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Category Archives: INDICES

Mini SP500 2016-2018 Review

 

I’m sure the entire planet is trying to figure out how far or how deep this bear market will go. Most of the time markets will come to a grinding halt at some previous bull market support. In this case that would be the 2016 low. (2000-1800).

I will also keep my expanded pattern alive as it is already telling me that one day, all the markets that have this pattern will get retraced in another bull market, but it may take 10 years or more before a new record SP500 high will ever get recorded.

I have mentioned many times that all the President Trump market gains will burn up in a puff of electronic smoke.

From the 2016 bottom we had a 2-year run to complete a move in Intermediate degree, so when the market retraces back to those levels, they would have retraced an Intermediate degree move. Since it would end with a run of 5, I always have to cap it. If I see “any” 5th wave uncapped, then I know those wave counters don’t have a clue where they really are!

This would be the “A” wave in Primary degree and “A” waves are usually “Buy” signals, but they are not the starting waves of a new bull market.

Any “B” wave in Primary degree will also be very choppy, which will be the first clue that it’s just another bear market rally.

It may sound crazy that the SP500 will crash down to the 1800 price level, but we are dealing with a Cycle degree bear market, the likes we have not seen since the 2009 lows.

Tech companies inside the SP500 are imploding with Facebook, Apple, and Nvidia leading the way. This should not be a surprise to any serious market observer as this is starting to happen for the third time since the 2000 tech bubble. Three bull market peaks have blessed the smart market timer, but those party days are over, at least until after 2022.

Solar Cycle #25 should kick in so the younger investors will enjoy the power of the sun. In 2008 it was Solar Cycle #24 that kicked in and it supercharged the markets until January 2018.

The Gold/Sp500 ratio has changed little and is on the expensive side of 2.2:1.

Some say there is no place to hide from this turmoil, but we also “always” have a choice. Any investors that are getting close to retirement should be extra cautious, as my generation got hit hard, and escaping into cash would have at least saved some capital gains.

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DJIA Intraday Downside Resumes!

This is a quick update and it may be the last one before I switch to the March 2019 contract. They run 3 months at a time but the volume is still a bit light in the March 2019 contract. Since Sunday night the DJIA has started to resume its decline after the Minute degree wave 2 completed.  In this case, it is impossible to give any price support forecast, as you have to ask “Support for what”?  The support that will make the DJIA soar to new extremes, or just temporary support that might last a few weeks or so?

If my 5 wave sequence is real then wave [i] support will never hold. Any bear market rally like this always retraces its entire bullish move, and I expect nothing less.

I checked the Gold/DJIA ratio this morning and it was one of the most expensive readings yet! It takes over 20 ounces of gold to buy one unit of the DJIA, from a max reading of 17:1. Cheap would be closer to 7:1, but that will not happen any time soon.

Longer term I think the markets will crash at an “A” wave in Primary degree but that won’t happen until Minor degree waves 3-4-5 has fully played out.  I would need another 3-4-5 wave as Minute degree also needs to play out.

There still hasn’t been an extension to speak of, but I’m sure it will show up one day. This type of 1-2, 1-2 wave count can be the setup for an extended run, but the last 5th wave could extend as well.

The 2018 January peak is the real peak and the third bull market peak since 2000. Each bear market since 2000 has been worse as each bear market bottom was also one degree higher.

This bear market is going to be much bigger than the 2007-2009 bear market was even though the markets may never break below 2009 lows.  This Cycle degree bear market will be a bit longer than what 2008 was. The 1929 bear market only took 3 years, but this decline could take a total of 4 years. 2018-2022.

I can see it already when the talking heads are calling for DOW 5500, you can come back and I will have a DOW 34,000 forecast.

 

Hits: 9

S&P Midcap Death Cross Update

Investors already got a good taste of what a Death Crossing can bring. The 50-day MA has crossed the 200-day MA in this daily chart, which they call a “Death Cross”. Many have no clue how damaging a death cross can be, but we have plenty of examples of real-world bear markets imploding after the death cross. If the wave 2 in Minor degree has completed then the wave 1 price support at 1769, will definitely not hold.

Looking for 5 waves down is my first choice but we are still a long way off, before wave 3-4 in Minor degree arrives.

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Apple Stock Crash Update.

This is for the people that must have trend lines, so I added a few lines that are important from my perspective. Most of the time I draw all these lines offline, but I don’t always publish them.  I went back to the 2015-2016 bull market which is where most indices also corrected with the same wave count.  The news that Apple and Amazon are hooking up destroyed this stock as all the mall stores will lose customers.

If Apple retraced back down to the bottom bullish trendline, then this would only get us closer to a single Primary degree bottom. Apple stock imploding from the Fibonacci $233 price level is not a surprise, as stocks also implode from the $55 Fibonacci price levels.

Every Fibonacci price drop is a 61% crash which we might get two of them.  The entire Apple wave count has always displayed diagonal wave structures, this is why I have no Primary degree wave 5 peak labeled. It’s a Primary degree “C” wave.

Without a doubt, this Apple stock was in a mania blow-off in Cycle degree. Any mania does not end with an 18 or 20% correction, as most of the time markets fall back to the previous 4th wave of one lesser degree.  That would get us closer to that $89 price level.

Apple was in a Cycle degree peak so, at a minimum, we have to see another Cycle degree bottom. 3 waves in Primary degree is what I will be looking for, which could also take until 2022 to play out.

Investors are going to learn what the real price value of Apple’s stock is in the next few years.

There is also a minimum of 3 gaps still open below present prices and I bet at least two of them will get filled.

The most extreme Gold/Apple ratio registered at about 5.27:1 on September 10th. It has been hitting the ratio brick wall and has now started to spread again. Still at a 6.34:1 ratio this morning, Apple stock is still extremely expensive to the price of gold. Cheap may come closer to the 21:1 range but that is only a reference. The gold ratio price brick wall would get hit first.

Some will never believe that Apple stock can even crash, but the size of this Apple bear market all depends on what degree this 2018 mania peak was!

 

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TLRY: Marijuana Mania Crash Review!

Smart investing is all about being in the right place at the right time, so do you think TLRY was a good buy when it hit $300?  This move is all about FOMO and it has nothing to do with fundamentals. Who in their right mind would buy into a vertical move like this?  Who was that greatest fool, thinking that the $300 price is a good deal?

The market punished these fools, with close to a 70% price crash below the $90 price level. My main interest is about the mania that has been surrounding a new industry, but some of these investors could have been sampling the product when they hit the “Buy” button when TLRY hit $300.

I do not give any investment advice on any single stocks that I post, and I have no holdings in pot-related companies at this time. I’ve had people ask me if it’s time to invest in pot stocks, and my simple answer is in the form of a question, “Do you have a trading account or investment account open”?  The answer is usally, “No”. This just shows how insane any mania can get when people what to invest, that have never bought or sold any stock in their life!

I guess TLRY is in a bear market when it hit a 70% decline. Stories about pot shortages did not happen in Vancouver.  Most of those dispenseries never missed a beat as they were open under municiple by-laws, not federal laws.

 

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GE 18-Year Bear Market Review

 

When markets crash they create the headlines and GE is no exception. Hedge funds are dumping stock (selling low) as they panic to get out of their long positions. I will not keep detailed wave counts on GE, but it sure looks like it has been close to an 18-year bear market. Every attempt to go higher was trashed and GE resumed its decline. This is just a quick look at the GE stock and I do have alternate wave positions as this double zigzag could also be a diagonal set of 5 waves. Either way, a new bear market record low should happen. Below $5 would be my obvious choice which could also be the “A” wave in Primary degree, that I’m after. If that is the case then any substantial rally should give us another rocky bullish trend.

I had no Gold/GE ratio database started, so I checked a few of the extremes to see how expensive GE was when compared to the gold futures cash price.

Starting back at the top in 2000 the Gold/GE ratio hit 5:1, that was an extreme just about matching the 2018 Apple peak. Then from the 2000 peak, GE crashed into the 2009 bottom along with the general markets, and the Gold/GE ratio exploded to 100:1. Then the bull market that ended the Great Recession compressed the Gold/GE ratio back to about 41:1.

In early 2016 the bottom fell out of the GE price as support seemed to be non-existent. Today this Gold/GE ratio is sitting at 150:1 which makes it cheaper than the 2009 bottom already! I’m sure the spreading of the Gold/GE ratio is not finished. One would just about have to take weekly ratio readings, to catch it when the Gold/GE ratio starts hitting a price brickwall.

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Nasdaq 100 Daily Chart Update

 

On this daily chart, the Death Cross is still going to happen as the Nasdaq wanted nothing to do with the 50-day MA, and could not find support above the 200-day MA!  If the big bearish trend is true, then no amount of jaw-boning will turn the tide, even with the COT report below showing a small net long position. The bears will show us if they are in-control by taking out my wave 1 position Minor degree which still could happen this month.

My last Gold/Nasdaq ratio calculation was in early September 2018 what at that time registered the most expensive ratio of 6.38:1. It takes 6.38 gold ounces to but just one unit of the Nasdaq which blows the old record of 4.94 gold ounces by a long shot.  Cheap would be 1.18, so there is a long way to go before this Nasdaq becomes cheap again. The Gold/Nasdaq ratio has been hitting a brick wall a the 6:1 range, so that is a usually a big clue that this market is far too expensive to be a good long-term investment at this time.

This is only a very small net long position with this COT report, which is nothing to get excited about especially when this is one of the only long indices I have.

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Russell 2000 Daily Chart And The Death Cross

 

While many of the talking heads are bullish towards the stock market as the “Buy on the dip” battle cry, still seems to be a common theme. We are looking at a daily chart with the 50-day MA getting close to kissing the 200-day MA line, and when it does, it turns into a Death Cross. A Death Cross on a daily chart forecasts a bearish move that will devastate all those smart bulls that have been brainwashed to stay invested for the longer term. Maybe the younger investors can recoup years down the road, but if my boomer generation is still “invested” then they will never have the time to recoup any market losses. Many boomers lost their retirement investments with the 2008 crash. Even older Gen-X investors may not recover from this next bear market downturn.

When I switch this to a weekly chart setting, then the 200-day Death Cross is at the 1360 price level, so a wild ride is surely coming!

Just about all COT reports regarding the different indices, show commercials still having net short positions. I will not turn bullish on stocks until all their short positions start to reverse!

Hits: 7

Mini SP500 Intraday Rally Update

 

Obviously, the bullish crowd sees the midterm elections as a positive thing, otherwise, the markets would have tanked far sooner. Wild bullish charts like this virtually look vertical on a daily chart, so a correction should be near. If the bigger trend is bearish then a complete retracement of the October bottom will happen. We also have the potential for an H&S top, which the SP500 is running up against. This is a classic textbook retracement move, but we have to see if it’s real!

This is the E-Mini SP500 COT report that shows the commercials having a bearish outlook, while the speculators are in a typical inverse position. Speculators or managed money always seem to get trapped as they are not the smart money crowd that media makes out to be.

 

On A different note, the pages read on this blog have exploded dramatically in the last 3 days, as over 6000 pages were view in a 24 hour period. I was set-back by these numbers but it may be just due to many people being off work and voting. It’s nice to see these numbers, but only time will tell if it’s not just a freaky one of a kind type of move.

I will not post on Remembrance Day for obvious reasons as I take that day very seriously.

Hits: 9

SPX: Flying High This Morning

 

This SPX chart is flying high but it also left 2 gaps in its wake.  I’m sure those two gaps will get filled, but I can’t give a time frame when they will get closed. Even the futures charts have gaps, so  those two gaps will keep me in a long-term bearish mood. I made some position changes with the DJIA, but left them off the September peak, due to space limitations.

The Market Vane Report on the SP500 was pretty boring as they ranged between 53% and 55% bulls present. That is not even enough to get out of bed in the mornings for, as those readings are just middle of the road. If the big bearish picture is still in effect, then no new record highs should happen. The VIX has crashed acting inversely to the SPX, so in this case, the VIX is acting correctly.

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DJIA Intraday Rally Update

 

I looked at all the peaks of the markets that I cover and there is a good case that can be made that the expanded flat was just a diagonal wave 3-4-5 in Minor degree.  Sooner or later the markets will head in the direction it wants, but it should not soar to new record highs. Bullish moves this fast have nothing to do with fundamentals as it is more likely that the “Fear Of Missing Out” and buy stops getting hit is the main cause.

With a new location of the Cycle degree peak Wave 3, we would be starting a new set of impulse waves as well. There is no Market Vane Report for the DJIA but they do have the SP500 and the Nasdaq. Those reports are not at any extreme, and matter of fact is one of the most boring reports I have seen. Even the previous Market Vane Report was starting to get boring. Extreme readings is what I’m looking for, and I didn’t see any at this time.

Most commercial hedger readings were net short but I suspect they added to their long positions in the last few days.  I will not find out until Friday nights reports are published.

I’m still bearish long term but in the short term, the markets can still go up!

Hits: 4

Apple Crash Update: As Warren Buffet Loses 4 Billion in One Day!

 

https://www.marketwatch.com/story/warren-buffetts-big-bet-on-apple-has-one-wall-street-trader-asking-has-he-lost-it-2018-11-05

Apple investors are getting hammered including Warren Buffet. Warren Buffet has the biggest stake ever in Apple. I cannot see the logic of buying anything at extreme record highs but rich people are the only ones that can waste their money buying high price stocks. It’s all the other investors that are going to get sucked into thinking that Apple stock is still going to the moon.

https://www.cnbc.com/2018/11/02/warren-buffett-loses-nearly-4-billion-in-single-day-on-his-apple-stake.html

Warren Buffet is  buying his own stock back as well. If $4 billion is not enough, then just follow this saga as the world is slowing down and heading into another recession. Buffet bought IBM the same way, and look how that turned out. In recent months the Gold/Apple ratio has been the most expensive around the 8:1 ratio and today it sits at 6.0:1 about the same it was back in August 2018. A cheap Gold/Apple ratio is about 21:1, which may never get hit again but when any ratio starts to hit a price brick wall, then this is a sign of a major top. I think Apple is also at a Cycle degree wave 3 peak and they do not correct in just a few months as it could take years for this impending bear market to play out.

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DJIA, Intraday Rally Update.

 

The DJIA finished on the upside last night, but this E-Mini contract sure reversed in a hurry.  I can work an expanded flat for last Octobers bottom but at the same time, I also dropped my degree level down by one. The long run-up sure looks like a good set of 5 waves, so we also may have finished at an “A” wave in Minute degree. In other words, we might only be a 3d of the way through this potential bear market rally. Most of this market rally was just the “Buy” stops getting hit right up to a big a previous high. The DJIA also ended with another spike to the upside and if this is still a bear market rally, then the markets will go back to creating lower lows.

I will keep the postings short today until I get a chance to review all the COT reports that come out every Friday.

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SPX: SP500 Index Rally Update!

 

Some of these waves in the SPX sure look better from Bigcharts than they do with any of the futures contracts I cover.  We had a nice spike to the downside just yesterday and now the second day, the SPX made a wild rocket move to the upside. Before noon our time, the SPX made a huge spike to the upside, with a huge open gap as well. That makes for a deadly combination, and I see it as a fake start to any mythical bull market we may still be in!  If all the futures-related commercial positions were all net long, then it would be a different story.

Any rally like this starts out, by hitting all the “Buy” orders first.  Now sell orders will be piling up below present prices, and the bulls will turn to instant bears once their stop-loss orders start getting hit. This can go on and on, and once the SPX support prices get close to that February low, then you will see investors really freak out!  There are crashes,and then there are crashes and bear markets. Crashes happen at smaller degree levels. On large degree corrections you often get a bear market rally before the long bearish decline.

This is a Cycle degree bear market and it looks like we are going to get a bear market rally and then the longer drawn out decline. With the major indices it looks like we will get a Cycle degree flat, but, in the end, it might look like a zigzag! I might be posting more SPX charts in the future, as these charts are smoothed out a bit more.

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TGOD And The Results Of A Mania!

 

There is no other way of describing the legalization of marijuana use in Canada.  This marijuana mania is no different than what the bitcoin mania was a few years ago.  They laughed at me we I mentioned that TGOD could fall below $5, well how does $3.00 work for?  I actually shorted this stock several times and made a little money doing it, but I still would not touch any of these stocks, as TGOD could disappear as many of these producers would have to merge. Size matters as I think the US-based companies are already taking over and could gobble up any other grower.

I’m sure you have heard about the great marijuana shortage up here and some shops selling out. Well, any shortage can be fixed in a month, just for every pot smoker in Canada, quit for a whole month.  How long do you you think it would take them to fill all the shelves to the rafters!  Marijuana is a consumer good, so it’s subject to the whims of the age group.

I’m kidding about this, as we all know that there wouldn’t be any takers in Canada!

I put up TGOD as just another inverted zigzag with an “X” wave. We could get another zigzag bull market at a later date.  I do not spend any time on the fundamentals of most companies, and doing your own research is critical.  I have no time and no interest in spending weeks trying to justify any fundamental homework!  Even the Warrant that goes with TGOD retraced its entire bullish cycle.

 

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Mini DJIA Intraday Rally Update.

 

Two days ago this Mini DJIA chart ended with a nice long spike to the downside, and since then the markets have been in a rally.  Is the correction over? Not by long shot folks as the world markets are in a tailspin. If we only had a single wild crash much like 1987, then I would turn bullish much sooner. The problem with thinking about 1987 is that the 1987 crash was just a “Minor” degree crash.  This crash will be larger by 4-degree levels and has a good chance of producing a long drawn out bearish phase, which has not happened since the 1930-32 decline.  1987 was 31 years away, while the 1929 peak to 2018 is now 89 years.  I have learned not to ignore the Fibonacci 89 years as that is 1 year short of the 30-year cycle. If I use 60, 90 or 120 years, just divide those numbers into 30-year sections which I use as my time forecasts into the future.

We can be out by a minimum of 61% (.618) In price and time, so I want to be very careful when I move a big degree around in the future.  Imagine jumping 100’s of years forwards or backward in time by drawing a number or letter on a chart! Flipping numbers and letters around like flipping burgers is just like a warp jump going to Mars. It might take until Supercycle degree wave 3 to colonize Mars towards the 2041 time period. 2041 is only a “one” degree jump while many others are over 3-degree levels off.

At the intraday level, it’s a different ball game, but I look for all the Minor degree turns first. All the warnings investors got with this market top, they still think they can escape before the crowd. Some experts are still as bullish as we can get and they seemed to want to ignore the reversal of fundamentals that the Trade War is bringing.

End of the month has arrived and if this bearish market has legs, our present little price support will never last!

 

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IVV Fund Inflow Update

 

 

I’m sure investors are paying attention when funds are flowing into IVV and SPY. Last Thursday was one of those days that reported billions of funds flowing into these two sp500 related ETFs.

Who says that these fund flows isn’t dumb emotional money thinking the bear market is over!  This kind of fund flow always happens near tops just like in January when investors stuff their accounts to make it for the 2017 tax season. In late January 2018 is when my 5 wave counts finished, which was followed by another record-breaking secondary top. The bullish “C” wave is about as choppy as you can get, so this tells me that IVV was also in a rally going against the larger trend. Missing an expanded top anywhere throws the entire wave count into disarray forever, if it is not rectified instantly.  Every major index in the USA has this expanded pattern, so it’s not just one lonely little pattern. Expanded tops happen frequently so they sure are not rare market patterns.

I started a new category with IVV as I may post more of IVV in the future.

Since the expanded pattern is basically an inverted flat or zigzag, it would be a bear market rally. To confirm that this is still part of a bear market rally, then IVV still has to crash below that $256 price level.  Lower lows and lower highs are the signs of a bear and right now we are in No man’s land like Flanders Fields, except we have bulls and bears fighting over who controls the space.

These counter rallies can be terrifying for the crowd that is fearful of missing out. Decisions made under fear never seems to work out very well.

I don’t trust in-flow numbers that much as I think insider buying reports are far more important.

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HEDGE: Cycle Degree Bottom Review!

 

 

 

In September HDGE completed a bottom before it soared as fear starts to take over this market.  If the general markets hit their mania peaks in January of 2018, then HDGE should also contain an expanded pattern. Our present move up will need corrections and backfilling. In the end, I’m looking for 5 waves up in a Minor degree to complete a potential “A” wave in Primary degree.  In order for that to happen, HDGE still needs to retrace and take out the $8.60 price level.  HDGE goes up when stocks go down, so I will remain bullish on HDGE until the majority want to own some HDGE shares.

The crowd is always late, so jumping on the bandwagon at this time will give you the same results as the majority get, usually nothing! Even a falling wedge can be clearly visible, which are powerful reversal patterns at all degree levels. We still have time this year for HDGE to fill out a set of 5 waves in Minor degree, after which a huge correction will send HDGE plunging one more time.

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S&P TSE Index 2014-2018 Update!

 

When I looked at this chart I instantly noticed the exact same pattern in this TSE chart during the 2015 crash as the SP500 -8-9 months.  The only difference is this move did not expand higher, but otherwise, it is the exact same wave pattern we have been getting since the January 2018 peak. These are ugly patterns, but sure have characteristics of the commodities diagonal wave structure I use.

After the January 2018 peak, another expanded pattern developed, and still, the outcome will be the same.  In the long run, the bottom trend line may not hold but at this time it is a bit early to speculate about it.

Canada is in serious trouble as our Fed is determined to crash the markets with their stupid outlook about inflation. The Bank Of Canada rate increase may not sound like much but what rate increases do is drain the liquidity from the economy. Very few people will have an appetite to borrow money for an overpriced home or condo. The bull market is over folks, as the anticipated bear market is going to last much longer, and fall much deeper than we can all imagine at this time.

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SP500 E-Mini 2000-2018 Review: Bear Market 3.0

 

 

I thought I would post this chart to show that there is also a huge wedge at play in the markets as well. Call it a reverse Megaphone if you, like but the recent bearish moves are up against a big support trend line that is going to fail. The 2007 peak was much smaller and sure added to the confusion, if 2007 was a “B” wave top or not. Join the Primary degree wave 3 with the Primary degree wave 5 (Jan 2018), The same parallel bottom trend line might give us some support, but eventually, that trend line should not hold as a Cycle degree bottom would trash the Primary degree trend lines. Analysts are worried about some 10% or 20% correction before the markets soar again. I’m sure they will argue for years trying to sort out the 3 tops in this SP500 chart.

It took me years, and not until I switched to Cycle degree wave analysts over 3 years ago did things start to make sense and fit better. I will never switch to a higher degree as that is happening by itself already!  We are lucky as every major dip only took about 5 years or so before new record highs were achieved again. Supercycle degree wave 3 could take much longer, to surpass our present peak of 2900.  We have 2 major price support levels that very few think can even happen, but more and more are joining the bearish trend.

Things have changed dramatically since the January 2018 peak as the moods have turned bearish. Just because the stock bears are shredding bullish investors accounts does not mean a contrarian buy signal has arrived. I will remain bearish, until at least a potential “A” wave in Primary degree arrives, and that may not happen for months. Commercial COT reports show that they are net short in most of the 5 indices that I cover. Until they start to build net long positions a real bottom is going to be hard to justify. Bear markets and crashes are just part of bigger bull market corrections just like the 1929 crash has demonstrated.

Since 2000 this will be the third crash I am attempting to count down and chances are it will be my last one. My goal is to get most of the indices down to a Cycle Degree wave 4 bottom, but after that, this blog may shut down.

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NASDAQ Plunge Update!

 

This is the December contract which shows better when I use line type settings, but it also changes many of the wave positions.  At the top could be my first wave 1-2 in Minute degree which would make the October rally as the potential 4 waves in Minute degree which brings us to a potential wave one in Minor degree. I will need to make adjustments as this bearish phase develops, as there is more than one index that shows a high wave 1-2 pattern. Nvidia Corp has crashed over $100 already as demand for Bitcoin mining has faded fast. Fear of just about anything is pushing the markets down, besides the Fed is creating a worldwide, liquidity issue.

The Midcaps are much further along the slippery slope already and they may also be ready for another rally. Short term I may be a bit bullish but longer term a huge bear market is coming if we like it or not!

What really irks me is that the talking heads are saying to stay in the markets for the long term. This is nonsense if age is not taken into account. Many boomers that were invested in 2007 got wiped out and many have never recovered. Even early Gen X start to retire in 2029, and many will never have enough time to recoup up to 70% losses!

You can check your older relatives and I bet few if any can say, “Yes I retired at the top of the stock market with my mutual funds intack”.

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Artificial Intelligence: BOTZ ETF Crash Update!

 

It looks like this AI ETF has a real emotional crowd selling all the AI stocks! Just goes to show that emotion has the ultimate power.  The top has one wave position missing and by doing that, I am breaking my own ‘Law” so to speak, leaving an uncapped 5th wave. I couldn’t fit it in, but this is also Cycle degree wave 3 when a potential Primary degree zigzag bear market could also develop. The sloth of smart bears have taken over and there is no amount of bullish jargon that will turn a trend, that still needs to finish. This could sync up with the stock market very well as a potential wave 2 counter-rally.

I have no real Gold/BOTZ  ratio profile made up but I still have to back-check the extreme ratio. Today this ratio sits at 64.26:1 but this could still spread much further by the end of the year. No amount of ratio calculations will help here, as we have no real knowledge how pumped-up the AI stocks really were! BOTZ could suffer the same bear market length as stocks, which I expect to end sometime in 2022. When solar cycle #25 starts up in sunspot activity again, I’m sure all the companies inside the BOTZ ETF are going to get energized. Only time will tell if this keeps heading south but another sideways correction should happen by the end of this year.

As much as I’m bearish on BOTZ now, that will end once solar cycle #25 sneaks up on us!  The start of solar cycles are bear terminators, so this is when you can witness and feel the mood change along with the sun morphing into SC#25.

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DJIA Intraday Crash Update: No Rules In A Bull And Bear Fight!

 

It looks like the markets are resuming their larger trend if we all knew what that large trend actually is.  This is my third big stock market crash I am actively tracking and it is also the third peak that has to have a wave position to it that fits. Most markets I am tracking have an expanded pattern to them which ended October 3, 2018. The real top ended in January of 2018, just about 10 months ago.  I know how much the wave counts will distort every outlook if we keep ignoring any expanded tops. The January peak is my third wave 3-4 peak since the market bubble top in 2000, and it should produce bear market conditions that will be worse than what the 2008 crash produced, but not as bad as the 1930’s depression.  1932 was my wave 2 in Supercycle degree, which will not end until we get closer to 2041.

In the short term, it could take until 2022 to play out, but we should also get another huge counter rally that not too many people will see coming, as they all think that the bull market has returned.

Gold reacted positively to this market decline, which may be a good sign for gold investors, but a “run” to safety is a human emotional move that will reverse just as fast because if stocks start to rally again, they will dump gold and gold stocks in a flash. The markets have never been tested with the world on “High Speed” data lines, where flash crashes could become normal. We have seen what high-speed computer trading has done in the past, and the FCC is powerless to do anything about it.

I have flexibility when counting down the start to this bear market, but sooner or later real fear will take-over then all the analytics in the world will not work, nor make any sense.

All those that are calling to, “Buy on the dips”,  do not know how big this stock bubble actually is. This market should have a Primary degree counter rally coming, which is when I will become bullish again.

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S&P Midcap E-Mini 2000-2018 Update.

 

I had to use 1500 bars with this weekly chart as it shows better contrast. I started back with the 2000 peak which was followed by a very clean or near perfect expanded flat that I have run into. The correction only took a few years or so before it turned and started to soar north again until the 2007 peak!

At the 2007 peak the majority were extremely bullish and they saw no end to the good times! Market Hulbert did a very good job of recording the 2007 bullish top as he collects all his own data!  The bullish herd never listens to the bears stock outlook anyways, so the majority got hit hard all the way down until March 2009!

Even when all the indicators showed that the 2008 market crash is going to turn, the Elliott Wave crowd were looking for a much deeper run well below 1996 price levels.  Hell looking for another 5 waves down in Primary degree would have taken the Sp500 Midcaps to “ZERO”!  Insiders were already buying everything that was crushed in price, yet the wave counters remained extremely bearish.

The records how bearish market analysts were at the 2009 bottom are still floating around the internet! Having a bearish wave count, and ignoring the start of solar cycle #24 along with every bearish investors will never work. They will never work when it happens with the start of solar cycle #25!

Even Warren Buffet’s scream to buy stocks in 2008 the wave counting crowd was oblivious to all of it!

When you look at the big picture we can see that the 400 price level has some serious support. This could end up being major support for any future bear market that you can dream up. Any Cycle degree 4th wave bottom may stop well short of a new record low, so chances are good the wave counting bears will miss another huge bull market being set-up!

Many boomers were wiped out with the 2007-2009 crash, so buy and hold will not work for the older folks getting ready to retire.

The Fed is creating a liquidity problem around the world by raising rates, and subtle reports show that is exactly what is happening. President Trump is at odds with the Fed as they choke the life blood out of this market. All those that think gold is going to fly due to inflation are fighting the Fed as the Fed is trying to kill inflation.

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Gold Weekly Chart, 200-Day Moving Average Update!

 

I realize that my bearish precious metals outlook does not sit well with many of the gold bulls still around today. The gold bulls that only see or want to see a bullish gold wave count will not find it on this blog just yet! The people that like to shred my work are the bullish investors. There are thousands of sites out today that will cater to your gold related bullish needs, and they may even be telling us about a $5000 gold price coming soon!  They always use the fiat money printing fundamentals as a reason to hedge, or stay invested in gold!  This time I included the 50-200-day MA and we can see that gold is hitting the 200-day MA line. Gold would have to rise sharply to get above and stay above, this 200-day MA. Since gold is still in the glow of the “Golden Gross”, then the 50-day MA must not fall into the 200-day MA, because then we would get a “Death Cross” in this weekly gold chart. I track 3 major gold price support numbers with $1160, $1120 and $1047!

The gold bulls need for gold to break well above $1400, while the gold bears need gold to crash below $1047. The entire gold related analytical world is focused on these two main price levels.

Which price level is going to get hit first?  It might take the rest of this month or even longer before we can become more certain. All my metal COT reports do not support a big bullish surge at this time.

All the wave counting in the world will not help us forecast the gold price if we have no clue what that 2011 peak actually was.

I included the silver, copper and gold COT report again, which I see as very bearish indicators. The herd of metal analysts always recite or use the non-commercial trader’s numbers, but they are always the group that gets into a trap be it a bear or bull. The COT reports get posted on Fridays and investors have the choice to read or ignore.

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Shanghai Bear Market Continues…

 

The Shanghai index topped in late 2007, after which it crashed in a dramatic fashion. This also matches the crude oil peak very well, with that secondary peak never reaching new highs since. I see the crash and counter-rally containing an inverted zigzag.  The long trend line from the 1996 bottom did not hold back the bearish mood that is starting to hit stock markets around the world.

Any bear market rally always retraces itself, back to the point of origin, which would be the (A) wave in Intermediate degree. Of course, it can go much lower as well. We also have one crazy wedge that can give us a clue that the Shanghai index is going down. I show a 1-2 wave count in Minor degree, but that can also be the 4th wave  already, due to its length in time it took to counter rally.

We will know more as we get further along in the year, as once a trend resumes it will not stop until it is in an oversold position again. A zigzag decline leading into a Primary degree “A” would definitely give us another bullish phase as another bear market rally,  which can be an inverted flat. I have no COT, or MV report available to use, but all the North American markets do. When the commercial hedgers all turn net long, then the Shanghai will also rally.

Mark Hulbert posted a great article that will give a few people something to think about.

Opinion: Would you recognize a market top if it was staring you in the face?

 

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SPX 2018 Elliott Wave Review

 

 

SPX is another SP500 type index. IVV is also a Sp500 related ETF.  It was the January 2018 peak where my Cycle degree wave 3 resides. What followed was an expanded type top, which most USA indices displayed as well. The last 8 months were very bullish with record new highs, which has now reversed. “C” wave crashes have a tendency to do exactly that, so this bearish move is not a surprise at all.  Any company inside the SPX will also get trashed, as all the high fliers have crashed as well.  I don’t think we are at wave 1 in Minor degree just yet, but it can easily be adjusted at later date. The choppy 5 waves you see ending in October, are diagonal waves which are also an indicator that the SPX ran against the larger trend.

There are forecasts being made to stay in for the “long” haul! Investors will suffer huge losses and could end up waiting 3-4 years just before we hit a major bottom. Can investors handle a 70-75% stock market crash? Every major top, since 2000 had the experts telling us to stay in for the long run. The only reason we get told this is because the experts have no clue how deep any correction can go. The stock bubble mania has ended folks, and from here on, the younger Millennial crowd of investors are going to take some serious hits if they are still invested.

The function of stock markets declining is deflationary, just like in 1929-1932 and in 2007-2008.  If any boomers are still invested then, they will get wiped out as boomers are retiring at a rate of 10,000 per day!

We are looking at a potential Cycle degree decline in the next few years, and it will not stop with a simple 10% correction. A 40% correction will not do it as well, even though 40% is my standard wave 4 correction depth.

 

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Crude Oil 2012-2018 Weekly Chart Review

 

 

This is just a quick update for an alternate wave count that I have for this wild crude oil bull market that has been going since the 2016 bottom. 2 years and 10 months crude oil is in now in a downturn. No doubt about it crude oil was a wild ride, which topped on Oct 1, 2018, at about $76.90 with this December contract. The Gold/Oil ratio has been at an extreme with a 17.61:1 reading this morning. The 17:1 average reading lately is a far cry from the 44:1 ratio I recorded at 2016, $28 low.

Even then expert analysts were calling for $20 and even $10 oil still to come, as the world was in a huge world oil glut. Do you remember exactly what triggered oil to soar in a world glut? Nobody will give you a good answer as they don’t remember!  I knew at that time that the oil bottom was near just like it has done in every other major world oil glut we ever had!  2008 was also a world oil glut when crude oil hit about $34 and the ratio at that time was only 25:1. Markets do the exact opposite of what fundamentals always suggest, as fundamentals will always tell us the wrong things at the extremes.

We are at an extreme as commercials have a huge net short position, while the speculators have built a huge net long position. One group has to be wrong, and my bet it’s always the speculators that get into a trap.  My Tuesdays Market Vane report didn’t show any real extremes, but they sure do with RBOB gasoline and heating oils.

For now, a potential “D” wave could have finished. There is so little difference in mood between a bull market wave “1”, “B” and “D” wave that no expert can tell the difference.

In the long run, we should get a good corrective wave to show itself. Except for the “D” and “B” wave tops. Any wave 2 must not crash to a new record low.

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Intraday E-Mini DJIA Rally Update

 

I think this market rally is just another bear rally, and it could be coming to an end this week. We had 3 moves that overlapped each other which are signs that the market is also going against the larger trend.  We are going to run into many of these types of rallies, but we may not be at my anticipated wave 2 in Minor degree at this time. Yes, we did get a great spike to the downside, which can happen at any major bottom, but they also show up, when we only have a correction.

Today the DJIA made a vertical move to the upside, so that is looking good for a reversal as vertical moves like this cannot be maintained for very long.  Hopefully, we will see more downside by the end of this week, and a new record low will certainly confirm it.  Any support we presently do have is just a temporary rest stop.

You can bet that there are large amounts of stop-loss “Sell Orders” below present prices which can get triggered,  like what happened between the 9th and 10th of October. If any dips get too large, certain safeguards can kick in so don’t expect a 1929 stock market crash to happen all in one day.

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Crude Oil Weekly Chart Update. Will the Bullish Mood Last Forever?

 

All those analysts that report on the price of oil, work with fundamentals to justify future price increases in crude oil. In 1998 when oil was closer to $10, and a full-blown “oil glut crisis” was in progress, did the fundamentals at that time forecast a bull market to come?  That was close to 20 years ago, which many oil analysts don’t even remember! Right in the middle of the “world oil glut” crude oil prices started to turn and only looked back a few times, as oil roared up to $147 US dollars. No a single fundamental analyst at that time could forecast + $100 oil.

10 years later in 2008, crude oil was pushing $147, and the world experts declared a bull market and a massive shortage in crude oil. Every expert joined in on the “Peak Oil” bandwagon, as even more insane price forecasts were being regurgitated. $200-$300 crude oil price forecasts were not uncommon, as the world suffered another so-called shortage.

What do you think happened next? Sure enough, the markets screwed all the “expert analysts forecasts” and from about a $147  peak, oil started to crash, ending closer to $34 in a little better than 8 months!  If fundamentals really work, then we all should come up with a solid reason for each and ever major crude oil market turning.

At the 2008 bottom, more bearish calls for oil to fall too $20 were common, as another world oil glut was produced. Nobody expected a crude oil price turning, in a world flooded with oil, but ignoring the fundamantals, oil prices turned and a 5 year run followed, pushing crude oil back to $115 US.

Now when oil heads down, they dig up and report bearish oil news, and when the price of oil heads back down, all the bearsh oil news will come out. Commercials sure don’t support crude oil prices to go higher, as they are net short crude oil by a wide margin. The Gold/Oil ratio also gives us a clue that oil is very expensive when we use gold as money.

Gold/Oil ratio is sitting at 17:1 from which it has crashed once before.  Now 44:1 was extremely cheap in 2016, and oil had no choice but to soar once again. This time crude oil is closer to pushing $75-$80 with a 17:1 ratio.

2016 could be my wave 4 bottom in Cycle degree, but at this time a diagonal pattern is emerging.

Another big zigzag, or 5 diagonal waves producing many overlapping wave structures. From 1998 we had 7 waves, so the exact same thing can happen again, but it could take until 2038 before oil hits new record highs again. If the bigger bullish cycle is real then any anticipated crude oil correction should “Not” create new record lows, but stop well short of a new low!

Either way, any “A” wave in Primary degree can double as a wave 1 in Primary degree, which could take many years before my wave count gets trashed. A big market recession is coming, and chances are slim that the oil price will hold up.

In August China reported no US oil imports, but they like our cheap Canadian Oil prices.  Most of the oil news is, just a bunch of  “Jawboning”  and talking doesn’t change a trend, nor do government actions.

Gasoline prices have a head start already, as RBOB prices are imploding.  In the short term, oil can head higher, but a big correction should be on the way.

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