so it’s not just one thing I rely on. All my futures wave counts are in what I call, “The Wave Pool”, which are all in-house created indicators that only a few one on one people get to see in any detail.  I also built a “Ratio Pool” and a “50-200-day MA Pool”.

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Australian Dollar Bear Market Update

Any currency that has supported any run in gold and silver sure have not been cooperative at all. It sure supports the bearish stance that I have. We just finished a Golden Cross, but the Death Cross is in the Australian dollars near future. That puts CAD and AUD on the same path and it represents deflation, as the US dollar is in a big bull market that very few people understand.  I think the AUD will play out a huge zigzag correction where part one may just finish this fall.

Either way,  new record lows in the Australian dollar will happen, as the last two year rally was a fake just like gold.

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HMMJ Bear Market Update

This HMMJ chart is still the best ETF to track the legal marijuana industry.   Since it is so new there really is no track record we can rely on. My wave positions could be so far off, even though we could be heading down to a flat bearish ending. My bottom trend line may not even hold, as we are close to a 75-150-day MA Death Cross in HMMJ as well.

 

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