Monthly Archives: September 2018

T-Bond Wave Counting Example From March, 1980!

Digging around the Internet for big historical charts, I found this very interesting T-Bond wave count. I don’t know who the author was but that’s how everything was counted like in those days. In those days it was just before the end of the T-Bond crash, and to top it off, he was seeing 5 waves down in Primary degree. I had no problems in deciphering his degree list as it looks like it came from an “old school” degree list. 38 years later I have the same 5 waves down in Primary degree. The only difference is that the “b, c” in Cycle degree should be switched around. The “b” wave in Cycle degree should be at the top.

If I had to assemble a crew of wave analysts, I would hire him on the spot. I sure can’t say that about any wave analysts today. I never had decent charts until well into the early 1990’s as all I had was a Text-based internet.

T-Bonds came to a 120-year bear market bottom in 1981, which I see as a wave 2 in Supercycle degree. All my large degree analytical Elliott Wave work is done off-line with big print-outs. 38 years later I end up confirming in what he thinks he is seeing.

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A Look At The 30-Day Fund Rate!

 

I found my own chart on the internet from March 2018 highlighting all the flat or horizontal moves. The horizontal moves are when the FED halts or rests from raising rates.  The fed can only raise rates when the Fed-Fund rate allows them to do it. EWI has conducted studies that show exactly that.

The chart above is heading to support trend line, and it also has a couple of huge gaps, that can work as major support before this chart trend will reverse itself.

 

This is our recent 30-day Fed Fund rate, and it suffered another mini-crash to the downside. This trend will reverse itself, but I believe that the charts have to flatten out or go sideways for a certain period of time before the Fed-Fund rate on this chart starts to point up again.

Nothing I see supports any major inflationary run, as the commercials added to their bullish bond positions in a rather large move. I only see overwhelming odds that T-Bonds and all other associated 2-year, 10-year Treasury bills have huge long positions. I never argue about those kinds of odds, as being bearish on T-Bonds will be proven to be wrong in the long run!

It may take the rest of the year to see if the Fed pauses or follows through with another rate increase, but I would like to see this chart go flat!

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Gold Intraday Update: Is The Correction Finished?

 

Gold sure looks like it turned this morning, which could be the end of the correction. All we need is for gold to trash some of the resistance we are going to run into, then the gold bulls will take over control of the market again. The pattern I’m expecting is a sequence of 5 waves up in Minor degree. This eventualy should push the gold price to $1700-$1900, but all indicators I use will have to confirm it first.

I use GDX as my main trading ETF, and it should also have hit a bottom this morning.

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Natural Gas: Weekly Chart Bullish Update

 

 

The 2005 peak is about as close to Cycle degree wave 3 that I can get. What followed surely looks like an impulse but it belongs to the diagonal world. With winter coming on, it would be futile, or a waste of time to chase any bearish outlook at this time.

A quick look at the COT reports, the commercial hedgers are net long while the speculators are still net short.

 

Both groups can’t be right, and I know that the speculators are the trend chasers, who still see a bearish decline coming.

This is also where the falling wedge looks pretty obvious if know some basic technical analysis. Experts can spew all the fundamental rhetoric they want but when they know nothing about falling wedges and the major bullish phase that they can produce, they will be wrong every time!

Fundamentals will always tell us the wrong things at the extremes, as markets always do the opposite of what the fundamental, indicators and analysts forecast.

The wedge is holding NG prices down for now, but keep an eye open for a breakout that we could still get this year.

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Quick GDX Update!

 

GDX hit a bottom at $17.28 and is now looking like it is correcting. If this big bullish phase is on, then GDX must head higher, leaving all previous resistance levels in the dust, or should I say, “gold dust”.

There may be a bottom in GDX today, but the rest of the day could still change things.  Above all, we must see bullish sequences with good corrections, as that is the sign of a bullish phase in effect.

The Gold/GDX Ratio is sitting at 64.25:1. This is cheap, but still far away from being extreme of 84:1.

As this GDX bullish phase advances, then this ratio will start to compress. Not until we get to a ridiculous expensive ratio, would GDX be overbought.

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HMMJ: Reefer Madness In Canada Update!

 

Marijuana-related stocks and ETFs have gone wild in Canada. It smells like a mania to me, as it has all the same media attention as when Bitcoin went ballistic. My wave positions are just experimental, as there is no real history of cycles that I can see or use. The spiked top this September is the record top to beat, created with all the Marijuana stock IPOs that have been pushed onto the markets. IPOs always come out at peaks of the markets, so what has been happening is no surprise. I participated in one IPO (MMJ) and sold when it went vertical at about 60¢. The same stock is now around 16¢. Many single stocks have done this as I also unloaded some pot stock losers.

Not until I see a correction that makes any sense, will I turn bullish on the industry.

At a minimum, I would like to see HMMJ fall below $14, with the mainstream media being very pessimistic.

I have some initial Gold/HMMJ ratio’s recorded, but there is no way that it can be useful at this time. The Gold/HMMJ ratio is at 49:1 which makes this ratio the most expensive gold ratio to date, but still a bit away from being insane!

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Russell 2000 Weekly Chart Update!

 

The Russell 2000 may have hit a peak as well, but this is not the top I count from! Cycle degree wave 3 ended in January 2018, not in September of 2018.  What we have is a potential expanded pattern that very few if any can spot, before they happen.  This is just the lead-in for the “A” wave in Primary degree, and there is no way of knowing exactly where the “A” wave will stop. It may rest at 2016 lows and even go sideways before it turns and starts to head south again.

Since the 2000 peak, every bull market correction has taken a little longer than the previous bear market. This is because of the sequence of 1 higher degree each time.

Any Cycle degree bear market would take longer, which may take until 2022 to finally hit a bottom. Solar Cycle #25 will have the final word, as the starts of new solar cycles are bear-killers! Most of all, the start-up of a solar cycle will kill every professional bearish wave count, just like it did in 2008-2009.

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Russian Ruble: From A Bear To A Bull?

 

The Russian Ruble hit a bottom about two weeks ago and has now started to turn up. We could have a bottom from the correction. This bottom could produce a “C” wave bullish phase, or even another 5 waves up in a Minor degree that would change this into a 5 wave sequence in Intermediate degree. The difference between the two may only be cleared up, if we get a very choppy bullish phase, instead of any smooth sequences.

Either way, if the correction is right, then the Ruble should breakout to new record highs. The commercials are net long, but not by very much.

I can’t maintain any intraday moves but will try to catch the top when it happens.

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T-Bond Supercycle Degree Wave (III) 1981-2041

 

I have been working on T-Bonds, as there is a much bigger bull market here, that anyone would even dare suggest. I have a chart that starts in 1861 and T-Bonds crashed for 120 years in a spectacular giant zigzag, ending in 1981! Two-60 year moves made up the bear market with one bottom being in 1920!

I will drop the GSC degree T-bond analytics, and drop all my wave positions down by one degree. Can you imagine 5 waves up in Cycle degree? They will not end until SC degree wave 3 ends in 2041.

1981 is the big time period from where the time count, starts from, so 1981+30 years ± 1 year = 2011!  2011 is the year that stocks went on a rampage, and gold/gold stocks imploded.

I believe wave 1 in Cycle degree may still be ahead of us, but that will take work to confirm if wave one in Cycle degree has already completed. I may start SC degree T-Bonds as a separate page, as T-Bonds are directly related to interest rates.

At this time all my COT reports do not suggest any huge shifts, as commercials are net long across the majority of futures that are interest rate sensitive. The Fed is still fighting inflation, but that will end up in a bust.

 

 

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Crude Oil Daily Chart Bullish Wave Count Update.

 

I have been working on all my long-term oil charts and I think that 2016 low is a Cycle degree wave 4 bottom, which means  this bull market has much more to go, but we could get a violent reaction as the Gold/Oil ratio is at 16.62:1, the most expensive reading I have so far.  A fast or violent correction in oil would change that ratio around a bit. If we continue then a ratio of 10:1 or event 8:1 may still happen. I changed my positions and started a 5 wave sequence in Intermediate degree, which could lead up to a Primary degree “A” wave.

All commodities have a diagonal idealized custom pattern I visualize, taken from the real world lcharts ike the CRB index.  A short example of this diagonal is the ending diagonal in our EWP books, but just forget the “ending” part and stretch it 600 years. The DOW up to the early 1920’s were all diagonal wave structures. This stopped as financial instruments were invented and the majority of people could own stocks. The more people in the markets smoothed all the diagoanls waves out.

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Gold Intraday Bull Market Update.

 

This is the 90-minute intraday chart, with the bearish phase ending in August 2018.  Since then gold is doing what a bullish market is supposed to be doing as 5 waves seemed to be forming.  I may have to adjust the degree level later on,  but for now, I will start with 5 waves up in Minute degree, with a starting 1-2, 1-2 wave count. Gold could turn into diagonal waves, just as easily, which only time can confirm in the next few weeks.

Last week of a quarter, after which gold could soar much further. Technically speaking, gold should form 5 waves up in Minor degree, that will eventually push gold way over $1375 again. $1375 is the key price that gold has to retrace because that is the location of an Intermediate degree top.

I’m looking for a Primary “B” wave top, so the Intermediate degree position eventually has to get retraced. The only way gold will keep going up is if the US dollar keeps up its decline. Investors love that $1200 price level, and sooner or later, gold will get above that number and not get hit again for some time.

At this time I have a gold price window bull market peak, between $1700-$1900. Compare that to GDX, and GDX could hit between $45-$65.

The US dollar already took 14 months for its A5 wave decline with a 6-month counter-rally. If zigzags are supposed to be even, then another 14-month decline would be an initial time target of November 2019, as a potential peak.

At this time gold may work as a safe-haven asset class, but long-term every myth that you know about gold will be proven false. Gold will never protect you from deflation, and the only way gold will protect you against inflation is when the price of gold gets crushed. Banks are buying gold this year, but back in 1998, they were selling gold.

The big thing that readers of this blog must be confident about, and that is what that 2011 peak in gold represents!

Before you think that gold is just in an ordinary bull market again, then you should do your homework in what a mania is! Gold runs on a 30-year cycle from one mania peak to the next, so the next mania is not going to peak until 2041. This would be Supercycle degree wave 3 in commodaties.

One thing I’m very certain on, that at the peak of this bullish run, gold will give bullion holders a chance to unload or they will suffer the consequences when gold crashes between $500-$350! Deflation is coming in the next three years, and gold will, “Never” protect you from this deflation.

Boomers are retiring at a rate of 10,000 per day for the next 19 years! What do you think they will do with their investments?  All those boomers will be permanent sellers of real-estate.

It’s not just gold,  but the entire commodities world will get hit with deflation by 2022-2023

 

This is what the COT report on gold looks like. This does not instill any great confidence that a super gold bull is coming when their stats are so flat and even. Oh, I’m sure this picture will change, until we can see some extreme readings again. When the top speculators move to the bottom then we know that the speculators are in a bull trap, and it would be time to short gold again.

 

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HDGE A Cycle Degree Bottom?

 

I’m not going to cover HDGE very often but will try and catch major turnings. Since I’m working 3-4 expanded patterns then HDGE should technically also contain an expanded pattern.  January 2018 was the real low and if we ignore that Cycle degree low our time forecasts will not work.

Take 1929 and add 89 years, we would get 2018, which are 3, 30-year cycles, short by one year! I like to keep time forecasts to within plus or minus 1-year parameters, all under the Cycle degree perspective. They flip numbers and letters around without regard to the time jumps they make on paper each time. SC degree wave 3 may not come until 2041, and GSC degree not until 2071. Those wave analysts who are at those degree levels already have warped into the future.

The EWP is true, “Garbage in” and “Garbage out” if our vision of the idealized form is different for every analyst. Let’s hope that the recent spike to the downside has some holding power in it, but every rally will meet resistance. Any resistance should melt in the face of the bearish herd that is coming.

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DJIA 2018 Cycle Degree Wave 3 Update

 

This is the CBOT Dow index which only updates during the day. The DJIA just recently broke out to new record highs, but only by the slimmest of margins. This fits the expanded top very well so until this market proves otherwise, I will remain as bearish as I ever have.  Sure it is next to impossiable to know exactly what day this may happen, but when it does it could be a very sharp decline initially.

This may not be obvious until the DOW crashes below the bottom wedge line, after which the bottom support prices at the 23,500 price level would be next to get hit. The 23,500 bottom my supply short-term support but jumping in on that dip will prove costly.  Lucky for wave analsyts that see this coming, but the majority of investors have no clue in what is going to hit them in the next 3 years!

We have a full moon today and only 5 trading days left in this third quarter, so shit can hit the fan when investors least expect it.

The entire 4th wave correction could take until 2022 to finish, which would be a deflationary crash. All the crashes since 2000 have taken a bit longer than the previous bear market, so a Cycle degree crash should be the longest in time.  Any “C” wave bottom that ends would get us to the stock market  Primary degree “A” wave, which should produce a Primary degree counter rally bullish phase! First the DJIA has to display 5 waves down in Minor degree, as gold should go up with 5 waves in Minor degree.

The DOW now shows 2 peaks which are very obviuous, but one peak belongs to the bullish side while the other already belongs to the bearish side!

Just like big bear market rallies, small counter rallies act the same way. Every bearish rally will completley retrace itself, so not until the impending decline starts to exhaust itself will it be safe to take a small bullish position.

The VIX is also getting excited as the COT commercial traders are clearly bullish in the VIX! On any of the US indices, the commercials are net short, so a big leg up in stocks is not what I see that is about to happen.

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Nasdaq 100 Daily Chart Cycle Degree Wave 3 Review

 

Since my last update I had to move my “C” wave in Minor degree up as I was still early by a week or so. The last peak was September, 3, 2018 at the 7720 price level. The real peak where I have to count from, was way back in January of 2018.  I’m sure we can hear the crying how I can’t count this way, but I see so many of these that ignoring them is not an option.  It is the “C” wave that gives it away, and we have to wait until the end of the month to see if the Nasdaq 7720 price level holds.

In a fit of madness stops or options get triggered which still could spike the Nasdaq higher, but I think the markets are running on fumes. Just scanning all the commercial COT report positions, there are vertualy no net long positions anywhere. Painting a bullish picture in stocks, will show you how the majority of wave analsyts can fall into the “mood trap” just like any other human does.

See all that empty space below our present high? What do you think is down there? Nothing but PUT options and protective sell stop orders, and when they get hit, all those bulls will turn into instant bears.

Stocks also follow the 30 year cycles but they sure can crash together like they did in 2008!

The “C” wave decline in Intermediate degree could be fairly steep but will only be obvious after it has formed.  The Nasdaq is the odd ball here as it seems to have pushed this “C” wave further than all the others. This will be last of the Internet bubbles in a long time, as the internet has matured and we don’t need to invent a new smart phone.

Readers have to make up their own minds if things are, “Different This Time”. Sure it’s different, but so was 1929, 1987, 2ooo, and 2007! Take our 2018 peak and count back 89 years and we get 1929! Ignoring the 30 year inflationary and deflationary cycles is not an option. T-Bonds have a 120-year cycle that started in 1981. (two 60-year Cycles).

We also have a rising wedge which every technical analsyt knows about, but only a few have the confidence to read them.

Once this turns then things can speed up, as panic will take control of the crowd, and no more record highs are produced. Add 3 years to our January peak and we coud see a bottom by 2022, so buckle up and watch all the bullish investment prices evaporate and disappear.

Gold, silver are pushing higher so money leaving stocks can flow into gold stocks in a flash, if the GDX holds it’s price level.

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British Pound Daily Chart Bull Market Update

 

The COT report you see above is for the British Pound which shows that the commercials or hedgers have a massive long position, and then on the flip side, the bottom shows all the managed money positions or large speculators with a bearish opinion. Two massive opposing views in which way the market is going to go. I watch COT reports for over 18 years and I know that it is the hedge fund money speculators that “always”get into a trap of one type or another.   Any wave analysts that is still bearish on the BP will have the wave positions trashed all the time.

It is futile to count bearish wave counts when the numbers are so skewed against the GBP bears.

 

This daily chart I added 100 bars,  keeps the Primary degree “B” wave bottom in view.  What follows the “B” wave bottom should be 5 waves up in Intermediate degree. 1985 was a pivotal year for many currencies that made a wave 4 bottom in Cycle degree.  A short description would be, “it’s a bull market”!

Elliott Wave is much easier to figure out from the idealized vision, and I ask the same group of questions before every turning. Where am I, and what do I need to fill the entire “C” wave in Primary degree? In this case, 5 waves up in Intermediate degree is the only idealized pattern. When a pattern does not happen, then it should always force a complete review.

When was the last time that a wave analyst has shown you a complete Cycle degree update, with the 1985 bottom visible? 1985 ended in massive moves making those spikes stand out like a sore thumb. If I see 1985 ignored then those analysts have no clue where they are. Anyone can flip numbers and letters around inside a computer, but get them to count it out on a big monthly chart with pen and paper, they will not be able to do it.

The correcting phase may still be in effect so wave 2 would still have to be adjusted in the future.

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CRB Boom And Bust Cycles 1865-2011 Review

 

I have mentioned it many times that I use the 30-year commodities cycles to help forecast time into the future as well as into the past. You can let your thoughts run wild here but we can see, that being out by just 1 single degree can send you reeling as you warp drive on paper everytime we mark down a degree. 30-year, 60-year, 90-year and the 120-year cycles are all the same. A 600-year span would be 10, 60-year cycles, just short of a Fibonacci number 610. Commodities run on their own idealized pattern that is all based on diagonal wave structures, which are just zigzags connected to each other.

A shorter description might be that we take the ending diagonal 5th wave in our EWP book, and stretch it horizontally and print it on legal paper size. Some of the bear markets below have lasted 17-18 years before the next “C” wave leg would start.

From 1920, and what I have is the SC degree wave 1 peak, we can count forward 90 years and we get 2010, off by one year peaking in 2011. Take 2011 and ad yet another 90 years, we get 2101!

the year 2101 is Submillennium Degree wave 3. Adding only 30 years to the 2011 peak, we get 2041 as a potential year for SC degree wave three to end. I count gold out much the same way as I firmly believe that the 2011 peak was a 30-year mania cycle peak and not some correction in an ongoing bull market.

Since many commodities are in the CRB different pattern in the corrections also happen. The main thing is we can use the 2011 wave count (position) to establish a very strong base to count from into the future. Wave analysis is not about flipping numbers and letters around like they are chicken on the barbecue, as I just can’t change the 2011 wave position on a whim anymore!

If you still see many wave analysts change their 2011 location around, then they have no clue where they really are. Any wave 5 peaks, that you see on the net, that are not capped, instantly tells you that the wave analyst is lost.

Looking at all commodities from a Cycle degree perspective is not something I just dreamed up but was a sequential retreat from GSC degree, then down to SC degree, and for the last few years, it’s all done from a Cycle degree perspective.

Elliott Wave is not about counting what we see, but it’s all about what we are supposed to see if our vision of an idealized diagonal is real! Just because something goes sideways does not mean it’s an automatic 4th wave.

 

 

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SP500 Record Top Update.

 

 

Stocks seem to find no real top as records are still being broken. Investing in at the top of the biggest bubble in all of financial history, is very popular.  Investors seem to ignore all the fundamentals with a “who cares” approach.

The biggest and worst advice we are getting is, “Stay in for the long run”. At every major top like 1929-2000,2007, 2018 they always coach you to stay invested for the long term. Tell that to the investors that got wiped out during the 2008 crash, or the 1987 crash.

Stay invested and keep buying the dips, as this market has a long way to go, is the general advice. Only the very inexperienced can do that, but for the millions of boomers retiring it would be financial suicide to stay invested. 10,000 boomers are retiring every day for the next 19 years, so where is all the money going to come from that will push the markets to the extreme? The world has a Titanic anchor of debt hung around their necks and they will get thrown over-board the first time the SS SP500 springs a leak!

The expanded pattern I show, is not just on one index but we can find it in the top 3-5 indices. This expanded pattern would just be a lead into the bigger “A” wave bottom in Primary degree, that is sure to come.  Every wave analysts would be screaming to get out if they new how deadly this pattern actually is. We will know only when it hits, as something will set the herd of investors into a panic.

The VIX tells us that much already, because commercial traders are about as bullish with the VIX as you can imagine, while the speculators are in another bear trap with the VIX. When it changes then expect some violent moves in the VIX as we have seen that happen many times before.

As long as all the expert wave analysts don’t see this expanded pattern their wave counts will get trashed. If all wave analysts don’t see this crash coming then what good is all that wave counting? They sure could not hit the 2009 bottom as that was screwed up as well.

 

 

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Gold Daily Chart Update

 

 

So far gold has started to rally from that August low, but this morning gold to a swan dive that is hard to see on a daily chart but it sure shows well with an intraday chart.  What you see in this daily chart is a Minor degree triangle with a count of 5 zigzags. This hasn’t changed at all, even after I moved my “A”  in Primary degree back about 2 years and 8 months. I like to calculate my time in years, +or- 1 year.  Being late by over 2 years, 8 months in a Primary degree wave position, is time traveling on paper at warp speed. Being out by a Primary degree time position will throw all-time forecasts out the window, the second they are created. 2011 was a Cycle degree gold mania peak in Cycle degree which very few gold experts even acknowledge. Those that do are hated by gold investors, as they do not understand that gold has 30-year cycles to them, from peak to peak.

The last thing I will ever do and that is, call a long position in gold an investment. I reversed all my bearish positions well over a week ago before I get out of bed as I put in all my orders late at night.

This so-called shorter move is just the last part of a running triangle. Running patterns are very normal much like the “E” wave in gold. Some are even bent over much worse as some of the gold stock ETFs show us. It’s not the $1160 price that is important but it’s the spike that made it, which is much more important.  At the top, we had 4-5 spikes to the upside which all failed.

I have switched to the bullish side but mostly use GDX to trade with.  I believe this impending gold market bear “rally” should show us 5 waves up in Minor degree but they could get very ugly pattern wise. 5 wave runs in any direction is not something I want to miss as they are the ones that can give you stunning returns if we can ride them out. I’m a gold bull rider now and will stay that way until all indicators tell me I’m in a bull trap!

My main trading ETF is GDX as the reversal we had, happen the same way in late 2008. As of August 2018, I have thrown options into the mix as just “one” of the uses for options is to treat them like Insurance. I had loss insurance out on my silver coin bet, and it already paid out very well.

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T-Bond Monthly Chart 1981-2018 Review

 

This is just a simple version, but we have to back to 1981 when this big bullish phase started. There is definitely a 60-year cycle to T-Bonds which is just 2, 30 cycles back to back. 1981+60 gets us to 2041, which is my SC degree wave 3 top as well. This bull market is far from over as there is no threat of inflation. All the commercial COT numbers show that they have net long positions in everything related to bonds. This does not support a bigger bearish phase at all. Even the 30-day Fed fund rate has been stagnating, showing that the Fed may be forced to pause or slow down the rate increases, and maybe even reverse.

I need lots of work to find a better fit, but a new bullish phase to new record high bond prices sure would help to confirm my bullish outlook.

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US Dollar 1985-2018 Monthly Chart Update

 

I’m sure all the gold investors will be grinning from ear to ear much like the Joker in a Batman movie, as the US dollar keeps declining. What this big chart shows is the huge falling wedge from that 1985 peak, which stopped in 2008 before it blasted in a surprise move. That 2008 rally was no surprise to the contrarians at that time because I documented the turning in great detail, and at that time I also had some futures long contracts out on in, and caught a good part of the move.

From the 2008 bottom  I spent years counting it out as a bear market rally, and switched to a bullish wave count as well.  The idea that a beautiful impulse is still going to happen, will fail as soon as the USD dips into my wave “A”.  It doesn’t even have to get that far as, but if  the USD is in a much bigger bull market then the US dollar will find a major bottom and reverse. The wedge is telling us that a huge bull market still has to form in the US dollar.

The US dollar is heading into a correction that may take it down to that 80 price level before it finds a solid bottom again. Since the Euro makes up about 57% of the US dollar index, it has shown very bullish moves inverse to the US dollar.  When the US dollar does find a new bottom then many of my COT reports and the Market Vane report, will also change to a bullish reversal. I believe the ETF UUP would be a buy once wave 2 in Primary degree sees it’s bottom.

Without a doubt the US dollar will soar above 120 and even beat or double top the 1985 peak at about 165.  This may take until 2041 to happen, so only the younger wave analysts will benifit in the long-term.

 

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Silver Weekly Chart: A Double Bottom And A Bear Trap!

 

I will no longer count out Minute degree waves unless I need them to clarify a pattern. I think an SLV bear trap is in, and the fear or threat of a further decline is not going to happen. Markets never reward fear, as it takes courage to do the opposite thing. Technically the 5 waves I was expecting have already started. I only have some real money Silver units in my Forex trading account as the rest is all with GDX and options.

The only way that silver and gold will fly, is when the US dollar turns south. In the end, it will always be about the currency markets and their wild swings. Last week many of the COT reports came out with some extremes, in all those currencies inverse to the US dollar. We can argue for years where silver will end up at, but that all depends on what that 2011 peak was all about. That 2011 peak was a gold&silver mania peak that comes along once every 30 years! It is very easy to double check and count backward 3, 30-year cycles, starting from the 2011 peak, plus or minus, one year!

Commodities do not follow the normal idealized patterns as they are all connected with zigzag type waves. Why do you think that the bear market with silver in the 1990s is so choppy?  It’s because it was a very drawn out flat type of a running pattern between a much bigger zigzag in Primary degree.  It could even work as a triangle as we did move into one higher degree in 2011.

Every person can pinpoint their birth year in this 30-year cycle, as I was born year one after the 1950 gold peak. Between each cycle, it will end up with major lows, but then gold and silver become a “long-term investment” once they are crushed in price.  We will have to wait until 2022 when solar cycle #25 starts to poke through the sun’s northern latitudes,  you don’t want a bearish bone left in your body when the poles on the sun start to flip. Solar cycle upswings act like bear market terminators. It would also be a good time to start a business, as you will have the power of the sun at your back!

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Australian Dollar Weekly Chart Update.

 

The Australian dollar is not in the US dollar index, but it reacts much like our CAD does. Commercials have shifted to the long side while the speculators are in a bear trap. Maintaining a bearish wave outlook will not work. The choppy ride up in the last several years looks just like a bearish rally, but they also can belong to a diagonal bullish move. The AUD may have already turned the corner so it needs watching to see if it confirms bullish wave action. I will not produce intraday Minute degree wave counts anymore, as all I need is to confirm 3 degree levels, and Minor degree is it.

I believe that we are in another bullish stage that is heading up to a “B” wave in Primary degree and once this peak becomes clear a new commodities crash will happen. 2011 was a 30 year mania peak which all commodities follow. All commodities as a group have a unique idealized blue print that I am mapping in my memory first, when we don’t, how do we know what we are supposed to be looking for?

Sorry folks, but I’m not any fan of modern-day wave analysis, as they do more damage to investors then they know. Big currency moves are happening and Cycle degree wave 4 crash in the AUD is still to come. At least until solar cycle #25 starts we should see deflationary times as part of the 30 year cycle that I use. Supercycle degree wave 3 in gold will not arrive until 2041 which I’m sure the CAD and AUD will confirm.

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Mini SP500 Daily September Futures Update

 

This will be the last of the September index as all of them will be moved to the December 2018 contracts.  The markets are doing a good job of killing any bearish wave positions as they ride the choppy move to the upside. I will stick to my guns, and look at  this as the start of an expanded pattern. The stock bubble ended in January and I have that peak as a Cycle degree wave 3 peak.

There is no way of hitting the exact wave, but a fast retreat would be sign that this bull market has had enough. Investing at world record highs seems to be the popular thing to do. I see it as just plain greed when putting money at risk like this.  Over a 400% gain in a 9 year run is still not enough for investors, as I see nothing but a stock market bull trap being set-up.

Nothing new here as I am tracking another mania for the third time. Patterns like this can create very steep drops, as the investing crowd is going to panic once a few support prices get breached.

I filled in wave positions down to the Minuette degree level, as the “C” wave is a diagonal wave structure and is going against the bigger trend.

My wave position is only a Cycle degree top, as the majority are in SC and GSC degree wave counts already. 2018 is 89 years from the 1929 peak, but this time it’s just one degree lower than the 1929 crash was so it will be like 1929 and 2008 which should take 2-3 years to fully play out. 2022 is my target year, as years ending in 2 seem to have major reversals connected to them.

Massive deflation is the true threat, and we may see that by the FED, “resting” on rate hikes. Even when they drop rates again inflation will not be the driving factor, as printing money is not inflation. If the velocity of money picks up then gold will benifit by going up in price. Gold has already turned the corner last week with a low spike of about $1160.

All my work is from a Cycle degree perspective so all SC and GSC degree wave counts will not happen for decades far beyond my years, but which the new Generation-Z will live work and invest in.

The first of the Generation-Z was born in 2008, but I am checking that, as it would also cut off all kids born to the Millennial generation.

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Canadian Dollar 2002-2018 Update

 

Our Canadain dollar wave positions needed some work. Last week things changed as many important COT reports had strong shifts including our CAD. Hedgers are still net long while the speculators are net short.

I started wave tracking the CAD back in the late 1990’s. At that time it was a wild ride, and it looks like it might do it again. I moved my Cycle degree peek over to the 2011 peak, as that matched the gold&silver mania bubble in 2011.  All commodities are linked together with zigzags and the twin tops show how related or CAD is to both gold and oil production.

What followed in 2011 was a swan dive that had a big bear market rally and followed by a set of 5 waves smaller in size. The late 2007 peak has a huge spike in it, then eventually another major spike at the 2016 bottom. CAD and oil like two pea’s in a pod! What followed in 2016 was a wild ride that looks like one of the best zigzags ever formed, which has not changed.

The crash into 2016 is a zigzag with a long tail. The 1929-1932 crash did the same thing so, if it happens once than I  look for that pattern all the time. The next big zigzag is in progress but the Primary degree “B” wave is not even close. “B” waves can contain flats that start out with smaller degree zigzags, and our CAD fits that very well right now.

If we maintain a bearish CAD veiw we will be wrong every step of the way as a new bullish phase may have begun.  5 waves up in Minor degree is on the menu, but it looks very choppy on the daily charts. That’s ok, as it looks like a diagonal wave structure is starting to form.

Our CAD is not going to the moon, but it can head to a triple top, in the next few years.

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DJIA Picture Of A Bubble!

 

Once in a while, I like to post the DJIA with a linear chart setting, as that really shows the all-time history extreme stock mania. This mania will end in a major market decline, which could last well into 2022, or after solar cycle #25 starts. If readers think stocks are still going to the moon, or that Facebook is a “buy” then you have little idea about the shit storm that is coming. Investors always forget previous bubbles as it’s, “Always different this time”. They think it can never happen again.

If you take the 30-year cycle serious enough then count backward 89 years from today and we get 1929, off by one year. Cycles repeat and 89 is just one year off a perfect 3 sets of 30-year cycles.

We are definitely not at some imaginary SC, or GSC peak as modern wave analysts seem to be able to time travel into the future with a click of the mouse! If I did that, I sure wouldn’t time travel into the future, I would rather time travel into the past. We can’t flip numbers and letters around like they were hamburgers, you have to treat every position change much like a doctor handles a heart transplant or operation. There are very specific wave counts that must be confirmed if we are in SC degree in 2018.

Some little correction is not going to fix or deleverage the world, as it will take a 70% correction or more. Any stock market crash is deflationary as even in 2008 nothing was spared except for the US dollar. The boomer generation is retiring at a rate of 10,000 perday for the next 19 years! They are going to be busy on cruise lines not beating on their screens or trying to make a “long term” investment.

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GDX: A Bullish Phase In Progress?

 

 

GDX hasn’t moved that much, but last week many the COT reports I follow had some major shifts which is always a wake-up call that something has changed, That change should be to the bullish side. Even my PUT options watch list saw a major price drop, which would mean there is no longer time for the PUTs to recover and that they will all expire worthless. The addition of a CALL watch list, keeps you feedback in a real time basis, so I see a huge benefit of watching an “Options Pool”. With Options you can always calculate how much will cash will disappear, once the risk to zero is calculated the instant you buy any option.  Last week I reversed my entire account before I got up in the morning as I start late at night putting my orders in. I don’t run to my desk when I get up but coffee comes first!  Adding options to the mix is going to be the norm not the exception.

Many hate options, but there is a crowd that likes them, and I’m one of them. I think professional traders and hedge funds all use options regularly. If you hate options, because they may expire worthless, is more about how we use them. If readers want more options commentary in the mix then please e-mail me and let me know. Locally I look for traders I can meet face to face with. My buddy has taken a full course on options trading, so if I need any questions cleared up then I will will consult to him. After this bullish phase appears and then starts to stall at the $30 price level, we know we have a big H&S to contend with, but think of them now as friendly H&S patterns.

The Gold/GDX ratio has been hitting a price brick wall at over 66:1 which is not extreme, from a 84:1 major low. The same thing that happens on the upside also happens to the downside, when the ratios seem to slow down and then reverse. At least GDX now has the “C” wave second bottom which is very important for a corrective pattern to complete.

 

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Euro Daily Chart Bullish Update.

 

The Euro makes up about 59% of the US dollar index, and runs inversely to the USD all the time. It’s impossible for the US dollar to implode without the Euro going the opposite way. Short-term in the next year or so the Euro should rally which I think is a wave 2 rally. Last week many COT reports changed dramatically which is a sign that “shit” is about to hit the fan!

Sure the Euro can make some wild corrections but I will no longer be bearish on the Euro until I see the impending bullish phase start to get real tired! Bulls can only run so long and then they get tired and must rest. The Euro bear market is far from finished, so the next 5 waves up will end and then die again.  On a weekly chart we are still in a Golden Cross position so that also helps make a strong bullish case. I hate to miss any 5 wave run in Minor degree, but GDX will provide the same type of a 5 wave move.

The COT reports are not ideal but COT positions in other inverse related futures do. The Euro will also join the Cycle degree 4th wave club, but it’s 4th wave peak was in April of 2008, along with oil.

In 1985 the Euro also hit a wave 3 bottom in Cycle degree. 1985 is a real popular year as it stands out like a sore thumb, so there can never be an argument. The only argument or disagreement you will find is between all the wave analysts trying figure out what wave position it really is. We can’t wait for them folks as I already have mapped it all under Cycle degree guidelines, and it’s the readers choice which he wants to waste his time with in following. SC, GSC, and Submillennium degree wave 3 markets are far into the future as that is what Cycle degree forecasting is all about.

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Lumber Cycle Degree Crash Update

 

What I see here is a diagonal set of 5 waves in Intermediate degree connected by zigzags. All commodities are connected in the same way, and require a completely different idealized pattern to go by. There is an extremely good chance that gold has already seen a bottom, then if this is true shouldn’t lumber prices soar as well?  Crashing lumber prices also tell us where the housing market is going as demand for new homes is failing.

If the big bearish cycle in lumber is in effect then there should be no new record highs. We might get a wave 2 rally but if it turns choppy then more downside will come. It will be a long-term bearish trend that will change housing forever. 10,000 boomers are retiring every day for the next 19 years, so do you think that this is positive for the prices of SFD to keep going up? Maybe on Mars, but not on earth.

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ABX: From A Bear To A Bull?

 

 

 

The more I look at this Barrick chart the closer I think it’s at a bottom. I counted the entire 5 wave decline as a near perfect impulse decline while other were far from being nice impulse waves. Moving the big “A” wave to the 2016 bottom sends us on about a 3 year time jump back into history. Jumping back in time also allows us to look forward and find a new location.

Barrick and other gold stock EFTs could soar as another “C” wave bullish phase is near.  I’m no longer and have reversed my positions last Thursday. I do not give any investment advice as if I did, I’m sure you would lose money at it if you jump in with an emotional “All IN”.  I post this stock as I think the decline we have been having is part of a correction and there is a good chance ABX could add a nice set of 5 waves in Minor degree, which are the prized target wave runs everyone should experience once.  I have no clue what the options chain looks like, but If I miss this up I will  try not to miss the ABX decline when it happens.

Once this starts it should take very little to start seeing a bullish pattern to develop. ABX is one of the biggest miners in the world, which is in the GDX ETF as well. So if I have GDX long positions I already would own a small part ABX .

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Gasoline Cycle Degree Update.

 

This gasoline futures chart is on a different wave pattern as it’s Cycle degree 4th wave bottom was in late 2008 not in 2016.  The British Pound is very much the same so it’s not an isolated rare pattern as the 2016 bottom would be a running type wave.  This doesn’t mean a very deep correction is coming as another leg up may still happen in the next few years. Even Brent hitting the $80 price level, may break-out to the upside again. This has taken far to long for a bear market rally, so that always forces me to look for a better fit. More and more commodities are seeing Cycle degree 4th wave lows,  and that should only increase in the next few years. By about 2022 many other stock indices will join the 4th wave Cycle degree club.

I keep track of all the completed 4th waves under a seperate page heading, so check that page as the Cycle degree 4th wave count is growing slowly!

In this case the huge gap we do have can also act as support, as prices also repell from gaps. I’m sure in the future that this monster gap in gasoline will close off, but that may be a Supercycle degree crash when it happens. Gasoline is just in a huge zigzag bull market and between the two sets of 5 waves virtually any pattern can develop.  I haven’t checked the weekly chart Death Cross but the 200-day MA could be support, as on a daily chart we could hit a Golden Cross. Even now the correction is not as impulsive as you would expect, so this can always crank up and add another leg to this insane bullish move.

We can also see a big H&S pattern, so if gasoline prices are still very bullish, then the right shoulder will not hold and a push higher should happen. In a bearish situation a H&S pattern like this would go to new record lows.

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