I occasionally run charts in linear scale just because it shows the extreme that this market has traveled. Now if investors want to sit on the points of 3 needles (triple spike top) then they will suffer the pain in their investments once a potential Cycle degree correction starts to get serious.
The triple top is the most obvious point of resistance and the DJIA would have to be very bullish to make a solid breakout to new record highs.
The 4th wave big dip in 2018 is just an intermediate degree bottom so once this market starts a good bearish run, it should crash right through that 4th wave support.
This is the September contract and I made some small adjustments to what is a diagonal wave pattern. With the world being fundamentally bullish and oil is pointing up, then showing you a potentially bearish scenario is hard to understand.
I expected the June rally and it started to hit resistance at $60. Even with trade wars, oil tanker attacks, tanker confiscation and a host of other fundamental reasons, crude oil can still crash. Just because shortages can spike the oil price at any time, does not mean a whole new bull market has started.
Every time there was a war in the Mideast during the 1990s, oil would spike from a $10 low to $40 and then back down to $10.
That was a 19-year bear market with a triangle in its “B” wave of Intermediate degree. Oil is presently in an 11-year bear market and it had a huge bullish phase until 2014-2015 after which it crashed to $28.
The Gold/Ratio is sitting at 24.2 which is a bit cheaper but it seems to be stuck on repeat as this ratio hasn’t moved much.
All commodities travel as diagonals and they have been doing this since the Little Ice Age. The 1890s DJIA pattern is so choppy it took me years to understand. This all change with the Roaring 20s as other investments took over.
The DJIA also crashed with gold so any rush to a safe-haven sure looks like it’s not working this morning. The only question is how deep this can go during the month of July. A bigger bearish phase should slice my support line and eventually the 26,460 price level as well.
The mainstream analysts called for DOW 27,000 after which it crashed. Now the experts will give us all sorts of forecasts how deep this “Correction” is going to go. If we have a Cycle degree wave 3 top then this requires a Primary degree correction down to Minor degree.
3-degree levels above Cycle degree and 3-degree levels below Cycle degree have always been my goals.
I treat solar cycles like an emotional fundamental as the entire world seems like it’s in a climate emergency! In reality, the markets don’t give a shit about climate change as we have had a bull market since early 2009! Has the climate changed in 10 years?
Until solar cycle 24 ends and solar cycle 25 starts I will remain bearish but try and catch any larger reversals when possible.
This bullish run started June 25 and is still going as I post. Even though the USD can fit into a 5 wave sequence we can get a 5th wave extension that may still surprise us. Moves like this always affect the price of gold which crashed this morning as well. I bet if you searched analyst reports why the US dollar exploded they would all come up with a different set of fundamentals reasons. Even the majority of wave analysts always inject some fundamental reasoning into their wave counts but the biggest fundamental of human emotions they seem to ignore.
Mini panic buying or selling is an emotional thing and in this case, short sellers got caught in traps of their own making. There are no daily trading limits in commodities so moves can move dramatically without obvious counter-rallies.
US stocks and the gold price crashed together this morning which also happened during the 2008 crash.