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Category Archives: Misc.

Amazon: Price Still Heading To The Moon

It seems Amazon is impervious to any meaningful price correction. The record high so far has hit $1724 and has backed off a bit last week. Sure I would love to see a good correction as I think its high time for one to happen. We also know that any extreme can keep on pushing higher until another new extreme is reached. This extreme may be a Cycle degree top , but I will stay away from any huge moves until it happens. AMZN could just keep on bumping and grinding along, until some fundamental catalyst sets if off.   President Trump ‘s trade war may have unsuspecting consequences on Amazon.

Only the rich can play this Amazon game as average Joe can’t afford enough stocks to make a difference. If he does, then wouldn’t it be smart to sell high priced stocks to those rich people that can afford them. Buying from the poor and then selling to the rich is what buying low and selling high is all about. 😛

My top trend line might have more meaning than the bottom trend line has, but if a Cycle degree correction is coming then the bottom trend line may not hold.

There are a few stocks like Amazon, Apple, Tesla that seem to defy gravity and they need to get hit hard once the Nasdaq bubble starts to burst.

Back in April 2018, I show the  Gold/Amzn ratio hit 1.09:1, today this ratio is now 1.34:1. It now takes 1.34 gold ounces to buy just one Amazon stock which should also establish another new Gold/Amazon ratio extreme.

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TGOD And TGOD.WT Bearish Move Review

When an asset class goes vertical like TGOD has done after its IPO, then the people that were in the original IPO would be very rich! There is one big trick to all this as all investors have not made a single dime, until they have sold out. There were well over 2 million shares traded today and I bet many of the IPO investors are dumping to lock in their profits. The worst thing we can do is chase this bull market, but to wait until a good correction is visable.

I try to avoid single stock commentary but I can’t help it.  🙂 I show a “B” wave top in Minor degree as it syncronized well wth the peak in HMMJ.  TGOD could crash so deep that it will shock most participating speculators.  TGOD could retrace its entire IPO move if we are close to matching the HMMJ ETF pattern. No Price support is going to help us here if a 100% retracement is going to happen.

This is the warrant chart  for TGOD and the “B”wave top is just s reference point to the HMMJ pattern. TGOD.WT could fall well below $1.00 before it could be ready to bottom.

I’m sure TGOD is not inside the HMMF ETF, but it can still act much like HMMJ. Only time will tell, as to how well they will syncronize with each other. As far as I can tell from the HMMJ ETF is that we are correcting, but not finished at this point. Once I see a sufficient correction has taken place then a full set of 5 waves up should follow.  (5 waves in Minor degree)  Any trader should not miss 5 waves up in Minor degree, as that is the most exciting thing you can ever experience.

We are going to get swamped with good buying opertunities, but there are only a few that know how to catch a, “falling knife”, in a  “C” wave crash!

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HMMJ, Horizons Marijuana Life Sciences Index ETF And TGOD IPO

HMMJ has gone higher than anticipated so that calls for a review and come up with a better fitting wave count.  I choked once I looked at the bear market as a potential triangle. We should be getting close to finishing the “D” wave in Minor degree.  We should get another zigzag decline that may look completely different than the other 4. We are still missing the “E” wave.  I could be completley wrong but this sideways bear market could be in a 4th wave correction. It could take the rest of the year to play out escepcially if we get many diagonal wave structures. So far this ETF is not leveraged so the wave structure may also be easier to count, once we think we have another good location.

 

Green Organic Dutchman Holdings Ltd. (TOR)

TGOD is a single stock which is only a little more than a month old. One thing is certain the stock has gone vertical and my bet is that a wicked correction is comming. I would like to see it correct big enough so we can have something to count. Right now TGOD has soared its entire IPO time with HMMJ, so a correction in both can happen. HMMJ’s rally started in April 2018 while TGOD started in May.  It would be something if the present TGOD peak is also a “D” wave peak.

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VIX Intraday Crash Update

So far the VIX has crashed and we can make the argument that the VIX has gone lower than $12.29. That would make the late May rally another bear market rally.  3 wave zigzag crashes are pretty normal in diagonal waves, and this decline could fall even further.  If a newer low becomes true then the May and June pattern cecomes just another wave 3-4-5.  The big open gap is now closed, but there will be no rest for the VIX bears as 2 more gaps are now open above present prices. These gaps will get filled, as all gaps have a 90% chance of getting filled.

It may take all of June for these gaps to get filled, and it could be another violent move once the VIX bears realize they are in a VIX bear trap! A VIX “bear trap” means a stock market “bull trap”.

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June, 1, 2018 VIX Intraday Crash Update

We are getting close to a VIX bear trap as the big gap is just about closed off.  Wall Street calls the VIX the fear index and as the VIX crashes investors become oblivious to the trade wars that have started to erupt in 2018. All the bad news in the world doesn’t seem to phase the bullish investor at this time. Of course that can change in a blink of an eye as we now have 2 open gaps above present prices. These two gaps will get filled so, I’m confident in saying fear is going to come back into the markets for June.

At $13.40 the big gap will be closed after which it can develop a base and then soar again.  Stopping well short of a new record low would be ideal.

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VIX Gyrations Update!

As much as I would like to see the VIX soar, I cannot ignore the gap that is still open directly below present VIX prices. This gap should still get closed off and even travel closer to the $10 price level. The VIX should not crash to new record lows, if what we have is a potential VIX, 3 wave correction.  Some traders were very well positioned to take advantage of the February spike with call options.  A trader named ’50 Cent’ made a huge bet and others did as well.  I’m sure that many others will see another VIX bullish set-up as this cycle keeps repeating itself.   Once the VIX starts another leg up, another spike to the upside can happen. It’s pretty hard to control our emotions to do the opposite of what the crowd is doing, but you have to remember that the ‘crowd’ can never benefit from the very same crowd.

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HMMJ Horizons Marijuana Life Sciences Index ETF Update

In the past month HMMJ has been on a rally that looks more like an inverted zigzag than the start of a new impulse set of waves. The bearish trend in HMMJ sure is starting to look like a 5 wave diagonal decline and if I’m right  we should see this rally die and then head south again. Another set of 5 waves down in Minuette degree should land us at a wave 3 in Minor degree.

Crossing the $14 price line by even the slimiest of margins is all we need to help confirm that the bearish trend is still alive and well.

I would not touch this ETF with a 10-foot pole until all reamaing diagoanls waves are show they are all played out.  If the impending decline turns into a wild diagonal then this will also help to confirm another “C” wave deline. So far this has not happend on a smaller scale, so maybe we’ll get lucky  and we get a pretty clean decline.

 

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Apple Stock: Ride The Buffett Band Wagon!

 

Warren Buffett has repeatedly been buying Apple stock at record highs, in a record high stock market. I’m sure investors have jumped on the Buffett bandwagon as only the rich can afford to buy into Apple at these peaks.  Maybe it’s time to short Apple now that Warren Buffett has stopped buying. I couldn’t put a wave count on this, but it looks like Apple stock can go a bit higher. If the entire stock market starts to implode like the Nasdaq, or DOW then do you think that the Apple stock price, well remain permanently high?  I doubt it very much, but only time will help to confirm that.

I think Apple is also heading to a wave three Cycle degree top, but if volatility in Apple starts again, then you know a trend change is starting to happen.

I will keep my updates short, this Friday, but will do more updates later and during the weekend. I will focus more on some of these ETFs as they are more important to watch than every single intraday stock market update.

 

Hits: 5

Another Idealized Cycle Degree Bear Market Chart.

 

This is a third alternate for a Cycle degree bear market where the “A B” wave in Intermediate degree rides very high near the top, followed by 5 waves down in Minor degree, not Intermediate degree. The intermediate degree 5 waves down must only happen after the “B” wave top in Primary degree. In the end, a 3-3-5 pattern should emerge. This is a bit more complex than the other two corrections that I have posted, but I assure you other even more complex patterns might show themselves as well. Elliott Wave is what you perceive the idealized pattern should be, not what you see in the markets, specifically the DJIA. The EWP originates from the DOW so the best way to understand the EWP, tracking the DJIA is critical.

I visualize the idealized EWP as being one big impulse wave where wave 3 in Submillennium degree starts about 1500 CE (Common Era) Otherwise know as the Little Ice Age. The low social mo0d at that time coincided with the witch burnings and the plagues that swept Europe. There are market records going back that far once British markets are spliced it. I have a big commodity chart that goes back to 1100 CE so the wave 2 base in Submillennium degree is in 1500 CE. From this base all wave two bases must be found first.

About 1843 the wave 2 of GSC degree completed and from that point on, any wave two bases must be in declining order, where the 1932 bottom is my wave 2 bottom in Supercycle degree. When counting from a wave 2 base, we are always making sure that wave 3 is going to be the longest. From the 1932 base, we have modern day records that really show how the wave 3 took off. The next lower degree wave two would be in Cycle degree with the 1942 bottom.

There seems to be a real theme of wave 2 bottoms coinciding with years ending in 2. The next wave 1-2 must be in Primary degree, followed by 3 more sets of 1-2 waves at sequentially lower degree levels. From the last wave 2 in Minute degree, we need wave 3-4-5 to finish wave 3 in Minor degree at the 1987 peak.

From 1987 all future waves must end with wave 3 peaks, and they must all end with a wave three top. From 1987 and into the future all wave three peaks must be in ascending order, where the count would be 3-4-5 in Intermediate degree than wave 3-4-5 in Primary degree, and in 2018 we should look for wave 3-4-5 in Cycle degree. I have more than enough idealized charts up that show 5 waves up in a Primary degree which we will need once Cycle degree wave 4 has hit rock bottom!

Markets do not make patterns that are simple for us to follow, if they did every wave counter would be a billionaire. The market follows the idealized pattern  and it is our perception of this idealized pattern that needs a critical look. I’m dedicated to locating and tracking all 5 waves in Cycle degree first, as without all 5 waves in Cycle degree having secure tops, there cannot be any SC or GSC degree wave counts anywhere! At least not on this planet!

Think of it in visual form, where Cycle degree wave 3 is Mount Everest, SC degree wave three being the Moon and GSC degree being Mars! 😯

I count from a wave 2 base first, before I look for all wave 3s to peak. After 1987 and far into the future all peaks will end with ascending higher wave 3 degree levels.

The sad fact is that our modern day EWP is a biased description of GSC degree and many are growing up in this belief of a GSC degree super crash. Needless to say we will end up with an extreme forecast that will make no sense.

I can only forecast anything from a Cycle degree perspective and any SC or GSC degree commentary I make, is about the future not the present.

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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.

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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.

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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.

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VIX: Another Leg Up?

So far it looks like the VIX wants to keep the bullish run alive, and I’m sure not the one to try and convince the VIX  into going the opposite direction.  We have a small gap above present prices, but we also have a bigger gap still open below, at the bottom trend line.  In the long term the peak $50 price level must get retraced if this VIX bullish run is to continue. Since the January bottom, the VIX has created higher lows which is encouraging that the VIX may have some running room left yet.

A small H&S pattern has been created, but this can be a very bullish sign as the VIX could be getting ready for another upside breakout.  Besides the VIX retracing the $50 price level, it should also break the $90 price level in the next few years. Vertical fear levels cannot be maintained over the long term as investors would fall dead from all the stress fear creates!

The entire VIX pattern is diagonal related so it’s next to impossible to pick out a good looking 5 wave impulse, except for very small ones.

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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.

 

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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.

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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.

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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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VIX Explosion Update

The VIX has demonstrated what it can do after it is boxed into a corner or a wedge like condition. To the majority this was a surprise move that they never saw coming, but there are the few that did see it coming. The commercial traders sure saw it coming as they were net long for sometime already. Of course the non-commercial speculators were extremely bearish towards the VIX. How can you lose on a sure trade betting against volatility?

It’s easy if you owned a bunch of XIV shares and don’t know how to read charts. Of course, someone will always get blamed for, “taking down the house”.  In my experience, it’s always the speculators that get into traps. The speculators, trend chasers, or managed money people, is always the group, being quoted in the financial news. When they are quoted,  they are just about always in a trap as well.

The XIV will disappear as it sounds like they will stop trading in XIV by Februray, 20, 2018.

Last Friday they posted the COT report in the VIX. We can see a massive change by the commercials to a point where they are now in a net short position by about 45,000 contracts. Of course the speculators panicked and did the exact opposite.  In other words, they are chasing the VIX bull market. Eventually the speculators will get into a bigger VIX bull trap and the markets will force another reversal.

There is a good chance wave 2 in Minor degree has finished with waves 3-4-5 still to complete. After these 5 waves up in Minor degree have completed, then we should see a massive VIX crash that will shock the majority again.

The VIX peaked at $50 and eventually the VIX should cross the $90 price level. The VIX may not do it on this trip, but by the time this bear market is finishing I’m sure the VIX will far exceed $90

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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

 

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The Explosive VIX Review

The VIX had one of its biggest one day price jumps in its entire history, which the majority was betting on that it would never happen.

The dumb money or (managed money) were already in a massive bear trap, while the commercials had built up huge long positions.

Those investors that think they are investing will always get fried as you don’t invest in anything that is extremely leveraged and a futures contract that is all about volatility in the first place.   When you are playing with fire, you can’t expect to not get burnt, but these emotional traders will blame others first for their mistakes.  Being complacent in a violent and volatile world is the biggest mistake we can make.

The commercial reports don’t come out until Friday, but we should see the commercials closing off their long positions, but could also be building up their net short VIX positions.  This doesn’t happen overnight, but can be a long  process.

The VIX spiked to the $50 price level, but the $90 price level is the number to beat as that is the 2008 peak in the VIX.

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Crash OF XIV Inverse Stock Split Coming Up?

XIV trader: ‘I’ve lost $4 million, 3 years of work and other people’s money’ – MarketWatch

I read the story above about the huge losses this XIV trader suffered. I’m sure he was not the only one as XIV crashed dramatically this week. This XIV ETN followed the bull market up as complacency dominated the stock market again. I don’t have any sympathy for those that think they are investing in double leveraged products, without thinking how much of a bull trap they were in, in the first place.

Smart money would already have been short, long before this topped out. This XIV crashed all the way down to $6.15 and I don’t think it’s finished by a long shot.  Since it is very close to that magic $5 price level, any inverse stock split is highly likely. Usually we would be looking at a 4:1 inverse split which would price this ETN at about $24.

A simple tight stop loss would have protected most of your gains. Investing for the long term means nothing if we can’t see a potential crash setup, where all gains can get wiped out. The real VIX spiked up just like this ETN spiked down. I’m sure there were tons of stop loss orders crammed under the peak, so it takes very little to roll over and trigger these sell orders.

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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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Quick Look At The VIX

Today the stock markets took a big hit, and the VIX soared. The VIX is in a vertical position right now, which usually precedes a correction or a reversal. Once we check the top trend line on the daily VIX chart, we can see that the VIX is pointing to the $14-$15 price range where strong resistance can come from.

We also have two open gaps well below todays VIX prices. It doesn’t necessarily mean that these two gaps, have to get filled on the next trip down, but there is a good chance that the $10.20 gap could get filled.  Any short small correction could happen, then this bullish phase will develop another leg up.

The commercials have had net long positions for a long time while those speculators have been betting on much lower VIX lows.  I’m sure you will read other analysts that report the trader’s positions, but they always tell you what the speculators are doing. The commercials were on the right side while the speculators got themselves into a bear trap! Following a group of traders that consistently trap themselves is not exactly my idea of the smart thing to do.

When the commercials become net short again, then I can see a big reversal with the VIX.

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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.

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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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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.

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