Monthly Archives: November 2018

SP500 Rally Death Cross Review

 

So far the stock rally has performed in the last part of November, but that doesn’t mean it can’t stop on a dime and reverse. So far the counter-rally was a little more dynamic than what I  expected but it will still fit as a bear market rally.  This year we have had about 5 bottoms at various price levels, and if the bigger bearish picture is real then there is no chance that any of these bottom prices will hold. Prices rarely ever hold for very long but a good wave count bottom can.

Sure we could see this move turn into a year-end bullish party and we have to wait and see if this becomes the case. The Gold/SP500 ratio is about 2.25:1 this morning which is still about as expensive that we can get.  One ounce of gold can only buy 2.25 units of the SP500, so we want that number to spread as stocks become cheaper. Just because they did get a bit cheaper doesn’t mean a bull market can keep it going.  Another super leg up is pretty hard for me to accept as nothing is oversold from my Cycle degree perspective.

 

 

I applied the 50-200-day MA lines to this daily chart when the 50-day MA is going to cross the 200-day MA, which they call a “Death Cross”. Investors should never ignore these crossings but I know most of them to do, as they are fundamental analysts first.  The 50-day MA can now supply resistance, so combine that with the “Death Cross”, we have a very bearish situation going into 2019.

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Crude Oil Daily Chart Crash Update

 

 

In the last few days, crude oil did create another record bottom low of about $49.41, after which crude oil soared and so far has created another bullish set of 5 waves.  As I post crude oil has created another higher low, and it will be important to see if it the crude oil price will hold. I would like to see a counter rally of some sort, but a rally lasting a bit longer than just a few days.

A crash this long and deep sure has the potential to be part of an “A” wave as another 5 waves down in Minor degree sure might have a hard time as there may not be enough room.  Even a zigzag decline can crash to new record lows but that remains to be seen.

At this time the record low has a Gold/Oil ratio of 24.18:1, which is getting cheaper but that doesn’t mean we are at an extreme just yet. A Gold/Oil ratio of 30:1 would be better, but if crude oil rallies in the short term, this ratio will start to compress again.

The storage and pipeline networks have seen some extreme fluctuations, which in the longer term, will distort any supply-demand picture that is forming. I don’t rely on supply-demand numbers as there is no honest reporting that we can count on. If we think we are getting honest numbers from, Russia, China, Iran or any other dictatorship then we are just fooling ourselves.

The last month of the year could put supply numbers in focus again as the holiday season could kick in driving and flying plans. Until the airport gets buried in snow and all flights get canceled.

 

 

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US Dollar Daily Chart Bullish Update

 

One of the reasons why gold is not really soaring in price is because the US dollar is in a bull market, and not in a bear market rally. Sure, we will see the US dollar tumble, but that will happen during a bigger degree of a correction. The US dollar started getting a bit more choppy recently which can mean a correction is still in progress. The US dollar can still take another dip to the downside before it resumes its bullish trend.

Waiting for the US dollar to turn into an extended bear market is not going to happen at this time, even though commercial hedgers are in net short positions already. The commercial traders do not confirm bullish COT positions in gold or silver, so I’m pretty confident gold and silver will still act rather subdued in the near term.

Longer-term, the US dollar will soar above the 103.820 price level which would be another all-time record high since the major 2008 bottom. Wishing for a 2001-2008 like US dollar decline is just wishful thinking because there is no room on the charts for that to happen. The Euro is inverse to the US dollar and I’m sure it’s not going to jump out of the USD basket today or tomorrow. This trade war thing started well before President Trump got into power, so you can’t blame all market woes on President Trump. The massive debt bubble that China is creating has been bursting which makes the US dollar the go-to currency of the world.

Have you noticed how fast GM shut down production in Canada and the USA? It’s more a snub towards President Trump as I’m sure any plants outside the US or Canada will be the last to shut down.

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Mini DJIA Intraday Rally Update

 

In the last 3-4 days, the DJIA has been in a rally which I still consider as being a bear market rally. There still may be some upside to go but this stock rally should run out of steam this week. Chances are also good that the general decline may have to get adjusted as a diagonal wave structure, but it’s not critical at this time.  Either way, I’m looking for 5 waves down in Minor degree which should finish at a Primary degree, “A” wave bottom.  From an Elliott Wave perspective, large degree “A” wave bottoms are, “Buy” signals.

The Gold/DJIA ratio was about 20:1 which my database shows as still being extremely expensive to gold. It requires 20 gold ounces to buy one unit of the DJIA which is a far cry away from the 7:1 ratio it was when the DJIA was cheap. That day will come again, but we may have a long way to go before the Gold/DJIA ratio becomes cheap. There are still too many stock bulls around when they scream, “Buy On The Dips”!  We will get our dip, but there will be many more dips if this is a Cycle degree bear market.

Investors run from low prices in stocks, as they did at every major bottom since the 2000 peak. In the real world, shoppers rush to lower prices but they love to do the opposite in the markets. That would be the same as only buying high priced gasoline at your local pumps.  When the markets start to point down again, then they are also selling when they are in a mini-panic situation. VTX is splitting up so the internal composition of the DJIA 30 will change. If it makes a major change to my wave counts remains to be seen, but most of the time I have noticed no change.

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T-Note Weekly Chart Update

 

Waiting for the Fed to see what it is going to do seems to be the favorite pastime for Fed watchers.  They may still raise rates but at the same time, they can also “Pop” the market bubble top.  What we have is a potential completed zigzag, which means this is a correction in a 37-year bull market. Even after the Fed does serious damage, and starts dropping rates, that will be no guarantee that the market even cares. They dropped rates during the 2008 crash many times and the markets ignored all of them.

Rates are dropping already as demand for loans are drying up! T-Bonds are in a bull market that will push to new world record highs, which looks like we could be heading to a Cycle degree wave 1 Peak.  This could take years to play out but a big correction may have nothing to do with the Fed as market forces can force T-Bond prices to fluctuate wildly.

In order for this to get confirmed as a correction then T-Bonds must soar to new highs eventually.

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US Dollar Intraday Bull Market Update.

 

When I see this US dollar chart, it sure looks like a bullish move to me.  Even with all the Trump rhetoric, the US dollar is taking it in stride. I’m starting to push my degree levels to the point I may run out.  When that happens then a bigger review will need to be done. The US dollar has demonstrated to me that it remains in a bullish trend, which started way back in 2008!  It may take the rest of the week or longer, but the USD should show us new record highs.

Anything above the 104 price level could be the setup for a major USD reversal. All other currencies inside the US dollar basket should react positively as well. One way to look at it is that we include gold inside this basket, as it acts inverse to the US dollar very well. Demographics is the main driver of the US dollar as very few even look at the generational impact of the aging boomers.

Breaking out over 97.700 would be the first hurdle to cross, but an impending small double top could put up a good fight. Some analysts are saying that 2019 could be very positive for gold and I see no problem with that, but I would like to see my wave count of wave 3 in Primary degree start to arrive first.

 

 

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NVIDIA Cycle Degree Crash In Progress?

 

 

Since Nvidia has started to implode in a dramatic fashion, is it time to buy the “Dip”?  That might work in a bull market but the bull market is over!  The crash of Bitcoin miners sure had an impact on the Nvidia stock price. There is far more pain coming for those that think we are still in a bull market. My bottom trend line might not hold back anything as there are also several gaps still open below present prices. We do have a huge open gap above current prices, but this gap can remain open for decades. The mania tech bubble of 2017 has come to an end and if we have no idea what happens after a tech wreck, or “Any” other financial wreck still to come, then we would still be far too early taking any long positions.

Markets return to their previous 4th wave of one lesser degree, but in bear markets that can just be wishful thinking. NVDA can fall well below my Intermediate degree “B” wave bottom location at the $15 price level.

None of this wave structure will work under true Impulse wave counting methods, as this chart belongs in the Diagonal world which most wave analysts ignore. Everything that NVDA produces is commodities related, but also security has become a major issue.

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Shanghai Bear Market Review

 

 

The majority of the world may be fooled by the propaganda of the China miracle rise, but I’m not! Everything regarding China is built on debt as their money printing skills make the USA  look like rank amateurs. What brought the 2007-2009 markets down with toxic investments is now being used in China on a scale not even imaginable! I have a very large following from China but the news is censored and false news is rampant. A chart is about the only truth we can see regarding investing in China.

Since the 2007 peak, the Shanghai index tried the second time to break out but failed miserably so far. I see the secondary top as an ending to an inverted zigzag which started back in late 2008. This “A” wave bottom in Intermediate degree would be the point of origin. Returning back to the point of origin would prove this 10-year-old bull/bear market is just a fake like all the other news coming from China.

China Uncensored is an attempt to give us alternate news and I have watched about 20 episodes in the last few weeks. Search out the “Bike Sharing Video” and you will see how markets really work under communist economic logic!

I have no Gold/Shanghai ratio database setup but at present, we are sitting at about 2.10:1 which means it takes about 2.10 gold ounces to buy one unit of the Shanghai stock index.

If we are lucky the Shanghai could also see an “A” wave bottom when the DJIA does the same thing this year or early next year.

If there is one country that can bring down the entire world financial system and that is China. I think big tech companies trying to get a foothold in China have compromised their own security and all their customer’s security as well. Apple is no exception!  In a tech bear market, all the horror stories will come out as bearish news becomes a top seller!

 

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Bitcoin Crash Review

I have mentioned it many times in the past that Bitcoin would eventually crash well below that $4000 price level. $3846 and counting as the Bitcoin crash is far from finished.  A report suggested that 600,000 miners have shut down already and I’m sure there are far more closures to come. Bitcoin investors are running on hope as below $1000 is the most likely price target that will still get hit! This is in Log form so that we can see the previous big low more clearly.

When Bitcoin no longer keeps going up, then Bitcoin eventually will look like any Tulip Mania price chart. It would not surprise me if Bitcoin crashed between $200-$400. All interest in Bitcoins will have died as the experiment of creating money from nothing fails again.

There is no reason why Bitcoin prices should take off when the tech sectors around the world are getting hit hard!  Folks, some of the worst or crazy bullish price forecasts have been made in the Bitcoin world and none of them will come true. Wild forecasts in any asset class hardly ever come true, as the $2000 gold price forecast is over 40 years old! Now the wild gold price number has switched to $5000- $10,000.

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OVX: CBOE Crude Oil Volatility Index (INDEX)

 

Terror has struck the Oil markets as crude oil plunges and OVX soars!  This OVX also is tied to the USO oil fund, so looking at the OVX will shed some more light on how deep the oil crash can still go.  The maximum spike to the upside registered about 95 in this chart.  Following the spike, OVX crashed and has now worked its way back up, to the point where stiff resistance can occur. We are presently at about 65, with the 80 price level coming up fast.

The chances that the OVX can make a double top are good right now, but 100 would run into my top trend line, adding another roadblock for the OVX in the near-term.

When it comes to fear moves, they all come to an end sooner or later as fear levels can’t be maintained forever. WTI crude oil has crashed and now has a Gold/Oil ratio of 24.25:1, which is so far the cheapest ratio I have measured during all of 2018! If the Gold/Oil ratio is going to hit 30:1, this would push crude oil to the extreme side.

Once this fear gauge reverses then chances are good another spike to the downside will occur, but it will take its sweet time about it. Any bearish scenario will have to show a correction of some type if the OVX is going to make another dash to a new record high. Only time can clear this up, but the Christmas holiday season can make for some stunning reversals.

Combine, the trade wars, with congested pipelines that can’t move the oil fast enough, this makes for a very distorted fundamental picture. Besides that, President Trump has been trying to crash the oil price for months as well.

In the long term, world economies are going to fail in spectacular fashion like Venezuela that has a million percent inflation rate, created by 2 dictators. The biggest bubbles and the number of different bubbles come from China, which makes North America look pretty tame in comparison.

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SPX Bear Market Update.

 

This morning the markets have resumed their bearish mood, which is far from finished or even getting close to being oversold at this time.  That day will come when all those Apple stock investors have sold out, or when the majority think there is no “Hope”! It was the late January peak that was the real peak as I have to keep the expanded pattern alive. Missing or ignoring any potential expanded top anywhere will screw up any wave count. Any large degree expanded top has huge forecasting qualities built in, as I already know that by 2029-2041 all markets will exceed the September peaks by a wide margin.  This will not happen until after Cycle degree wave 4 has completed with stock prices crushed down to the 700-800 price level.

When everyone is screaming for lower and lower SPX prices then I would be confident in calling for the SPX  to hit 3400-4000. This will not happen until solar cycle #24 has ended and all the science blogs have declared the start of Solar Cycle #25! Those investors that see it coming and can wait for the next 3-4 years will have the power of solar cycle #25 working for them.

The exact same thing happened in 2008-2009 and that produced a 10-year bullish phase. What do you call the solar cycles? Fundamental or Technical indicators?  Solar cycles will demolish any bearish wave counts at that time, and if the majority of wave analysts do not realize this, their bearish moods will get terminated and they will miss another super bull market.

The 2530 price level may give temporary support for the SPX, but you can never rely on prices to make long-term investment decisions. We are living in a “Hyped Up and Inflated World”,  and no little correction is going to address those issues in a short time. It took 3 years from the 1929 peak to the 1932 bottom and that was a Supercycle degree crash so a 3-4 year bear market is not unrealistic at this time. This bear market should also be longer than the 2001 and 2008 declines, as they were all lower degree level bear markets.

 

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DJIA Intraday Bear Market Update

After the stock bears stopped for their Turkey dinners, they seemed to have resumed their decline.  At this time my wave positions haven’t changed all that much but there will always be adjustments and fine-tuning along the way.  It may take far more downside before the majority start to clue into the size or scope of the impending bear market.

When the small minority start to see the bearish scenario all at the same time then a mini panic usually occurs. Black Friday shopping and Black Friday stock market panics are not the same things!  🙂

I will keep this update fairly short, but most of the indices I cover have similar wave counts.  Trillions of US dollars has evaporated (lost) in a puff of E-Smoke already,  and I’m sure deeper losses are still to come this year.  Money destruction is hardly ever associated with “deflation” but that is exactly what is happening.  This is now the third episode of money destruction since the 2000 peaks. It’s far from over as the 2016 lows might give the markets some temporary support.

Any market rally that does not act like it’s in a real bull market, will just be another bearish rally. “All” bear market rallies retrace themselves eventually, and the size of these bear market rallies depends on the degree level we think we are in.  Sorry, but any Cycle degree bear market is not going to end in just a few months, or even in a few years, as this could take until 2022 to play out!

 

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January Crude Oil Weekly Chart Update.

 

So far the oil crash has been un-eventfull, but analysts make it out like it’s the end of the world. The talking heads will always find a reason, “Why” oil or any asset has crashed because it’s their job!

The news is all about fundamentals, but fundamentals are always lagging indicators and change like the wind just as fast.

The fundamentals I find important is the COT (Commitment Of Traders)report, Market Vane Report, and the net long or net short positions of the traders. Right now, oil is just a bit above the 200-day MA.

Today the Gold/Oil ratio hit 22.41:1 which is the cheapest oil has been all year when we use gold as money.  At 22:1 this is not nearly extreme enough to expect a huge rally to bounce from, as 30: would start getting close to being oversold.

China Inventories Rise 416%

That is a big jump in inventory levels, but it’s more profitable to store oil at low prices as the smart traders that do that use big crude carriers as floating storage units. That usually happens near a big glut, which I don’t see just yet.

If by some odd chance that the world calls it an “Oil Glut”, then I know the oil bearish phase is over, and a new bullish phase will start. You may laugh about that, but its not rocket science folks. The first glut in late 1999 turned $10 priced oil into a $147 oil price by the 2008 peak. The experts went nuts in 2008 forecasting huge price gains still to come, but what really happened is the oil price reversed and crashed to about $34! During that same time, oil traveled from a Gold/Oil ratio of 25:1 to 9:1 in about 8 years.

Oil markets have always moved in the opposite directions than what the fundamentalists are telling us! All the squawking about $100-$300 oil just being around the corner has dried up!

The smallest move up in the price of oil can bring back any $100 price forecast very quick.

At the intraday scale, it sure looks like a potential expanded pattern is in progress, where some violent upside can still happen. I don’t think this decline is resolved, as another zigzag may yet develop but it’s still too early to tell.

 

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US Dollar Intraday Update: Is The Bottom In?

 

This morning the US dollar spiked to the downside and then instantly turned back up. Now we have to see if we keep getting higher lows, as that is one sign of a bullish phase cranking back up.

One thing I like to stress is that the commercial hedgers are net short by a wide margin, but I have also witnessed them make dramatic changes from one week to the next. Besides those commercials are net short in the precious metals which I think could have far more power than one single asset class. Commercial traders don’t have the same agenda as non-commercials do as they work inside or with the people closest to the industry.

Many Gold investors may wish and pray for the US dollar to implode but that is highly unlikely this time. The 2008 low in the US dollar was a.”Major” low that I documented very well. The US dollar also produced a giant falling wedge, about 23 years long. By itself, this type of wedge is extremely bullish, so it’s not just about any single wave count.

I spent years looking at the US dollar as a big bear market rally but every bearish wave count I came up with would never last for very long.

A new record high will help to confirm that the bullish scenario is alive and well!

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Palladium 1980-2018 Review

If you have never seen a wild and choppy bull market then here’s one. Not until I applied diagonal wave counting to all my commodities did this pattern make any sense. We just hit a new record high at about $1178, and Palladium has backed off a bit this morning since then.

All the peaks are connected with zigzags, except for the 2008 bottom which ended up being a running flat, with a near picture perfect zigzag crash into the 2003 bottom. From the 2008 bottom, another zigzag bull market developed with an expanded pattern for its “B” wave correction.

Any Cycle degree bear market will crush this Palladium chart and initially, Palladium could reach my previous “B” wave bottom in Intermediate degree. This would be close to the $832 price level, but it’s still not the end of any bear market.

I never apply conventional market correction calculations, as commodities are in a different world. Soaring to extremes and then crashing down to an extreme is pretty normal. Commodities are in a Submillennium degree wave 3 diagonal wave structure that started way back in the Little Ice Age.

It was the Roaring 1920’s when it all changed as that was the first time that ordinary investors got the investing bug and they also invented new types of assets during that time period. This is very obvious if you look at the charts before 1920.

Technically speaking, another zigzag should develop but it will be one degree higher as a zigzag in Primary degree.

Commercial hedgers are net short by a wide margin, which should start to turn as a Palladium bear market becomes more obvious to the talking heads.  It’s the non-commercial traders that always get caught in a trap as they seem to love chasing bull and bear markets.

 

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Mini SP500 2016-2018 Review

 

I’m sure the entire planet is trying to figure out how far or how deep this bear market will go. Most of the time markets will come to a grinding halt at some previous bull market support. In this case that would be the 2016 low. (2000-1800).

I will also keep my expanded pattern alive as it is already telling me that one day, all the markets that have this pattern will get retraced in another bull market, but it may take 10 years or more before a new record SP500 high will ever get recorded.

I have mentioned many times that all the President Trump market gains will burn up in a puff of electronic smoke.

From the 2016 bottom we had a 2-year run to complete a move in Intermediate degree, so when the market retraces back to those levels, they would have retraced an Intermediate degree move. Since it would end with a run of 5, I always have to cap it. If I see “any” 5th wave uncapped, then I know those wave counters don’t have a clue where they really are!

This would be the “A” wave in Primary degree and “A” waves are usually “Buy” signals, but they are not the starting waves of a new bull market.

Any “B” wave in Primary degree will also be very choppy, which will be the first clue that it’s just another bear market rally.

It may sound crazy that the SP500 will crash down to the 1800 price level, but we are dealing with a Cycle degree bear market, the likes we have not seen since the 2009 lows.

Tech companies inside the SP500 are imploding with Facebook, Apple, and Nvidia leading the way. This should not be a surprise to any serious market observer as this is starting to happen for the third time since the 2000 tech bubble. Three bull market peaks have blessed the smart market timer, but those party days are over, at least until after 2022.

Solar Cycle #25 should kick in so the younger investors will enjoy the power of the sun. In 2008 it was Solar Cycle #24 that kicked in and it supercharged the markets until January 2018.

The Gold/Sp500 ratio has changed little and is on the expensive side of 2.2:1.

Some say there is no place to hide from this turmoil, but we also “always” have a choice. Any investors that are getting close to retirement should be extra cautious, as my generation got hit hard, and escaping into cash would have at least saved some capital gains.

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DJIA Intraday Downside Resumes!

This is a quick update and it may be the last one before I switch to the March 2019 contract. They run 3 months at a time but the volume is still a bit light in the March 2019 contract. Since Sunday night the DJIA has started to resume its decline after the Minute degree wave 2 completed.  In this case, it is impossible to give any price support forecast, as you have to ask “Support for what”?  The support that will make the DJIA soar to new extremes, or just temporary support that might last a few weeks or so?

If my 5 wave sequence is real then wave [i] support will never hold. Any bear market rally like this always retraces its entire bullish move, and I expect nothing less.

I checked the Gold/DJIA ratio this morning and it was one of the most expensive readings yet! It takes over 20 ounces of gold to buy one unit of the DJIA, from a max reading of 17:1. Cheap would be closer to 7:1, but that will not happen any time soon.

Longer term I think the markets will crash at an “A” wave in Primary degree but that won’t happen until Minor degree waves 3-4-5 has fully played out.  I would need another 3-4-5 wave as Minute degree also needs to play out.

There still hasn’t been an extension to speak of, but I’m sure it will show up one day. This type of 1-2, 1-2 wave count can be the setup for an extended run, but the last 5th wave could extend as well.

The 2018 January peak is the real peak and the third bull market peak since 2000. Each bear market since 2000 has been worse as each bear market bottom was also one degree higher.

This bear market is going to be much bigger than the 2007-2009 bear market was even though the markets may never break below 2009 lows.  This Cycle degree bear market will be a bit longer than what 2008 was. The 1929 bear market only took 3 years, but this decline could take a total of 4 years. 2018-2022.

I can see it already when the talking heads are calling for DOW 5500, you can come back and I will have a DOW 34,000 forecast.

 

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FXB: Invesco Currency Shares British Pound Sterling Trust (ETF)

This FXB chart is an ETF that seems to act very well to the regular futures charts I use. There are little differences but not enough to impact major changes from the British Pound futures charts.

The big thing is that this ETF follows as close as possible to the futures charts, not like all those leveraged funds do. It also shows the late 2007 peak which matches the oil peak. Markets started to crash 2007-8 and this ETF crashed right along with the stock markets as well. Gold also imploded as the US dollar exploded in price from 2007 to 2009.

For well over 5 years the FXB went sideways with many rallies and crashes. From 2009 to 2014 that sideways market has been confirmed to be just a big bear market rally as the 2016-2017 crash bottom, completely retracing back to the start of origin, which was the early 2009 bottom.

When some gold experts tell me some forecast where the FXB is going to jump out of the US dollar basket, then they are forgetting the inverse relationship that’s always present

That brings us to our November 16th bottom as I was bullish but it is not responding as bullish as it should, so I have to look at this as a good chance that more downside is still to come.

There is so little price cushion to spare, so any day next week we could see support just melt away!

There could be a new downside to come and it will not be the over or end until a new BP record low is achieved. The way I see it at this time is that the British Pound can land at the same Primary degree “A” wave bottom as all the USA stock indices, silver, Cad, Euro, and gold. I’m sure there are a few more I missed to mention. It’s not about one asset class that may turn, it’s the majority as they are all connected.

In the long run, the BP could be a flat and this bear market is just the zigzag intro. We could get another zigzag bullish phase but once that has been completed, the 5 waves down in Intermediate degree show happen. That’s one thing zigzags and flats have in common they have same 5 waves down their “C” wave slope.

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Gold Daily Chart Rally Update!

I’m sure that gold investors are jumping up and down with glee this morning as gold made a great looking vertical move to the $1224 price level. I take it as another gold bear market rally as gold has to impress me by the 50-Day MA line becoming support. Silver moved as well but silver is just getting close to the 50-Day MA.

The Platinum chart looks like this daily chart except it went sideways and flat before it crashed to new record lows.

The speed of the rally should give us a clue that it could be an emotional rally, not the start of a real trend.  Emotional buying for FOMO reasons never last. The US dollar would have to keep imploding like it did this morning.

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British Pound Crash Update!

All this looks very bearish as the British Pound futures imploded this morning again. Sure the GBP can still crash and if this is just a bear market rally, then the 2017 bottom will never hold. The commercials do not support the public bearish view as they have very large long positions open with the GBP.

It would be something if the pattern is a 1-2, 1-2, 1-2 wave count. This wave pattern can produce an impulse move that is pretty rare and one more small 1-2 wave structure should appear. 3 sets of 1-2 wave counts after the wave 2 in Intermediate, is about the maximum that we can see, as they will be pretty small after Minuette degree. Either way betting against the commercial hedgers is a futile activity, as it would only give out short-term gains at best.

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T-Bond Bullish Review!

So far the October low in T-Bonds has held and T-Bonds have been in a bullish rally since. We also have a higher low which is also a very bullish sign.  The Fed is already making it very clear that a “Pause” in rate hikes is coming in 2019! Rate hikes have drained the markets of liquidity and are killing the stock market bull run at the same time.

https://www.bloomberg.com/news/articles/2018-11-16/fed-rate-pause-possible-in-2019-as-powell-highlights-headwinds

The Fed may not talk about the falling stock market, but it will do everything in its power to stop the markets from imploding.  China has also made it pretty clear that they will do everything in their power to save their stock markets from crashing. This is nothing new, but dropping rates in the 2007-2009 crash pushed stocks lower, as investors just wanted out at that time, and I’m sure this will happen again as T-Bonds can keep right on soaring.

I may have to change my bottom wave count in the future, but for now, a bullish phase is what I’m looking at. I want to see more evidence this T-Bond rally is serious, as diagonal runs look and even act like bear market rallies. TLT touched a new record low and it has started to rally as well.

T-Bonds have been in a bull market since 1981 and T-Bonds have a 120-Year cycle to them that can also divide into 60-year cycles as they did from 1861 to 1981. When bonds rise in price then this takes the pressure off the Fed to keep raising rates.

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Natural Gas: Impending Correction Review?

The vertical move in the last day or so cannot be maintained as past historic spikes have obviously confirmed.  I understand a cold spell may have set this off, but what else is new. It’s the vertical move that could be the end of a run and not the beginning.

I also have an “A” wave peak in Intermediate degree but I have other choices as well. This bullish phase has been running since 2016, and since looks like an inverted zigzag I have look at it like’s a bear market rally as well. If this is a bear market rally, then a complete retracement of this NG bullish phase.

We’ve had three bear market rallies which all were completely retraced, so who says we can’t get the 5th bottom?

With my “A” wave peak then chances are good no new record low will happen but a good corrective wave has to form to convince me otherwise. Natural Gas is another prime example of diagonal wave structures, as there is nothing but overlapping wave structures everywhere.

For a correction, NG could drop well below the “B” wave bottom I show, and it would take time to play out. FOMO is also always part of any move, but so is fear of losing.

The commercial traders are short Natural Gas, but not by that much.  My Market Vane report this week showed about 77% bullish which is pretty high, but may not go to an extreme. Anything above 90% bulls, we are entering the extreme side of prices after which they can implode.

 

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US Dollar Intraday Bullish Review!

The US dollar may not be finished just yet, as one more plunge can also still happen. The small open gap is now closed off and a small H&S pattern is also forming. Higher lows is a sign of a bull market, and so far the US dollar index is still creating them. The idea that the US dollar is in a bull market sounds impossible to comprehend by many, but everybody on the planet hated the US dollar in 2008 but yet the US dollar turned and then soared. I spent years counting the US rally as a bear market rally, but my wave counts were trashed many times.

2008 was such an extreme bottom for US dollar which most people are not aware of.  I remember it very well as I had the USD 2008 bottom extremely well documented. 2008 was also the ending of a huge falling wedge, which if they are ignored can produce very violent reversals. We are getting close to a 10-year US dollar bull market where 5 waves up in Primary degree are in effect. Wave 3 in Primary degree would still be in our future as that would represent the increasing “Buying Power” of the US dollar. The Fed action of raising rates is draining liquidity out of the markets which is exactly what raising rates are designed to do in the first place. When markets crash then trillions of dollars will go up in smoke in rapid fashion.

At that rate, money will be destroyed and it would take a 2000 horsepower turbocharged engine driving the printing presses to build it all backup!  When the world is choking on debt then no matter how low rates may go they no longer have the stomach to take on more debt.

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S&P Midcap Death Cross Update

Investors already got a good taste of what a Death Crossing can bring. The 50-day MA has crossed the 200-day MA in this daily chart, which they call a “Death Cross”. Many have no clue how damaging a death cross can be, but we have plenty of examples of real-world bear markets imploding after the death cross. If the wave 2 in Minor degree has completed then the wave 1 price support at 1769, will definitely not hold.

Looking for 5 waves down is my first choice but we are still a long way off, before wave 3-4 in Minor degree arrives.

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Crude Oil Crash And Rally Update.

Crude oil created a fast move to the downside which usually happens just before another turning. On the daily chart this left a nice spike and the potential for a turning as oil bears could be in a small bear trap. Crude oil stopped dead at $54.90 and has now been in a rally that may not be finished. We could have  landed at a potential “A” wave in Minor degree, but we need time to help confirm this.

Any “B” wave can be a flat type with the first move being a zigzag. Two zigzags back to back and then 5 waves up in Minute degree could finish this rally. That’s if we were in a perfect world, as oil could drag out going sideways in a triangle nightmare as well.

What I really noticed shortly after the oil bottom on the 13th, was that the amount of bearish news just exploded and became, “Intense”. Opec is freaking out as they try to cut production again. The oil world is in such a turmoil state that fundamentals can change very fast from one week to the next.

https://www.cnn.com/2018/11/14/business/oil-prices-opec-what-next/index.html

One announcer called it the end of a 10-year bull market in oil! What? It was early 2016 when we had our last world oil glut which is not even a 3-year bull market.

The Gold/Ratio got a little better but is only a bit over 22:1,  which is nowhere near any extreme at this time.

Crude oil could also slip to a new low but then reverse just as fast, as an expanded bottom can still happen as well.

 

 

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Apple Stock Crash Update.

This is for the people that must have trend lines, so I added a few lines that are important from my perspective. Most of the time I draw all these lines offline, but I don’t always publish them.  I went back to the 2015-2016 bull market which is where most indices also corrected with the same wave count.  The news that Apple and Amazon are hooking up destroyed this stock as all the mall stores will lose customers.

If Apple retraced back down to the bottom bullish trendline, then this would only get us closer to a single Primary degree bottom. Apple stock imploding from the Fibonacci $233 price level is not a surprise, as stocks also implode from the $55 Fibonacci price levels.

Every Fibonacci price drop is a 61% crash which we might get two of them.  The entire Apple wave count has always displayed diagonal wave structures, this is why I have no Primary degree wave 5 peak labeled. It’s a Primary degree “C” wave.

Without a doubt, this Apple stock was in a mania blow-off in Cycle degree. Any mania does not end with an 18 or 20% correction, as most of the time markets fall back to the previous 4th wave of one lesser degree.  That would get us closer to that $89 price level.

Apple was in a Cycle degree peak so, at a minimum, we have to see another Cycle degree bottom. 3 waves in Primary degree is what I will be looking for, which could also take until 2022 to play out.

Investors are going to learn what the real price value of Apple’s stock is in the next few years.

There is also a minimum of 3 gaps still open below present prices and I bet at least two of them will get filled.

The most extreme Gold/Apple ratio registered at about 5.27:1 on September 10th. It has been hitting the ratio brick wall and has now started to spread again. Still at a 6.34:1 ratio this morning, Apple stock is still extremely expensive to the price of gold. Cheap may come closer to the 21:1 range but that is only a reference. The gold ratio price brick wall would get hit first.

Some will never believe that Apple stock can even crash, but the size of this Apple bear market all depends on what degree this 2018 mania peak was!

 

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TLRY: Marijuana Mania Crash Review!

Smart investing is all about being in the right place at the right time, so do you think TLRY was a good buy when it hit $300?  This move is all about FOMO and it has nothing to do with fundamentals. Who in their right mind would buy into a vertical move like this?  Who was that greatest fool, thinking that the $300 price is a good deal?

The market punished these fools, with close to a 70% price crash below the $90 price level. My main interest is about the mania that has been surrounding a new industry, but some of these investors could have been sampling the product when they hit the “Buy” button when TLRY hit $300.

I do not give any investment advice on any single stocks that I post, and I have no holdings in pot-related companies at this time. I’ve had people ask me if it’s time to invest in pot stocks, and my simple answer is in the form of a question, “Do you have a trading account or investment account open”?  The answer is usally, “No”. This just shows how insane any mania can get when people what to invest, that have never bought or sold any stock in their life!

I guess TLRY is in a bear market when it hit a 70% decline. Stories about pot shortages did not happen in Vancouver.  Most of those dispenseries never missed a beat as they were open under municiple by-laws, not federal laws.

 

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Crude Oil Daily Chart Crash Update.

It could be a bit early, but I think a reversal is coming as crude oil is forming a great looking spike with this daily chart.

WTI crude oil price is also approaching the Fibonacci $55 price level and potential support going back to early 2017.  It could be a violent reversal as some fundamental news will come out and get the oil bulls all excited again. The $56 price level is a far cry from the $100+ price forecasts they did have. The Gold/Oil ratio improved nicely and is now sitting at the 21.42:1 ratio. Oil still has a long way to go before this ratio turns extreme, but in the short-term, a rally should ensue.

They have already declared oil in a conventional bear market, but from an EWP perspective, the entire bull market could be a bear market rally. Using stock market descriptions in the commodities markets is like mixing oil and water, they will not work if we don’t understand how big bear market rallies can actually get!

How high the counter rally could go is just the best guess, but $60-$67 will start to give crude oil some resistance. Wave 1-2 rally or a “B” wave rally in Minor degree would also work.

The crude oil price is still crashing as I post, so trying to catch a Falling Knife, will put you in the read very quickly.

Any choppy counter rally that we do run into would be a small version of a “Bear market rally”. The 200-day MA is at the $64 price level after which the Death Cross on a daily chart could also happen.

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US Dollar Bull Market Correction Update

Since the top of the September in stocks, this US dollar chart has also been on a bullish phase that the contrarians said will never happen. Well this USD bull market just keeps on going, and going  even though the commercials were net short by a large margin. I was pleasantly surprised last week as the commercials added to the bullish side and they removed  some contracts from the bearish side.  The 2008 bottom with the USD was an extreme the likes that only comes along once every 30 years. The USD bull market is only 10 years old, but it sure looks like it’s running a set of 5 waves in Primary degree. Wave 3 in the Primary degree is still ahead of us. Wave 3 peak would coincide with my “A” wave bottom in my Gold wave counts.

This correction could still make some twists and turns as this correction may not be finished today.

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Silver 1980-2018 Monthly Chart Review

 

I spent years counting out this big silver chart, with idealized counting methods. This never made sense until I accepted the fact that commodities run under a different idealized pattern. Why did the 2011 peak barely break to a new record high while gold soared well above its 1980 peak?

They are all diagonal waves structures which defy EW accepted logic but when we accept them as being normal wave structures of the diagonal kind, then it’s a different ball game. They are all connected with zigzags and they run in 30-year cycles which tracks the Cycle degree peaks and valleys. The entire wave 3 in Submillennium degree is a diagonal wave structure, so this silver chart will not smooth out any time soon.

Counting backward 60 years from the 2011 peak gives us another Cycle degree peak in 1950-1951! Count backward another 30 years to 1920 and that would be close to SC degree wave 1-2. 2011 to our present 2018 low is not 30 years no matter how much we try to twist the math. Supercycle degree wave three in metals will not arrive until 2041.

Silver has not finished any major bear market, as last week the COT reports sure did not favor silver and most of the other precious metals as well.

 

With the commercials turning net short on silver, there would be little hope for some huge silver bull market to materialize until these COT numbers start to shift into net long positions.

The worst thing we can see is the Kiss Of Death between the 50-day and 200-day moving averages is going to give us another “Death Cross”!

Silver is only 50 cents away from breaking a new bear market low! How does that work? Silver makes a new bear market low while gold is going to soar? NOT!

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