Author Archives: "BB"

Gasoline Bull Run Update.

From my perspective, we are looking at a rising wedge in Minuette degree. The wide part spans 2 of the same degree levels so we understand that we are looking at a Subminuette degree rising wedge. Rising wedges are used in bull markets and their endings, while falling wedges are used for the ends of bear markets.  Right at the top we see a funny pattern that looks like the gasoline market is giving viewers the middle finger. I think it is flashing a signal to all the gasoline bulls presently driving this market nuts.

Do supply and demand pictures change that fast in such a short period of time to justify the wild gasoline swings? I doubt it as algorithms can’t figure out the fundamentals, yet the fundamentals is what is supposed to drive the markets. In the end no matter what if we think that this market is manipulated, they sure know how to manipulate it in Elliott Wave fashion. Wow, are those manipulators ever good if they can manipulate Elliott Waves at will.

The fact is they always blame “maniulation” when the markets go down, but use fundamentals as an excuse when it goes up!  Investors think that there should be no volatility in the markets, as they get scared when it starts to move violently. “Take a pill folks”, as this is the name of the game in commodities. “Fear” dominates the commodities markets and fundamentals are just lagging indicators not leading indicators.  It took 2 years for analyst’s to see the improving fundamentals, as the expert consensus is extremely bullish right now.

The biggest trend is not going to take gasoline prices to the moon, at least not on this trip!  The biggest gap in all my charts is open in this gasoline chart, so I think that gap will get closed first in the next few years.

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Euro Daily Chart Crash Update

The Euro acts inversely to the US dollar, most of the time but not always. At this time the Euro is acting the opposite way of the USD which is pretty normal.

If the Euro still has a big up cycle left, then this decline will come to a halt and then reverse again. The first horizontal line is the previous 4th wave of one lesser degree, but in a wave 2 decline, it does not have to make a picture perfect landing. It can do a belly flop at much lower prices.  For a wave 2, I like to see a 60-70% retracement as that sure would get the Euro bears excited.

We do have some sideways action that already suggests a correction is going to take place. I looked at the COT report and the commercials were skewed to the short side, and the speculators are still skewed to the long side. Two completely different sets of opinions!  We should understand that the speculators are the trend chasers. They will always get into a trap, be it a bull or a bear trap.

The media spouts what the speculators are doing, as they think that the speculator long positions is the smart money.

Be prepared that the Euro has more downside to go,  as this decline is not deep or long enough to have completed a wave 2 in Minor degree.

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US Dollar Daily Chart Bullish Phase Update.

It’s obvious that we see the US dollar in a bullish phase. Technically, it would be called a bear market rally if we believe that more downside is still to come.

Otherwise, we just assume that the US dollar bear market is over and the great USD bull market will resume. The horizontal line connects at least 7 points, which can give the US dollar rally reason to pause or even run out of power!  I will be looking for a wave 2 top in Minor degree with the trend line being well within the previous 4th wave of one lesser degree.  Any wave 2 rally is not limited by any means to stop dead at the trend line above as %60-%70 percent rallies can and do take place. In short, the general guideline for previous 4th wave reversal might not mean anything.

Fighting against the bigger trend can take more time than normal, so we have to have patience as I believe that the US dollar still has a huge bear market to show us. This USD rally is keeping a lid on gold and silver prices and it could still force a temporary drop in the price of gold and gold stocks.

The Euro is also crashing, and our CAD seems to want to take a rest from getting beat up.  US Dollar COT reports do not show that both types of traders are in radical positions which gives the US dollar a bit of flexibility how high it can go.

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December 2018 Crude Oil Review

When I looked over the crude oil December 2018 contract, I found an extra diagonal wave 1-2. With the June contract, no way would that fit as a 1-2 wave.

December is also a little less busy as the waves seem a little less jerky. Rising wedges happen in bull markets and this oil chart has a pretty good rising wedge right now.  Wave 3-4 in Subminuette degree,  are the two starting points which makes this a Subminuette degree rising wedge. I will always try to keep my wedges between two of the same degree levels at all degree levels. From the 4th wave bottom in Subminuette degree is a diagonal 5th wave, not an impulse 5th wave. If we count oblivious to the diagonal, then you end up with 7 waves. We need 5 diagonal waves before they finish and that is what I counted out.

This is also a very common diagonal and gives us big hints that we are in a 5th wave location. One of my own rules is that all 5th waves must always be capped by one degree higher. If there is no “cap”  then the Elliott Wave sequence has been broken and it can no longer be trusted.

I don’t have enough room to fill all the degree levels, but it’s not ending on a “5”.  🙄

I will be switching to this December chart form now on but it is $2.79 per barrel less than the June contract. This doesn’t  instill bullish fever from my perspective. Experts are not even looking that far ahead, otherwise they would be reporting it as well.

Does this change the Gold/Oil ratio? Not really, as we are at 20.14:1 today. It’s been around this average for over 3 months and does not seem like the ratio is dramatically changing.

Some are calling for $100 oil this year, but they forget about the gold/oil ratio as $100 oil would mean a $2000 gold price.

We could be at a fake top so oil would have to dip soon to help the bearish case.

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Quick Look At The Crude Oil Intraday Crash.

When we look at the Intraday oil chart, we can see violent moves in both directions.  If fundamentals make oil go up and down, then we should know exactly what news story created which move. The fact it’s next to impossible to forecast the price of oil with fundamental analysis. Even the experts couldn’t see an oil crash coming back in 2008 and they all used fundamentals to justify any price move. It is also very rare that you will find any oil bulls scream “sell” at a major top!  When markets are down, analysts give us a reason why it went down, and when this market goes up, they post all the good news about oil.

In a bearish trend any bullish news will have little impact on the overall bearish move, until one day bearish news keeps oil from going deeper, then we know that a reversal will be coming.  In 2015 massive news about the world oil glut, no longer had impact, after which oil turned and soared again.

Bull traps and bear traps happen all the time, but if we’re not looking for these traps, we will step in the trap ourselves. Raw human emotions drive the markets and leverage compounds our emotions.

So far,  this short term bearish move has not completed like what I would like to see, as oil is in a bit of a rally. If the bigger trend is real then oil has much further to fall if the 4th wave scenario holds true.

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SP500 Intraday Bearish Outlook.

My ending diagonal may not happen as the markets still have downside pressure today. I did change my degree level to an intermediate degree “B” wave top. Any decline has to be 5 waves in Minor degree, not Minute degree.  I have multiple different tops between 5 different indices and sorting them out will take time. This is my third bear market since the 2000 peak and I’m very stubborn in sorting out tops.  We need a long set of 5 waves in Minor degree, which could  land us directly on the “A” wave in Primary degree.  If this wave count has more validity to it, then it can stretch and extend dramatically. It sure would help to answer the question what type of a correction Cycle degree wave 4 will have. I think I can still put any Cycle degree triangle pattern back into my inventory as any Cycle degree correction should happen in much less time

If this continues, then all support below this chart will not hold.

We will be finishing the third month of this bearish phase and that is not nearly enough time to finish a big correction. We could be heading into the summer  where the winds start blowing from the NW  much stronger flipping our little “sailboats” upside down.

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Bitcoin Rally Update

I’m sure Bitcoin speculators are in 7th heaven as they grew richer by the day during this April rally. The rally  looks impressive, but I can also see a possible inverted zigzag that has developed.  Any inverted zigzag rally can be part of a bearish rally which I think could be just topping out. The horizontal line reaches all the way back where Bitcoin had turning points in four places.

We also have a H&S pattern in there and if we are in a bigger bullish phase, then this horizontal line will get lifted.  A huge majority of  the Cryptos have been lighting up green for the past several weeks, but if I’m right then the board will be turning to red soon. (Down)

I changed the degree level up by one degree level, so I have more degree levels to work with. We could see a 60-70% correction and Bitcoins could soar back, but then we are looking at a potential triangle.

If you have no way of an established and tested path to convert Bitcoins into US cash and then haul it back into your home account, then I wouldn’t  touch Bitcoins with a 10 foot pole.  I have created a few necklaces with my physical tokens and have been selling them off my neck for $20 Cad. Friends have no problem in buying Bitcoin tokens for $10 CAD each. The expression people have when I show them a token, is priceless.

 

 

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E-Mini SP500 Intraday Catching A Falling Knife?

The markets had an exciting afternoon, as it seems the bottom fell out! Don’t let that fool you because that drop has all the markings of a zigzag correction. I deliberately left all other wave counts bare until after this wave count fails. Folks, I’m showing what could be a diagonal 4th wave zigzag crash, and we could see a rocking bullish phase return.  It is clearly an ending diagonal at this time because wave 4 is well inside wave two parameters. Wave 2 and wave 4 zigzags look identical, but they are still very different as wave 4 subdivides much better.

With a potential rising wedge which is mostly used for bull markets. If we look to the start of the top wedge line, what the hell do we see?  Another H&S that helped to determine a top. If the market is still bullish then this top trend line could get lifted. Exceeding March highs would be nice, but the SP500 should not push to new record highs.

This diagonal which is in Minute degree also changes the entire degree I have been using since the wave 3 top. I mentioned that this market was in a pattern with not very smooth flowing moves. Plus, it was taking  too long to resume the bigger decline, so this impending little bear trap will answer more of my questions. I have run into many of these types of diagonals and they sure will not be the last that we will run into.

The more this market gyrates the more conflicting fundamentals we will read about. This will confuse the majority and we end up having no clue which direction this market is going.  This could all happen in a very short time ending close to the end of the month or early May.

If this decline clears below my wave 2, then this wave count is instantly trashed

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Mini DJIA Intraday Crash Review

The DJIA has finally succumbed to bearish pressure, but we could still see a violent counter rally at any time. The DJIA must trash all support price levels that you see on the chart above, if the decline is more serious than what the investing bulls thinks it is. This DJIA chart I am cheating a bit in that I’m also working it as a potential diagonal decline. This may smooth out once any decline starts to get recognized, but this is still too early to tell.

In the afternoon the DJIA dropped close to 700 points which is a pretty good vertical drop. Sure, we can draw a wedge from the bottom up and if this is as bearish as I think it will be that bottom invisible wedge line will not hold.  We do have 3 lower high peaks in this developing trend, and that indicates a bearish phase in progress.  I don’t want to abuse wedges and trend lines as they can be extremely biased most of the time. The DJIA saw its peak way back in January of 2o18 which may be the top for 2018 as well. Sooner or later investors will lose patience and when a group sees the same thing at the same time we get mini panic sell offs, like today.

At the top I have 3 sets of 5 waves that have terminated which “must” be stacked from the smallest to the largest, which in this case is Cycle degree wave 3.

My strict rule is that no 5th wave peak should be left uncapped, “EVER” because an uncapped 5th wave clearly tells me an analyst is just guessing or bluffing.

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Nasdaq Intraday Decline Update

The Nasdaq hit a major peak in March before it decided to crash again. I have conflicting tops between the Nasdaq and the other 4 major indices that I cover, but I think the Nasdaq top is the real deal, and the top is a good place to start a bearish count down from. Notice that I have a small H&S pattern already completed, and if we are still in the bullish phase, the Nasdaq will  lift the right side of the invisible horizontal line dramatically. I will still keep the present decline as a Minute degree declining 5 wave sequence,but will adjust later on if my degree level is too low.

If the bearish scenario is true, then all popular support levels will get trashed.  Those that are talking about buying the dips don’t realize how big, “The Big Dip” will get.  At a bare minimum the Nasdaq will retrace the 4000  price level, which also puts the Nasdaq into the previous 4th wave of one lesser degree.

One lesser degree in a Cycle degree correction is a Primary degree, not the Intermediate degree bottom at the 4000 price level.  We have a long way to go with many twists and turns, but sooner or later the fog will clear and the basic shape of 3 simple corrections will take place. The triangle is my last choice as the solar cycle #25 will not allow it to fully play out. When solar cycle #25 starts to crank up, then all stock bears and bearish wave counts will get terminated.

Sure the bottom may still be three years away (2021) and the investors at that bottom will be the ones that have lots of dry gunpowder ready. (Cash)

Buying low at a market bottom is rarely done by the average investor, as they will be wiped during the “Big Dip” decline.

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Silver Daily Chart: The Short Term Bearish Case Review

The mass media has been brainwashing us with gold bullish stories and some even have a $1550 gold price target like I had. Except for one problem and that is silver refuses to play along and has consistently lagged behind gold for the past year. Silver should have hit $20 if it joined the gold rush, but silver did not follow through.  The experts come up with the idea that silver is going to wake up and surprise us all, by playing “catch up” to gold.

The idea of silver catching up is a myth by any stretch of the imagination which has been used as an excuse why silver is lagging.  Back in 2011 they were waiting for gold stocks to “catch up ” to gold but they never did. Silver has a year long trend that has produced at least three sets of Head&Shoulder patterns, which are hard to ignore. If we were in a much bigger bullish phase, then each one of the right shoulders would lift the top trend line higher.

Silver has refused to do this as after each right shoulder the silver market has pushed down. This is the sign of a bear, not a bull. We also have a sideways wedge with silver getting very close to slicing the rising trend line in two. At $16.10 our present little rally will be confirmed as a bearish rally. Silver still has two very critical bottoms to retrace, and they are pretty close to each other. $15.50 and $15.20 could also get retraced. When silver retraces the $15.20 price level, then from my perspective silver jumps back into the unfinished bearish territory. From todays levels, silver still has to crash well below $14 which is only about $3 below present prices.

Silver has no problem crashing $3 at a crack so that could happen in rapid succession. $13 is also a great Fibonacci number. Below that $14 price level silver will have completely retraced its so called bull market, but then it would also be ready for a major new stronger bullish phase.

Sure, I’m a silver bull, but if the market is telling me that the bearish phase is not finished, I want to be aware of it. I’m also fully aware that I am going against the mainstream media bullish bias, but I have been in those situations many times before.

I was very bearish when experts were calling for a $200 silver price, from the 2011 peak, but their forecasts went south instead.

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10-Year T-Notes Intraday Crash Update!

The crashing bond market is in the news, as the rally up to the April peak was super choppy, and then decided to pack it in and crash to new lows. I believe we are declining from a 4th wave in Minute degree.  Starting the decline it looked diagonally like right away, so instantly we have to look for the connecting zigzags to confirm it. There may still be a bit of a downside, but I would be expecting a correction of another 4th wave rally in Minute degree.

This rally can go sideways and force us to pull out our hair, or it can soar right back up to the top trend line in short order. Either way it will shut the Bond Bear’s mouth for awhile.   So far this diagonal decline tells us it is a 5th wave down, as it’s any 5th wave where they can show up most frequently.

This is a classic move and a very common diagonal, as they can get so choppy where this pattern is much harder to see. In a diagonal I like to see that waves 1,3 and 5 are zigzags, with wave 2 and 4 being any regular correction, even a triangle. A triangle in a diagonal 4th wave is a real mouth full, which can produce super choppy waves that will defy logic. 4th waves are also warning us that a higher degree is going to be terminated on the 5th wave, before this decline is finished.  All 5th waves must be capped, which should be followed by another much larger bullish move.

Investors might be running away from the safety of bonds, but they could also come running back with a vengeance. I’m not certain enough to call bonds with a Cycle degree 4 peak as finished yet, but any bond rally will help to take the pressure off the Fed, from having to keep on raising interest rates.

How rallies act is always important, as a choppy rally will tell us that it’s just a little bear rally!  It may take longer than the end of the month to play out, but any counter rally correction needs time to fully develop.

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Crude Oil Rocket Rally Update

What a great vertical spike crude oil just had, but it also looks like an inverted expanded zigzag which I’m hesitant in labeling it as a wave 1-2.  Any decline could just be another set of 5 waves which would place us at a diagonal wave 1, one degree higher. One minute it’s all about the inventory, then the next it’s about the rig counts. Even the news of hijacked tankers could have made this spike. https://oilprice.com/Energy/Energy-General/19-Oil-Tankers-Held-Hostage-Off-Yemeni-Coast.html.   It matters little if the news is fake or real, but emotional traders will react. I”m sure that many stop lost buy orders were hit as well. If the story of the 19 tankers is false, then the oil price can crash right back down, and go much deeper adding on another leg down.

The violent move up in oil and a violent move down in gold made put crude oil back on the expensive side with a Gold/Oil ratio of 19.2:1.

I show a 4th wave top in Intermediate degree, but it is still a bit early to see if it will hold.  Analysts are still extremely bullish as talk of $100 seems to be increasing.  The oil experts were also telling us the same story at the top in 2008, and the only thing than has changed since then is  the price!

What ever happen to $200 oil?  If we use the 19:1 ratio and the $100 oil price this would translate to a $3800 gold price. All I can say is good luck with that $100 oil forecast,  as it’s not going to happen on this trip. Even Trump is trying to crash the oil price as he blames the Saudis (OPEC) for price manipulation.  Give me a break! Tweeting oils price destruction is not going to do it, as this has been going on for decades and will continue.

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US Dollar Bullish Spike Review

I’m working this rally as a Minor degree correction, which is not finished just yet, but this USD rally  has more to go, as another wave 3-4 should happen.

We had several gaps open up on the way down, so I was pretty confident that the US dollar still had to rally and close those 2 gaps. Now on the way up, a huge gap open up, which will get closed in the future. We know that the USD will eventually decline again, and close this gap completely.

Gold and silver both took hits as well, while oil soared this morning in a massive bullish move at the intraday scale.  I have full confidence that the US dollar is not going to the moon, but this rally could remain bullish in the shorter term.

I usually do not post on Mondays that much as most of the real action happens during the rest of the week.  The full moon is still about 5 trading sessions away so we will find out with the Sunday session if any reversal may happen.

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ZGD: BMO Equal Weight Global Gold Index ETF

This ZGD is a fairly new addition to Canadian ETFs, which is a bit over 5 years old. The invisible wave count previous to 2013 can be used from any other Canadian ETFs with some differences. It’s an equal weight ETF  and will produce different wave patterns, but in general they will react the same as most other ETFs.  I show Minor and Intermediate degree tops and bottoms with the Minor degree 5th wave being a diagonal. ZGD made its bottom in mid 2015 long before any other gold stock related ETFs did. Again, I could be wrong on this, but I have to call them the way I see it, even if it means missing out on the next leg.

I hate to miss out any any bullish phase, so this is a tough call.

Any price action “after” the 2015 bottom belongs to the bullish side as a potential expanded counter corrective move. The 2016 rally is what I call a “C” wave bullish phase, which peaked suddenly in mid 2016. $14.50 CAD seems to be the peak after which all gold stock related ETFs start a grinding bearish phase, with parts of it fitting into a falling wedge. Falling wedges are very bullish indeed, but any wedge can fool us, especially if it is a fairly small one.

ZGD is now poised to do one of two things, blast up, or keep falling! “It’s now or never”,  as I like to say. All ZGD needs to do is decline just a fraction below the 2015 low, and then this market will have confirmed, that a “complete”retracemet, has taken place.  In short, we may find out the hard way what a fake bull market can do. Way back at the 2013 lows we can see a gentle sloping decline between 4 points. This is a bullish pattern as the markets are starting to bunch up.

I only have one Gold/ZGD ratio from today, and it’s sitting at 146:1. I may get an expensive ratio reading from the Mid 2016 peak, but that still requires more homework.

Chances are good I will update this ZGD more frequently as it deserves far more attention at this critical stage.

With most gold stocks pointing down and gold pointing up, many analysts say that gold stocks will catch up! I don’t believe in this “catch up myth” as they were saying the same thing at the 2011 peak and it didn’t work.

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Bitcoin Update: X Marks The Spot!

This is the cash chart which only gets updated during the day. (BGY00) It also produces different wave patterns that are not the same as the actual April contract. The next available contract month is May and it has so little interest that it’s not worth posting.  I tried something different this time as I applied a custom moving average as 25 day and 100 day averages. This produces a quicker “Death Cross” or “Golden Cross”. We just had a golden cross just a few days from the unknown bottom, which is marketed “X”. Jokingly, “X” = “I don’t have a clue”. In this case X marks the spot to the start of a new wave count.

So far it works as a diagonal, but a pretty clean one I label with a 5 wave run in Minuette degree. There still is upside left, but we start running into resistance again at the $9000 price level, with the big resistance line at just below the $12,000 price level.  Sure, volume in the entire Crpto world has improved dramatically, but it can also be the smart money selling to the gullable dumb money.

The bearish history of Bitcoins is relatively short, and if the bigger trend is still down, then this run must end. This would only be one move, but we need three moves  to help confirm a bear market rally.   We do have  a huge double bottom from the February bottom,  and if you like, we can even draw a falling wedge. If this wedge means anything I would be surprised.

The total Crypto market cap has improved by about $100 billion, but still down close to $500 billion since the peak of the good times in December 2017.

We are getting close to finishing a 4 month bearish phase that the majority thinks is  just a correction in a bull market. Bear markets and even bear market rallies are not over in a few short months but can last many years.

My Bitcoin updates will be once a week unless I see some potential dramatic move being setup.

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SP500 Intraday Gyrations Update.

Since the January top it looks like a nice 5 wave decline, but it has not been flowing as nicely as I expect, from a 5 wave decline in Minor degree.  The DOW and the Nasdaq have both created wave peaks that just do not fit into the bigger picture very well. I did go back to the 2016 peak where the wave 1-2 in Minor degree sits, so instead of a Cycle degree peak it could be a Minor degree peak. The bottom trend line from wave two, can now fit with the bottom in early April.  Right now the markets are in a decline and it will be critical to see if it turns again and creates yet another higher high.

Any 5th wave can form a diagonal wave pattern so this could get very choppy in the short term.  Any new record lows will kill this wave count, but I have to run this wave count to eliminate it.  We are in a decline, but the SP500 could turn into a correction, and a mini bear trap.  Any dip below the diagonal wave 2, would also kill this bullish wave count, so many things can go wrong in a short period of time.

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Crude Oil Intraday Bearish Review

Yesterday, crude oil peaked with a small double top after which oil immediately reversed its trend and now looks like a new trend is forming.  Since my top could be a 4th wave top in intermediate degree. I know that my largest degree of this decline must only be Minor degree, so I sure do not want to start with a a degree far too high.  One 5 wave sequence in Micro degree has already started with two lower degrees also visible. I have used Miniscule degree which is the bottom from my list of 15 degree levels. I will adjust my degree levels once this decline starts to show its true colors.

It is also a good idea to look for bear traps at the earliest moments but that might happen when all the patterns start to get super choppy. We need more evidence that this move is part of a bigger bearish run, and until then we have to be aware that we can always be wrong.  The longer it takes for any new highs  to be reached again, the better I like.

The oil bullish peak came within 45 cents of the $70 price forecast, but that forecast is an easy call if we were at $65 already. As I post, this chart has already dipped much lower, but in the end only time will help how this progresses.

The Gold/Oil ratio has compressed a bit more which means crude is still hitting the ratio brick wall. The Gold/Oil ratio is at 19.71:1, but it’s supposed to go the other way. In relation to the last 3 month Gold/Oil ratio average this makes oil more expensive.

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Canadian Dollar Daily Chart Update

Since last August, 2017 our Canadian dollar has gone wild, with swings up followed by dramatic declines. As soon as our dollar went higher than the previous little bump, the bearish scenario was trashed at least temporary.  This can work as an expanded triangle and it looks big compared to any wave 1-2 that I have.

From the “D” wave top to the “E” wave bottom we only have a 7-wave count which works as a zigzag very well.  Any triangle pattern that we may have must not break below my 4th wave position because if it does, then chances are good my diagonal scenario gets reused. Market action has not forced me to change the bigger degree positions, but this little rally is either going to blow past the top trend line, or it will fail.

I have high confidence with my 4th wave scenario, but some of  the smaller moves  sure test my patience. Many times the CAD has also turned around close to months end, so it could take until May before this rally gets resolved.

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GDXJ, Gold Stock Bull Trap?

The start of the bull market in early 2016, soared with small subdivisions This bullish phase ended in mid 2016 at about the $50 price level before GDXJ started to turn down again. For just about 2 years, GDXJ has been grinding sideways for far too long in a bullish correction. A horizontal wedge has also formed which compounds and confuses the next potential move. If we look at it from a bearish point of view, then it’s an easy guess, otherwise it can soar out of this wedge just as easily.

Even now the Gold/GDXJ ratio is hitting a break wall with todays reading at 39.8:1 which makes GDXJ a bit more expensive. This ratio should spread, as any decline intensifies. I have 62:1 as my cheap ratio, but we may never hit that again for a very long time.

Most of the gold stock related ETFs also have this sideways wedge,  so it’s not just some isolated pattern.  The well heeled gold stock contrarians who have very deep pockets will just be buying more, but for a new player this decline would hit them hard.

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Silver Daily Chart Update: Bull Trap?

This is a daily chart but I have increased the bar count from a normal 500 to 1500 which stretches this daily chart. This way the top wave 2 in Intermediate degree is showing.  Silver is not even close to looking like gold and I don’t think it is going to catch up. Catching up rarely happens as silver works much better as a leading indicator to what gold is going to do.

Since the 2016 peak, silver has executed a grinding bear market, which does work as a triangle in a “B” wave. Silver also has a wedge that is horizontal, further compounding the forecast in which way silver can go.  We do have a few waves that show higher lows, but that could be just a “D” wave.  Short term gold and silver can fall right along with crude oil.  The fact that silver has been struggling to gain bullish momentum also helps any bearish outlook.  Any “C” wave, crash, can happen so fast it will surprise us all.  I don’t like surprises, so it’s always a good idea to look for them before they happen.

If the bearish 4th wave scenario is true, then the silver market has to crash to new lows, even by a very small amount.

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Crude Oil Daily Chart And The $100 Forecast!

When I read the news that the $100 price forecast was back on, then chances are good that, it will never happen. At the 2016 bottom the media saw no bull market coming, but they sure can see it now! Back then they were calling for $20 and even $10 oil, yet the market did the exact opposite and started to soar.

This is the June contract in line type settings, which eliminates most erroneous spikes and shows no gaps.  This morning oil topped just short of $70 and has now started to back off as I post.  I’m not bullish on oil at all, even though oil broke out of the top trend line. The flat line shows the potential of two H&S patterns starting to develop around this $70 price level. $70 is a very boring number as I love the rounded Fibonacci numbers much more, where $89 has a much better ring to it!  Even $89 is a pipe dream right now,  because the entire crude oil bull market could be just a big bear market rally.  To confirm that, then nothing short of  complete retracement of this oil bull will happen. It may take two years to decline, but the bullish move from the 2017 bottom was a very choppy diagonal.

Oil may still give us a hard time, but this morning the Gold/Oil ratio, compressed down to 19.38:1. This happens just before a major reversal like it did back at the 2014 peak, when the ratio touched 17:1.  When oil becomes cheap, then this ratio will start to widen again. Something much wider than the narrow 21:1 average range we’ve had for the last 3 months.

There is a huge Falling Wedge (Cycle Degree) in crude oil and others, which on the bigger scale forecasts another huge oil bull move will come, but it may take a few years just to get to a bottom. The power for oil to crash like in 2008 is always there, and if you hate volatility then you shouldn’t be in a long position anymore.

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VIX Daily Chart: Falling Wedges Are Bull Traps!

 

 

 

I have been using different descriptions for basically the same pattern. They call them “Falling Wedges” and they produce powerful bullish reversals. From an Elliott Wave perspective, they are also called Bear Traps.

The bottom of the VIX wedge took about 6 months to build up before it exploded and has now been settling down in the last month or so. I had to switch this VIX chart to line type which took out many of the erroneous spikes and cut or peak price to $37.

I think there is a very good probability that the VIX may be in a wave 1-2 pattern, but the VIX may still need to fall to $13 or below. I have a little 5 wave sequence that soared, but now has just about been completely retraced. If the VIX drops below $15 then that single set of 5 waves didn’t go anywhere!

The reason those Subminuette degree 5 waves didn’t go anywhere is because it belongs to an expanded pattern which is sure starting to look like a zigzag correction so far.  Zigzags do cut short but I treat them like running zigzags, not as a truncation.

Many are using the VIX to explain how bullish for stocks the falling VIX really is!  Sure, that would be true if the VIX topped out at a $100 or so and has just started to fall, but we are looking at a potential huge double bottom. At $9 we also will have a huge Head & Shoulder pattern, which is also very bullish.

Since the 2008 peak in the VIX,  we can see a huge falling wedge that has a 23 year long bottom. Even on the weekly scale we can see falling wedges.  It’s not just one wedge, we have multiple wedges. Once I look over the VIX COT reports after Friday, I will know more which way the traders are leaning. Short term the VIX is still bearish, but I sure wouldn’t trust it to keep being bearish for very long.

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Nasdaq Intraday Bullish Phase Update!

When markets go up the expert analysts turn bullish, and when the markets are heading down then they turn bearish. No matter what the direction they will find you a reason explaining why. The Nasdaq contains the biggest elephants in the room which suggests very large companies. I think elephants are pretty small compared to some of these “FANG” stocks which are more the size of the biggest T-Rex!  In January of 2018, all the indices recorded world record highs, never matched in financial history. This bull market top calls for a correction that nobody expects, with some analyst getting suspicious as to the staying power of this bull market.

The Nasdaq bearish phase has only started more than a month ago, so in order to help confirm a major bear market is coming, all major markets have to crash to new record  lows again.  Price is only important to the majority, but from an EWP perspective pattern is far more important. Yes, I use price projections as well, but you will see no prices posted in my charts.

Another little pop is still possible, but the declining pattern will be important to see that it contains no corrective moves. A grinding summer bearish phase would suit me fine, but only time will prove that true.

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DJIA Intraday Bullish Progress Update

As of this morning the Mini DJIA seems to be in a small correction. The VIX also reacted with a huge spike to the upside, which tells me it takes little to spook this herd of DJIA bullish traders.  From my “B” wave bottom, the DJIA has travelled a choppy path which indicates I should be looking at diagonal wave structures.   I can draw a nice wedge as well, just by adding the top trend line, but we have to be careful not to see imaginary wedges hiding behind every move.

Since it’s only midweek, another small move to the upside could still happen, but in the end, this present rally still looks like a bearish rally.  To confirm this move the markets must resume their downward path and completely retrace the entire April bullish phase. Usually there is a much better flow to any 5 wave sequence, but this can smooth out over time. I do have different wave count tops like the Nasdaq does, so I have to look at a potential expanded top, which should be one degree higher. In other words, the “B” wave top in Intermediate degree is already in. The late 2007 peak can count out as an expanded top as well with the same degree level.

Many analysts are very bullish on stocks, forecasting that the next leg up is just around the corner. Since 2000 it has been my experience that markets never do what consensus forecasts are always telling us. ( At the extremes)  Basing forecasts on fundamentals never work, because they are lagging indicators, not leading indicators. In the case of the DJIA it was close to a 8-9 year lag as the best fundamentals were at the January, 2018 peak.

Where were all these bullish experts when the DJIA was at 6500? We know history proved the majority wrong in late 2008 or early 2009. Some analysts are so young that they have no recollection of the 2008 crash, so it is pretty hard to find an analyst that is a contrarian in the mass media today.

I can’t see this market being bullish all summer long as a bearish move into the fall has happened many times before.

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Gold Daily Chart: Is $1375 A Bull Trap?

 

Our present gold bullish phase was an extremely choppy ride and gold has been struggling as of late. We can go back 5-6 years and gold have struggled around this 1375 price level many times before. Based on the top line we also have 4 H&S patterns of various sizes, which would be very bullish in a bull market, but it would be very bearish if a big correction is coming.  I cannot stay bullish when I see this as it looks too much like a gold bull trap to me.

I did raise my degree level up by one, and the “A” wave I’m use can switch to a 4th wave easily. The rally that started in early 2017, can work as a triangle in a “B” wave. Any triangle in a “B” wave like this is very bullish in the long term, but short term gold bulls could be trapped.

We also have a rising wedge which we know can produce some violent trend reversals. Our present top could be a running inverted zigzag so a dip below $1300 would be the first logical price target to get breached.

Gold could turn bearish, along with the stock market, which has happened before during the 2008 crisis.  Gold could roll around some more, but if the entire gold bull market was a fake, then it must start to tell us soon.

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Crude Oil Intraday Update

About 5 days ago crude oil peaked which produce what looks like a triple top. The third peak is a wild spike which you can ignore, which doesn’t happen in line type charts.  After yesterday’s bottom oil rallied before it started to grind back down, which does not fit into an impulse anymore. I labeled the entire move as a zigzag, but a diagonal can also fit into a 5th wave decline, so both wave counts have to be kept in play until one gets eliminated. Oil is a wild animal at best of times so violent moves are going to happen.  We can draw trend lines, but it is far too early to start doing that. In a bear market lower lows is the  pattern of a decline, so lower lows below $65.60 should happen.

Our present little rally as the makings of a 1-2 wave so if the quality of any 5 wave decline remains very high, then this would be a very good bearish sign.

This may be wishful thinking, but wave structures do smooth out a bit once any  bearish decline is more accepted by the majority.

On a bigger scale crude oil has a Cycle degree declining wedge in it, so that alone can forecast another huge bull market in a few years time.  The whole idea of high degree wave counts is to “see” it coming long before the majority ever will. When a big group of investors  also seen the same thing, then you can get what would be a mini panic.  This has only happened in a very small scale, so bigger panic situations will arrive as more and more people get suspicious to the staying power of this so called bull market.

The Gold/Oil ratio has not changed hardly at all, as it has been hitting the ratio brick wall for months already.  Today the Gold/Oil ratio is at 20.23:1.

In Canada, Alberta is talking about conduction pipeline wars, as Alberta wants to cut oil supplies into BC, if the pipeline does not get built. If this actually happens, then BC could see some explosive gas price increases at the pumps, crushing BC’s economy along with them.

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Mini SP500 2000-2018 Review: Buying The Dips?

When intraday gyrations seem a bit foggy, then it is always a good time to review the big picture, looking at where we came from, and then where we are heading to.  Analysts are becoming frothy again as they say this market has turned and all new record highs are coming. The crashing of the VIX confirms it as they say that bigger bullish moves are ahead of us.

We can go back a relatively short time period to the 2000 peak where the majority were also very bullish but yet the markets imploded, just like they did again in the 2008 crash. Now those crashes were dips as well, but the majority were sellers, not buyers at the previous two lowest dips.

The majority of experts have no clue how deep the next bottom will dip down to, so those investors and their clients are going to go down with the ship because they refuse to ignore financial history.

I show two stages for the next decline with the SP500 1800 price level being a potential resting spot before a downside breakout happens.  The general guideline for the depths of bear market retracements is near the bottom of the previous 4th wave of one lesser degree. If we have no clue what our 2018 peak actually is, then any previous 4th wave forecast is pretty meaningless. I have mentioned it a few times already, and that is “NO” 5th wave peak must be left “uncapped”, otherwise they have broken the wave sequence and we might as well be playing Snakes & Ladders!  BTW, in January, 2018 we have 2 ending 5th waves yet I left one uncapped. After a Primary degree 5th wave has peaked, then a Cycle degree number must find a permanent home.

The SP500 won’t even get close to the top of the previous 4th wave until it crashes through the 1600 price level, while SP500 700-800 would get us near the lows of the previous 4th wave of one lesser degree. The 4th wave crash in Cycle degree is the real important dip as that is the only dip that will send the markets into another major bull market.  Flipping big wave counts around like a person flips burgers, is not my style as counted like that for over 15 years.

If you are looking for some SC or GSC degree wave count your not going to get it at Elliott Wave 5.0 as from my perspective, both of those degree levels are  still 11-12 years in the future. Don’t get me wrong, as we are still in SC degree wave 3, and still on GSC degree wave 3 as well. Both will never arrive if all 5 waves in Cycle degree are not found and confirmed.

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DJIA “Big Dip” Update!

So far the DJIA has procrastinated in following through with any decline, and the fact I have an extra lower high also makes me suspicious as where the market is going in the short term. Long term I remain bearish as, “The Big Dip” I talk about is yet to come. Reading about how some investors are buying on the ‘Dips”, I start to shake my head and say, “What Dip”?   Buying on the dips in the worlds biggest financial stock market bubble in history would be a mistake if we have no clue as to the size of the real dip to come.  A Minor degree dip in a Cycle degree world is nothing if the DOW still has to fall below 16,000 or 8000!

I have mentioned that when you see “any” wave count where an expert or hobby wave analysts leaves the 5th wave peak without a “Cap”, then any wave count following this 5th wave, is just guess work.

This “Cap” must always be one degree higher, and leaving off this cap, sends a clear signal to me, that the wave analysts have broken the Elliott Wave sequence, and therefore they are making shit up. (Cosmetic Wave Counting)

Not capping a 5th wave break’s every rule in Elliott Wave counting, because once you see an uncapped 5th wave, then any wave count that follows is worthless information for us. If there was a bounty on any uncapped 5th wave you can find anywhere on the Internet, then  you would become a very rich bounty hunter!

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Crude Oil Intraday Crash Update

 

This chart is in a 5 minute setting and it is switched to a line type setting. The bar chart version was so choppy and it created erroneous spike, I couldn’t tell where to start the countdown from. The secondary peak was the real top of this run, which also produced a triple top along with a wicked H&S pattern. This is also a prime example of what a H&S pattern can do at the peak of a bullish run and the end a rising wedge.  Crude oil also had a little sideways move, that from my perspective is a perfectly formed triangle. This Elliott Wave Triangle gave me a warning that I can’t use a 1-2, 1-2  wave count.

Early this morning crude oil soared one more time, but now has already started to back off. I can take another zigzag rally as we could have finished another inverted 1-2 wave set.  Worst case scenario is that crude oil keeps soaring because we missed an expanded top. If the big trend has reversed, then we should see crude oil take out our present $66.13 price level. Oil may still pop to a new rally high, but only time can confirm that.

As I post oil is soaring once again so this wave count could be trashed by the end of the day.

 

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