Daily Archives: December 5, 2018

Mini SP500 Daily Chart Death Cross Update

 

With the wild moves going on in late trading this March 2019 contract charged up and then down again when the bears attacked again. This time the 50-day MA sliced across the 200-day MA which is the classic technical indicator called a Death Cross. I have a slew of Death Crosses forming and now we have another one. These Death Crosses forecast long-term declines and the Death Cross on a weekly chart is way down at the 2340 price level. My best bet is that any wave 3 decline could slice right through that price level with ease. This fast drop could have ended at my first wave 1-2 in Minute degree then I would only look for 1 more set in Minuette degree. I might need an electronic scanning microscope to see the smaller waves. If the wave three extends then even the 5th wave could extend so this bear party is not over by a long shot. Don’t blame President Trump for all the problems, as it was the Fed that took the alcohol away from the stock partygoers.

This is nothing new as I watched different Feds do the same thing twice before since the 2000 peaks. Since late January, we have 4 bottom support prices showing, and each one of them will get trashed, or rectraced. That would also confirm that from that February bottom up and down again was just part of a bear market rally.

All those misguided investors that just finished putting billions into the markets are now sitting on a Death Cross. Think of anything above the 200-day MA as a group of partygoers all standing on a porch and there are too many on the deck! When the deck legs buckle and snap, then it’s too late to do anything about it. Not too many people listen to a technical analyst, but investing blindly right before the Death Cross is strictly FOMO driven so who cares about some mythical Death Cross!

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HMMJ Bear Market Continues!

 

I’m sure many investors are still “High” on marijuana stocks but I think reality may be setting in for those that didn’t expect pot stocks to crash. I knew they would crash as as this new industry turn into a mania instantly.  This ETF is showing the way and today HMMJ has created another spike to the downside. A correction may come but this market decline is far from over. I think the industry also has it shares of crooks as they just love to take advantage of the emotion. Many big companies have also crashed and the only people that made any money are the ones that participated in any of the IPOs.   I will never turn bullish on this sector until all the ETFs and stocks have been crushed, and even then there is no guarantee they will go anywhere.

The wave count is more like a diagonal which is normal for anything commodities related but they are a bit smoother set of waves. Sure, the price has come down to the point where the Gold/HMMJ ratio is at about 80:1. The most expensive Gold/HMMJ ratio at one point was 49:1 in September  2018.

The dirt cheap ratio was 150:1 so we have a long way to go before this ETF turns real cheap. It may never return to the 150:1 ratio but we may catch it if it keeps heading into a ratio price brick wall.

I don’t have the time or don’t want to spend the time, tracking this ratio as I have a data base of over 28 ratios I’m already tracking. I updated most of them today while US markets were closed.

The potential start of a 5 wave run in Minor degree would match the stock markets wave count as well. I doubt that this will finish this year as it could stretch into early spring 2019.

I think many companies will disappear as margins are going to be razor thin with huge start-up costs involved as well. Then the biggest con of all is that there is a shortage of pot! Yeah right! The dispensaries in Vancouver never shut down. They’ve had their licenses for a few years already and never missed a beat waiting for the rest of Canada to wake up.

If the legal markets can’t supply inventory just yet, then the black market will always come to the rescue.

 

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Algorithms Caused Market Sell-Off?

  This sell-off was caused by a computer-driven ‘footrace,’ Jim Cramer says

We may think that Jim Cramer is full of BS, but he has more knowledge about how markets work and what he says is not just a bunch of hype. The speed of the sell-off on Tuesday was far too fast for humans to be part off. I see them as Algorithms being programmed to sell on certain indicators before the herd gets the same idea. These computer-driven moves will always happen and they are run by hedge funds, that can afford to create the programs in the first place. Flash Crashes work this way which has happened many times before, but they happened in a bull market when after the Flash Crash stocks always went higher. This time that trick will not work if Investor Joe/Jane starts to hate this market and refuses to hit the “Buy” button.

I guess everyone has to learn how to code Algorithms and create AI robots to do all the trading for us.

 

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HDGE Bear Trap Update

 

HDGE runs inversely to the stock markets so I look for the same pattern but I have to look at it as a Cycle degree 4th wave bull market. It will be the wildest bull market you can imagine if the recent bottom did complete wave 2 in Minor degree. HDGE dropped like a rock producing an insane spike to the downside and then reversed in a spectacular fashion. It’s those long spikes to the downside I like to see happen, as they are signals for a reversal or a correction. The only thing that matters now is if the rest of this 5 wave run comes in.

We know a bear trap was forming because HDGE can’t go to zero, and at the $5 price level, they tend to have an inverse stock split, which would have made the news. HDGE should develop 5 waves up in Minor degree and since there is nothing but fear involved this ETF should travel up along with VIX.

I wouldn’t be happy until HDGE goes off the chart, but there could be another 2 sets of 1-2, wave structures we may run across. We should see the next wave 1-2 when it comes, and then after that nothing but 3-4 wave structures will arrive until wave 5 in Minor degree is finished. We are going to run into 5 wave sequences and if I’m out by one degree on this run then I’m out by a Fricken mile.

From here on we should get higher lows which are all corrections. It’s also starting to become obvious that the odds of this 5 wave run finishing this year, is too optimistic as it may stretch into February/March

 

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