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.
It seems tech investors only see a rosy future as all the fundamental changes that the trade wars are producing are being ignored. Markets move because of hope and greed but on the next correction disappointment and fear will suddenly come back.
At 7900 the Nasdaq is approaching record highs and another double top as well.
I know I have complained that there should be “No” 5th wave positions uncapped, well I broke that rule 5 times and even for the 6th time as I have Primary degree wave 5 still not included. 6 sets of 5th wave tops are pretty rare as I have run out of space at the top.
A small gap has also formed so in a mini panic this gap should have little problem in getting filled. Analysts talk about the market’s bull run just getting started. A melt-up is sure to come, based on the hope that the trade wars will end.
When the majority are bullish then who is left to come in when the experts are screaming bullish sentiment 24/7? Of course when the bears attack they will be screaming just as loud to get out of stocks.
The Gold/Nasdaq ratio is at 5.57 this morning with 6.38 being the expensive record to beat. Real cheap would be about 1.18 so there is a long way to go price wise before the Nasdaq becomes cheap again.
It would be a good laugh if the Nasdaq was held up due to highly processed veggie burgers (BYND) and dog treats (CHWY).
It’s also a new moon today followed by Independence Day celebrations on July 4th which can produce surprise reversals on Friday!
Since late last week, the SP500 has been in a bearish funk waiting for some fundamental news that will send stocks soaring again. The SP500 is sitting on the 200-MA line so when that support is not strong enough, them more downside is sure to come.
At 2969 this market has a major roadblock to contend with in the shape of a triple top and a couple of H&S dips.
The SP500 needs to keep going south before another death cross kicks in. I’m guilty of leaving the 5th wave uncapped due to lack of room.
Leaving any 5th wave uncapped must not happen as it tells all readers that the wave count is terminated, worse yet it shows we have no confidence in our wave counts.
In the long run, the entire June bull run will get retraced once the SP500 falls below 2740. We also have to be aware that another correction will complete before then.
The Gold/SP500 ratio is at 2.08 from a high of 2.41, so I still consider that very expensive.
One thing to watch for is how gold is going to react while stocks are heading down. Running into a safe-haven like gold is an emotional decision, and can work against us. As soon as any counter rally or bigger bullish run comes along, those gold investors will start to run like chickens as the stock market is very strong competition for gold.
Solar cycles are the real fundamentals as they produce the bullish business cycles like what happened in early 2009.
Younger investors should track the solar cycles as they also drive all commodity prices. The 2020 elections will happen at the bottom of solar cycle 24 so I’m sure there is lots of room for any turmoil to strike fear into the hearts of investors.
The E-Mini Dow hit a major peak last Friday and has now started a bearish move. The DJIA peaked about 26,922 just short of the 27,000 that many analysts were calling for.
The problem is that they never can tell how deep any correction will go until its too late.
For the rest of this month, we should know if a big top is in but I start a count-down anyways. If the big party is over then the correction that is coming will be much bigger than most are expecting. If we are at a Cycle degree peak then any bear market will just be a correction, but it will be a Cycle degree correction.
I could be early again but gold has also turned today. Most of the month of June gold and the E-Mini moved up together, so I have to question the stability or the life span of our present gold run as well.
To automatically assume that gold stocks will soar if the markets go for a mini-crash is wrong. When markets turn bearish then investors can sell anything and everything just to save their asses (assets) from a complete loss, throwing out gold stock ETFs as well. Instead, many analysts are calling for a FOMO inspired melt-up in stocks!
The solar cycle 24 bottom is ahead of us, close to the late 2020 time period and until solar cycle 25 starts, stocks can still act very bearish.
The markets continued with their relentless bullish advance last week and so far investors in June see no fundamentals to dull their enthusiasm for stocks.
Markets are always full of surprises but I’m sure an upside breakout is what is expected. The problem is that we are sitting at a triple top at the 2970 price level and we have two obvious H&S patterns as well. In a very bullish scenario that right shoulder would blow its top and the bullish advance would “keep on trucking”.
If investors are just chasing the trend to get back on the bullish bandwagon, then the weak players could be the first to run like chickens screaming the “Sky is falling”.
They don’t even have to run away as a smart algorithm will do it for you. At 2940 the markets would hit another small triple bottom so once it crashes below that, we have a good chance a bigger or longer bearish phase has started.
Of course, a stock crash or “correction” below the 2320 price level brings out all the bearish fundamental news that you can never read because you would be swamped with the amount of bearish news. If they declare their 20% bear market drop has arrived chances are good another bullish phase would start again.
Markets never do what the majority want as that would be simple and to easy.
The commercial hedgers offer no special insight as they are net short by only a small amount.
SP500 soared last week but so has gold, if gold and stocks can soar together they can also plunge together as they did in 2008.
The 2020 elections might seem far away but without a doubt, the public is getting brainwashed by the big political parties already.
All indices I cover has now moved into the September month. This market sure seems like it doesn’t want to quit until a new record high is established.
With this DOW an expanded pattern started to form back in May 2019 when the impulse started to fall apart. At the June’s bottom, the Nasdaq and the SP500 created a perfect H&S while this DOW rolled over and created just a single bottom.
This futures chart is not manipulated and we can see big gaps when activity was still rather weak. You can bet that investors are waiting for some report or announcement but that happens 24/7. They are all hoping that the trade war will end, so any bad news could send the markets reeling.
If this is another last hurrah then this market could make a radical jump even from this level. What many do not see is the huge H&S top just about 1-year-old. That can be a huge resistance factor even if the DOW charges up to 27,000.
The Gold/Dow ratio has not changed all that much and is sitting at 19:1, Expensive is about 21:1 so not until this 19:1 ratio gets chopped down in size can I turn super bullish again.
My little moon app tells me that we are also at a full moon which can be very bearish at times. The problem with using the moon cycles is that they are not that reliable as some make them out to be. At times major reversals have occurred during the full moon, but so have new moons.
The next new moon should be July 3, 2019, still a few weeks away. Sometimes midweek will supply a turning in the stock markets so a reversal could still take a few days.
I would love to count down 5 waves in Minute degree but this wave structure just doesn’t fit a wave 2 rally, as I would like to see the SP500 initially go a bit deeper. Otherwise, we would need some wild extensions for this impending 5 wave run in Minute degree.
Commercial hedgers net short positions hardly show up, which is still fairly bullish from my perspective. I’ll give this bullish run until the end of the week where this strong bullish trend faces a correction or an end to this bullish phase. If this June bull run is just a big bear market rally then eventually the SP500 would have to retrace the 2730 price level.
The Gold/SP500 ratio has not changed that much and it’s still at the 2.16:1 range which is still far too expensive, as gold ratios go.
My first try looking for a wave count fail by a wide margin which was around the $74 price level. Retail participants don’t care about any value they just don’t want to be left behind.
If you owned BYND then you only had a 1-2 day window to unload! Selling into the spike is the best but if you see the spike or not, all depends on how you manipulate your charts.
I think this chart is heading into a bear market as a major price peak is already in by late Friday. We have a large gap open below present prices which I think will get filled at the $100 price level.
Bear market rallies retrace themselves and we have to wait and see if BYND falls below its IPO price.
The spike high was around the $185 but the charts only quote $150. At best the $60-$70 price level may produce some support but solar cycle 24 could be pulling Beyond Meat down as well.
Back in May, I took a Gold/BYND ratio reading which was about 18:1 with the recent ratio reading of only 7.44:1.
Its been a while since I posted the Midcaps and one main reason is that the April peak did not soar to new record highs.
I can’t count that peak as a “Truncated Peak” because it’s just too far gone for my liking besides that, line mode confirms the bar chart as well.
The crash down to the December 2018 bottom still is a great looking zigzag which matches many other indices.
From the 2018 bottom to the April/May top would be a bear market rally but the markets have to confirm it. There are two major price support levels, one at 1800 and another at the 1565 price level.
Being bullish when a potential death cross is just around the corner is not my way of looking at things.
Solar cycle 24 is also ending by 2020 which work more like magnets drawing or repealing prices. The big recession ended in early 2009 when solar cycle 23 stopped and solar cycle 24 started.
It could take 4 more months if one month takes the time of 1 Minor degree wave structure.