When markets crash they create the headlines and GE is no exception. Hedge funds are dumping stock (selling low) as they panic to get out of their long positions. I will not keep detailed wave counts on GE, but it sure looks like it has been close to an 18-year bear market. Every attempt to go higher was trashed and GE resumed its decline. This is just a quick look at the GE stock and I do have alternate wave positions as this double zigzag could also be a diagonal set of 5 waves. Either way, a new bear market record low should happen. Below $5 would be my obvious choice which could also be the “A” wave in Primary degree, that I’m after. If that is the case then any substantial rally should give us another rocky bullish trend.
I had no Gold/GE ratio database started, so I checked a few of the extremes to see how expensive GE was when compared to the gold futures cash price.
Starting back at the top in 2000 the Gold/GE ratio hit 5:1, that was an extreme just about matching the 2018 Apple peak. Then from the 2000 peak, GE crashed into the 2009 bottom along with the general markets, and the Gold/GE ratio exploded to 100:1. Then the bull market that ended the Great Recession compressed the Gold/GE ratio back to about 41:1.
In early 2016 the bottom fell out of the GE price as support seemed to be non-existent. Today this Gold/GE ratio is sitting at 150:1 which makes it cheaper than the 2009 bottom already! I’m sure the spreading of the Gold/GE ratio is not finished. One would just about have to take weekly ratio readings, to catch it when the Gold/GE ratio starts hitting a price brickwall.
With COT charts like this, we just look at what is above and below the line and by the looks of it, there seems to be little interest on the commercial hedger’s side to build long positions. I’d rather see extremes first before I turn into a CAD bull and so far we are far from it.
Since the 2017 peak our CAD has been grinding down and all the gold investors need for our Canadian Dollar to soar! That has not happened, and it even seems like a new record low is still to materialize. From July to about September the CAD was on a rally with some insane overlapping wave structures. Short term Bear market rallies behave just like this and “ALL” bear market rallies retrace themselves sooner or later. This small bear market rally will be retracted when the CAD hits below that .75 price level.
What the public calls a bull or bear market is not even close to what I use as we can get a 61% correction in a wave 2, and get a 40% decline for a 4th wave bottom. I’m sure nobody called the end to the CAD bear market rally in 2017, but we know the majority were all very bullish. Since the 2017 peak two support price levels are retraced and now we are going to face the 3rd one in a few weeks or so.
This is the Euro daily chart which had its last major peak February, 16th, 2018 at the 1.22 price level. Since then the Euro is showing its bearish side as the Euro slides and creates a Death Cross as well. A Death Cross is about as bearish of a situation that we can run into, but most analysts ignore them.
On the weekly chart settings, the Euro is sitting close to the 200-day MA and has dropped below it a bit.
I’m sure analysts will not be screaming, “20%”, bear market territory anytime soon, because the Euro bear market started back in 2008, about 10 years ago. 2008 was also the oil bubble peak!
Any Euro wave count is basically an inverted version of the USD, and early this morning Euro support crumbled sending the Euro to a new bearish low. I will be the last guy to tell you where support is because you also have to ask support for what? Is the Euro going to pull off a miracle turning on some bullish news flash? News can give us short-term moves, but it takes much more than just some fundamental news report to turn a trend.
Trying to stop a trend with a news release is like trying to stop a semi truck by jumping in front of it with a big flash card! The COT report below shows little interest in building long positions on the commercial hedger’s side. The 1.03 price level can give us support, but that may just be the 4th wave support which I’m looking for.
Remember, all those gold bull investors foaming at the mouth? They need the Euro to sail north, not south like it has been doing.