The HUI turned out to be a popular gold stock related index while GDX is a good ETF to watch. They are both about the same but GDX is performing a bit better than the HUI.
Gold has already soared well above that 2016 high while the HUI has still been lagging far behind. Many of the gold-stock ETFs have been lagging far behind gold, so I’m sure there is some catching-up still to come.
Analysts have been looking for big break-out moves back in 2011 and they never materialized as well. Silver is in the same boat as the 2011 peak barely exceeded the 1980 peak by just a few dollars.
Don’t get me wrong as I’m bullish until all 5 waves in Minor degree show themselves. The lagging is just an early warning.
The Gold/Hui ratio sits at 6.9 this morning and that number should compress much more before this bullish phase comes to an end.
GDX is an ETF that we can trade so it makes sense not to spend too much of my time wave counting the HUI.
Give this until late this year to see if the next leg appears, but either way, I don’t want to turn bearish too early.
For all of August, the DOW E-Mini has been dancing around in both directions. Good Luck trying to fit this into a bullish impulse even though a set of 5 waves seems to be finishing.
Yes the DOW has just created a golden cross, but it sure can head back down and execute a death cross! From what I see I have to remain bearish as 2 H&S patterns have also formed.
A strong bullish move would shred the resistance line to the upside. On the bearish side, we eventually would have to see new records lows.
Give it until the end of the month for a new bearish trend to show itself with a wave 3-4-5 in Minor degree still to complete.
Another leg down in the DOW sure could send gold soaring in another leg up. In a sic way the DOW could see 5 waves down in Minor degree while gold might get 5 waves up in Minor degree.
If we were in an Intermediate degree decline, then I think this sideways pattern would take much longer to play out.
Once the DOW crashes below the August 6th low then we will know for sure that this August rally was just another bear market rally. Yes, the decline started out very choppy but they can also smooth out as the trend matures. 21,600 could bring us support but that number may mean nothing once fear starts spreading far and wide.
Even though I look at the charts every day, my short term wave counts need improvements and that all depends on where we are in the bigger picture.
Crude oil charts go back to the 1850s and the start of Supercycle degree oil. One thing is certain is that crude oil and all commodities as well belong in the diagonal world where zigzags are everywhere and most of the time the waves overlap with each other.
This makes it impossible to count out any high quality 5 wave impulse. There are more Minor degree 5 wave runs in a Cycle degree world and the above chart has two sets of them.
It may be a temporary thing but I reduced the degree level after the 2008 peak. This makes 2016 low the Primary degree “A” wave, matching gold.
If I moved wave 3 in Cycle degree back to the 1980 peak it would be very strange and all the wave counts would no longer make sense. I have switched to Cycle degree wave counting since 2013 and have “No” intention of going back again.
The Gold/Oil cash is about 26.7 which is not cheap enough to produce a massive crude oil bull market but still produce more zigzags along with the bullish gold price.
I show a potential wedge which oil will need to slice through. Oil would have to travel the furthest to the downside with a bearish mood. With the trade war and tanker traffic war turning off their GPS units, oil could float around for years distorting any fundamental reporting.
The USA is now the worlds largest oil and gas a producer which is not bad considering the experts had us running out of oil in early 2008!
Some investors may be unloading gold inventory which was bound to happen after a vertical move. The question is how deep can gold go? Below $1485 would be nice but I’ll be open to a deeper plunge if need be.
Any correction means another leg up in the gold price is still to come. I’m looking for diagonal connections, as the mainstream media was all charged up for $1600 gold. We sure don’t want to disappoint them if gold crashed to $1400!
Silver is also taking a hit but it has a lot of catching up to do and is lagging behind gold like it has done many times before.
Some analysts are already calling for $2200 gold but they have been doing that since the 1970s.
GDX tracks the HUI fairly well with plenty of volume and liquidity for any trader. I don’t have any positions in GDX but my funds are in 4 Canadian penny stocks that do have exposure to the gold sector.
Trend lines can be very subjective but right now the trend looks like it’s still heading up! I believe we need a 5 wave sequence in Minor degree with wave 3-4-5 still to develop.
Since the 2018 price low, we’ve been in a “C” wave bull market which if we are very lucky, might take us to the $55 price level again.
Last week, with gold making a bit of a jump, the Gold/GDX ratio expanded to 53.46 from 50.98 which means that GDX got a little cheaper last week. This bullish phase could last all year but the trick is to understand the 4th wave when it is unfolding.
It is a good idea to watch the Russell 2000 once in a while as it can be a very good leading indicator. The Russell rolled over just about a year ago and has never followed the three other indices.
Besides a little support at the time of this posting, the next price support may happen at 1250! That would also slice the trend line which now has 2 Intermediate degree bottoms.
Crashing through any intermediate degree bottom would force me to look for a Primary degree position!
I have a bearish outlook and until solar cycle 25 starts to run rampant I will not turn long term bullish.
The Gold/Russell 2000 ratio is still expensive at 1.02 so I would like to see that ratio get much cheaper.
The Nasdaq was rolling over in July already which works like a diagonal starting out. If we’re lucky the patterns will smooth out a bit but that may also be wishful thinking at this point.
With there being a potential Cycle degree correction (Bear Market) the markets have a long way to go before we could expect a return to a real bull market.
This may not happen until solar cycle 25 dominates sunspot activity. Our present little rally looks like another bearish rally and if that is true then the 7400 and 7200 price level will not hold.
The 7000 price level is another potential price target for some more support but eventually, the 7000 price level will not hold as well.
The Gold/Nasdaq ratio got better at 5 but is still a far cry from being the cheapest of 1.18. The Gold/Nasdaq ratio doesn’t have to go that cheap but it sure would help to see the ratio get better than 3:1.
The commercials for the Nasdaq are net short but not by any extreme amount. The speculators have the opposite side of this deal as they are all pile onto the long side. Both parties can’t be right so sooner or later one side is going to panic.
I normally avoid wave counting in single stocks but the story that CGC has lost 1.28 Billion quarterly loss was to good to pass up! There are more losses to come as these growers over paid for “Growing Real Estate”(Greenhouse) by an insane amount! Pot production per square footage is the key and they are paying top dollar to grow pot inside.
What the black market has been doing profitable for years the legal market hasen’t even come close! to matching.
When a stock hits $55 then funds will find them too rich and they start to dump their CGC stock.
The previous bull market correction can be a great target for some support but remember this pot industry was a mania right from the start, and hysteria’s or mania’s never end well.
When markets go wild then it also draws in all the crooks that love to scam investors. I participated in one pot IPO which I sold after a 5 wave run and will stay away from all marijuana related assets.
If CGC crashes back down to $5 CAD again it would not surprise me!
In my last USD posting, I described that the USD dollar could be in a diagonal 4th wave and sure enough, the USD seems to be heading up again. It won’t be a smooth ride for a 5th wave because this is a world filled with diagonal wave structures.
I would love to see the USD breakout to new record highs even by the slimmest of margins but “Time” will have the final word!
Just inverse the chart above and it will look like the Euro which should produce another record low.
Gold and the USD have both been bullish today so we could run into more situations like this in the future.
The commercials are net short by a wide margin which does not seem to slow the USD bullish phase down any, at this time.
Not enough traffic has moved to the December time period so this is still the September contract. This is the 90-minute intraday chart, which could be showing a 4th wave rally for this month.
In the last few days, the DJIA plunged about 1000 points before it started to recover. Markets can move month to month so this bearish phase my turn by the end of September.
I will not repeat the fundamental jargon that 1000 others are doing. Nobody knows “What News” really cause the markets to head up or down and it’s impossible for the same news to happen for us to take advantage of it. Did the bearish news in late 2008 get you in a panic to get out or did all the bearish news tell you to load up?
The VIX sure has exploded but I think the VIX could still go above 40. The arrival of solar cycle 25 is the deciding factor as solar cycle 25 could produce 5 waves up in Primary degree.
Looking at silver with a daily chart it shows we have some way to go before we get close to another Minute degree peak, nevermind getting to another potential wave 3 in Minor degree. Compared to gold which has already blasted past the July 2016 peak, silver has a “Long” way to go just to get to its July 2016 breakout price.
Silver is lagging far behind gold which has happened many times before, like in 2011.
Of course, silver never caught up with gold, as the 2011 silver peak just barely broke above the 1980 metals peak by just a few dollars, while gold traveled about $1040 during the same time period!
There’s always the 5th wave which can produce dramatic extensions and it will seem like silver is catching up gold!
Gold and silver have a long way to go to finish this “C” wave bullish phase so don’t commit the investing sin by getting out too early!
I trade silver Forex units with my iPhone and just added another unit on August the 8th. There is a good chance this bullish phase can last all year as Christmas shopping can dump trillions into Brick&Morter stores.
Last week the commercials added to their silver “Long” positions, which is a good sign. The hedge fund speculators did the exact opposite as they panicked and sold their long positions and increased their short positions. The speculators are the trend chasers yet the mass media constantly tells us what the speculators and not the commercial hedgers are doing.
The US dollar did rally as stocks charged upward but so far the US dollar rally is a bit subdued! The decline also is very close to the previous “B” wave which doubles as a potential diagonal wave 2. Usually, it can even end up lower but never below any potential diagonal wave 2.
The commercials are still stacked to the bearish side by a ratio of 23:1 which can still force the US dollar to the downside. The media quotes the speculators and what they are doing but the hedge fund speculators always chase the markets and eventually, they get trapped and change directions in a panic.
The Euro is inverse to the USD as it’s inside the US dollar basket. It would be next to impossible for the Euro and the US dollar to soar at the same time.
I apologize to my readers as my postings are very sporadic and they will continue that way, until early 2020 or until I can find a new place I can afford.
An explosive move this morning in stocks was a near-vertical lift which never can be maintained for very long. Investors have to decide, keep loading up on stocks at the same time dumping gold. I have labeled this like a diagonal 5 wave sequence but it remains to be seen if another leg down is going to happen.
Gold went south while oil enjoyed a big rally. About all it tells us, is that investors are willing to dump gold stocks at a drop of a hat if they think stocks have seen a major bottom.
The Russell 2000 and the Midcaps do not confirm the SP500/Dow/Nasdaq so I think this is still part of a bearish rally.
The full moon is due on Thursday of this month and last night I could hear the coyotes howling under the power lines. Just kidding folks as moon cycles can trigger any type of a turning as I don’t see them being all that reliable anyway.
There is a gap below at the 2915 price level, so I’m sure that gap will get filled in the near future!
The bottom fell out of the gold price with a near-vertical drop that also left an open gap in its wake. Sudden drops like this happen as there are “No” daily trading limits in commodities.
The only question is how deep gold can still go as downward spikes like this can be a very bullish sign. Stocks/Oil exploded, but the gold and silver price headed south.
There should still be more upside, as the pattern so far, does not suggest a long gold price decline. Besides that, the $1600 price range is a much better resistance level than $1535 is.
The full moon is just a few days away so that can act as a reversal time period. Gold already recovered about $10 so that is also a good sign. I see it as a warning that later on when stocks start a real bull market that gold will decline as stocks supply the real competition for gold-related assets.
The 2011 gold peak is a prime example of what can happen.
I may have to drop this wave count degree level down by one, and I also doubled the “Custom Bars” to 1000. During July I thought I would get a set of 5 waves but now even an extreme diagonal 4th wave is being pushed to the extreme.
Friday the USD dropped like a rock but at the same time we could end up with a huge open gap! The zigzag bullish run could be a bear rally and usually, any Elliott Wave bear market rally gets retraced by 100% or more.
In order for gold to keep soaring the USD has to backslide. Combine that with still horrible commercial hedger positions, we could see the USD twist and turn, up or down!
For now, the trend still seems down as some key support price levels could get trashed.
GDX has been on a wild bullish ride that many gold investors have been hoping for. What is important is the 2015-2016 gold-stock bottom as the majority thinks we are in a huge bull market that still has a long way to run.
I think we are in a “C” wave bull market and it could be a complete set of 5 waves in Minor degree. It’s still a bear market rally from an Elliott Wave perspective and the entire time investors will get convinced to jump onto the gold stock bandwagon!
When wave 3 comes then all these “New Riders” will get thrown off when the 4th wave bearish phase becomes obvious. The 4th wave could also end up being a triangle which dictates the coming end of a this Minor degree run.
The Fibonacci $34, $55 price levels will supply resistance levels with $65 being a possible maximum.
The Gold/GDX ratio sits at 50.1 which should continue to compress as this bullish cycle keeps going. 50.1 is the most expensive ratio this year with 30:1 being the most extreme reading I have recorded.
GDX is in a bullish mood as solar cycle 24 is still crashing and the start of solar cycle 25 can cause all gold and gold stocks to reverse and crash. If this invisible 5 wave sequence comes true, then I think the impending bear market would be another 5 waves down in Intermediate degree.
I have a few penny stocks with exposure to gold and they have acted very bullishly, which also helps to confirm the bigger bullish trend!
Originally the 2015 bottom was wave 3 in Intermediate degree but that started to take far to long, so I looked for a higher degree position.
I have been using the (A) wave bottom for 3-4 months and at this time don’t see any reason to change it.
At this time the present bullish phase is what I call a “C” wave bull market, which still has a long way to go. Diagonal wave structures can develop at any time, and I still need to see some sort of Minor degree wave 3-4-5 structure to play out.
EWI (Elliott Wave International) has the same bottom for December 2015 as I do so they are bullish as well.
Yes, we should get corrections as nothing travels in a straight line for very long. The last thing I want to do is turn bearish on gold too early!
Gold was well above $1500 at one point and I’m sure $1600 is within reach this year. August 15, 2019, will be the next full moon which can trigger surprise reversals.
This is the position for solar cycle 24 to the end of July 2019. So far this has produced about 67% spotless days for 2019.
I would like to see that number register 71% or more. Each dot represents a month, and sunspot activity could bounce at any time as well. We could have another year or so as solar cycle 24 can still flatline until the 2020 elections or inauguration of a new president.
Spaceweather.com does a great job of posting solar cycle 24 sunspot activity and the new solar cycle 25 sunspots when they arrive. The first peak in 2011 sent stocks soaring and at the same time gold and gold-related assets all started to crash.
Of course many will just brush that off as a coincidental event but when you go back in gold chart history gold has been repelled or attracted by sunspot activity.
At this point in time, solar cycle 24 is dying, and gold prices have exploded.
I talk to people about the sun and I encourage them to put Spaceweather.com on their smartphone homepage. Investors will never know how important solar cycles are in driving prices and climate change. Solar cycle 24 drove the stock markets in early 2009 and the same thing is about to happen in the next 1-2 years with solar cycle 25!
In the last year or so we have seen oil crash and in the last day or so another crude oil price drop has made its presence known. There are no daily trading limits in commodities and it is the main reason why oil has made such huge price dips.
The decline is not finished just yet as I expect more downside to come. The Gold/Oil ratio is flashing and today the Gold/Oil ratio is the second cheapest ratio in two years.
The Gold/Oil ratio sits at 29.42 today matched only once in the last two years! This is a fast ratio move and I would like to see this ratio continue to spread in the short term. I trade the Forex oil units and have made some small good short bets, but the Gold/Oil ratio is sending a signal that we may have to reverse all our bearish thoughts as we will end up in a crude oil bear trap sooner or later.
Gold soaring, oil crashing changes the Gold/Oil ratio quickly so if we ignore it we can find ourselves in a crude oil bear trap and won’t have a clue that it is happening.
Oil might have another small degree, 3-4-5 wave count, to play out, but after that, a bullish oil move could surprise us.
Gold investors are jumping on the gold bandwagon as they think it will protect them from the savage stock market gyrations. Short term it will work but long term investors know that gold can reverse with little warning. I think there is more upside as a 5 wave sequence in Minor degree seems to have started.
Many may think that the gold bottom of late 2015 ($1050) is a major bottom but in Primary degree. We are not in a Cycle degree bullish phase so eventually, I will turn very bearish.
I have seen some EWI gold wave counts a few months back and we have the same “A” wave bottom in Primary degree.
This is very rare but they have a huge following reading their newsletters and when EWI turns bearish all of their subscribers will know it.
I’m still very bullish on gold and it may last all year or until stocks have crashed significantly. For now, this gold bullish phase should continue, so enjoy it as all trends eventually come to an end.
Silver has come back from the “Dead” and has been soaring with a great spike being formed right now. I believe there is more silver upside, but the corrections can scare even the most bullish traders. This could be part of a 5 wave Minor degree sequence, which also makes it a “C” wave bull market.
I have about 6 silver long positions which I got in a little late but I have no intention of selling just yet. I find no use in using the outdated Gold/Silver ratio as they are both used as metal currencies.
I don’t see any group of analysts that use silver as a base to calculate all other ratios with.
Silver is also part of the “Energy Metals” group as it is used in solar cell production. Silver might not slow down until we reach wave 3-4 in Minor degree so be prepared for a wild ride.
Each index that I cover has differences in the wave patterns which does make it much more difficult to find a good wave count. This DJIA chart top has rolled over a bit before it went south with “Gusto”.
One little dip is not going to cut it when a Cycle degree top is involved. Besides that solar cycle, 24 is still alive and well until solar cycle 25 starts to make a strong showing. A few sunspots belonging to solar cycle 25 have already been recorded but we need a good 50/50 mix before solar cycle 24 is completely dead!
Sunspot activity was dead last month and it could still last all of 2020 or early 2021. Once this solar cycle 25 starts to crank-up then there is no chance that I can stay bearish. The sun is the “Bull Killer” and the “Bear Killer, as the 2000 peak and 2009 bottom clearly demonstrated.
All hell can break loose a year or so from a solar cycle bottom like 2008 and now we are heading into the same situation except its one degree larger of a decline.
The younger investors can take advantage of “Sun Power 25” but you have to watch it and build up trust with our sun and its cycles.
The markets took a “Big” dip since last week and many experts are talking about buying the “Dip”! Sure it looks like an impressive dip but I believe the bears still want to shred some more stock bulls. So far, we are in a counter-rally which may be a wave 2 in Minor degree.
Buying the “Dip” for what? Another bull market or are we just in another bear market counter rally? I don’t think this market will let the stock bulls off so easily as this was just a wake-up call for what’s to come.
There is no real support just yet as the SP500 should fall below the June 2019 low. 2750 could supply support but the big support range is 2350!
We are at a Cycle degree top and Cycle degree corrections are not over in just a few days of crashing prices. Besides that, solar cycle 24 is here, which could still last a year or so. My bet is that this top is the last record high for the year so this might go on until we hit the lowest point of the year.
If stocks have yet another major move up then, to put it bluntly, Gold and gold stocks would crash.
The Gold/SP500 ratio is 1.94 which still has a long way to go before this market is really cheap when using the gold cash price.
This Midcap chart is on a different path as it started to roll over while the SP500 and DJIA created new record highs. By the time end of September rolls around Mid-Caps have been leading the bearish phase by nearly a year.
I believe we are in for a Cycle degree correction and eventually, It will take A Primary degree correction to complete.
We have about three price support levels we may have to deal with but we can only deal with one at a time.
The stock markets have started a bearish move with the DJIA having a bit different of a top than the SP500. It’s been a long-anticipated move which will produce many twists and turns before we find that mythical support price.
Support for what? A temporary stop for just a correction or something that is going to breed the next big bull market. This all depends on what degree the record high actually was.
I’m looking for a Cycle degree correction which the majority of analysts will end up calling a conventional bear market.
I will keep my options open as to what type of correction we will get. We could eliminate any potential triangle as there is not enough time before solar cycle 25 starts to crank-up.
A “Flat or Zigzag” is my pick but the present decline can just carry on without any obvious Primary degree counter-rally. “A” waves can crash very deep and then produce insane rallies as well.
Gold is still soaring but I think the gold move is mostly emotional with the US dollar breaking a new record high just before it took a nosedive.
Stocks and gold compete with each other so when the DJIA is ready to make a huge bullish move then gold and gold stocks should implode.
Stocks could see a bearish mood for the rest of the summer and well into the fall, but that remains to be seen. Sometimes the choppy decline can smooth-out a bit but only time can confirm that.
This is the August Gold contract as the cash chart has too many erroneous spikes at this time. Prices will be a bit different as this gold market is still advancing. I don’t want to see new record lows in gold but a deep plunge can also happen before gold starts to crank up again.
Commercials are close to having record net short positions but it’s the speculators that can panic sell at the drop of a dime. This Fridays COT report may tell us more. There is a good chance that the “C” wave bull market is alive but we need more evidence to support it with the development of wave 3-4-5 in Minor degree. Once gold soars to about $1500 + then I’m sure the gold bulls will be jumping up and down with joy. When they all agree that gold is bullish then gold can crash and wipe the smiles off anyone that buys when prices go vertical.
In the long run, I’m working gold as a big bear market rally so very choppy waves in a bull market are very normal.
The SP500 had a peak on the 29th before it started to back off and start yet another decline or correction. I see them as diagonal waves with the last (c) wave looking like a small ending diagonal. The SP500 definitely would have to fall much deeper if a bigger bear market is coming.
Back in early July we still have a small open gap and the very least, that gap should get filled. Commercial traders positions do not support a super bearish picture at least not just yet.
After a small break, search engine attacks have started up again, which slows down the entire blog. The majority of search engines attacks came from Hong Kong and China and “they” have now switched to attacking this site from Singapore. In the long run, no web site can stand up to these kinds of attacks and I will only mention it once in this post so legitimate readers are informed.
July 16, looks like the last record high and since then the Nasdaq has made some wild moves that could be the start of a new trend. Lower highs are not yet visible or long enough but all it takes is one more new record low which can get investors into a mini panic.
Antitrust investigations can get investors nervous as the stories are out that the SEC has officially started investigations of the “FANG” stocks.
Some analysts are very bullish on stocks as we hear stories about a melt-up is coming. Any potential melt-up is pretty hard to swallow at this time as it would start at world record highs. A melt-up from this point is next to impossible as the Gold/Nasdaq ratio is already super expensive at 5.6.
Commercials are net short but yet not quite extreme enough.
We are getting closer and closer to the fall and the fall time period can produce some ugly melt-downs.
The decline ended on September 2018 and GDX has been in a bullish phase since then. Higher lows on the charts are patterns of a bullish phase, with this wave 1 containing diagonal waves. Pretty trend lines will rarely work even if we are expecting a full set of 5 waves in Minor degree. Also, you can’t trust any angle that much and in this case the angle change dramatically as we started up wave 3 in Minor degree.
Even chart gaps have opened up below present prices but they can stay open for the entire bullish phase. Besides that, the big open gap at the $34 price level is a much more powerful draw.
With the fast move up in GDX it also changes the Gold/Gdx ratio which sits at 50.1 today. GDX is now more expensive than it has in the last 2 years. Any true bullish phase still to come, will push that ratio much further as 30:1 is my most expensive ratio to beat!
Jumping on a bullish bandwagon after it has already gone vertical or near-vertical only works if you have the bigger direction right. We can run into all sorts of wild corrective moves yet, but after each correction gold-stock, ETFs should push higher.
I can’t tell you when this GDX bullish phase will come to an end as extensions can push GDX beyond logic. Anywhere between $45 and $55 can be my price target after the impending 5 waves up have completed.
Once all the analysts turn bullish on gold stocks we know there is nobody left to jump on the bandwagon.
At this time my last record high was July 15, 2019, at the 3026 price level. What followed is a very choppy decline that can fool anyone into thinking that stocks are just in a correction.
Analysts that are looking for any price support target are still on the bullish side. Well, bear markets start out exactly like that but they also can smooth out as any bearish phase keeps on growing.
Any bear market has a starting point far removed from the consensus vote of a 20% decline. I think a cycle degree bear market will produce a far bigger downside move and investors could end up running to the hills looking for gold and silver.
This could take until next week before a new leg down can happen and once investors show “Red” they could run to a safe haven in the “Yellow” metal. We can’t forget silver as it’s still acting very bullish even after a near vertical move.
Lower highs are the signs of a bearish decline and until the decline can be easily seen this market could soar to another record high! The odds of a new record high decrease every day and can establish the last high of the year.
2020 elections will be a big part of it as parties crank up the rhetoric.
The president that wins in 2020 will have the sun at his back which is about as bullish of a scenario that I can see.
I am very bearish on the 4-5 main indices that cover but very bullish on gold&silver.