Not much has changed except that the Nasdaq also started to take a dip which I believe is a wave 1-2 development. The Nasdaq needs to take out the 7400 price level and eventually the 6900 price level as well.
I’m looking for a Cycle degree correction which could take until early 2021 when solar cycle 25 starts to crank up. The 4 month crash into late 2018 traveled fast enough, so anything that happens once can happen again. When the analysts scream “Black Monday” then chances are good that the worst is over and we should look for widespread insider buying, buying their own stock back.
There are some ugly stocks in the Nasdaq and they need to go bankrupt and get tossed out of the index.
To all devoted readers
This year has seen unprecedented events happen in my life that I must address before I can continue to publish. So far I see no end in sight. Moving to another set of digs I have to cut back on everything including shutting down this blog. I may try and publish on the weekends but I can’t make any promises.
Everything may be paid up until early 2020 but I can’t keep dishing out $500-$600 per year with no return. I thank the small donators that helped out.
The DOW is being pushed to the limits of what wave 2 rallies can do so only a clear push to new record highs will kill it. Otherwise, it is primed to fall and start to close 2 of the big caps open below present prices.
Besides being an unlucky Friday 13th, we also have a full moon today which can be a turning signal as well. With 2 open gaps that makes it about 4 bearish signals that I use, which most analysts ignore as they are to busy chasing fundamentals which change as fast as the wind.
Any drop in the DOW will bring out the bearish news and we never know from what country it will come from.
Record high prices don’t reflect that a recession is here already, even though we can see the world economies are slowing down.
It’s a “Sit and Wait” situation at this time, but next week should tell us more.
The Gold/Dow ratio is still very expensive as it was 18.3 today from the ratio of 21:1, we have a long way to go before the DOW becomes cheap again at 7.19 where it only takes 7.19 ounces of gold to buy one unit of the DOW.
I have gone over the entire bull market since the 2009 bottom and I may have missed an extension. Also since the December 2018 bottom, a set of 5 waves developed also containing an expanded pattern after which we had a July peak after which the DOW started another bearish move.
Expanded patterns show in 4th wave corrections frequently, so that also fits better. If our present move is a wave 2, then there should be no more new record highs. Many more gaps show up with this chart so anyone of them can get closed in the next few months or so.
This is all coming down to the wire but all it takes is the wrong kind of news and the DOW will make another leg down.
The index only moves during the day with some of the wild moves smooth out a bit more.
The recent bullish price surge is getting down to the wire as there is very little room left before the SP500 breaks out to new record highs.
There is also an open gap which should get closed off, but ultimately this wave count has to decline and take out multiple support price levels around the 2830 price level.
They keep talking about a recession but this chart is still at record highs. Record lows would be better as when that happens we know the recession will be over. 2008 was a good recession year reflected by the charts with massive insider buying.
If, we don’t get a significant correction by the time solar cycle 25 is in full force a new bull market should start.
Upswings in solar cycles are very bullish for stocks which could happen by early 2021. In the next few months, this SP500 would have a long way to go as it has to clear the bottom of my “A” in Intermediate degree.
The Gold/SP500 ratio is sitting at record highs at 1.96 just off the 2:1 expensive ratio I have recorded.
After a month of sideways movement, the E-Mini is back at the resistance of about 26,400 with a quadruple top. A huge breakout to the upside would kill this wave count off pretty quick, as we also have possible double zigzag.
The short version is that during the month of August, wave 3-4 may just be finishing. We wouldn’t know that until the August price support crumbles and the majority of analysts start to freak out.
At this scale, the moving averages bounce around a lot so they are not that reliable as they criss-cross each other.
The new moon is this Friday and we are on the last days of the month so that combination can always raise a bit of stock market turmoil.
My last Gold/Dow ratio recorded was July, 11 at 19.3 with today recording a ratio of 17. The DOW got cheaper but not by all that much. A ratio of 8:1 is dirt cheap but that will need constant checking when we think we are getting close.
Gold is acting a bit bearish today so a correction could be just around the corner.
Last week the DOW hit resistance about 3 times after which the investors started to panic again. I believe this could be a wave 1-2 in Minor degree, but the DOW needs to decline much further to show us that the stock bears are in control.
Friday ended with a sharp spike to the downside but we will see if that spike holds any serious price level.
We also finished a golden cross but it may mean nothing as a death cross could follow just as fast.
For all of August, the DOW E-Mini has been dancing around in both directions. Good Luck trying to fit this into a bullish impulse even though a set of 5 waves seems to be finishing.
Yes the DOW has just created a golden cross, but it sure can head back down and execute a death cross! From what I see I have to remain bearish as 2 H&S patterns have also formed.
A strong bullish move would shred the resistance line to the upside. On the bearish side, we eventually would have to see new records lows.
Give it until the end of the month for a new bearish trend to show itself with a wave 3-4-5 in Minor degree still to complete.
Another leg down in the DOW sure could send gold soaring in another leg up. In a sic way the DOW could see 5 waves down in Minor degree while gold might get 5 waves up in Minor degree.
If we were in an Intermediate degree decline, then I think this sideways pattern would take much longer to play out.
Once the DOW crashes below the August 6th low then we will know for sure that this August rally was just another bear market rally. Yes, the decline started out very choppy but they can also smooth out as the trend matures. 21,600 could bring us support but that number may mean nothing once fear starts spreading far and wide.
It is a good idea to watch the Russell 2000 once in a while as it can be a very good leading indicator. The Russell rolled over just about a year ago and has never followed the three other indices.
Besides a little support at the time of this posting, the next price support may happen at 1250! That would also slice the trend line which now has 2 Intermediate degree bottoms.
Crashing through any intermediate degree bottom would force me to look for a Primary degree position!
I have a bearish outlook and until solar cycle 25 starts to run rampant I will not turn long term bullish.
The Gold/Russell 2000 ratio is still expensive at 1.02 so I would like to see that ratio get much cheaper.
The Nasdaq was rolling over in July already which works like a diagonal starting out. If we’re lucky the patterns will smooth out a bit but that may also be wishful thinking at this point.
With there being a potential Cycle degree correction (Bear Market) the markets have a long way to go before we could expect a return to a real bull market.
This may not happen until solar cycle 25 dominates sunspot activity. Our present little rally looks like another bearish rally and if that is true then the 7400 and 7200 price level will not hold.
The 7000 price level is another potential price target for some more support but eventually, the 7000 price level will not hold as well.
The Gold/Nasdaq ratio got better at 5 but is still a far cry from being the cheapest of 1.18. The Gold/Nasdaq ratio doesn’t have to go that cheap but it sure would help to see the ratio get better than 3:1.
The commercials for the Nasdaq are net short but not by any extreme amount. The speculators have the opposite side of this deal as they are all pile onto the long side. Both parties can’t be right so sooner or later one side is going to panic.
Not enough traffic has moved to the December time period so this is still the September contract. This is the 90-minute intraday chart, which could be showing a 4th wave rally for this month.
In the last few days, the DJIA plunged about 1000 points before it started to recover. Markets can move month to month so this bearish phase my turn by the end of September.
I will not repeat the fundamental jargon that 1000 others are doing. Nobody knows “What News” really cause the markets to head up or down and it’s impossible for the same news to happen for us to take advantage of it. Did the bearish news in late 2008 get you in a panic to get out or did all the bearish news tell you to load up?
The VIX sure has exploded but I think the VIX could still go above 40. The arrival of solar cycle 25 is the deciding factor as solar cycle 25 could produce 5 waves up in Primary degree.
Looking at silver with a daily chart it shows we have some way to go before we get close to another Minute degree peak, nevermind getting to another potential wave 3 in Minor degree. Compared to gold which has already blasted past the July 2016 peak, silver has a “Long” way to go just to get to its July 2016 breakout price.
Silver is lagging far behind gold which has happened many times before, like in 2011.
Of course, silver never caught up with gold, as the 2011 silver peak just barely broke above the 1980 metals peak by just a few dollars, while gold traveled about $1040 during the same time period!
There’s always the 5th wave which can produce dramatic extensions and it will seem like silver is catching up gold!
Gold and silver have a long way to go to finish this “C” wave bullish phase so don’t commit the investing sin by getting out too early!
I trade silver Forex units with my iPhone and just added another unit on August the 8th. There is a good chance this bullish phase can last all year as Christmas shopping can dump trillions into Brick&Morter stores.
Last week the commercials added to their silver “Long” positions, which is a good sign. The hedge fund speculators did the exact opposite as they panicked and sold their long positions and increased their short positions. The speculators are the trend chasers yet the mass media constantly tells us what the speculators and not the commercial hedgers are doing.
The US dollar did rally as stocks charged upward but so far the US dollar rally is a bit subdued! The decline also is very close to the previous “B” wave which doubles as a potential diagonal wave 2. Usually, it can even end up lower but never below any potential diagonal wave 2.
The commercials are still stacked to the bearish side by a ratio of 23:1 which can still force the US dollar to the downside. The media quotes the speculators and what they are doing but the hedge fund speculators always chase the markets and eventually, they get trapped and change directions in a panic.
The Euro is inverse to the USD as it’s inside the US dollar basket. It would be next to impossible for the Euro and the US dollar to soar at the same time.
I apologize to my readers as my postings are very sporadic and they will continue that way, until early 2020 or until I can find a new place I can afford.
An explosive move this morning in stocks was a near-vertical lift which never can be maintained for very long. Investors have to decide, keep loading up on stocks at the same time dumping gold. I have labeled this like a diagonal 5 wave sequence but it remains to be seen if another leg down is going to happen.
Gold went south while oil enjoyed a big rally. About all it tells us, is that investors are willing to dump gold stocks at a drop of a hat if they think stocks have seen a major bottom.
The Russell 2000 and the Midcaps do not confirm the SP500/Dow/Nasdaq so I think this is still part of a bearish rally.
The full moon is due on Thursday of this month and last night I could hear the coyotes howling under the power lines. Just kidding folks as moon cycles can trigger any type of a turning as I don’t see them being all that reliable anyway.
There is a gap below at the 2915 price level, so I’m sure that gap will get filled in the near future!
Each index that I cover has differences in the wave patterns which does make it much more difficult to find a good wave count. This DJIA chart top has rolled over a bit before it went south with “Gusto”.
One little dip is not going to cut it when a Cycle degree top is involved. Besides that solar cycle, 24 is still alive and well until solar cycle 25 starts to make a strong showing. A few sunspots belonging to solar cycle 25 have already been recorded but we need a good 50/50 mix before solar cycle 24 is completely dead!
Sunspot activity was dead last month and it could still last all of 2020 or early 2021. Once this solar cycle 25 starts to crank-up then there is no chance that I can stay bearish. The sun is the “Bull Killer” and the “Bear Killer, as the 2000 peak and 2009 bottom clearly demonstrated.
All hell can break loose a year or so from a solar cycle bottom like 2008 and now we are heading into the same situation except its one degree larger of a decline.
The younger investors can take advantage of “Sun Power 25” but you have to watch it and build up trust with our sun and its cycles.
The markets took a “Big” dip since last week and many experts are talking about buying the “Dip”! Sure it looks like an impressive dip but I believe the bears still want to shred some more stock bulls. So far, we are in a counter-rally which may be a wave 2 in Minor degree.
Buying the “Dip” for what? Another bull market or are we just in another bear market counter rally? I don’t think this market will let the stock bulls off so easily as this was just a wake-up call for what’s to come.
There is no real support just yet as the SP500 should fall below the June 2019 low. 2750 could supply support but the big support range is 2350!
We are at a Cycle degree top and Cycle degree corrections are not over in just a few days of crashing prices. Besides that, solar cycle 24 is here, which could still last a year or so. My bet is that this top is the last record high for the year so this might go on until we hit the lowest point of the year.
If stocks have yet another major move up then, to put it bluntly, Gold and gold stocks would crash.
The Gold/SP500 ratio is 1.94 which still has a long way to go before this market is really cheap when using the gold cash price.
This Midcap chart is on a different path as it started to roll over while the SP500 and DJIA created new record highs. By the time end of September rolls around Mid-Caps have been leading the bearish phase by nearly a year.
I believe we are in for a Cycle degree correction and eventually, It will take A Primary degree correction to complete.
We have about three price support levels we may have to deal with but we can only deal with one at a time.
The stock markets have started a bearish move with the DJIA having a bit different of a top than the SP500. It’s been a long-anticipated move which will produce many twists and turns before we find that mythical support price.
Support for what? A temporary stop for just a correction or something that is going to breed the next big bull market. This all depends on what degree the record high actually was.
I’m looking for a Cycle degree correction which the majority of analysts will end up calling a conventional bear market.
I will keep my options open as to what type of correction we will get. We could eliminate any potential triangle as there is not enough time before solar cycle 25 starts to crank-up.
A “Flat or Zigzag” is my pick but the present decline can just carry on without any obvious Primary degree counter-rally. “A” waves can crash very deep and then produce insane rallies as well.
Gold is still soaring but I think the gold move is mostly emotional with the US dollar breaking a new record high just before it took a nosedive.
Stocks and gold compete with each other so when the DJIA is ready to make a huge bullish move then gold and gold stocks should implode.
Stocks could see a bearish mood for the rest of the summer and well into the fall, but that remains to be seen. Sometimes the choppy decline can smooth-out a bit but only time can confirm that.
The SP500 had a peak on the 29th before it started to back off and start yet another decline or correction. I see them as diagonal waves with the last (c) wave looking like a small ending diagonal. The SP500 definitely would have to fall much deeper if a bigger bear market is coming.
Back in early July we still have a small open gap and the very least, that gap should get filled. Commercial traders positions do not support a super bearish picture at least not just yet.
After a small break, search engine attacks have started up again, which slows down the entire blog. The majority of search engines attacks came from Hong Kong and China and “they” have now switched to attacking this site from Singapore. In the long run, no web site can stand up to these kinds of attacks and I will only mention it once in this post so legitimate readers are informed.
July 16, looks like the last record high and since then the Nasdaq has made some wild moves that could be the start of a new trend. Lower highs are not yet visible or long enough but all it takes is one more new record low which can get investors into a mini panic.
Antitrust investigations can get investors nervous as the stories are out that the SEC has officially started investigations of the “FANG” stocks.
Some analysts are very bullish on stocks as we hear stories about a melt-up is coming. Any potential melt-up is pretty hard to swallow at this time as it would start at world record highs. A melt-up from this point is next to impossible as the Gold/Nasdaq ratio is already super expensive at 5.6.
Commercials are net short but yet not quite extreme enough.
We are getting closer and closer to the fall and the fall time period can produce some ugly melt-downs.
At this time my last record high was July 15, 2019, at the 3026 price level. What followed is a very choppy decline that can fool anyone into thinking that stocks are just in a correction.
Analysts that are looking for any price support target are still on the bullish side. Well, bear markets start out exactly like that but they also can smooth out as any bearish phase keeps on growing.
Any bear market has a starting point far removed from the consensus vote of a 20% decline. I think a cycle degree bear market will produce a far bigger downside move and investors could end up running to the hills looking for gold and silver.
This could take until next week before a new leg down can happen and once investors show “Red” they could run to a safe haven in the “Yellow” metal. We can’t forget silver as it’s still acting very bullish even after a near vertical move.
Lower highs are the signs of a bearish decline and until the decline can be easily seen this market could soar to another record high! The odds of a new record high decrease every day and can establish the last high of the year.
2020 elections will be a big part of it as parties crank up the rhetoric.
The president that wins in 2020 will have the sun at his back which is about as bullish of a scenario that I can see.
I am very bearish on the 4-5 main indices that cover but very bullish on gold&silver.
At this time the DOW has topped July 16 at the 27,396 price level. Even though many are looking for a major top, this market does a good job of aggravating the stock bears as it tries to keep pushing higher. We need more evidence that a top is in and by that, I mean another run to the downside would help with that.
There is a little line down at the 14,000 price level but don’t take that as some magical support for another huge bull market as 14,000 is just the minimum I would like to see the DOW hit for a Cycle degree low.
It could take until spring of 2021 as the elections could change the political landscape dramatically. Some may call this the election cycle and politicians do have an impact on the markets. We are in a world where a single “Tweet” could take down a country and false news dominates.
Millions of investors that have pushed the DOW vertically all have smart connections or advisors and so far the majority see no problem in the trade war, oil war, hyped-up climate change, and a host of other fears.
In short, stock investors don’t give a shit about fundamentals as long as the market keeps going up! Oh but wait, when the markets start to decline, then all the bearish news will matter and it will become front-page news again.
Will the SP500 create a new record high for 2019? Many are betting on it but a new record low will certainly put a lot of doubt and fear into the mix. If the markets are on the bearish side already then there is no way the trend line will hold.
Sooner or later the record high for the Mini SP500 will be in, if it hasn’t already done so, July 15th at the 3023 price level.
A new record high could come but at this time its a flip of the coin when a substantial bearish move starts to take place.
In the end, it will boil down to the US elections and who gets into power. Election campaigning is in full swing and if President Trump is set to lose then the markets can turn into a massive “Sell-Off”.
Inauguration in January 2021 is when the new president and his crew take control and after that, the markets could soar again.
This all coincides very well with the solar cycles as the new president in 2021 will have solar Cycle 25 at his back! Until then solar cycle 24 and solar cycle 25 will mix with solar cycle 24 eventually disappearing never to be seen again.
The Gold/SP500 ratio is about as expensive as I have seen it at 2.1. It takes 2.1 gold ounces to buy one unit of the SP500 and we need that number to compress in the months and years ahead. Record cheap is when it only takes .75 of a Troy gold ounce to buy a unit of the SP500.
Without a doubt, the Nasdaq marches to a different drummer as the 2007 peak never reached new record highs as most other indices did during that rally. For now, the pattern from the 2000 peak to the 2009 bottom can work as a zigzag but it would have to be a “Running Zigzag” or what the book calls “Truncated”.
The 2009 bottom is still my Primary degree bottom followed by a blistering bull market. Drawing the trend line across the two tops and one trend line up from the 2009 bottom, what do we end up with?
We have the mother of all “Rising Wedges” starting to squeeze the two trends into the cone or “Apex” of the wedge. What do you think will happen when the stock bulls keep getting squeezed into a corner? I will include the link from Investopedia that has a good explanation regarding “Rising Wedges”.
All investors are distracted with the fundamentals while the “Big Wedge” is giving us a very bearish warning.
I’m looking for a Cycle degree correction but the Nasdaq has no short term support that I can see at this time. Above all the impending bearish phase should be obvious but the crowd may not know until they see it in hindsight. A lot of good that does us unless we take “Hindsight” and always turn it into “Foresight”. The simple answer is that if we ignore the financial past we are doomed to repeat it. All sources of better fitting wave counts are found in “Hindsight” not by flipping our present wave counts thousands of times.
We still have time before solar cycle 24 ends so hang onto your hat, as the winds can change direction and start blowing in from the North West!
I moved my wave 3 extension back down so now it’s the 5th wave I’m extending. Since the 2007 peak, the markets are in the process of finishing wave 3 positions each declining by one degree. 2007 was a Primary degree, 2015 is an Intermediate degree, 2018 being a wave 3 peak in Minor degree.
As I run out of degrees then Cycle degree wave 3 should be next to complete. The peaks will become one degree larger degree wise. SC degree wave 3 will peak in our future peak and not in our present, yet the majority of wave analysts are still trying to force GSC degree wave 3 onto the 2000 peak! Sorry folks, markets do not have multigenerational 5th wave extensions as they are technical the weakest.
This markets can jerk around frustrating us to no end, but another correction is due that can send investors running to the hills once again.
2011 is when gold imploded and when stock indices were ready to crank up again. Much of the DOW run has been choppy but this is what 5th waves do. When I post review chances are good I have changed a wave position or two.
In this case, I extended the 5th wave in Intermediate degree. The end result will be the same as any potential type of a Cycle degree correction can still come.
By the looks of it, the DOW has broken the 27,000 price level and established a new record high. I think the DOW is struggling to maintain upward speed but it can keep us guessing as to “When” a reversal might come.
I cheated at our present top as I left one 5th wave uncapped, but only because I had no more room on the chart. Gold still seems to be in a correction but when stocks decline, and investors start running to a safe-haven asset then that is understandable. Solar Cycle 24 still has the power to disrupt this bullish phase, within the next couple of years.
CO2 is plant food and these satellite images confirm it!
I occasionally run charts in linear scale just because it shows the extreme that this market has traveled. Now if investors want to sit on the points of 3 needles (triple spike top) then they will suffer the pain in their investments once a potential Cycle degree correction starts to get serious.
The triple top is the most obvious point of resistance and the DJIA would have to be very bullish to make a solid breakout to new record highs.
The 4th wave big dip in 2018 is just an intermediate degree bottom so once this market starts a good bearish run, it should crash right through that 4th wave support.
The DJIA also crashed with gold so any rush to a safe-haven sure looks like it’s not working this morning. The only question is how deep this can go during the month of July. A bigger bearish phase should slice my support line and eventually the 26,460 price level as well.
The mainstream analysts called for DOW 27,000 after which it crashed. Now the experts will give us all sorts of forecasts how deep this “Correction” is going to go. If we have a Cycle degree wave 3 top then this requires a Primary degree correction down to Minor degree.
3-degree levels above Cycle degree and 3-degree levels below Cycle degree have always been my goals.
I treat solar cycles like an emotional fundamental as the entire world seems like it’s in a climate emergency! In reality, the markets don’t give a shit about climate change as we have had a bull market since early 2009! Has the climate changed in 10 years?
Until solar cycle 24 ends and solar cycle 25 starts I will remain bearish but try and catch any larger reversals when possible.