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Category Archives: INDICES

SP500 Intraday Peak Review

Investors had a bit of downtime on Monday but the SP500 peaked out on Friday, January 18th.  Since then the SP500 has been slowly grinding down. The entire move since late 2018 sure fits into a 3 wave move which can be just a bear market rally.  On Sunday we also had a full moon which can act like a bull trap at certain times.  The world sad state of affairs will not get fixed with just a short correction as it will take years to unwind the deep debt that all governments are presently in.  At the 2680 price level, we also have a very tall H&S pattern being set-up which would be very bearish if the bear market rally is real.

The trend lines are there as it also looks like a rising wedge at this intraday level.  Not until the SP500 crashes well below the 2580 price level, can we still be in a bigger bullish phase?

The question I always have for the stock bulls is, “Where is this bullish phase going to”? Is the “bottom in”? Is it a bottom for a return to a multi-year bull market?  I’m looking for a bullish phase as well, but this is not it no matter how bearish the stock bears become.  Insiders would also be buying their own shares back and I don’t mean using shareholders money to try and manipulate their own stocks.  Buy-backs manipulate earnings with only a temporary effect even though they waste shareholders money. Companies that pay dividends or buy their own shares back are sending clear signals telling  you, ” We  have nothing better to do with investors money”.

Apple fits that description very well and once it started paying dividends under investors pressures, its innovations declined.  When we read countless stories about insider buying their own shares back then we might see a potential bottom for a big bullish move. Insiders did this on a massive scale in 2008, and they do not buy on a whim, and they most certainly don’t sell on a “Whim”.  A bottom with insider buying lasts much longer so if you were still bearish in March 2009 you will be left holding a wooden nickle like all the wave analysts did.  Thinking back to 2009 can give most investors brain cramps as researching that far back sounds too much like work. Talking about the market peaks in 2000 would be 18 year ancient history.

Solar Cycle #24 was underway by early 2009 yet all the wave analysts ignored this fact as in 2009 they all had very bearish wave counts. The wave analysts that are still chasing 5 waves down in Primary degree are living in La-La Land as they have learned nothing in the last 18 years!  Expert wave analysts are also telling us that 5th waves can extend 50 years or more which I think is impossible as 5th waves always contain the weakest fundamentals. Besides that, not a single 4th wave bottom in 1932 or 1974 have the markets ever retraced back to. The reason this has never happened is that 1932 was not a 4th wave bottom in SC degree.

2020-2021 could see the arrival of solar cycle #25 and being bearish when a solar cycle starts to crank-up will put investors right back into a bear trap much like early 2009!  Solar cycle studies were in the books of EWI, yet at that time they ignored solar cycles just like they ignored insider buying.

 

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Chinese Juan Offshore Elliott Wave Review

Since there is always news about the Chinese Juan, I thought I would look up its chart on bigcharts.com. USDCNH is offshore money much like US dollars are offshore as Eurodollars. If we start back at the 2014 low we can see what looks like the start to a fantastic 5 wave impulse.  The Juan’s bullish phase that ended in late 2016 sure works well as what followed was 7 wave decline. I don’t have exact dates for each bottom but many tops and bottoms happen spring and fall as well.  The bottom in early 2018 produced another fairly clean set of 5 waves which can work as my first 1-2 wave set if wave 3 is going to extend. If and when we see two more sets of 1-2 wave structures then as sure as I’m typing this, a wave 3 extension will happen.

2017-2018 we now have a great looking double top which is an H&S double top as well. In a bull market, H&S patterns are extremely bullish, so I wouldn’t be thinking bearish thoughts here as the Juan still has a long bull market ahead.  Unless I’m far too early with the Minor degree wave 2 bottom.  We should find out in about 3-5 months as I fully expect the Juan to break out in 2019!

 

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SPY Bull Market Update

SPY is very popular with investors and there is lots of liquidity until buyers take a rest. Being bullish in a vertical price move that seems it doesn’t want to stop, is exhausting.

This ETF will go a bit higher than what is posted, and there is still upside that we can take. Diagonal 4th waves can soar well into any part of the previous wave 2. Triple tops at the $280 price level would be close to my maximum what I would allow. Even before SPY gets near that $280 target price we should start seeing a strong correction.  The stock market sure doesn’t care about any government shutdown as it just keeps on trucking. Maybe the shock will come once the shutdown becomes history, as they will have to sort through tons of date just to catch up.

Nobody knows when the shutdown is going to end, but they believe that the stock market will soar once this trade war comes to an end.  Any COT reports have not been updated and when they resume posting traders positions we could see a mini “COT Shock”. We can’t tell until it happens as it could act just like a “Flash Crash”.

 

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IJH Mid-Cap ETF Update.

This Mid-Cap ETF is also a diagonal wave as IJH has now dipped into my wave 2 in Minor degree. IJH should resume its bearish trend and if this was a fake, or bear market rally then a 100% retracement must happen.

The biggest asset manager in the world (Blackrock) says the bottom is in and we are off and running into the next big bullish phase. Of course, they always have a fundamental reason,  that may derail the bull market.  The world’s problems are not going to get fixed in a short correction, as it will take much longer then most of us have the patience for.  We could get another zigzag decline that will look like 5 waves, or we can get an obvious zigzag that stands out like a sore thumb. Either way, a new record low will be a trigger to close off shorts positions and even look at going long.

I have a small short position with this ETF and once IJH drops below $175 it will turn my short position green.  Below $156 my short position will be closed off, as sure as “shit”, a counter rally will wipe out any gains we may have at that point.

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HDGE Crash Update

HDGE moves inversely to the SP500 but it doesn’t follow it in a perfect lock-step manner as the deep crash went deeper than expected. The only way HDGE can crash so deep into wave 2 in Minor degree is if it’s a diagonal wave structure. HDGE is now forming a double bottom with two spikes in a row. HDGE can take more downside but I see a bottom starting to develop.  One more bullish leg above the $9.00 price level would work well to complete this bullish run. That will not happen today or tomorrow as it could take well into February or even March before this run completes.

After that HDGE should suffer a much bigger correction and should also take much more time completing. We would be in a Primary degree world by then and heading down to a Primary degree “B” wave.  The VIX has also plunged in the same manner, so it’s not just one asset class that has displayed this bearish decline.

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SP500 Intraday Update

So far the SP500 is keeping its bullish trend while the VIX created a huge decline.  I have only one trend line which the SP500 is starting to cross or roll over. Any bigger dip will help confirm that the SP500 could be losing it’s power, as buyers take a rest. Markets are just big auction sales which always gets sold to the highest bidder and I see the markets reacting the same way.

I can’t get a correction out of the VIX as it looks like 5 waves down. I’m sure the VIX will crank up again as the VIX could be on a “C” wave decline.  All this might still take the rest of the week to play out, as little choppy waves stretch time. US government shutdown has killed any COT reports and once the government gets up and running again, we could get a COT “Data Shock”. My last report will be a month old by January 20th so positions could make dramatic shifts when it gets released again.

The Market Vane Report I still get is a private report, which shows that 47%-48% bulls were present all last week. There are still too many bulls around to keep fueling this bullish phase for another major leg up. Our 24 month high was 73% bulls, which is not as extreme as it can get, but enough to kill the stock bull. The basic logic is when the majority are bullish then who is left to get in. Is it a tribe that just came out of a cave or just another greater fool chasing a bull market? FOMO is a popular bull trap

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DJIA Intraday Bullish Phase Update

The markets keep pushing higher, chopping up all the bears into hamburger meat in the process. The DJIA has already gone sideways long enough to where it has broken the bigger trend line that started in 2018. I’m showing a wedge which some even call a bullish flag.  I see a wedge at this time but the DJIA can keep pushing north, but it can also suddenly reverse in a surprise bearish mood swing. Analysts will always find a reason why any asset class goes up and down but can we invest or trade with any single fundamental opinion.

Without a doubt, some analysts are very bullish when the markets are pointing up, and they become very bearish when the markets are pointing down. Only a few have the courage to be bullish when the markets make a big dip like in December of 2018. Most investors didn’t have a clue a market drop was coming in October 2018. To say that Apple didn’t see the slowdown coming is not being truthful as Tim Cook was the expert on China long before Steve Jobs passed away. Apple has a position in the DOW, so chances are slim that Apple will soar when the DJIA reverses its bullish trend.

The Gold/DJIA ratio and the Gold/Apple ratio give us a clue when an asset class becomes very expensive or cheap.

The record Gold/DJIA ratio to beat is 21:1 which happened a long time ago in August of 2018! Today we sit at 18.40:1 which still makes the DJIA expensive. Cheap would be 7:1 but that could be a pipe dream if you think it’s happening now.

I think options are due this Friday which can always cause some unwanted turmoil as well, and we will find out how committed the stock bulls really are. Usually, funds enter in January for income tax and retirement funding, and when the flow stops, stocks can make a huge plunge.  When the DJIA retraces the 21,500 price level then this rally will be confirmed that it was just a small bear market rally, in Minor degree. If any Minor degree rally can trap the bulls then any Primary degree bear market rally will trap many more.

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Hacked Email Account Problems

January 15, 2019

I apologize to my readers for inconsistent updates, but one of my personal email accounts has been hacked and spam mail has been flooding in for months already.  The threats of blackmail demanding Bitcoin payments have intensified and have also become more vicious.  I stopped into my provider’s office and showed him a printout. They also gave me an e-mail where I can send some of the worst threats to. In short, my private FaceBook Account has been hacked because the problems did not come from this blog. A friend is coming over this week and he has had the same problems including death threats. Needless to say, he had to delete his FB account which I might do as well. I have changed and increased my password strength, which is just one step I can take. It will take time to see if the spam mail slows down.  Phishing emails are pretty common and I report them as well. The writing is on the wall as I think it is time to reduce my digital footprint as much as possible.

This year other things have developed that further hinder any consistent postings which I will elaborate on in the future.

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Netflix, Impending Correction Or Crash Review!

Talk about going ballistic we have to look no further than this NFLX chart.  What Netflix is showing is more a diagonal move than an impulse move. Since the November 2018 bottom (Wave 3). Netflix created an expanded pattern which are more common than wave analysts give credit to. Our present day move has at least three open gaps which would not get closed until NFLX hits the $270 price level.  We could get another zigzag decline which could close that open gap we have back in January 2018. NFLX sure repelled from this gap, but there is still a small part of this gap open.  Ideally another new record low can happen, but we must be open to a bull trap before then.

I don’t have any  Gold/NFLX ratio database setup, but today we are sitting at a ratio of 3.81:1, which is only slightly cheaper then when NFLX was at $420 in June of 2018.

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SP500 E-Mini Daily Chart Update

I will stay with the big wave structure until this wave count shows me otherwise. Fast moves like this tend to never last that long as most moves like this are just emotional moves. FOMO or unstable algorithms producing flash crashes is part of the landscape that we can’t avoid. The SP500 is starting to flatten out a bit so it’s just a matter of time before some mentally unstable algorithms start to freak-out.  I’m just having a bit of fun here as algorithms are not human but very few people can tell the difference. Algorithms are created by humans just the same.  Traders can’t move as fast so spikes are produced which usually develop at turnings.

The bigger the spike the bigger or longer any counter rally will last. Since the 2018 January peak, we’ve had more spikes that we can count and each one produced a reversal.

In candlestick form, you would have to count all the “Hairs”, (Wicks) and always know the price of each “hair” tip.  If this rally is a bearish rally then a new low below 2040 should happen. Many analysts are very bullish at this point, but they were also bullish at every major top we’ve had so far.

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DJIA Rally Daily Chart Update

The DJIA is now well within 2018 spring lows which can work as resistance for a bear market rally.  Any retracement back below the 21,700 price level will confirm that this rally was just another start to a fake bull market or bear market rally. I will leave the top as is for now, until this 5 wave sequence gets confirmed. In the long run, a wave “A” in Primary degree is in our future where we can get a decent chance at a longer sustained bear market rally.  From a Cycle degree perspective, this so-called”correction” is far from finished, if the markets have a Cycle degree wave 3 top.

If we start from the 2009 bottom the following bull market was about as choppy as they come, which is very typical in 5th waves. 5th waves are fundamentally much weaker than 3rd waves are, but the majority of wave analysts think 5th waves can extend 80 years or more.  Nobody has a real clue what degree we are in but if analysts keep chasing 5 waves down in Primary degree we know that the majority think they are in GSC degree already! That logic does not wash with me, because not a single wave analysts have ever confirmed any Primary degree 5 wave sequence since the peaks in 2000.

Albert Einstein: The definition of insanity is doing the same thing over and over and expecting different results.

This is the best way to describe what has been happening with the majority of wave analysts for the last 18 years.

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Nasdaq Bull Market Or Bear Rally?

So far the markets have refused to die, as they keep on ticking and heading higher. Many are convinced the correction is over and higher highs are coming. Dynamic bullish moves like this happen in bear market rallies frequently and most of the time they never last that long as well.  From a Cycle degree perspective, every bear market rally gets retraced which in the Nasdaq started from the 5900 price level.   Any move below this 5900 price level would confirm that our present rally was just another fake.

If investors are getting fooled with just a Minor degree bullish move then there is little hope in convincing anyone that there are Primary degree bear market rallies.

The SP500, DJIA and the Midcaps all seem to match this Nasdaq rally on the intraday scale, which I think is a bear market rally. The Nasdaq has dipped into the previous wave 2 which automatically makes it a diagonal pattern. The Nasdaq has already backed off but another short spike may still turn up.

The COT reports are unreliable until after the government goes back to work. This is when the gold ratio database is helpful how expensive or cheap the markets are when we always calculate using the futures gold cash price.  My new record for the Gold/Nasdaq ratio was 6.38:1, and today it is at 5.1:1. This is a bit cheaper but still on the extreme expensive side. Cheap was 1.18:1, so I would like to see a 3:1 or even a 2:1 ratio.

 

 

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DJIA Intraday Correction Update.

Last night the DJIA has started to back off from a wild bullish run which has convinced many to jump back into this so-called bull market. Wednesday is also a good turning day during a week!

Since December 2018 this move may not be finished yet if a bigger bullish move is still in progress, but if the zigzag rally is real then that December bottom of 2018 will not hold. (21,500). This move can be just a small bear market rally, and the best way to confirm that is if we see the DJIA completely retrace this bullish move.  This 2019 bullish move was a very fast move which is normal in a bear market rally but seldom can maintain the move in the long run.

This morning the  Gold/DJIA ratio was 18.40:1 which is an improvement but still not cheap enough by a long shot. I figure that at about 14:1 this market may be cheap enough to sustain another bullish phase, but at this time we are not even close. I have a Gold/DJIA ratio that made the DJIA “Cheap” when compared to gold, which was about 7.19:1.  One day in the future this 7.19:1 ratio could get beat again and if and when it does, I will turn extremely bullish.

With the shutdown no government COT reports have been issued so we only have Dec 20, 2018, as the last time the COT report has been published. At least the Gold/Ratios never shut down as they are always in effect.

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SP500 Rally To Keep Going?

The rally I was working has traveled further than what I would like to see, which makes the unthinkable of a new record high a real possibility.  This January rally being a small degree was enough to force a review starting back at the 2009 bear market bottom.  In this case, I looked at extending wave 3 in Intermediate degree. I’m sure this market rally has something to do with investors trying to top off their retirement accounts. That December 26th bottom left a big spike behind, which is one big clue that this bottom can hold for longer than the bears anticipate.

From the  September 2018 peak to the December bottom we also have a pretty good looking zigzag at this time. Any zigzag can get completely retraced but that could now take all of January to accomplish.  A run back up to the 2800 price level, could happen as this rally still seems to have more power behind it. The key will be that on the intraday scale higher corrective lows keep forming.

This 2018 peak will need more work, as the September peak can turn into a wave 3 as well. The Gold/SP500 ratio is about as expensive as I have seen so there is nothing cheap about this market just yet. Today we are at a 2:1 ratio with the record being about 2.41:1.  The cheap Gold/SP500 ratio is about .75:1, so there is a long way to go before this SP500 becomes cheap again when we compared the SP500 to the price of gold.

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I have not been able to update as much as I would like and it may not get any better at this time. I have some serious issues I have to deal with which cannot be resolved this spring or even this summer, so my postings will be far less than what I would like to post.

 

 

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DJIA Rally Update

Since December 26, 2018, the DJIA index started on a rally and has gone on a bit longer than what I expected.  We now have 2 lower lows which are the sign of a bear market in progress. A market plunge next week, followed by another bullish run, could already be wave 3-4 in Minor degree. Of course, we can blame it all on the Apple stock price crash.

Reporters and analysts will always find you a reason why the markets are crashing and if there are 100 analysts, you will find 100 different reasons as well. It’s worse if you are following other wave analysts with the DJIA. You can do an “Image” search, ” Elliott Wave DJIA”,  and you will find a different wave count each time.  Worse yet they will fill the chart with “W, X, Y” waves or leave 5th waves uncapped. Leaving any 5th wave uncapped anywhere clearly shows that the analysts have no clue what is supposed to cap any 5th wave.

At this time I’m going to explore the possibility that we could already be in Minor degree wave 4, which could extend any 5th wave we might still get.  We are still under a “Death Cross”  so my big bearish mood is still being played out. A little Minute degree move can fool the herd into jumping back into the markets as FOMO can produce powerful moves that might make little sense when they happen. Just because something looks “Cheap”  doesn’t mean a bull market is just around the corner.

The January Wave 3 peak in Cycle degree has arrived about 50 years later than what the majority of wave analysts are telling us, so when you change a small part of a cycle degree move, you are basically creating a “Time” jump or traveling in time on paper.  This is just a mild example of  EWP time travel as it gets worse the higher degree we think we are in.

The entire wave counting world is telling us that 5th waves can extend for generations, which is false and has never been confirmed. 5th waves are the weakest waves.

The 2009-2018 5th wave bull market was all produced by flooding the markets by dropping money from a helicopter.

I keep about 28 or so Gold ratios which are impossible for me to track in detail, but I have a good idea when something is cheap to the cash price of gold.  My old record of the Gold/DJIA expensive ratio was about 17.24:1. This record was broken in August 2018 with a new extreme reading of 21:1!

The cheap Gold/DJIA ratio is about 7.19:1 which means it only takes 7.19 Troy ounces to buy one unit of the DOW.  Today this ratio sits at 18.25:1 which is better, but still a far cry from being “Cheap”. The fluctuation of the gold price is irrelevant as the gold ratios are always present and are always being adjusted.

 

 

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Apple Crash Update

At this time my expanded top for Apple is a pattern I have to keep using until it no longer works. On the downward slope, I’m dealing with diagonal waves.  Recently support for Apple failed but it failed with a big gap still open. From here on things can go wild if we run into a short 5th wave in Minute degree. This important gap also happened close to the Fibonacci number $144. Between $130-$120 we have another huge open gap that could get closed on this run. The wave count layout might take a month or so, but then Apple should rally along with the general markets.

Smart analysts are still shaking their heads why Warren Buffet was buying AAPL stock at world record highs. Warren Buffet is now deep underwater with his Apple shares and it will be interesting to hear if he starts to sell any of his Apple holdings.

With this huge price chop, one would figure that the Gold/Apple ratio has improved. At 9.13:1 it has, but not nearly enough to get excited about. One extreme “cheap” Gold/Apple ratio is 21:1. I don’t think we will see the 21:1 ratio on this trip but I sure would like to see more than this recent 9.13:1 ratio we now have.

 

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S&P Midcap 400 Review

The markets have been bullish but any rally will still be a bear market rally. This S&P Midcap 400 index is important to keep as it could be acting a bit like a leading indicator. The 2015-2016 bearish phase had the world in a mini panic. Not much has changed as fears have returned with a temporary breach in the bearish action.   I have mentioned it many times how deep any market can fall and it all depends on what degree the bear market is supposed to be.  The 2015-2016 is not the previous 4th wave one lesser degree if we are looking at a Cycle degree bear market.

2015-2016 is only an Intermediate degree 4th wave. If the “C” wave ends towards the bottom range, it would only match Intermediate degree to another Intermediate degree bottom. This is a good thing as once this bottoms we are forced into a higher degree. The SP500 and the DJIA are still a long way away from doing the same thing. Comparing one Intermediate degree with another helps to keep us from bouncing into a higher degree before its time.  Many wave analysts are at a “B” wave cycle degree top so they require 5 waves down in Primary degree.

They will never find those mythical 5 waves in Primary degree even though this is the third time they will be trying since the 2000 peak. Some of the wave counting experts have already reached GSC status in 2000 which throws time into disarray.  The majority of “All” wave analysts have time-warped into the future by 50 years or more. Change a few more degree levels and we could time-warp for 90 years.  This may be hard to understand for readers, but flipping numbers and letters around with no respect for the time-warping that happens each time, has never worked.

The short version is that wave analysts working in higher degree levels are feeding us a mythical world that may still be 50-100 years away. GSC degree wave three might get close by 2071, not 2000!

The majority of wave analysts are showing you a mythical world which means nothing. My world is all in Cycle degree which every person on this planet will experience at least once maybe twice, in their entire lifetime.

Minor degree runs happen more frequently, with 5 waves in Intermediate degree, also being part of the landscape. I believe the markets are in a Cycle degree bear market which could take until after the 2020 elections are finished, with Solar Cycle #25 slated to start by then as well. If a market creates its 20% decline is that the top of a bear market, or is it the bottom?

Once this Cycle degree 4th wave bottom arrives, then we can dust-off the idealized 5 wave sequence in Primary degree.

If we go back to 1932 or 1974 and you see a 4th wave bottom in SC or Cycle degree then these analysts are telling us that 5th waves can extend 50-90 years or even longer. Nowhere in market history has this ever happen, as it is impossible for any 5th wave to last the time span of multiple generations.  The EWP is never about what you think we are seeing, but it’s all about how well we visualize what the real idealized impulse is supposed to look like.  The idealized pattern is the blueprint for market action and when we are wrong, we shouldn’t throw out the blueprints because we are too lazy to find our own mistakes.  I spent over a decade chasing GSC and SC degree wave positions and for 5 years have been working the markets from a Cycle degree perspective.

Every big bear market investors will ever face, can give us 3 simple corrections. Eliminating the least likely patterns first reduces our choices and what is left may be the right one.

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SPX : Potential Bull Trap Update.

The DJIA and this SPX index look very much the same and are on the same path to wave 3 in Minor degree.  The story remains the same as   Cycle degree wave 3 ended with the January 2018 peak, not at the September 2018 peak. It’s not an extended top, but an expanded top, which is completely different wave patterns. I’ve searched for months and you will not find a single wave analyst anywhere on the internet, that sees an expanded top!  Counting is a secondary act of trying to confirm what you think we are seeing.

This fast counter rally sent shock waves around the world as it seemed to have broken a few records. I was impressed that a Minute degree rally can cause such emotions around the world. A new low is coming if you like it or not, as the 5 wave sequence in Minute degree is far from finished.  High-speed algorithms were blamed for the move but this has been going on since 2000 already. I’m sure we will see more,  but fast moves like this don’t last very long as the algorithms can panic on the way down as well. The problem with any computer trading program is that the can’t judge human emotions.  They don’t use COT reports or any sentiment reports like the Market Vane report I have used.

It might take a few more months for the 5 waves down in Minor degree to complete after which I expect a rally from another huge bear trap. There are no Primary degree sets of 5 waves down coming, as a run of 5 in Primary degree all come from much higher degree levels that I work with. You can bet that the Primary degree “A” wave will be wave 1 in Primary degree, which has “never” work in 18 years.  If a set of 5 waves down in Primary degree has never been confirmed, then we must throw out at least 3 higher degree levels.

That means we have to check all the wave counts starting with the 1929 peak and look for all wave 3 extensions. You can’t have a 44-year 5th wave extension (1974-2018).  If 1974 was the 4th wave bottom in Cycle degree, then the two bear markets we have had since 2000, should have entered its price territory a long time ago.

2019 is a new year and I expect more bearish action but it will come to an end sooner or later. Keeping our minds open for another month or so could show us a different picture that few expect.

Have a safe and happy New Year!

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DJIA: Another Mini Bull Trap ?

The majority of the world is convinced that the Sept/Oct 2018 peak was a bull market top. What they don’t realize is that expanded tops are more common than what even the wave counters see.  Expanded tops also have extreme forecasting qualities built right in.  For the last 3 months or so we had a bearish phase that still has not completed. This bullish rally soared extremely fast which is common in bear market rallies.  By the end of January 2019 this bearish phase will be 1 year old already.

What any expanded pattern tells us is if the DJIA eventually crashes to 7000, then we already know that this 2018 peak will get completely retraced.  The DJIA will never crash that deep without huge counter rallies slowing it down. Often turnings happen closer to the end of a month like the DJIA is doing now.

Some compare this decline to the 1987 crash which is 31 years old. We are nowhere near those 1987 times as the markets will always do something a bit different to confuse as many investors as it can. The Cycle degree wave 3-4 is still valid and a Primary degree bear market is what is required to complete any 4th wave bearish phase.

The entire universe of wave analysts believes that the markets are in a huge 5th wave extension. One from the 1932 bottom and another 4th wave bottom in 1974.  I’m being very direct or blunt about this, as 5th wave extensions, this long has never happened in 500 years of market history, least of all 86 years long which covers about 3-4 generations or seasons. The crowd of wave analysts has been looking for 5 waves down in Primary degree for over 18 years, and not a single set has ever developed or confirmed.

Short term another new low should happen after which another rally could surprise the investors again. Until all 5 waves down are completed I will remain bearish, but I will have no problem at looking for a Primary degree “B” wave rally in 2019.  “A” wave bottoms are buy signals but it is important what degree of an “A” wave we are talking about.

All the mini or micro mini wave counting  you see is useless work if we keep missing huge bull or bear markets.

 

 

 

 

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VOO: Another SP500 ETF

I may post this VOO ETF more frequently. It also has a very clean pattern to it at this time. Readers may not agree with any expanded top and wave analysts certainly do not agree as I have not seen a single wave analysts see 2018 as an expanded top. They happen frequently as  I might working 5-8 asset classes that had expended wave three type tops.  The real top was in January as the markets went vertical.

My 5 wave decline is still valid but the 5 waves in Minute degree is not finished just yet.  The big rally is a fake or just a bear market rally and we will get proof of this when VOO creates a new record low. That may happen in the spring.  Any 5 waves in the “C” wave location can produce 5 waves where the 5th wave can expand, or do the opposite and become very short.  Any triangle I would expect in wave 4 in Minor degree as it would also force this wave count to end one degree higher. Since there is an Intermediate degree in progress our next major bottom must be a Primary degree position. (Primary degree wave “A”)  It will certainly not be a wave 1 in Primary degree. Modern wave analysts have tried the 5 waves down in Primary degree 2 times already and I’m sure they will try again this time.  Any 5th wave position you see anywhere on the internet that is “uncapped” is sending me a clear message and that is, “I don’t have a clue where I’m at”  They flip numbers and letters around like they are flipping hamburgers when they should be acting like a “Surgeon”.

Every major wave analysts believe that a 5th wave can be 3 generations long! This is impossible and has “never” happen in over 500 years of market history.  Yet the herd of analysts insists otherwise. Besides that, the last two bear markets should have retraced back to the previous 4th wave of one lesser degree already. This has never happened because no big 4th wave bottom ever happened. They are all wave 2 bottoms and you can wait until pigs learn to fly before this market will ever fall that deep.

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DJIA, Just A Mini Bear Trap?

Instead of a Santa rally, the markets gave the worst Chrismas performance ever. It broke some records. I look at this during the holidays and had a sneaky suspicion a counter rally may happen. Sure enough, the markets have roared back from the dead and made up of the price it lost last week. Nobody calls the December decline as deflation, but that is exactly what it is. The USD can now buy more stocks than what it could all year.  Sure we can see some more upside but a good correction should happen as well.  Right now,  I bet we are in a Minute degree wave 4 rally that still may flop around before it resumes its bearish phase.

To confirm that this is just a mini bear market rally the DJIA  has to retrace the entire move below the point of origin, which is wave 3 in Minute degree.  The big bear is far from finished as we are coming off the biggest stock bubble/mania in financial history.  This is my third bear market I have tracked in the last 18 years and each bear market will be different. We are not going to get anything like the 2002 bear market and it will be different than the 2007-2009 bear market. I searched the internet for most of December and there is not a single wave analyst out today has recognized a 2018 expanded top.  One of the most important markets moves there are and the experts don’t see it.

Once the bigger bearish phase resumes we should start running into wave 3 and 4 in Minor degree after which we could be approaching the “A” wave bottom in Primary degree.  Any Minor degree 4th wave can contain a triangle as a triangle always forces a move into one higher degree, sometimes 2 higher degree levels. When that happens I assure you I will turn bullish on stocks.

Oil has also reacted tonight and only time will tell if it has legs to move much higher on this trip. One good thing about watching the markets during night trading is that you know all other ETF related asset class will roar in early trading sessions.

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DJIA, The Big One: 1929-2018 Review

I have been posting small charts which can make my wave positions hard to read.  The fonts may be hard to read but I will not make my fonts on the charts any bigger. Instead, I increased the chart size that I post. This chart is one of the first that are full-sized and I did a printout comparison with my original chart and found little difference. The difference might be the speed of the page loading up. If the change makes the charts clear for readers, and they make better printouts then I will try full-sized postings for the rest of the year.

Learning any EWP is impossible when all wave counting is done on a computer screen. The majority of my wave analysis is done on paper where I can take weeks looking at it before I lay down one single number or letter.

1929 was a wave 1 peak in SC degree and definitely is “not” a wave 3 peak.  Starting with the 1929 peak we have a 1-2 wave count then by 1942 the second wave 1-2 completed. After the second set of 1-2 waves is when the wave 3 can start to extend producing the wave 1-2 in Primary degree which ending 1974!  During the ’70s and early ’80s 3 back to back 1-2 waves developed with wave 5 in Minor degree really kicking in the extension.  I looked at all the wave failures during that time as the majority were all looking for 5 waves down in Primary degree. They didn’t learn anything from that but tried to repeat the same 5 waves down in Primary degree by the 2009 bottom.

I’m sure that the experts are going to repeat the same mistake in 2019 especially if you see major peaks with uncapped 5th waves. When “Any” wave analyst leaves a 5th wave uncapped he or she is sending a clear message that they have no clue where they really are!  So if we give our present decline a few more months and you are searching for other wave positions with any wave 1 in Primary degree then feel free to send me the link.

Our present peak contains an expanded pattern which is the first step in a potential flat yet to come. This flat may end up looking like a zigzag as nobody is looking for expanded tops. Expanded tops are powerful forecasting waves. For an example, if the DJIA crashes down to 7000, I will turn very bullish and will call DOW 34,000 or higher for the next major SC degree wave 3. I have at least 5 major expanded patterns in progress, so all of them will join the new bull market sometime after the 2020 elections. Solar Cycle #25 will also kick in at that time so I’m sure the stock party will return.

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SP500 2000-2018 Review

The debate about what degree level we are in continues, as the majority of wave analysts all have different wave positions. The Elliott Wave Principle is not what you think you are seeing, but it’s what you visualize what the idealized pattern is supposed to look like. Every major wave analyst has 5th wave extensions when in fact wave 3 does most of extending in the stock markets. About 5 years ago I switched to looking at the markets from a Cycle degree perspective because I also tried GSC and SC degree for many years.

The 2000 peak is an Intermediate degree peak while the majority have the 2000 peak as a GSC peak or SC peak. An intermediate degree is a minimum of 4-degree levels lower than every major wave analysts has today. Most wave counts published today are nothing but a “Dog and Pony” show or a great “Smoke and Mirror” magic act. Elliott Wave is not about flipping numbers and letters around like we are flipping hamburgers, but it’s more like being a surgeon where you must think out any moves with great care.

Every number and letter also represents time,  so when I see switches being made between a GSC and SC degree wave count we can jump 50-100 years into the future without realizing it. Cycle degree is basically jumping back in time which puts any SC, GSC and Submillennium degree in our future. The 2000-2002 decline took about 30 months while the 2008 decline only took about 17 months. That’s a big difference and is mainly due to the type of corrective pattern we get.

Before we ever get there this market has to suffer through a bear market for a few years before a new major bull market will start. This may take until 2020 or after the US elections before the markets start to crank up again. Every major bull market peak for the next 100 years will terminate with a wave 3 position and since Cycle degree wave 3 is used, the next major peak will be wave 3 in SC degree.

Our present bearish phase can still last into the spring of 2019, after which we should see a rally in stocks that will convince the majority that the bull is back.

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Berkshire Hathaway Cycle Degree Update!

Those that are staying long (Bullish) on Berkshire Hathaway stock are now taking a beating. Will it continue?  I have no doubt that it will as BRK.A is just about the same as the DJIA. Since the January 2018 peak, BRK.A  also looks like it contains an expanded top. I can’t repeat it more often as expanded tops are powerful forecasting patterns. No matter how deep BRK.A will eventually crash down to, we know that Berkshire Hathaway stock will comeback and exceed 2018 highs again. That could take until SC degree wave 3 comes due some time towards 2041! First BRK.A has to suffer through bear market that can also take the next 2-3 years to play out.

I have no gold ratio data base built but following the DJIA or even SP500 will give us a potential temporary bottom.  Wave 2 (up) has completed with wave 3-4-5 still to come. This may drag on into the spring as the rest of 2019 could be very bullish.  Markets always retrace back to the previous 4th wave of one lesser degree, but most don’t know where that previous 4th wave sits. The 2016 low is only an Intermediate degree low, not the Primary degree 4th wave we would need. The main reason why many markets have not retraced back to the previous 4th wave of one lesser degree, is because they were never 4th waves in the first place. 1932 and 1974 didn’t end on a 4th wave so that is the main reason markets did not follow that popular guideline. The EWP didn’t break any rules or guidelines here, as it was all caused by highly biased wave analysts.

Any wave 1-2 in Primary degree that you see being attempted, is sending you a clear signal that they are in SC or GSC degree already!  The short version is that they have time-warped 20-30 years into the future.

I have been connecting all the Cycle degree dots for 5 years now and I will never change back as there is a direct EWP mathematical advantage that few can understand.

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Nasdaq Daily Chart Cycle Degree Crash Update.

All support for 2018 has now vanished with nothing but empty space below. It’s not completely empty as there are always some protective stops below. I’m sure that many are looking to get-out as the majority of analysts now call it a bear market. It’s always easy to call something in hindsight, but that is always too late.  We are going to find out if the current crop of talking heads can pick the next strong bottom.

We still have a long way to go even thought we are getting some great looking spikes to the downside. It all looks good as a 5 wave run in Minor degree. Usually about 3 sets of 1-2 wave show up but the rest may never be seen as they are just to small. Right now I have 3 sets showing after wave 2 in Minor degree, so we should start to run into ending wave 3s. A quick scan of the commercial positions has not switched to the positive at this time but the spread is shrinking.

From 1987 to the January 2018 peak we have what is part of the 30-year cycle +1 year. I’m sure readers or investors want clarity but it’s the job of the markets to always confuse the majority every step of the way.  The easiest group to fool are the modern wave analysts that have never experienced the 2008 crash and have never gone back in history to do their homework.

An example is the 2018 market that contains an expanded pattern. Not a single wave expert seems to see the same pattern, and ignoring this type of  top will screw up the wave count forever. An expanded top gives us a huge look into the future that is hard to imagine at this time. The short version is that no matter how deep the entire bear market will get, eventually the market in question will rise and surpass the expanded part!  For an example, if the Nasdaq ended just below 2000 then I would have no hesitation in calling that the Nasdaq will eventually go above 8000!

Mind you that could take several decades to accomplish. It may take into 2019 before we see a strong bottom in Primary degree, after which I will turn very bullish. When you see any wave analyst produce a wave 1-2 in Primary degree, you instantly know that these analysts are in a much higher degree than “all” the work on this blog.

All the components inside the Nasdaq are taking big hits with Apple being a prime example. I’m sure Warren Buffet is scratching his head as his investment in Apple gets shredded.

The Gold/Nasdaq ratio was at 4.8:1 today which is down from the extreme of 6.38:1 in September.

 

Commercials are net short but not by that much. This will change in the months ahead as they switch to long positions.

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S&P Midcap Crash Daily Chart Update

This Midcap chart is one of the best forming wave patterns I have. We are getting spikes to the downside but that is pretty normal. Soon we should get to a point when wave 3’s start to appear, then you can bet that the waves will start to get real choppy. More diagonal waves will start to show up and wave patterns will get more confused. The goal is wave 3 in Minor degree so hang on to the saddle as this market is as wild as an unbroken horse. We will get many  reasons why this market is plunging and these reasons will change like the wind. What investors don’t realize is corrections and bear markets will always be  part of the landscape and the difference is just the degree!

In a few years we are heading down to a Cycle degree bottom, which is only one degree higher than what the 2009 bottom was. Most expert wave analysts are already in SC and GSC degree because wave 3 in the past has  “Never” been extended. We are dealing with a wave 3 in Cycle degree that is close to 76 years long, while modern wave analysts are working on an 89-year wave 5 extension.

There is no way that during an entire human lifetime we are in a 5th wave extension, spanning multiple generations as well. It is easy to tell when wave analysts are into a bigger degree than what they should be, and that is to look at the 1987 crash wave position.

Any wave analyst that is looking for a wave 1-2 in Primary degree now is way off in a time warp into the future. A Primary degree decline cannot happen, folks as not a single SC or GSC degree wave count has been confirmed in the last 18 years.

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DJIA Intraday Bear Market Update.

I will not spend too much time on my postings but let the charts do more of the “Talking”.  Yesterday the DJIA hit another bottom after which it rallied but also made a wild move that can only fit into a corrective move at this time.  I may be on my last 3rd set of 1-2 waves so soon this process will start to show wave 3 labels.  Wave 3 in Minor degree is the goal which could take into early 2019 to finish.

This rally should not go that high and if it does, I will have to adjust the wave positions as well. This bearish phase is  far from over, but rallies can convince the talking heads that the decline is a done deal. It all depends on the big size of this market correction is going to be. We are in a Cycle degree bear market and what we have witnessed so far, is just a wake-up call for the non-believers.

Yes, in 2018 the markets achieved world record highs and this bear market will not be over until we have achieved world record “lows”.  A big counter rally is coming but not just yet. It may take until late January or even February before this decline finishes.

 

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SP500 E-Mini Intraday Update

This is the March 2019 contract where every trader has to move to sooner or later. Support has now failed as the Fed has threatened more rate hikes in 2019. I find this very strange at this time as many asset classes are already crashing and liquidity is draining the life-blood out of the economy. Nobody is lining up to borrow more money and gold is not going to soar to the moon. Gold sure didn’t like the rate hike, which I will update later this week. In the end the Fed has executed the perfect stock market bull trap. The majority all believe that just a simple 10% correction was coming, but they under estimating the size or degree of this impending correction. They won’t call it a correction much longer as every hope for support will get dashed.

I might add a few more of these intraday charts on this page as the days of seeing sets of 1-2 waves is going to come to an end. Wave 3 will come to an end and the degrees will start to get higher each time a run of 5 completes. This is a wave three extension in progress but heading down. In bull markets the entire wave structures are reversed.

Only 49% are bullish towards the SP500 Market Vane Report, which is not extreme just yet.  The Death Cross on the daily SP500 chart happened at the 2770 price level, with the Gold/SP500 ratio sitting at a perfect 2:1. It takes 2 gold Troy ounces to buy one unit of the SP500.

Besides all these negative indicators the commercial hedgers are still net short by a good amount.

It will take far more downside to get the commercials to change direction. Even then there is no guarantee that commercial hedgers will pile into long positions.

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SPX: Having A Bad Hair Day Again!

The Fed is draining the life-blood out of this stock market and economy. It still amazes me when the herds decisions are based on words from the Fed. The talking heads just declared that a bottom was in a few days ago, but the markets didn’t care once Powell made his speech!  Today all support failed and the SPX plunged to new 2018 lows. What I’m showing with the above wave count is a 1-2, 1-2, 1-2, wave count. I still have 5 degree levels left before I run out, but there is also a physical point where the smaller degree levels get harder so.

Sorry,  I don’t have an electron scanning microscope at my disposal! 🙂 Lets say I can see one more set of 5 waves completed in Subminuette degree, then after that my entire wave counts will start to switch where we could get nothing but ending 3 waves.  This is telling me that a wave 3 extension is a very high probability. I don’t like to change the settings on these charts but I can get more detail from the intraday futures charts. Even the Gold/SPX ratio is still extreme and only 49-50% bulls were present in the MV report. That’s a boring number, as at 50/50 you may as well just flip a coin.

When Minute degree wave 3-4-5 complete and wave 3 in Minor degree is due, then this will coincide well for closing of shorts. A 4th wave counter rally in Minor degree could shred gains and it is better to play with light positions. If wave 3 in Minor degree appears this year, then January could see positive inflows. The whole idea in trying to be more accurate with the degrees and patterns is so, we can catch a huge error as soon as we can. On any 5th wave, we could also start seeing really choppy waves, as Diagonals just love to make wave counting a challenge.

 

 

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Nasdaq Daily Chart Death Cross Review

This is a daily chart using my standard 500 bar time periods. What is very important is technical indicator called a “Death Cross”.  Call it the Grim Reaper if you want,  but they both are guaranteed to steal bullish investor dollars. The 50-200-day MA is a deadly technical indicator that signals a long term decline, and we are just witnessing the start to this decline.

With the weekly chart the 200-day MA is down at the 5400 price level which could supply support and the potential for a “Golden Cross”. The Nasdaq is not the only asset class with a “Death Cross” as the SP500 also has one.

With this drop we would expect the Gold/NASDAQ ratio would improve. It did, but we are coming off a record extreme ratio of 6.38:1! This beat the old record by a wide margin of 4.94:1.  We want this ratio to compress as 1.18 is one of my “cheap” ratios which could still be years away.

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