Brent Crude Daily Chart Update

This is the June 2019 contract which topped out on February 22 at the $67.60 price level.  Brent crude never made it to the 200-day MA where we normally would expect resistance. Brent is also on a little rally as I’m posting,  so the entire expanded pattern is not written in stone just yet.  Even if another leg up is goning to take Brent to new record highs I would like to see a deeper correction develop. That could take Brent down to the 50-day, MA at about the $60 price level.

Brent is still under the effect of a Death Cross and any Golden Cross is still nowhere to be seen.  The Gold/Brent ratio is at 20.30:1 which is much better, but getting back up to the 17:1 range we used to have.  The commercial hedgers positions are too close to being neutral, so they will just give us false readings at this time.

 

At this time there may not be anymore updates until next month.

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DJIA Daily Chart Review

This DJIA is about the same as the SP500 in how far this bullish move has gone.  The DJIA still has a Death Cross below it even though the DJIA blasted right through both MA lines.  At 24,200 the 50-day MA might give the DJIA some support, but any correction could keep this Death Cross alive much longer.

The commercials don’t have a big bearish position, so this can give the DJIA a bit more wiggling room in the short term.

I’m not going to spent too much time on this update but the Gold/DJIA ratio is still near the extreme expensive side of 19.62, better than the 21:1 ratio I did have back in August 2018.  A cheap DJIA index would be 8:1 but that will not happen anytime soon.

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SP500 Daily Chart Review

The SP500 and other indices wave positions I had have now pushed further that I would like to see, so changes have to be made.  This 2800 price level has been hit for the 6th time this year alone, so it will be critical to see how long this bullish move will last. Even though this stock rally looks like a real impulse wave, there have been many like this which have been completely retraced. Gold is just one example.

The commercials are not skewed that much to the bearish side so that adds to the uncertainty to this bullish phase, in the short term. The Gold/SP500 ratio helps as it is at 2.10: this morning. This is still about as extreme as it gets as my last extreme was 2.41:1 back in September of 2018.  We also have one wicked H&S being set up and in a bigger bullish phase, the right shoulder will not hold.

Market players are always waiting for something to happen that will paint a bullish picture, like the trade talks. Fundamentals change like the wind and basing investment decisions on the words of a politician usually never last as emotional investors can interpret any news a thousand different waves. There are many contradictions made by the mainstream analysts and that alone is enough to take pause to see how long this bullish phase will go.

HEDGE decline to new record lows which makes it out of sync from the SP500 index by a large margin. HEDGE has far more “slippage” in it than I originally though, which makes it unsuitable for a long term investment/trade. When there are options inside an inverse ETF, I would not waste my time with it, so I will no longer spend my time wave counting out HDGE. Besides that, if HDGE  ever got closer to the $5 price level, an inverse split can happen. A normal inverse split can be a 4:1.

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My updates are going to be erratic and reduced this year. I will post updates on my page.

https://elliottwave5.com/elliott-wave-5-0-possible-status-change-in-2019/

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Gold Weekly Chart Review

Bull market or bear rally is the million dollar question?  What the majority do call a bull market, can be just a big bear market rally from an EWP point of view.  Since the 2011 peak we’ve had more bear rallies than we can count, well we can count them if we have nothing better to do. Many were Minor degree moves with one Intermediate degree bull move that all have failed.

I was fooled as well but slowly succumbed to the bears as counter rallies were always completely retraced.  Sure, at times the price is important but the pattern is far more important. If we look back to the 2015 low ($1050), gold has been in a bullish phase since then and is now a little over 3 years long in duration.  Since the 2015 bottom, we’ve had two higher lows which is a conventional way of calling a bull market.

Each of the three bullish phases topped out and was followed by a crash and recovery. We ended up with three peaks that have to produce some serious resistance, with the third peak reaching $1346 before gold started to correct again.  We would need this gold run to continue past the $1400 price, and once that happens you will hear the world screaming, “Upside Breakout”.

Since the 2016 top, we now have two sets of Head&Shoulder patterns already formed. Are they bullish H&S patterns or bearish patterns? We also have a wedge that has formed, so any new direction is not all that clear at this time. Gold has 3 major support prices that would have to hold if a true bullish phase is still in progress, but if gold has been in a 3-year bear rally, then all three price supports will get completely retraced. The three support prices would be $1160, $1120 and the last one would be $1050?

Gold has also been in a rally right along with stocks, so gold could also crash right along with the stock markets. When fear strikes logic thinking is thrown out the window and all those little emotional “Algorithms” will panic, selling out before bullish investors lose money.  Sell stops are piled up below present prices, and you don’t need a smart “Algorithm” to trigger them.

AI trading is also becoming a major factor and I see it more of a bad thing than a good thing.

I would be far more bullish if the commercial traders were in a net long position, but the sad fact is that they are not!

 

 

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Nasdaq Daily Chart Review

Several wave counts I was working on have now started to break down and no longer fit. This always calls for a review and at this time the obvious move is my Cycle degree wave 3 August 2018 peak.  The December 2018 bottom and our present rally display more and impulse wave than a counter rally wave.   Many rallies in the past also showed 5 waves up but ended up getting completely retraced.

The Nasdaq is still under a Death Cross and now has run up against the 200-day MA line. If this trend is going to continue then at least the 200-day MA can offer some resistance, but a bear market rally can completely retrace this entire bullish phase. Only time will tell but the tech is taking a beating around the world as its being used to brainwash all of us. Our smartphones have already turned us into digital zombies and governments use it to spy on everybody!

The recent attacks on the Australian parliament are just small examples of how tech is being used to try and control us. Every democratic government is coming under attack and Canada is no exception.

If you think I’m paranoid, I have a reason to be since my Facebook account got hacked last year. How many times have you heard about a Bitcoin robbery and hacked accounts with hundreds of millions gone missing?  As you walk the street or are just shopping, look up to the nearest cam and wave, as we are constantly being spied on.  Soon when you are caught doing something illegal they can fine you, and steal the fine out of your account by the time you cross the street.

All this may sound crazy but I’m reading about that stuff all the time. We haven’t even touched social media as it is the biggest spreader of false news today.  The point is that tech comes in cycles and a bearish cycle is on its way.

The expensive Gold/Nasdaq ratio topped out at 6.38:1 and today this ratio stands at 5.25:1. We have a long way to go before the Nasdaq becomes cheap again when compared to gold.  Short term the markets can head higher but there are large amounts of protective sell stops below all present prices.

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April Crude Oil Daily Chart Review

If I was a conventional wave analyst like the majority I would turn this into a bullish wave count with little effort. Easy wave counting is for suckers that have nothing better to do but count every little micro mini wave structure which we need an electron scanning microscope to see. Most all my wave counts that I’m after are three-degree levels below Cycle degree and three-degree levels above Cycle degree. Besides that “All” commodities run with idealized diagonal patterns that few wave analysts use.

The bull market from 1999 to the 2008 peak is a prime example of how forcing a 3 wave bull market into a 5 wave bull market can keep us chasing our tails for decades.  Any crude oil wave counts only started in 1850 which is close to the Grand Supercycle degree wave 1-2. Before 1850 the world ran on whale oil until they were hunted to extinction. The majority do not realize that without this energy source our present world could have never been built.

In a few years time, you will never even see these intraday waves and we will never know if an expanded pattern actually happened. Besides that, all the Miniscule wave counting is worthless if we can’t see a big crash or big bull market coming.  They say you can’t time the markets and to some extent they are right, but any investment is only as good as it’s timing.  The 2016 low was another prime example as analysts were forecasting that lower oil prices were still to come. Yet crude oil bottomed at about the $28 price level and then started to soar. Next thing we know investors started to jump on the oil bandwagon as $100 oil forecasts started to become popular again.

I use the gold ratio frequently which gives strong hints when some asset class is too expensive or is to cheap when compared to the cash price of gold. The cheap ratio in 2016 hit 44:1 which is the most extreme ratio that I have ever recorded. I was bullish before oil hit a bottom until this ratio started to shift again. The magic expensive ratio number in the past hit 17:1 twice and oil turned and crashed each time. Today, and since January 2019, this ratio has been averaging just below 24:1. This April contract is sitting at 23.81:1 and for 2019 seems to be hitting the 24:1 Gold/Oil ratio brick wall.

As I post, oil is still heading higher just above the Fibonacci $55 price level and at the very least we should get a strong correction.  Oil is still under the sign of the Death Cross but found support at the 50-day MA for now. All it takes is some fake fundamental news to get published and all these bullish traders can turn into instant bears. The world is changing folks, where false news or propaganda and Artificial Intelligence (AI) brainwashing is becoming normal. What the movie “1984” showed us would be a Sunday picnic compared to what is already happening.

 

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Euro Intraday Downside Breakout Review

Has the Euro rally gone far enough? Just like the USD, we are dealing with a potential expanded pattern, except the trend is going the opposite way. Even though commercials are net long, they are not net long by very much just yet. This bearish phase is not starting to hit major COT resistance.

In some respect my wave counts are playing, “Chicken” with the COT reports and it’s just a matter time to see who blinks first!

The 4th wave rally in Minor degree ended at the top left of this chart and a full set of 5 waves in Minute degree still have to play out. Even though the decline looks stunted, it can extend dramatically when we least expect it.  Any move below the 1.120 price level will certainly confirm that this present rally is still a bear market rally.

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US Dollar Intraday Bull Market Update.

Some investors are looking for the US dollar to imploded due to the massive printing program they have done over the decades. Back in 2008, this bearish mania was at its record low from its 1985 peak. We were all warned over and over to get into gold and out of the US dollar, yet what happened was the exact opposite. Back in 2008 the USD exploded and has been in a bull market ever since.

This intraday chart is just a very small time period of this bull market, part of a 5 wave run in Minor degree. The 4th wave sure looks like it ended in January as the second low was a higher corrective low. The late January crash has been retraced, and at this time the USD sure seems like it wants to keep heading higher.

It would be nice to think that another wave 1 peak has completed in Minuette degree, but the commercials are still building bearish positions.

I would be very bearish on the US dollar but usually, any asset class will start to “Act” funny, before it reverses any strong trend, which the US dollar has not created just yet.  The Euro and our CAD have also made some bearish moves which should happen as they act inversely inside the US dollar basket.

I would love to see the US dollar break above the 97.711 price level as that would establish a new 2019 record high.

 

At this time the commercials have a net short ratio of 7.29:1 which is on the extreme side. I’ve seen worse so this can keep going for many weeks.  The speculators removed 1659 contracts of their long positions which means they got scared. Another way of looking at this is that my bullish wave count is playing “Chicken” with the commercials at this time. One thing that has not happened as well, is a strong vertical spike in the daily, weekly or monthly charts.

On the daily chart, the USD has found support at the 200-day MA and is still under the influence of a Golden Cross.

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DJIA Bull Market Reality Check

In the last week, the DJIA and other markets have kept moving higher than what my wave count would allow. Our present rally that started after the December crash is looking too much like an impulse that is just now adding a spike to the upside.  We also have an H&S pattern forming, and if this bullish phase is going to continue to new record highs, then any right shoulder that will form will not last. Of course, the opposite would happen if this bullish phase is coming to an end.

I moved the Cycle degree wave 3 over, but that may be a temporary location only. Commercials are still short, but not all by that much so future bullish moves can still happen. When exploring a new wave count it can take months in that new position before the markets make or break it.

It may be hard to swallow that an expanded move can crash this deep, and I am pushing it to the limit. The mainstream analysts just love it as the markets recover from a bear market low and are now escaping this bear market. The market is also getting close to the 200-day MA, so we will see how much power the DJIA really has.

So far the USD, stocks, and gold have been in sync to some extent, so they can all crash together as well. It happened in 2008 and it can happen again. The Gold/DJIA ratio has pushed to 19.60:1 which is still an expensive extreme by any stretch of the imagination. Right after Presidents’ Day, the markets will be at a full moon, which can also produce devastating reversals. March has been famous for major reversals and in this case, it could send the markets south.

This market bullish move, if there is more to it, must at least produce a correction and retrace about 60% of this 2019 bullish move. If down the road a complete retracement develops, then we know our present market bullish moves was a bear market rally, from an Elliott Wave perspective.

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Platinum Weekly Chart Bear Market Review

This weekly chart of platinum is only about $28 away from hitting another major bear market low. Any price below $760 would confirm that the big bear market which started in 2008, is still alive and well. Little over a 10-year bear market and it’s still not finished. Bear markets don’t stop on a dime, even though at times it might look like it. This bearish phase could still twist and turn just to frustrate the hell out any wave analyst.

The best scenario would be a huge spike to the downside clearly visible on the bigger time series charts. In other words, this bearish move can still do a lot of damage to a bullish position. Commercials are still net short here, so I would like to see those numbers swing the opposite way before we get closer to a bottom.

I think my last Market Vane Report came in on the 12th and it shows a new record low amount of bulls present at 20%. This is the lowest reading in “All” of 35 different asset classes that make up the report. The 24-month low bullish number was 16%, so it will be interesting to see if 16% gets beat again. The lower the number, the more bulls there will be that can come back and drive a new bullish phase.

The bearish phase from the 2016 peak to the first 2018 peak is the same pattern as gold and silver have, except gold is the only asset that ended pointing up. Gold’s price action is brainwashing us because many mainstream analysts cover gold, but platinum is pretty well ignored.

I have to scan many mining blogs to catch the intensity of the platinum news, which I don’t have to do with gold. Any business related blog will have gold commentary.

 

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Silver Weekly Chart Death Cross Update.

This weekly chart shows the 2011 peak which was an insane mania peak ending 31 years after the 1980 silver mania peak. Crazy peaks like this do not correct in just a few short years but can take many years. 2011 also was an ending to zigzag peak in Primary degree, and topping it off with my Cycle degree wave 3. We are now a little over 7 years old in this bearish phase, and even if another major bottom materializes it could still take until 2021 to complete. 2011+30 years could give us a new Supercycle degree peak in 2041!  Once the Cycle degree 4th wave bottom becomes more certain, we can take that date and subtract that from 2041. I have counted out several silver bear markets that have lasted about 13 years, which would give us a bottom closer to 2024, leaving us with a potential 17-year bull market.

This is all fine and dandy but there is a big catch! This impending bull market will be in the shape of another huge zigzag in Primary degree.

In the last few days, silver has peaked and has now started to correct, depending on what you believe in. A true bull market cannot let silver crash below $13.50 which is only $2.06 away from doing so. On the daily chart, there is a huge gap still open that won’t get close until the $14.80 price level has been hit. This may supply short term support but if this so-called rally is a bear market rally then a new record low silver price will come.

The Death Cross on this weekly chart happened back in July 2018, with the daily chart Death Cross happening soon once silver gets near the gap.

Also, the monthly Death Cross is now having a big Valintine’s smooching feast as the 200-day and 50-day MA are kissing. The short version is there is no Golden Cross insight anywhere!

The silver COT report below shows commercials in the highest short position in close to a year so that reading does not entice me to stay in any long positions.

 

Friday night will give us some updated COT data but commercials would have to shift dramatically, and make that big red line disappear!

 

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Gold Intraday Bearish Update

In February gold has slipped back into a bearish mood now approaching the $1300 price level. $1300 is what I call a psychological price as the media picks up its commentary when this price level is getting close.  The other psychological price level is $1200. The gold analysts will go nuts if gold ever approaches $1200 again.  The question remains? Is gold in a bigger bullish phase, or was the move from $1160 just a big bear market rally?   Since the 2011 peak gold has made many bear market rallies where the majority were fooled into believing the return of the bull market.

I’m keeping my degree levels small at this time as small degree levels get trashed pretty quick, as it’s all about the process of elimination.

I would turn very bullish on gold if gold produced a big impressive spike to the downside, but gold must also display a huge zigzag or even a flat type of a crash.  It’s the end of “C” waves that do produce the huge spikes.

It looks like a nice run of 5 is starting so now its just a matter of time if another run of 5 completes. Sounds like playing cards when I talk about a run of 5, and it is. I used to play Big Bertha a lot where we always need to build runs. Even corrective waves come in runs of 5, like W, X, Y, X, Z.

Any drop in the gold price,  say from $1300 to $1200 is just, “Childs-play”, as gold can move very violently when it wants to. I also read that January gold runs don’t last all that long and even summers can be pretty boring for gold. When gold makes a run out of fear, “Safe-haven buyers rushing in”, then they can “Rush out” just as fast.

We are close to a 7-year bear market in gold so far, and I think it’s far from over. I’ve counted out 13-year bearish moves in silver several times, but that doesn’t mean it will happen this time.

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British Pound 1985-2019 Review

 

If we look back to 1985 there should be no doubt that we can see that the British Pound had a huge single spike to the downside. 1985 was an important year for many of the currencies to make major turnings. All the currencies inside the USD index act inversely, so our wave counts have to do the same thing.  Thinking upside down with the wave principle has to be pretty normal if we want a decent wave count.  The last thing I have is a decent GBP wave count.  What I want and what the market is going to give me are two different things. If the GBP gets close to the 1985 bottom will it be at a Cycle degree wave 5 bottom?  I have my doubts at this time as the 2009 bottom may be the “A” wave in Primary degree location as well.

If a new low is going to happen then a plunging zigzag could be in progress. Below the commercials have been switching to the bullish side, while the speculators have done the opposite. Speculators are believing the bearish fundamental news, as they think this bearish trend is going to continue.

All fundamentals come in the form of “news” as the government shutdown clearly demonstrated to me.

 

These visual COT reports give us an idea as shorts and longs are clearly visible. The red lines are the long positions so I would be hesitant to take any position in the short term. Brexit remains the problem and until that gets resolved the GBP could be stuck in no man’s land for a little while longer.

Last week I still received one more Market Vane sentiment report that ranged between 34%-40% bulls, which are not some readings I can jump up and down about. Now if there were only 14% bulls in the survey, then that would be a different story.  I refuse to give any long drawn out fundamental commentary as 1000’s of other analysts are paid full time to do that. Every time the GBP makes a move analysts will jump in and find you a reason why it moved.

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DJIA Intraday Update.

At this time it looks like the DJIA has peaked and the big question is are we heading into another correction or was this fantastic move just a bear market rally?  Rallies that travel at this speed always seem to run out of steam and then turn and head the opposite way. I show a Megaphone pattern which can happen in diagonal moves as well. The 4th wave rally traveling into the wave 2 positions is a dead give away that we are dealing with a diagonal run of 5 waves.

The Gold/DJIA ratio is down a bit from its extreme but yet still far too expensive. I would like to see our present Gold/DJIA ratio get chopped down to 14:1 before I get super bullish on the DJIA. Of course, many fund managers are frothing at the mouth as they, scream, “Buy the Dips”. DowJones_GoldPrice   Gives you an idea about others using the Gold/DJIA ratio over a bigger time period.

The stock market dip? Keep buying, says Bank of America Merrill Lynch

That might work for short term traders, but for a long term hold the DJIA is still going to get shredded.  If the Cycle degree peak is true, then at a bare minimum the DJIA would have to crash below 14,000. Others are as bearish as I am, and I’m sure many of the wave analysts are forecasting big bearish moves as well.

 

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Euro Monthly Chart Update

 

I’m sure the Eurozone is going to be bogged down with all sorts of fundamental problems which we here or read in the news.  The short version is “I don’t do fundamentals.”  Besides that, I don’t think a single analyst can give me a fundamental reason for each Intermediate degree or higher turning.  Forecasting a price crash to come, we know fundamentals will change, so does technical analysis change the fundamentals?

Just like the USD trend is up, the Euro is going the opposite way. Both these currencies need to travel the opposite way in order for gold to soar like they all say it will. After all gold is in a bull market right?  Since the 2008 peak, the Euro had 6 major bullish phases which all were completely retrace except for our present Euro rally.  Do you know how bullish everyone was on the Euro in 2008, yet the Euro turned and crashed?

2008 was also an important year as oil crashed as well.

Fundamentals are lagging indicators, and they mean little after every analyst on the planet is spouting the same gibberish.

Yes, the commercials are net long with their Euro positions, but they removed 5105 long contracts during the shutdown.  The speculators are bearish and last week they turned bullish as they added 9,229 contracts last week.

 

The COT report is a mixed bag and when there are no real extreme readings then I rely on my trend to give us a clue. I see the trend is still down on this monthly and even weekly charts. The wave 3-4 rally has an expanded pattern in it, which means a complete retracement to a new record low should happen. There are many expanded patterns that develop and to not look for them, will always give us a surprise.

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Solar Cycle #24 Update

 

All the investors that ignore the cycles of the sun have paid dearly in the past. The 2008 bottom and the 2018 bottom is 1o years apart but the markets crashed from 2007 to 2009.  Most professional wave analysts ignore the sun even though many studies have been conducted and posted in the EWP books.  A few years before a solar cycle hits a bottom can send the markets crashing. The start of solar cycle #24 killed all the bears, but murdered and skinned the majority of all wave counting bears! Will it happen again? I’m sure it will, as once solar cycle #25 starts to crank up, we will be in a huge bear trap the likes we have not seen since the 2009 bear trap! The housing also crashed in 2007-2009, which is already crashing, so if investors can wait out the next 2-3 years, real estate holdings will be much cheaper than they are now.

I’m going to add a “Global Warming” chart which the alarmists contradict. I’m not an expert by any means but these satellite readings offer an objective look at how the world is heating up and cooling down. Ground-based weather balloon readings confirm the satellite readings and we can only see two record highs. One in 1998 and another in 2016. In the stock bull market leading up to 2000, the global warming hype was pushed right along with the stock market hype. In other words, investors never cared about any global warming fear mongering. The idea that the Polar Vortex is caused by CO2 in our atmosphere is a joke since there isn’t a scientist that can measure the “Forcing” or leverage that CO2 has on worldwide temperatures. BTW, the last time I checked the CO2 levels it hit 411 PPM.   All our smartphones should include a CO2 analyzer then you would see how much more CO2 there really is inside any building.

Trying to reduce our carbon footprint in a world full of carbon is like trying to walk in 2 feet of snow without leaving an imprint. Combine all the governments in the world that are trying to stop a climate-changing world from getting warmer, is created to take your money with a carbon tax!  80% of the world energy needs still use fossil fuels to get food on our tables. If we suddenly stopped using fossil fuels to power the world, all our food distribution would cease and then we would see massive starvation set in very quickly. Oh, but we can move everything in an electrical world! Good luck with that, as electric cars lose power in cold weather. Electric car driving range is seriously reduced in cold weather. Just turning your key on drains power in an electric car.

My opinions are strictly personal and I can rant on and on about it, but in the long run, it’s the sun that controls all life on this planet, and not including any sun forcing in any calculation is a big mistake.

 

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US Dollar Intraday Double Top!

Before the digital ink even dried from my previous US dollar posting, we just hit a double top this morning to within .003 of a point.  Now we have to wait and see if this is a bullish H&S or a bearish one.  I still have 3 degrees left but we may be close to a wave 4 type of correction.  I may also be jumping the gun here, as just a small spike has developed. This entire bullish phase has been running since the January 10th bottom with the February low being the secondary bottom as a higher low. I believe the US dollar is in a much bigger bull market than most of us expect, but where we are in this bull market is always the task at hand. The US dollar turned very bullish in 2008 and since then has been in a 5 wave run in Primary degree.

The Euro took a hit, as well as the other 5 in the USD basket!

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US Dollar Quick Update

Regardless of the news, this US dollar chart is still heading up. The USD bull market is keeping the gold price in check. Even though the commercials positions are heavy net short, the USD seems to ignore that.  This does happen at times and can last a long time before any reversal happens.

We can see that the USD price moves are still controlled by the “Golden Cross” and the US dollar would have to crash deep before the “Death Cross” can even occur.  The USD is getting support at the 200-day MA line and I see that as a bullish sign.  All the gold bugs, (investors) want the USD to implode but at this time the USD refuses to play their game.  Short term the odds may be stacked against the US dollar but not long term as the US dollar is in a bigger bull market than we can imagine.

The next price target would be above my wave 3 in Minor degree, which is about 97.500.

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Bitcoin Futures Inverse Split?

I read a Crypto related blog and since the wild top, all I heard was news that was centered around “Hope”. Wishing that some miracle is going to happen to send Bitcoin prices soaring again has been the main theme. The last thing I will do is give readers a wave count on any Cryptos as it is a waste of our time.

It was the huge gap that opened up to the downside that caught my eye, and once I check the price at the mania peak it worked out that Bitcoin futures hit $1,931,501 US. We know Bitcoin never saw that price extreme, and it was a dead giveaway that they did some special work how this chart puts out data. Events or insane price top changes is not that uncommon, as many of the leveraged ETFs do exactly that.

The industry is so prone to hacking, and shady operators that it has turned off many people from using Bitcoin. Besides, that Bitcoin prices are declining which investors hate as well.

In the real world gaps have a 90% chance of getting filled, but in the Crypto world nothing is real and this gap will, “Never” get filled!  If it did then Bitcoin would have to go above $600,000 and the charts would need to get adjusted again.

 

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Gold Intraday Peak Update!

Last month gold has finally decided to back off in its price surge to $1325. If this so-called bull market in gold is real then a strong correction has to complete well before the $1160 price bottom. That’s a lot of price distance gold has to cover, which the majority of participants don’t expect. Banks are up to their usual tricks and have been buying gold in 2018.  The problem with banks buying and selling gold is they always buy high and then sell low at bear market bottoms. Back in 1998-2000, they were selling gold as fast as they could with countries unloading their gold stashes as well. In 1999 gold was considered an ancient relic, close to junk status.

As fast and far that gold can soar, it can crash even faster and deeper. We could see a correction, but don’t get excited as even a zigzag decline can crash to new lows if this bullish phase is just a big bear rally. Fear could engulf many asset classes where there is no place to hide as stock markets and gold crash at the same time.  Sure, I can be wrong and it will be important to recognize a correction when it’s going to finish.

I believe the 2011 peak was a 30-year mania peak in Cycle degree wave 3. Any Cycle degree bear market in gold does not end in just 8 or 10 years, as the bear market in gold during the 1990’s last 20 years.

Since the government shutdown, the first COT report was published last Friday. The way things are going the government could shut down again, with no COT reports being produced.

When I first saw the report I noticed a very large shift to the bearish side, with about 5-6 weeks backlogged data being published.

 

Commercials added 33,486 short positions and took away 2058 long positions, for a combined total of 35,544 contracts totaling just over 3.5 million Troy ounces.  Now, look over to the NON-Commercial side (Speculators).  We can see they did the exact opposite, chasing this gold bullish phase.  The problem is that both parties can’t be right!  The mass media always talk about what the speculators are doing and ignore all commercial hedgers action. From my perspective, the commercial hedgers have the best track record and ignoring them usually brings pain and suffering onto the bulls that think a trend can never end. What the COT report is telling me is that no super gold bull will start to soar anytime soon.

There is no corrective price bottom I want to use right now, as a 60%-70% net crash can happen. The $1200 price level is a gold psychological price level so if and when the gold price ever hits that area again it could put up a big fight!

Silver has a lot less distance to fall before it resumes the big bear market again.  Silver only has to fall below $14 and then below $13.50 and it would be back into its bear market.

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Natural Gas Weekly Chart Crash Update

I’ve made a few changes to my Wave count but the chances of the bullish phase that started in 2016 could be a false bull market or bear market rally. To help confirm that, Natural Gas charts must retrace the “Entire” bullish phase.  The $2.50 price level would be normal support but that has a slim chance of holding.

Gaps opened up but were also closed pretty quick. At the $3.00 price level, we have another open gap that would get closed on a potential 4 wave rally in Minor degree.

Commercials hedgers are still net short and I would like to see them switch before I turn bullish on NG again. You would figure due to the Great Arctic Vortex, natural gas price would be soaring?  In 2014 Natural Gas matched the secondary peak of solar cycle #24, after which it resumed its bearish move. NG also repelled from the 2011 solar cycle peak.  A few more years to go, as the start of solar cycle #25 would work like a magnet, drawing prices to it.  Once solar cycle #25 starts, natural gas prices could be propelled to the upside for years.

The Arctic Vortex has nothing to do with the amount of CO2 in our atmosphere because the amount of CO2 forcing (leverage) has no numbers they can measure.

Yes, we could end up with another little ice age, and the alarmists will still be calling it global warming. Low sunspot activity is a most likely cause of the Vortex.

This chart of the solar cycle decline includes the January numbers where we can see sunspot activity has increased. 61% of 2018 was spotless, which may not yet be a record. The record low spot count for 2008 was 73% which may get hit again.

I’m expecting solar cycle #24 to come to an end, and many good science sites will report and track the turning which may be a few years away.

 

 

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Nasdaq Intraday Record High Update

Just a quick Nasdaq update this morning as I think another major turning is near. The speed that stock bulls have returned is very impressive, and other analysts have noticed it as well.  Even though the markets look bullish, they can fool us because they are just big bear market rallies.

Investors forget, don’t care or were not old enough to experience the 2007-2009 decline, but investors bought in at the peaks as well.  So far it is nice to see a potential turning into another new month, which could turn February very bearish. In simple terms, bear market rallies always retrace themselves, back to the point of origin of December 2018! Any price dip below 5800 will work, but the Nasdaq will not just stop dead in its tracks, but March could end up being very bullish again. Lack of data is haunting the markets as even farmers are temporarily blinded due to back-log economic data. The problem with all that fundamental data (news) is that much of it is lagging and or manipulated.

Investors were surprised that the rate hikes may be taking a “pause”, but investors can take that as bad news, as a recession followed everytime they paused.  Sure, many tech companies surged but Facebook doesn’t justify its move at all. FB developed a huge gap to the upside, and any gap has a 90% chance of getting filled. Since my Facebook account got hacked a few months back, I have started to reduce my digital footprint.

Apple has security concerns with its Facetime app and it seems that all smartphones are just spying tools.

Another bearish reason is the Gold/Nasdaq ratio. At 6.38:1 it’s an expensive ratio.  This morning it was 5.25:1. There’s a long way to go down before the Nasdaq and other indices become cheap again.

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Silver Monthly Chart 1980-2019 Review

Many analysts and wave analysts are very bullish on gold and silver as they think it offers some protection or safe harbor.  Running into an asset class is an emotional decision, not a logic one.

Emotional runs rarely last that long and as we can see if we look back in history, how violent silver moves have been. Of course, 20-20 hindsight vision is all fine and dandy, but if we don’t look back further than 2011, it is hard to imagine how violent silver prices have moved in the past. It’s the nature of the beast as commodities all follow the diagonal wave patterns, not those pretty wave patterns that we have in the DJIA or SP500.  Diagonal wave structures break all the rules as overlapping is more like the rule than the exception.

I remember the days when the Hunt brothers were trying to corner the silver market and since they tried to do this near a 30-year 1980 record high it was doomed to fail.

If we look at the spikes in 1980 and 2011, what followed was a huge bear market. Commodities are just big zigzags that are linked together and silver is no exception. The 30-year cycle with a ± 1-year frequency to it can be tracked back by counting backward by 30 years each time. The 120, 90, 60-year cycles all contain the 30-year cycles as well. 2041 will be a Supercycle degree peak but that will not happen until the bear market since the 2011 peak is finished.

Last week the government bureaucrats went back to work and actually produced new COT reports dated February 1, 2011. During this downtime, the commercials didn’t get excited and jump on the bullish silver bandwagon but they turned bearish and increased their net short silver positions. The speculators did the exact opposite as they are still chasing the silver bull.  This gives me confidence that the bull market in silver can turn on a dime, and break a new record, below the $13-$14 price level.  The recent bullish phase in silver is just barely 3 months old and is lagging gold by a long shot.

Commercials added 2960 short positions and removed 1433 long positions. Combine the two and I see more bearish moves to come, than bullish moves. It’s the non-commercial hedgers that always get in a trap, not the commercials who work inside the industry.

Gold commercials made a big bearish move, which I will post and edit in my recent gold post.

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Apple: Bull Market or Bear Rally?

 

Last month Apple’s stock price finished to the upside.  All the dovish news about rate increases taking a break was a major surprise to investors but I said this could happen many times before as T-Bonds are in a bull market. One thing that is hard to imagine is that Apple keeps on soaring if the DJIA or SP500 heads south. There is a huge probability that an expanded bottom has been formed which seldom ever hold.

I labeled about 5 gaps with a recent gap to the upside still being open. Short term this gap will get closed, with a much bigger gap still open at the $120-$130 price level. Jumping on the Apple bandwagon after a month of bullish action, is an emotional decision, thinking we are buying on the “Dips”.  Of course, my bearish outlook can be wrong and for that to happen, we must see a correction form with “No” new record lows.

Just because an asset class goes up, does not mean it’s in a bull market. If market participants get fooled by a Minor degree rally then any Intermediate degree or Primary degree rally will really fool the majority.  I would be a lot more bullish on Apple’s stock price if there were records of insiders buying their own shares back. I read one story that Al Gore was a buyer, but I have to hunt up the article to confirm it. I believe the board wants to kick Al Gore of the team. If and when this happens I will shed no tears for Al Gore to be removed from his position.

Even before this rally Apple’s stock price was not dirt cheap when we compared it to gold. Today this Gold/Apple ratio sits at 7.91:1 which is better than the extreme ratio of 5.24:1.

I think the Gold/Apple ratio should get closer to 10:1 or even 15:1 before it may be a longer-term hold.

With the new moon coming on Monday, it can provide an extra push if the reversal is near.  I’m sure they will get their Facetime bug fixed, but it also goes to show how easy it is to hack into this digital world. The biggest threat is Artificial Intelligence, (AI) as dictators and communist countries use AI to brainwash and control them. If you think the movie “1984” is about dystopia, then what we have today is far more powerful and insidious.

 

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Gold 1950-2011 Review

I’m showing a big picture in gold that very few wave analysts will show us. Wave analysts have gold in a bull market with the contrarians making damn sure in telling me that I’m wrong that gold still has to form new record lows in the next 2-3 years.  The $1400-$1050 price range in gold is the argument and recently gold was heading to $1325, so the $1400 gold price move is not yet dead!

The main difference of opinion is what we think the 2011 peak in gold actually was?  If we think that the 2011 peak was just a normal peak in a normal bull market then yes,  many expect a new bull market in gold. From my Cycle degree perspective, this gold peak of 2011 is part of a 30-year cycle which had peaked in 1950, 1980 and now in 2011. We are out by one year but the next major mania gold and silver peak will not happen until 2041. 2041 would be the Cycle degree wave 5 peak, and since no 5th wave should ever be uncapped, 2041 will also be an SC degree wave 3 peak.

There is little doubt in my mind that this gold market has not completed any 4th wave in Cycle degree. At a bare minimum, gold would have to retrace deep enough to enter the price level of the 1980 peak of $850. The 2011  peak also matches the first peak of solar cycle #24. 1980 was also a solar cycle peak but I’m not sure of the exact cycle peak it was.  All commodities follow diagonal patterns and from the 1950 peak to the 2011 peak gold was just a huge zigzag.

Gold travels up and down with demographics as I started work at the bottom of wave 2 in cycle degree and the bull market in gold we do see was created by the boomers entering the labor force. In 1968 I was working for $2.98 CAD per hour, but we got a 20% pay raise every year for 4 years running!  I was able to save money and still blow much of it on having a good time.

If gold ever plunges below $500 in the next 2-3 years then gold will be a long term hold until 2041!  At this scale, the 200-day MA is still down at the $1000 price level and betting against gold hitting this 200-day MA may be a long term losing proposition.

What will happen first? Will gold close above $1400, before it closes below $1050? One price represents a bullish breakout while the $1050 price level would the bearish breakout!   Just to really make things interesting gold could shoot above $1401 and then turn around and head down to $1049!

 

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VIX Crash Daily Chart Review

The January 2019 VIX crash has now gone deeper than expected and when that happens an instant wave count review should be initiated. The VIX is now sitting on the 200-day MA line close to the $16 price level. Is the 200-day-MA going to give us some support? A small triple bottom is also developing along with the new moon on Monday, so this can provide an additional reason for a reversal.  If we are lucky we may see some COT updates but I won’t know that until late today.  Investors as a group, have now started to calm down like a herd of cattle would after being stampeded.

We may see a mini VIX rally up past $20 again as this can also work as an expanded pattern at the Minuette degree level.  As we can see the VIX is littered with many spikes in both directions and I try to look for the longest spikes which tend to hold the longest before the next reversal.  All the market bullish hype in the world will mean little when the VIX is ready to turn.

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