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Category Archives: Misc.

Thanks For The Blog Support!

I would like to thank all the new readers and those that have followed me for the last two years. In the last few months the blog hits have exploded! Most of the time 400-500 hits a day were pretty normal, but last night this number hit another record where we were just shy of 4000 hits, in one 24 hour period. 40,000 hits have already been registered for this month and we still have about 10 days to go. 47,000 hits in a month, has been my all time record high from all the blogs I ever had.

We could be on target for 60,000 hits for the month of April 2018. In two years this blog has registered 600,000 hits, which every reader deserves a pat on the back for helping to achieve this record number.   

Donations are always welcome as there are constant yearly costs of keeping this blog running. I have several PayPal links up, but visitors can also donate with on line directdepost Interac e-Transfers  Canadian funds. 

You can also send in donations via the Goldmoney System. 

Thanks Again

“BB”

 

Hits: 4

VIX Intraday Update: Calm Before The Storm?

When the VIX is declining,  the excited bullish stock herd start to calm down, from the mini panic spike in late January 2018.  Before the big spike, VIX players were in a trap with a small inverted Megahone pattern also showing.  Inverted Megaphones are more open ended with the open end facing to our left on the charts and with the cone pointing east. A normal Megaphone would always have the wide mouth facing east (right side) and the cone would be pointing west. (Left side)

We still could see some dipping in the next few days, but no new record lows should happen.  The VIX has wild and choppy wave patterns, but this is the real world when it comes to diagonal wave counting.  Complaining about volatility will get us nowhere, and all I can say is, “Buckle Up”, as this roller coaster ride will start to get going again.

The COT report that comes out every Friday will give us a better idea who is still net long or short the VIX.

Hits: 1

HMMJ, Horizons Marijuana Life Sciences Index ETF (ETF)

HMMJ ETF crash through that $15 price level, but instantly reversed. It also reversed right at my bottom trend line.  This may only be a temporary stop and I would not think about going long until any potential diagonal decline has fully played out. Even then this ETF is acting much like Bitcoins have been doing as they have no leverage content inside the ETF. I can tell because if it was leveraged, these waves would be far more wild and violent.

There are no established cycles at this time, which makes it harder to trust any bottom  even when it looks real good. If HMMJ ever hits 5 dollars, then we could even see an inverse stock split.

Hits: 3

HMMJ, Horizons Marijuana Life Sciences Index ETF Update

This HMMJ ETF is related to the marijuana industry and has little history since it only started in 2017. Last years bullish phase counted out as a near perfect wave 3 extended wave structure. We actually don’t know if this moon shot was a wave 3, but it sure looks like at this time. The $15 price level could still get retraced and we will find out how much that bottom trend line has sway over any bullish phase still to come.

Every bullish move needs a sufficient correction, and a real bullish wave count would turn this decline into a triangle. Yes, a triangle, It might not even slice through my bottom trend line, because the “E” wave has already advanced too far. Any real moves outside the bottom trend line, will force me to chuck the wave count into the trash bin.  :mrgreen:

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Amazon Bull Trap?

 

This Amazon bull market can’t last forever, but it sure looks like it will keep soaring to the heavens, after all they are crushing brick and mortar stores consistently. I guess AMZN investors never heard about the trade wars that may be starting or is Amazon impervious to any trade war or recession?  The move in 2007, to late 2008 is a potential wave 3-4 in Primary degree, and what followed fits better into a diagonal wave count, but I have been using the simple count at this time.

If you notice how the horizontal lines get smaller as the bull market keeps running, then we know that just a little correction can send Amazon crashing hundreds of dollars in a very short distance. Just to get to the bottom trend line Amazon would hit the $600 price level.

One of the expensive Gold/AMZN ratios back in July 2017 was 1.16 and today we have about a 1.2:1 ratio. One ounce of gold will only buy 1.2 shares of  Amazon. I measured a cheap ratio of 25:1 at the 2002 bottom so I doubt we will ever see that ratio again. Amazon would vanish before that crazy low ratio will get hit again. In todays world anything can happen, so I never rule out anything even a 25:1 ratio.

We seem to be heading into a brick wall with our present ratios, and more than just a few times, so this can be a very bearish sign for Amazon.

Hits: 6

VIX Intraday Crash Update!

The VIX rocket move perfectly reflects the fear that was present in the SP500 and the fear gage is starting to dissipate for now. Of course, if the bigger bearish scenario is alive, then the VIX should find a bottom, followed by another leg up.  This leg up could produce another complete set of 5 waves up, but not before a good correction has taken place.  This may not happen until the VIX settles at the previous bottom of the 4th wave position.  Just below that is a big gap that is still open, so this open gap has a good chance of also getting filled with this trip down. Just under $15 would close the gap which can repel the VIX to soar again.

Higher lows also have to dominate as well to help confirm that the VIX is still in a bull market.

 

Hits: 5

HDGE Review: Has The Bull Market Arrived?

 

This HDGE ETF travels inversely to the stock markets. Due to its short history I’m not sure which index it follows the best. Either the DOW or SP500 will work.  We really don’t need all the history if the 2015 4th wave is at the correct position. If the stock bull market is to continue like once they all said it would, then the original HDGE decline would have to go much, much lower.

Until it hits $5! At $5, many ETFs can create an inverse stock split, of 4:1. At $8, and a 4:1 inverse split, this HDGE would then be $32.

Many ETFs can pivot around the even Fibonacci numbers like it is now doing at $8. When I count up by jumps of 1.618, we get $13, $21, and $34! I love the Fibonacci whole numbers as I use them to calculate time in years, between tops and bottoms and the lengths of many bullish moves.  Make the jump from 8 to $13 which gets you to the top of my 4th wave in Intermediate degree. (Red)

When HDGE gets close to that, I’m sure we are going to run into a serious correction, or some resistance. Then when HDGE starts getting close to the $21-$22 price level more resistance should be expected. The ultimate prize would be for HDGE to hit $34 in the next 2-3 years.

The lift off we have so far from the $7.43 bottom looked like it contained a perfect impulse pattern, but it was the correction that gives us a clue to what’s next.  This correction was “not” a zigzag but it counts out very well as an expanded flat. (3-3-5)

To many wave analysts think an expanded flat in the wave 2 position should not happen, but they do. Even if they just happen once, then I look for them all the time and allow flats or expanded flats in any wave 2 position, in any degree.

From 1970-1974 my wave 1-2 in Primary degree was also an expanded flat correction.  (3-3-5) No, it was not a triangle, like all the SC and GSC degree wave counters are still trying to tell us.

What it should mean is that the next move up could be very strong.

Tracking HDGE also helps us to judge when the big stock bear is finished. I will post HDGE a bit more often, but I will not post every micro mini, turn. All the detailed wave counting that we can dream up will mean nothing, if we keep missing bull markets that could gain over 400%.

I haven’t tracked the Gold/HDGE ratio that much, but I have enough to give us some information how skewed this ETF has become. As HDGE declined you could buy more and more shares with one Troy ounce of gold. Today we hit a 165:1 ratio. In 2011 which was the start of the stock mania phase, this ratio was at 63:1. We may not get close to that again, but we do have a target we can use for now.

Hits: 8

30-Day Fed Fund Rate Review

I believe that the 30-day fed fund rate will determine any potential rate increases to come, and that the rates should go flat again in the future. We had flat bottoms and flat tops each time before rates reversed. Any flat bottom which represents a rate freeze for about a year or so preceded any  chart rise. A rise in the charts represents that lower rates are coming. This Wednesday another announcement is due so this is when this chart will move.

The Euro Dollar looks just like this chart except the pattern is more free flowing.  The commercial traders positions are net long/short neutral, with the 30-day rates but that can change fairly quickly.

The chart is about as interesting as watching paint dry so until a flat bottom shows up, rates could keep going up.

Hits: 5

HMMJ Marijuana ETF Update.

 

This marijuana related ETF is what I use to track the hemp related companies. Since its vertical move HMMJ has been in what looks like a correction. Sure, there may be more upside, but over all the marijuana market has been swamped with growers getting into the action. This has produced a legal marijuana glut in Canada and the wholesale price of hemp has been crashing for two years already. The best days are already gone even before they seemed to get going.

There is not much difference between the hemp industry in Canada and Bitcoins. We had our “Hemp Mania” blow its top earlier this year not that far apart from the Bitcoin Mania. The days of easy money are over, and it will take a considerable amount of time doing due diligence to figure out which companies still “may” soar!  I don’t have the time to do all that work, as I have my hands full with maintaining all my wave counts.

I kept the degrees small and started with a Minuette degree 3 wave zigzag, followed by two sets of 1-2 counts. The second 1-2 wave is two degrees lower, but I use that as if a wave 3 extension is coming. If this ETF deviates from its internal impulse structure, then this wave count will get instantly thrown out.

We may be in a triangle, but then we need three more zigzags to confirm it. In this potential triangle the second zigzag would also have to go much higher and add onto the “C” wave. At times there is very little difference between an “ABC” count and a “1,2,3” count, so we have to see if this scenario plays out.

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VIX Futures Intraday Bullish Phase Update

Just before the end of February the VIX bottomed and now has to proceed back to its bullish phase. I think the entire VIX correction is a flat, as I count 3-3-5. Change this same pattern to a Primary degree flat, and we can use it for the DJIA Cycle degree correction.

Many VIX spikes that show in bar type charts, do not show up when switching to line type charts. This throws any wave count into constant disarray. We can see how explosive the VIX can be and I’m sure many new players have joined the VIX bull market.

Eventually all the contrarian indicators will pile up against this VIX bull market, so those VIX investors find themselves in a bull trap! VIX bulls will get slashed by the bears if they think they can “invest” in the VIX.

Our last price peak was about $50, so any bullish phase should surpass this price level by a large margin.

Hits: 7

T-Notes Intraday Crash Update

This chart I show is at another very low point of T-Notes.  As long as these 10 Year T-Notes keep crashing chances are good that interest rates are going to keep going up.  The entire 10-Year T-Note bull market is a big diagonal bull market.  I’m pushing my luck if I think that we can hit a major bottom soon so these intraday wave counts can be off by a mile.

The media is freaking out about the bond crash so a reversal would be nice. This diagonal 4th wave bottom should produce 5 waves back up in Minor degree which can turn into a zigzag. They say that three more rate increases are coming this year, but they will only come if the free market allows them to do it.

The 30-day Fed Funds rate also controls what the Fed can do, or has to do. Commercials are net long the T-Notes but not by a large extreme. Even that can produce a short bear market rally that many may thing is heading back into a bull market.

The need for safety in T-Notes could also send T-Notes soaring so the investors that are dumping right now can flip on a dime and chase yet another bullish phase.  If this rally starts to distort too much or go sideways with a questionable pattern, then this big bearish move may not be finished.

 

When we look across the top we can see a big flat where they practically were giving the money away for close to 6-7 years. How deep this 30-Day fund rate can crash down to is just pure speculation at this time, but we could start to see a flat bottom form when it finishes  going down.

Setting any moving averages 90 and 30 days will show the “Death Crosses” and “Golden Crosses” sooner than later. The last “Death Cross” happen at the top about 2 years ago, so eventually we would have to see the “Golden Cross”, after this chart turns north again.

Hits: 4

The VIX Crash Daily Chart Update

The VIX spiked up to 50 after which it turned south with a vengeance.  It was an ugly correction and if I’m right,  then another leg up in the VIX will happen. We can see that the VIX  developed a “wedge”  which every technical analyst is taught to recognize, yet they never saw this explosive VIX rally coming.  Everybody on this planet was betting against volatility, but in doing so the VIX bears painted themselves into a bear trap.

Yes the commercial traders ended up becoming net short the VIX, but that can all change dramatically in a very short period of time.

One thing we can always depend on and that is investors can easily get into a trap, and recognizing this fact before it reverses is very important. The VIX is a world full of diagonal wave structures so don’t expect some perfectly formed impulse waves to develop. It isn’t going to happen,  no matter how much we wish any pray for it to happen.

In late 2008 the VIX had already peaked out at 90, yet the bears persisted in forecasting lower lows in stocks.

Insiders were buying stocks in late 2008 already, so the VIX bull market was doomed at that time. Will this happen again?, of course it will, nothing will stop it. When the public and the VIX are in general agreement, then the VIX will see a dramatic reversal. This will not be easy to catch as the VIX may have to score 100+ before a big reversal becomes a reality.

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10-Year T-Notes Crash Review

The fear of higher rates turns bullish stock investors into chickens. When bonds implode this sends interest rates skyward, which the Fed is powerless to stop. If Russia and China are dumping only higher rates might stem the tide. Due to the nature of the choppy decline, there is the strong possibility for this T-Bond chart to soar to new record highs one more time.

We are still a bit short of touching my invisible bottom trend line, so a bit more downside can still happen.

The entire T-Note bull market is an insane example of a diagonal wave structure. Longer term the entire bull market can get retraced which does not bode well for rates in the longer term.  Until this potential 4th wave bottom is cleared up a complete implosion of T-Bonds is not in the cards at this time.

Eventually T-Bonds will also hit a Cycle degree 4th wave peak, which would coincide well with the stock bottom in Cycle degree wave 4.

Hits: 4

XIV, Death Of An Elliott Wave Count!

 

Once I switched this chart to a daily type setting,  the big long spike had opened up into a massive gap. This ETN is history folks, as they plan to stop trading it on February, 20th, 2018. It will disappear into the dustbins of history and take this wave count with it.  You can add a Cycle degree wave 3 to this peak, but you will never ever see Cycle degree wave 4.  The gravitational pull was so great that not even light could escape from it.  Just like centers of universes have black holes, this ETN is also imploding into a black hole.

Credit Suisse ends obscure volatility security after an 80% plunge

 

Hits: 5

Reefer Madness, Canadian Style!

The Marijuana market in Canada has imploded as the legal supply side has already caught up to the legal demand side. New growers have flooded the markets, and most of them will disappear if their growing costs cannot compete with the top growers.

The wholesale prices of marijuana have already been crashing for several years, which is a main indicator that supply is flooding the markets.

The vertical move of HMMJ was suspicious the first time I saw it, as it’s not a good thing to jump on a bullish bandwagon after it already has gone vertical.

HMMJ has just about reached the previous 4t wave dip I had mentioned, but this all means very little in the big scope of things. This could all “flat line”  if it turns into a one hit wonder. Tulip Mania was a one hit wonder so Reefer Madness could also be another one hit wonder.

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VIX Impending Correction.

The VIX sliced through the top trend line before it reversed. This trend line sure seems to give any VIX bullish phase some pause, but eventually the VIX would have to clear 5 of the biggest spikes, by a wide margin.  The VIX could dip down to the $11 price range before it bottoms and soars again.

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Marijuana ETF, HMMJ Update And The Supply Surge!

 

Legal Marijuana Prices Are Plunging in Colorado, but Not for the Reason You’d Expect — The Motley Fool

Pot wholesale prices dive as growers flood market

The coming marijuana crash | Vancouver Sun

Wholesale pot prices hit new low as legal weed market sees surge in supply – Washington Times

 

The landscape of our new budding industry is turning at the wholesale price levels. It’s the price per gram or the price per pound that has been crashing since 2016. This means that the legal supply is catching up to the legal demand, faster than we thought would happen.

This also means that any producer who is not the lowest cost grower will have little chance of making it big, if they survive at all.  Once the government forces packaging regulations on growers, then the cost of growing marijuana increase as well. Electricity costs are a major factor where growers will set up operations. Much like Bitcoin mining, indoor hemp farming takes up just as much power where you grow 24/7.

This wholesale price crash is far from over, but really has not translated into lower retail prices. It was scary the first time I saw this HMMJ ETF and that hasn’t changed any when I look at it now.

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HMMJ, Another Look At The Marijuana Related ETF

I’m going to make this HMMJ ETF the mainstay ETF that I will track the high flying marijuana stocks. It’s in Canadian funds but there is a US dollar version out as well. The last time I mentioned that the vertical move this ETF has made could not be maintained, and this correction is a result of going too fast, too far.

I will not post intraday results, but only post when a strong turning can happen.

It can take years to build a decent wave count, but the rally between my two arrows, is one of the best real world examples of an impulse, I have seen. Wave 1 subdivided very nicely with wave three also extending as it contains a perfect 1-2, 1-2 and a third 1-2 wave structure. The last 5th wave did the real heavy lifting as it extended dramatically.

The near perfect 5 wave sequence suggests that there are no leverage products involved, so these moves are organic and no slippage or other detrimental leveraging tools seem to be present. From my perspective, this is a very good thing. Is the dip down to $19 enough of a correction or is there a bit more to go down to the $15 price level?  Gaps are present, but if gaps appear under more volume than I will use them.

From the bottom arrow to the top arrow, there was over a 300% gain in just 5-6 months. I manage to catch most of a single stock for a 660% gain, but will look at buying in again with 3 other hemp related growers.  Some of the single marijuana stocks are moving like Cryptocurrecies have moved, which is a unique opportunity for investors with Canadian funds. Jumping on any bandwagon could be the end of a run, so as soon as a person buys in, it dramatically corrects.

It may take the rest of the month before the correction is finished, but it could end early and the bull market would resume without me.

I am also starting to track the Gold/HMMJ ratio and so far it has been fluctuating in a pretty crazy fashion. The bottom low was close to a 150:1 ratio with a top ratio touching 51:1. Today it sits at 62:1. I don’t have enough history just yet to make the Gold/HMMJ ratio useful, but over time the ratios should become  very useful.

Hits: 4

HMMJ, Hemp ETF Bull Market Update.

This chart is a bit old, but this morning’s action doesn’t change any of the wave counts. HMMJ is already at $20 this morning.

Talk about a wild ride with this Hemp related ETF. It peaked at $25.56 before it reversed in a dramatic fashion. Any move like this cannot be maintained and it must correct. To go vertical it does so under high speed until no more suckers are left chasing a bull market. As a herd they have to take a break form buying as well.

I counted the bottom as a truncated 4th bottom, but with a small degree. If there is more to this bullish phase, then we should get some type of a 3 wave declining wave structure, much bigger than any correction we have seen. We have gaps open well below present prices, but they can’t be trusted for potential reversals at this time. If we are in any type of a wave 1 top, then a 50-60% correction could happen.

The $13 price level is my previous 4th wave of one lesser degree, which also matches the bottom trend line. On Monday I sold my Hemp stock after going ballistic, but I will buy it back once a sufficient correction unfolds.

Finding a great bottom with this HMMJ ETF will not be a walk in the park, as we can be far off the mark when it happens. Now if the 6 o’clock news is full about crashing Hemp stocks, then chances are good any bearish phase has ended, and a reversal would be near. Of course we have no clue at what price level that can happen at.

Our entire planet runs on price and fundamental analysis, but everything I do is pattern related. The pattern has to show itself first, as it matters little if a wave 2 bottom is $5 or $50

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Cocoa and The Impending Shortage of Chocolate.

Stories  are wild about another Cocoa shortage looming in the world today. Oh, the horror of it all, if this world runs out sweet chocolate again.

Big Chocolate Makers Drop $1 Billion to Head Off Worldwide Cocoa Shortage – Eater

With cocoa charts still pointing down, it’s hard to imagine a supply problem is actually here. There is the potential for another flat in the ending  stage, which could still produce a massive spike to the upside. Supply has been devastated due to crop diseases, with Ebolaalso  killing off many of the cocoa farmers.  They also blame global warming for the sad state of cocoa production.

I posted cocoa with a best estimated wave count, but I assure you that any wave structures in cocoa are diagonal in nature. If this is to be confirmed in the future, then any impending rally should contain an inverted zigzag.

This is not going to happen overnight, as the probabilities of more short-term downside still exist.  Even Coffee is reported to be in a shortage. Withdrawal from sugar and coffee, could send investors wild without another fix!  😀

Hits: 8

VIX Intraday Crash Update

The VIX crashed pretty good at the start of 2018. We are also at a 2 month long base,  just below that $9 price level. A record high for stocks and record lows for the VIX does not bode well for 2018. Analysts will twist the VIX results to justify the continuation of the bull market, giving even more incentive to stay long in these stock markets. Many question how much higher this market can go, but in reality they should be spending their time in figuring out how low these markets will eventually go.

The contrarians can scream off the top of a mountain that this stock market is expensive, but we know that the majority have never been listening in the first place.

At this recent VIX bottom the charts look like the algorithms are back at it again as the patterns are very tight and near vertical up and down.

The Mini SP500 soared to new record highs this morning as well, topping the 2728 price level. Another VIX bear trap and stock bull traps seem to be setting up at this time.

Hits: 1

December, 31, 2017 Year End VIX Update

A year end look at the VIX can give us some insight as to what is going to happen in the next 3-4 years. The VIX peak on your top left matches what I have is the Intermediate degree wave 4 top. What followed this VIX top was a long drawn out decline, with many counter rallies, that all ended with  vertical spikes. A person would be hard pressed to find any clean set of impulse waves during this decline,  except for very small degree level sequences.

What it boils down to is that anything with the VIX are all diagonal wave structures. Our “Little Blue Book” only shows what they call an “ending diagonal”. The fact is, these so called, “Ending Diagonal 5th Waves”,  can and do extend dramatically, far beyond what they ever show us in the EWP book. In the book they also show us pretty idealized charts, all subdividing into nice even wave structures. The simple truth is that you will “Never” find these pretty wave structures, because nothing in the markets is ever even.

What the VIX really shows us is a declining market with a potential wedge like pattern. For the last 3-4  months the VIX is setting up a massive base just below the $9 price level.  The two previous upward spikes came to a screeching halt, at the top trend line, before heading south again.  This base is now the lowest since the last major low in December of 1993, 24 years ago.

With the bottom base line being flat, the VIX bears are getting squeezed into a box. These boxes or uneven triangles can produce wild upward thrusts, that shock  us when they do happen. We will get a surprise if we choose to ignore these VIX bear trap situations.

The first peak we have to beat is the $21 price level, and then the $30 price level. Technically speaking, the VIX should exceed or retrace this entire VIX bear market, so hang onto your hats folks, as the VIX winds are going to start blowing to the northeast, sending stock markets southeast.

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10-Year T-Notes 1998-2017 Review

In general, when any bond declines in price, the rates go up. Government paper works on what they call the 10-Year T-Notes. Did this party end in late 2012, or are we still faced with a record move to the upside?  This bull market has been going on since 1982 from an inverted Cycle degree wave 3 base, and technically should end with a Cycle degree 4th wave top.  The entire bull market is a very messy pattern as it is next to impossible to find any decent or high quality 5 wave impulse sequences. Stocks are heading down in a potential 4th wave decline, so in that respect we want to keep our options open.

Investors can still seek refuge in T-Notes when carnage hits the stock markets. Long term this Cycle degree 4th wave rally should get completely retraced, but that could still take years before we will know for sure. Following the 2000 bottom, T-notes developed a typical diagonal wave structure which is a challenge to count out at anytime.

Hits: 1

Elon Musk plans to launch a Tesla to Mars!

Elon Musk plans to launch a Tesla to Mars — blasting a David Bowie Song — on a SpaceX rocket | Toronto Star

I follow Elon Musk and his space program. I’ve watched most of his rocket liftoffs, and his spectacular failures as well. Elon Musk is certainly a visionary and I respect that. In January 2018 he plans on testing his Falcon Heavy rocket, but he has repeatedly warned that this launch could go badly and even blow up.

Elon Musk plans on launching his own Tsla with this Falcon Heavy launch, so it will prove interesting either way.  Since the 2016 bottom TSLA’s stock price soared in a vertical move as it followed a pattern that works best as a single inverted zigzag. It also fits great into the bigger diagonal wave pattern that TSLA seems to have an abundance of.

In the bigger picture any inverted zigzag can get completely retraced, which means that the $140 price level should get exceeded in the next few years to come. The last high happened in September 2017, ending with a $389 price level. For the last 3 months TSLA stock has been over in the bearish world already and I expect it to continue. This decline is starting like another diagonal and it would be silly to expect anything else.

When TSLA first started every expert analyst on the planet seemed to hate the company, yet the stock price soared. This just goes to show how wrong the expert forecasters can be, and I sure don’t expect this to change. When the media paints us a rosy picture of the future, it coincides well with a major top as there is nobody left to come in.

The Gold/Tsla ratio is at 4.14 today, which is on the very expensive side and until this ratio becomes sane again this TSLA stock will be very expensive.

Elon Musk Introduces the New Big Falcon Rocket – Highlights – Bing video

If  you think the Falcon Heavy is a big rocket, “you ain’t seen nothing yet”, as he is also developing the BFR, Big Falcon Rocket”, in the next few years.

Hits: 6

HMMJ, Horizons Marijuana Life Sciences Index ETF (ETF)

I do not give “Buy or Sell” recommendations on any ETF or single stocks. I can only relay my feelings if I’m bullish or bearish at any given time. I have several Marijuana related stock positions myself, but which ones that will move into a bull market, takes many years of due diligence. Or you trust someone that has done his due diligence already.  I have some people I meet that want to jump on the Hemp bandwagon, but yet when you ask them if they have a Canadian trading account set up, they say, “No”.  These kinds of investors are jumping in with an emotional decision and are many years behind or late.

These types of investors that are getting in because they hear about the Hemp bull market in Canada from friends and news networks, are far too slow or late.

The HMMJ,  Horizons Marijuana Life Sciences Index ETF (ETF) is a prime example of a well advanced bullish phase. HMMJ can keep right on going, but chances are good when you jump in, a correction ensues and this ETF could drop 30-40% in no time at all.

Sure Canada has a great new bull market, but all this hype could end once the legal supply and demand numbers get filled. Unless the numbers tell me different, Canada’s hemp users are not growing by leaps and bounds, but the numbers could eventually run into a brick wall with no new users trying the product.

Any grower has to follow strict Canada Health Board regulations, so there are major hoops that any legal grower has to abide by.

Hits: 0

December, 13, 2017: VIX Intraday Crash Review

In early December the VIX spiked and then reversed and crashed. Vertical moves like this can never be maintained as they are also the fastest moves we can have.  $14.60 seems to be the price to beat and if my zigzag decline is correct,  then this $14.60 price level will get retraced.  We have an open gap just dead ahead so that could provide some resistance again, but at the same time could supply support, for a much stronger VIX move. 

The markets are at euphoric bubble highs with the VIX at record lows.  The VIX is where the real fear is shown with charts, and at this time investors show no real fear, just yet.   The fear will come back into the markets as bullish record highs always traps the majority. Thinking that good times are still to come,  always means  the end of a bull market, not the beginning of one.  

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The VIX Intraday Spike Review

With this bar type setting the VIX produced a sharp spike to the downside. I like to see this happen towards the end of a long decline, but this spike was computer generated as it corresponded with Black Friday as well.  The spike back up, still has a small gap in it which should still get closed off.

This spike does “not” show up when I switch to a line type of a chart. Technically speaking the VIX would still have to drop to the $9.00 price level before all the gaps are closed off.

There are a few gaps still open well above todays prices so these open gaps work like a magnet, drawing prices to them.

That $8.60 bottom represents a huge VIX bear trap, which is the opposite to the SP500 bull trap!

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VIX Intraday Gap Review.

The VIX cash contract has been heading down again, with a certain urgency to it.   Once we have a good look we can see that there are a few gaps that can throw a monkey wrench into the bullish and bearish scenarios of the VIX.   The first gap down at the bottom is still open, while we also have two gaps still open above present prices. Which set of open gaps is going to get closed off first? 

We can see a huge single spike to the upside, which can remain as the spike to beat, but it may get matched with an equally long spike to the downside.  I would love to see the opening gap in November get closed off, before the then next rally of fear,  starts to take off again.  Even if it doesn’t get closed off  we could get a H&S type setup as well. 

We also have a big open gap at the $23 price level so long term, any bullish run with the VIX, means a bearish run in stocks. 

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Berkshire Hathaway 2009-2017 Review

Since the 2009 bottom Berkshire Hathaway Inc has created what looks like a decent impulse, with some diagonal patterns thrown in to confuse us. BRK.  From the 2015 peak down to the 2016, $190,000 price levels, BRK has followed,  the stock markets very well.  I believe a  correction is coming and it may be bigger than most expect. 

I mean a correction that is big and long enough that can be followed by another 8 year bull market. If BRK gives us a zigzag or a flat correction is irrelevant, but I favor the flat at this time. BRK.A shares peaked at $285,950 for one single share. Since the 2016 bottom BRK.A gained about 150% in less than 2 years. 

The expensive Gold/BRK ratio reached about 221:1 and today it is sitting at 213:1. From my perspective, Berkshire is very expensive when we compare it to gold, so eventually this ratio should start to expand in the next 2-3 years.  Nobody knows how deep any correction has to go before BRK is ready to reverse back into another huge bull cycle. 

Are we at a Cycle degree top or a SC degree top? I favor the Cycle degree wave 3 top, and markets can fall all the way back down to the previous 4th wave of one lesser degree, which in this case is $70,000. Sometimes markets, even go under this previous 4th wave of one lesser degree, and the experts have forecast a DJIA 5000 price level to do just that. Warren Buffet just about owns the DOW,  so why should Berkshire behave any differently and keep soaring?

Just to get anywhere near the previous 4th wave of one lesser degree, Berkshire needs to go below $150,000, with $100,000 being more realistic. 

At the very least, BRK should retrace all of the 2016 and 2017 gains, after which we may see a pattern start to emerge that we can recognize.

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Lumber, Monthly Chart Quintuple Top Review

Recently, analysts are all excited about the shortages of lumber.  Due to the forest fires, fear of a duty on Canadian lumber exports, and hurricane Harvey, they claim we are heading into a shortage.

Stud Lumber Shortage & Record Prices Predicted | Wood Markets

Could a framing lumber shortage be underway? | Construction Dive

News – Tolko

Harvey recovery could mean labor, lumber shortages in Texas | Business | qconline.com

When we look at the chart above, we can see that lumber prices are approaching $500 per 1000 board feet.

Contract Specifications:

  • Symbol – LS
  • Name – Lumber (LBS)
  • Exchange – CME
  • Trading Months – FHKNUX
  • Trading Unit – 110,000 board foot
  • Tick Size – 10 cents per thousand board feet ($11.00 per contract)
  • Daily Limit – $10.00 per thousand board feet above or below the previous day’s settlement price
  • Trading Hours – 9:00a.m. – 4:00p.m. Mon-Thur, 5:00p.m. – 1:55p.m. Fri CST
  • Last Trading Day – Business day immediately preceding the 16th calendar day of the contract month
  • Value of one futures unit – $110
  • Value of one options unit – $110

Without a doubt the entire lumber market is related to the diagonal world, where impulse wave counting is no help at all. No way is this wave count perfect as it is just a rough start of one.  It can take years and years to build a decent wave count, and many will never tackle such an insane pattern in the first place.

Ok, we have a massive top? If this fundamental shortage is going to continue then lumber would have to initiate an upside breakout, and keep soaring.  Well, we could also be heading right into severe resistance,  and lumber prices could implode right along with other stock markets.  I tend to believe the huge resistance line is going to be a tough barrier to crack,  and nothing can really help except that markets can and do behave the opposite of the fundamentals.

This is where the Lumber COT reports can help, if they are extreme enough in their net long, or net short positions.

This is what the traders’ commitments show us as of Friday. Commercials are net short lumber by a ratio of 3.85:1 while the non-commercial traders are net long by a ratio of 2.0:1. There is nothing balanced in these ratios, especially from the commercial trader’s perspective.

With winter coming on, demand for winter building could drop unexpectedly in the next few months.

When stock markets dipped in 2009 and again in 2015, lumber prices in general followed along, which suggests lumber prices can crash again, in sympathy with the stock markets.

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