WTI Crude Oil Intraday Impending Correction Review

 

 

CLN16-May-27-2016

 

What I have counted out in oil as a potential wave three top in Minute degree may not work,  as there could be the chance for an expanded pattern to be in progress.  This would not make the correction as deep as it should but crude oil could stop short and add on another bullish type “C” wave. I’m sure we will still hear horror inventory problems, but those numbers can move very quickly as the terrorists blow up as much oil production as they can. 

Nigeria’s oil production has been hurt, just as our Canadian oil sands production has been dramatically curtailed due to the forest threats. We have to remember that oil came from an extreme gold/oil ratio, (45:1) that I have never seen before, so that alone can keep oil in a bull market for several years.

Today the gold/oil ratio was closer to 24.56:1 which is a dramatic difference from the end of 2015.  Yes, we could see an interim correction when the gold/oil ratio starts getting below 20:1 or so.  After any big correction the gold/oil ratio should change again, as oil would be cheaper when compared to gold. Leveraged assets like oil and gold do make massive dramatic swings in very short time frames, so many wave counts get busted all the time.  

 

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Mini DJIA Intraday Chart Review: Is It Just A Correction?

 

YMM16-May-27-2016

 

Markets are going to be very dull and boring before the weekend, but I am sure some late news will stir things up. Right now the DJIA can go down just as well as it can go up. It can go up if we are in an impulse and it can go down if we just finished a “D” wave rally. I don’t like it when we are  in a potential position when it is unclear, which way the markets can go in the short term.  

The bearish phase that started around April 20th, has many overlapping waves in it, which can work as a 4th wave type triangle. If that is the case, then the markets still have one more leg up to play out. 

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US Dollar Intraday Bull Market Review

 

DXY00-May-27-2016

 

The US dollar has been on a rip snorting bullish run. Is this run coming to an end soon or will it break higher one more time.  Gold has also responded to the US dollar bull market and has also been dropping like a rock.  Commercial positions are still net short by a ratio of about 2:1 but that is not skewed enough to help us much at this time.  The US dollar can head for another leg up (5th wave) but there is still a high probability that the US dollar is just on a “C” wave bullish run.

This would mean that the US dollar could implode and break that 92 price barrier one more time.  That scenario sure would send gold soaring, but another leg up with the US dollar may still be in progress. As I type the US dollar is very close to the top again so it is up to Janet Yellen to throw a monkey wrench into the market’s wheels.  The changing of the rates is only a concern to the masses as they live and die on fundamental news.

From an Elliott Wave standpoint, any news is just another bump in the charts with news being a lagging indicator, and not a leading indicator. If any big correction shows that the US dollar has created an “ABC” pattern, (With the “C” always facing down), then for sure the US dollar will soar again. 

 

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Palladium Daily Chart Review

 

PAY00-May-26-2016

 

The palladium wave count has a challenging pattern at the top. Since the 2016 bottom palladium has made what looks like a perfect impulse, but if that is the case a correction would have been already completed, and the next leg up should commence shortly.  This is also a great setup for a wave 3-4 to still develop which leaves palladium wide open for another big zigzag. If  another run up, is to happen, then we would look for choppy waves telling us that a “C” wave bull market is still going to play out.

Much depends on what type of pattern a palladium run will make, in the next few weeks or so.    

 

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Mini DJIA Intraday Bullish Move Review

 

 

YMM16-May-26-2016

 

The Mini DJIA made a clean move to the upside and now has started to correct. This will be a big test, because if this index is to go higher, then we need a correction, a potential 4th wave correction. We would need a little more time as it looks like it is only partially completed.  If the DJIA imploded for some crazy fundamental reason, then my wave count would definitely be destroyed when the DJIA hits the 17,450 price level.  If this just finished a “D” wave, then we know that we were still too early for the correction to be finished.    

By the end of the month we should find out as a triangle would force the DJIA to make another zigzag crash.

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Gold Intraday Crash Review

 

GCY00-May-26-2016

There is no question that gold is in a bearish phase, as it keeps pushing lower.  In the short scheme of things gold could see a small rally as this potential 4 wave triangle plays out.  I have pushed my degree down to the 15th degree level.  The wave pattern at this time sure looks like another diagonal decline, but I have counted it out as a normal impulse.  Even when this small potential 4th wave fully plays out, we may see another 4th wave type pattern immediately following this correction. 

The $1210 and the $1190 price levels are two areas where the entire topping process in gold is completely retraced.  If my Minor degree 4th wave top holds, then we would be looking for a potential zigzag type pattern, but it will not give us any major support until it blows back past $1050. I am sure this might sound crazy, but what sounds more crazy was the entire XAU index being completely retraced. A bull market that they thought was going to the moon turned into a complete bust.  Elliott wave gave us a clear warning about this but the masses completely ignored it. 

If the start of the gold’s big move showed no real impulse wave structure, then there is always a real chance of a complete retracement.  What will get in our way is the potential “B” wave counter rally. Before gold hits $1210, this would be the last chance that gold has to finish off an ending diagonal, which is only $10 away.  At this time the gold/oil ratio is about 24.56:1, which is still relatively cheap when compared to gold. This ratio works best at the extremes, but before oil took the “big one”, the ratio registered 17:1.  

 

 

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Crude Oil Daily Chart, Bull Market Review.

 

CLN16-May-26-2016

 

Another little push higher as oil keeps creeping along. “Creeping” is the key word as oil has slowed to a crawl, or seems to have slowed. Slowing down is usually a sign of an impending reversal, which we still may be too early.  If oil were to suddenly shoot higher then it would cut through my top trend line, potentially producing another major spike.  The top trend line is more useful as we will see it first when oil starts to roll over. Any bottom trend line at this time is useless, and distracts us more than it would be useful.  The top trend line also gives us an idea as to the angle this entire oil bull market can take.  If the angle was much steeper, then I would have more concerns as to what type of pattern this bull market may be.  

With this chart, I started labeling everything as a diagonal bull market in Minute degree. We are still far away from any “A” wave in Minor degree. The important thing is how, or what type of pattern oil makes, when it starts to correct or change direction. If we see a lot of sideways choppy action as we go down, then oil will certainly push much higher in another leg up. When I call things an “ABC” correction, then at the same time I would be saying that another leg up should eventually be coming. 

This is the benefit of understanding Elliott corrective waves.  The reverse is also true if this bull market is part of a diagonal, as eventually a complete retracement would happen. We could see $150 oil, and if 2016 remains the low to beat, then the entire bull market will get retraced. Any three year run to this “E” wave target does seem a bit short so we have to be aware of that. 

 

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XAU Gold Stock Index Review: The Good, The Bad, And The Ugly!

 

XAU-May-25-2016

 

If it is one ugly wave pattern you want to see, then that would be the XAU. In the old days, (pre 2000) the XAU started out ugly and never put on any other good impulse show, as the choppy overlapping wave structures just would not go away.  All the wave counters should learn a valuable lesson about these wave structures in that they can completely retrace their entire bullish phase.  So far it has taken about 15 years to do, which goes to show there are no real limitations regarding the time aspect.  From 2000 to about the 2008 top, not a single pure 5 wave run can be counted out except for the really small ones, and even then they looked like diagonal waves. The XAU is a garbage index of all the leveraged gold mining companies which helped to produce all the wild swings. 

I have talked about bearish rallies, many times and will continue to do so. The trick is to see them early enough so when they do blow their tops, we have more confidence in selling out. There is nothing worse than getting caught in the massive bullish hype machine, when the patterns, insider selling and contrarians, were sending signals that the gold market was going to implode. Gold stocks started down as soon as stock mania kicked in, in 2011.   

EWI sure got it right back in those days, as I remember they said that the XAU was in a false bull market. There could be another leg up with the XAU, but we have to wait and see if the present correction holds. 

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GDX, Just A Correction?

 

GDX-May-25-2016

 

Gold stocks have declined and with this GDX ETF, we are at a point where GDX can reverse. We basically have to ignore the bottom trend line as it only highlights the section in review. Again, we are now at a point where the next counter rally has to give us a good impulse of some magnitude, or otherwise die in another leg down. 

Impulse waves can go up or down, and the ones that are traveling against the larger trend, usually contain waves that overlap at many of the critical wave positions.  Hopefully the next few days will tell us more. 

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Gold Intraday Crash Review

 

GCY00-May-25-2016

 

Gold has not crashed below the $1200 price level, but it sure hit the bottom of a parallel trend line.  It is all up to the US dollar if it will start into a correction from its bullish phase.  I am not going to rule out anything as this could be a 4th wave ending diagonal bottom as well, in which case gold could still soar.  Another choice is, a potential diagonal 4th wave rally, which could take gold back up to the top trend line.

It will be critically important to see how any rally starts, as that can give us an instant clue that another bearish rally is in progress.

At this time the gold/oil ratio is still around 25:1 so nothing much has changed there.  Short term I am bullish, until the pattern gives us another clue. 

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Mini SP500 Intraday Rocket Ride Review

 

ESM16-May-25-2016

 

It is amazing what one or two days can do, but this could also be due to thin trading and “buy” stops getting hit. Every Tom, Dick and Harry are playing this market with short positions, so it is real easy for the markets to keep trapping the early bears. 

With this E-Mini SP500 I will work it as an impulse and it should start to go a bit sideways and down. Any potential wave 3 top is still a bit too short for my liking as that could mean that a wild 5th wave extension could happen.  Overall the markets have rolled over in a very choppy manner, which does not fit well into a major “C” wave top just yet. There would be a much bigger blow off spike if we were completely finished with the stock bull run.

Depending on what charts you are looking at, we are not that far away from hitting an all time new bull market top.  Any price level above 2110 should do it, which is only 23 points away. The markets can do this in a blink of an eye if the wave counts are still destined to fill a “B” wave top in Primary degree. 

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Mini DJIA Intraday Review. Soar Like Stock Mania?

 

YMM16-May-25-2016

 

I am sure most of this explosive rally has more to do with stops getting hit then anything else. In one or two days the bearish decline is starting to get retraced. There are still many options, but I displayed only a potential start to a diagonal run.  This move would still be a little short for any 4th wave to kick in, but it should not be ruled out at all. Any other time, this would also work as an inverted zigzag, in which complete retracement could happen.

Of course gold reacted to this by plunging as well.  I kept my parallel lines in as they isolate one particular move. It is extremely important to always know when a specific count stops and when another starts going.  In the real world this is the hardest thing to do, and if we don’t get it, we can create wild wave counts and degrees that will never work.  

If the bearish looking correction is still part of a bigger triangle, then yes, we could see another zigzag crash.  We have until the new moon (June 4, plus or minus 4 days) to remain bullish as new moons can be very bearish for stocks or they can create very wild reversal times. 

The SP500 and the Nasdaq also so big moves to the upside so the herd seems like it got over this bearish mood rather quickly. 

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HUI, Gold Stock Index Review

 

HUI-May-24-2016

 

Here we go again as the HUI has started a decline.  For this wave count to work, we need a lot more downside to play out, but if a small flat has formed then one more leg up could happen. Investors are between a rock and a hard place, if this is going down much further than anyone thinks, as the time to sell would have been in late April.  

So far the bullish phase has been very choppy and only now we are getting a bigger move. The US dollar would have to drop like a rock and gold would have to soar to help push another leg up in the HUI.  I think this bullish phase is a fake run, but that does not mean that another move higher can not happen in the short term. 

There are many open gaps below, so eventually all those open gaps will get closed off, what is never certain is, “when” they will get closed off.  

 

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WTI Crude Oil Intraday Review: Oil Tankers Running In Circles!

 

I like reading the news about oil, and I got another great laugh when I read the Bloomberg news, about the oil tankers running in circles, trying  to unload oil in China! Of course that can be taken as very bearish fundamental news, which would send the price of oil down again.  Declines and corrections can always happen, but if we see oil only correcting then oil will push higher every time the bad news is at its most intense. In a true bullish phase, bearish news gets brushed off and sooner or later all news is factored into the price, and then the market returns to its bullish phase. 

Crazy forecasts are being made where they are spewing out $100 price forecasts for oil. Ok, well, eventually oil may even go higher, but it is not going to happen overnight. 

CLN16-May-24-2016

 

I switched my wave 1 to Minute degree, but there are overlapping situations where a pure impulse is rather iffy. So far the entire bullish phase for 2016 would be safer in a diagonal type pattern with the lead in to a potential “A” wave in Minor degree. 

Since the April bottom, oil has roared along, but it has now started to go sideways again.  If a violent move to the downside is going to happen then at this time oil could still be in a corrective move.   There could be another 5 waves up in a very small degree and maybe it will go vertical as a bigger correction should eventually come.  Anything can happen, but we would be on the look out for corrective patterns to form, as that gives us the confidence that oil will push higher.

If crude oil progresses further, then the $89 price level could be one price level, where my entire wave count can fall apart dramatically. This has still a long way to go, and a full zigzag would also have to come to completion at the same time.  The gold/oil ratio has compressed a bit more and is a little less than 25:1, using the July oil contract. This is still very cheap when compared to gold so unless these numbers change dramatically, I think the bull market is alive. Keeping the majority guessing as to the real trend, can make for a wild and bumpy bull market.      

 

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US Dollar Intraday Bull Market Review: Keeps On Ticking!

 

DXY00-May-24-2016

 

Since the US dollar bottom in early May, it has gone on a great looking bullish run that should  have more to go. Of course corrections are a big part of any bullish run and that is what we have to watch out for.

If everything is a potential Minor degree bullish run, then the US dollar could still soar above that 100 price level. If it crossed as a three wave pattern will not matter very much at this time, as that would be part of the finishing process as well.   Many wave counters count a 3 wave high as an impulse. This I believe is completely the wrong thing to do, and can screw up a wave count until the coming of the next ice age!

If all this is true and the US dollar still needs to clear all these overlapping waves, then I think we are still not at the halfway point, or at the Minute degree “A” wave.  Eventually I may have to bump up the entire wave  count by 1 degree, but it is not necessary at this time.

Any bullish correction, that veers off into some sideways choppy waves, can give us a clue that the US dollar is about to make a big top. Also, when those waves start to overlap, with many small inverted “ABCs” starting to form, it would also be a sign that things could be coming to a bull market end. 

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Gold Intraday Review: Back To Stock Mania?

 

GCY00-May-24-2016

In  2011 stocks were getting ready for a stock bull market, which upset gold and killed the gold stock bull market in its tracks.  We saw one crazy move in gold and gold stock starting in 2016, that many are convinced a new paradigm or a new major move in gold is in progress. They may be right, but I sure do not trust any asset class to soar to the moon, if the pattern will not allow it to happen.

Most investors have no clue about the patterns that form and what they mean, as that is part of technical analysis. The majority listens to the news, for their fundamental information, but this has never worked unless you are a contrarian and understand you have to act completely the opposite of the herd.If this gold pattern happens to be an inverted “ABC”, then a 100% retracement is extremely likely, erasing the entire gold bull market.

Not until gold shows us a very powerful correction, can I become bullish again. To pick another bottom can be much harder than we think, if this 5th wave decline is another zigzag as well. There are only a few dollars to go, and then most bearish rallies will be retraced with the $1200 price level being the next target. 

GDX, HUI and others all have already corrected and it remains to be seen what type of pattern the declining gold stocks will eventually make. If this 2016 gold move was a fake then, 100% retracement would still be in the cards. The hardest fake rallies to spot are those that shoot straight up as many times the wave separation is not big enough.

In the end the key is to know how many waves are overlapping, and if an expanded flat has not taken place. Either one of these two patterns is enough to kill a perceived bull market. 

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Mini SP500 2009-2016 Review

 

ESM16-May-24-2016

 

If we go back to the bottom of 2009, we can see that the SP500 took off like a rocket and then settled down, doing what it does best. “Fooling everyone” as much as it can. The thing is many people are getting better at seeing major bottoms and tops, and wave counters would really have to step up their game if we keep missing bull markets.   

In 2009 wave counters were still seeking wave 2 in Primary degree. Even Warren Buffet was extremely bullish, yet wave counters had the most bearish wave count in history still to come. 

Ok, that is history, but, there are many records out that major markets were being missed. It’s a degree problem and it is one of the main reasons why all my work is in Cycle degree.  All Cycle degree waves come before any SC or GSC degree waves, so hunting the Cycle degree dragon is my top priority. 

I have tried many different wave counts for the bullish phase from 2009 to 2015, and we could be in a potential diagonal 5th wave or even an “E” wave. Both of them can be very similar but both of them need a 3 wave pattern, pushing to newer highs.

This morning the SP500 soared as gold plunged, which I have talked about that it could happen.  Even though stocks soared in a very choppy manner, they still could be on a bullish path north for a few more weeks, or the next new moon cycle. 

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Another Look At The DJIA 2007-2016

 

In general, I do not post on Sundays or any US and Canadian holidays, but occasionally I will break that guideline to give a bigger picture review.  There is always a minimum of 5 different patterns that can be in effect at any one time, which is specific to the wave count that we may think we are in. “May think” are the key words as everybody has an opinion in what degree we may be in. I spent years, counting in all the highest degree scales and there were always too many waves left to label. Also, too many major bull market turnings were being missed.

We have to get rid of 3 choices quickly as 5 alternates just don’t cut it.  I don’t like to post alternate wave counts in one chart, as I start my wave counts fresh everyday.  This erases or wipes clean any wave counts that do not seem to be working. 

 

YMY00-May-23-2016

 

This wave position gives us a look at a potential “B” wave triangle which would have started at the bottom Of March 2009. The “A” wave in Primary degree terminated with a zigzag looking wave, which works as a lead in to an expanded flat.

Since 2015 the markets have gone sideways with wild moves in both directions, which is not what I would expect in a one shot inverted “ABC”.  Besides a flat correction in an expanded flat would be rare if not impossible, and another bull market zigzag would suggest a very big triangle. I don’t think the markets are going for a Cycle degree triangle, as the solar cycles will eventually kill that idea. 

A single expanded flat with a triangle inside the  “B” wave would work, but chances are we would still need to breakout to a new record high this year. If this becomes an “E” wave, then I can see the end of this huge bear market rally that started in early 2009. 

The triangle “B” scenario in stocks is much like the triangle “B” wave that we can get from oil, except oil was two degrees lower.  Triangles love the “B” and 4th wave positions, and triangles always force us to change our degree levels, if we like it or not.

The worst scenario that can still happen is that we actually finished a diagonal triangle 4th wave and we have a “thrust”, still to play out. 

I have created an idealized chart of all this starting when this “B” wave top can be better confirmed. This will eventually be posted on a permanent page. Idealized charts are critical in helping to keep the sequence in line and to know what we are supposed to be looking for.  There is too much of this aimless wave counting, and most of it comes from not putting in the work to go back in history and review everything to date.  

Any other wave count would have given us a major spike blow off, which we can see has not happened yet. Instead, we get a mess of waves up top, which eventually must be sorted out.  Which wave is still on the bullish side and which ones are already on the bearish sides, must eventually be worked out.  Just because the markets go down does not instantly mean a major bear market is on, as it can just be a correction to the ongoing bullish phase.  

Once this “B” wave top is better confirmed, then the decline should be 5 waves down in Intermediate degree, which many SC and GSC wave counters, may call the start of a Primary degree 5 wave run.  Not in 15 years has the markets given the big degree wave counters their 5 waves down in Primary degree, which must happen to even begin to confirm, any SC and GSC degree wave positions. 

Using only Cycle degree as my largest key degree is not something I dreamed up just to be different, but all Cycle degree positions must be found first, before we can move into the SC or GSC degree world.  It may take until 2029 before Cycle degree wave 5 is completed, so that is still over 13 years away. 

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DJIA 2007-2016 Review

 

YMMY16-May-21-2016

 

At this time I am not compelled to change my Cycle degree top, for the 2007 peak.  After 2007 we had a wild and crazy crash down, which many have called the worst since the 1929 crash. I see the 2008-2009 crash as a 3 wave crash not as a 5 wave decline.  This is very important to understand as it completely rules out certain wave counts for the future.

  I spent a lot of time trying to confirm or eliminate the potential of a diagonal 5th wave from 2009 to 2015, but this is getting much harder to do. I think we would have seen a more dramatic and impressive blow off, and not this boring sideways stuff that has been happening for the last year. 

 Our recent decline is choppy enough to classify it as a diagonal wave structure, or as a corrective wave.  If there is any life left in this party, then a blast up can still happen, and my wave count could switch into a big triangle “B” wave rally in Primary degree.  This may require another look for an “E” wave count, which can be very small in its final days. 

Since May 2015 we have had a pretty good roll over pattern, but we need some strong evidence to be convinced that the big move is here already.  If we have crossed the wave 2 peak, then this market has to perform on its way down, otherwise we have to go back to the drawing boards and keep any alternate wave counts alive.

If anything, this can be a big expanded “B” wave top, but only a single one, as the rally from 2009 to 2015 makes for a bad zigzag at best.  The only way to get zigzags back to back is with another potential big triangle.  Even then we could be looking at a running triangle which would be very bullish in the long run.  

Any expanded “B” wave top in any degree is a very bullish pattern once it has completely played out. This may not happen until the DJIA hits the 6,000 price level. (5999) will do. 🙂  Looking far ahead and talking about it early can get people thinking that it will happen tomorrow, but this is always the furthest from the facts, and besides you will have little time to react to take advantage of it. There are always tons of buy orders above any present price, and in a freakish reversal, those bears will scramble to get out, and in that process they will instantly turn into bulls.  

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WTI Crude Oil 1990-2016 Review

 

CLN16-May-21-2016-2

It is always very important to review as far back as necessary, but in this case we started in 1990. I am working a triangle inside a Primary degree “B” wave, and at this time no “B” wave in Primary degree has been found. I started switching over to Cycle degree wave counting in 2013, which means that “none” of my wave counts have passed any SC or GSC degree gates. (all wave 3’s) Throughout its history crude oil has bounced from one extreme and then back again, with oil gluts thrown in as well. Besides wild bull markets, oil will continue to do this for many decades to come.

The 2008 crash can be a set of 5 waves, as a flat or a small zigzag would show up better and be more obvious. What that 2008 crash was or contained is extremely important as otherwise we would not have a big zigzag crash, It would be just another flat in Intermediate degree and our present rally would be an impulse 5 waves. 

 This makes the 2008 to the 2016 bottom crash a pretty good looking zigzag to me, ending in a “D” wave crash. From 2016 anything can still go wrong in this oil bull market,  as now the $55-$60 price level could show some serious resistance.  Oil can’t continue on this blistering pace for very long as at a minimum it needs a good correction.  We can see a small spike forming on this large weekly chart, so this is always a good sign for a reversal. 

Longer term the $89 price level can give us more grief as we would be getting close to a top trend line. (Not drawn in) 

Ideally, we would want crude oil to break through that $89 price level as I think $115 or higher is in the cards.  How it gets there will be important as we could get an uneven zigzag bullish phase that will surprise us all.   We have a few years to wait to see if this all plays out. The halfway point which would be an “A” wave peak is not here yet, so we need to count out a 5 wave diagonal before the “A” wave arrives. 

Three years for an Intermediate degree rally to play out, may be far too short of a time period, as the others took 7-8 years. Nothing says that the time period has to repeat itself, but we can’t ignore it.  When it comes to time, wave counters can pull off anything, as one time a SC correction only takes three years while a Cycle degree correction takes 5 years. Why in the world would a GSC degree correction take hundreds of years?   Most oil bull traders get into a panic when their position turns into the red, and besides, they would get stopped out at a loss, just in time for the oil market to soar again.     

 A good site for oil news is OIlPRICE.com, and it is also available from a link in the sidebar. 

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LIT, Lithium ETF Review

If we look at some fundamentals in the Lithium world, they say that demand is far bigger than the supply, and it is only going to get worse as electric car production grows. When demand is not met, then prices should eventually go into a very bullish phase.

I am sure we could hear about “Peak Lithium” if and when prices soar, but by that time production will meet demand and the Lithium world could come crashing down again.  One big news break that the world must make a better and cheaper battery for car and home use, could make lithium obsolete.   

You have to do a lot of searching to come up with Lithium news, but this may be one site to look at.

How well the LIT ETF below will track the producers remains to be seen, as I know little about it. It can take years to produce a decent wave count, especially with so little ETF data to go on.   

 

LIT-May-20-2016

 

I must stress that this is only my first attempt at creating a wave count. I can move locations very easily and come up with a “D” wave rally as well. We do have a section where many waves overlap, ending on the downward spike. 

The problem is that after my wave 3 bottom I have an expanded flat which very often develop in the wave 3-4 positions. If this is true, then this LIT ETF is in a false run, or in EW  language, “a bear market rally”. Bear rallies always retrace themselves, so jumping on the bandwagon at this point is dangerous.  Chances are good as soon as we jump on the wagon, it is actually getting ready to crash.

Everything could remain bullish, but waiting for a potential swift decline or another clear “ABC” crash would be much better. Of course, then the last decline can be a zigzag as well and still travel to new lows. 

At this time it looks like LIT wants to follow gold, so this would be interesting to see if it happens. It may also be worthwhile to start a gold/lithium ratio to see if we can find a high and low extreme.  

   

Hits: 9

Gold Intraday Price Action Review: Do Or Die!

 

GCY00-May-20-2016

 

For the month of May 2016, we had a consistent gold bearish market, that hit another new bottom yesterday. Gold has crashed below the $1258 price I was looking for and then another rally started which can fit into an impulse very well. Technically speaking, if this month’s decline was not a diagonal wave, but a potential triangle decline, then we could be in for another rally that will take us back up to $1300 or more.  

There is so little room to move to the downside before this all goes for a bust, but early next week may tell us more, but $1245 must hold. I would love to see another run to past the $1300 price level as that would confirm that we were in a good corrective wave, and not those nasty diagonal waves, that can really screw up a wave count. 

We end the week going into the full moon so it will be curious to see if this will be bullish for gold, but it will also give us about two weeks, plus or minus, 4 days for it to play out. This is all technical speculation, for a specific degree wave count, and if it is really true, then gold must push higher in the next few weeks. Short term I am bullish on gold, but if it turns sideways too much or spikes early, then the gold party would be over again.

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Daily Chart Crude Oil July Contract Review And “Peak Oil II” Stories.

 

CLN16-May-20-2016

 

I’m now switching to the July WTI crude oil, which represents light crude high quality oil. Our Canadian thick oil has to be blended or refined thinner, just to get it through the pipelines.  With the forest fires lapping at the gates of the oil fields, fear has cut back much of the production just adding to the production destruction we have had in the last year or so.

In the end it is all part of the fundamentals that have dramatically changed in 2016. All the crying about $20 oil is no longer front page news, but stories about shortages are all ready coming out.

The big story is an accounting story as 50% of the world oil reserves vanish . Of course, this is a setup for “Peak Oil II”in the future, as the world figures out where 50% of the proven reserves vanished too.  My guess is those reserves, were never there in the first place as stories like this have been circulated before. 

Any future “Peak Oil II” stories would fit in just perfectly into my scenario, but don’t panic as Texas has more oil in shale than Saudi Arabia will ever have.  When I find that story about the shale oil reserves still sitting under Texas then I will post it as it was pretty impressive when I read about it for the first time. 

The WTI crude has been trending upward, but the correction we did get was pathetically small.  At the start of the April rally oil has displayed overlapping waves which suggests we can be in a 5th wave diagonal which usually bring on violent reversals.

Even then, we would not have that much room to move before another wave position is breached. In the blow off we could see a spike up, and terminate at a potential “A” wave in Minor degree. In the long run, we could see two major blow offs as the chances would be very high that the “C” will also have a wild spike to the upside before it ends.   

I will review this July contract as far back as I can, as a new month deserves reviews no matter if it needs it or not. The spike down in January 2016 will also be very different between daily and weekly charts, so this must be taken into consideration when we review the big picture. 

 

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Mini Sized DJIA Intraday Bull Attack Review.

 

YMM16-May-20-2016

 

Fear of another rate increase or no fear of a rate increase as this chart blasted up trapping many bears in the process.  I think this can still be another false rally as the pattern can be counted both ways.  If yesterday’s bottom was a 4th wave bottom, then stocks will still see a rally breaking the April 2016 peak.  You may laugh, but some analysts are suggesting that the SP500 still has 15% higher to go.

If we look at it from a diagonal point of view, we could get this type of market action go on for years as it slips down incrementally.  We could have some free falling price panics along the way, but in general the trend would still be down.  This type of a decline, we have had are very close to corrective looking waves, which makes it very hard to get a good wave count.

It was not even worth laying down some trend lines as there were not enough down spikes to draw between.  This may bounce around, but if this rally doesn’t stop, then my Big wave count will get reviewed again or I may have to apply a triangle type 4th wave pattern to it. This would make the wave 2 top early again, and it would have to be removed.  

In any potential 5 wave decline, and in this case a potential 5 waves down in Intermediate degree, and we see the 4th wave rally’s finish up high, then without a doubt the last 5th wave could be an extended type that will blow our minds.

 

 

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US Dollar Intraday Bull Market Review.

 

DXY00-May-20-2016

Since the bottom in early may at the 92 price level, the US dollar has been on a path heading north. If the trend continues, sooner or later the USD would have to make contact with the top trend line once again. It is starting to roll over, but this can always be a sign of a potential correction in progress.  I am expecting a correction big enough to force the USD bulls to switch size. 

This May rally can also be a “C” wave bull market where the correction will be more than a correction, and new 5th leg down could happen. If any correction shows up early with an “ABC” type pattern, then we are more assured that a big leg “UP” is going to happen.

Since the peak of the US dollar in Dec 2015, (about 100)  it has declined into May 2016, at the 92 price level. This was a full 8 points which happens often because it seems to fit a Fibonacci whole number.  What was wrong with that decline is that it was all choppy and the waves destroyed any true (or high quality), impulse wave count.  This means it can be part of a diagonal move, and many times be completely retraced. 

In short, this would mean that the USD can still end up targeting a 100 US dollar price level.  Well the 100 price level is only about another 5 points away, which is also a Fibonacci rounded number. At this time we have to keep our options open and see if the anticipated corrections starts.

Also today is the last day before the full moon, which can force dramatic reversals at times.   

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Canadian Dollar Intraday Crash Review

 

D6Y00-May-19-2016

We have seen a pretty good crash in our Canadian dollar  and we will see what type of a pattern it will make on the way down. Otherwise, our CAD could have been a big fake rally and we would be heading to a new record low.  Our CAD has been in sync with any commodities bull run in the past, so hopefully we will see more of a CAD rally. The sad part is we have to go through a correction before we will find out. I’m keeping it open just in case we get another inverted zig zag bull market.

If another wild move happens to the upside, we could be at an expanded type of a “B” wave  top.  This will be a shorter update as we are not at an extreme just yet, so things can still go in any direction. 

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Gold Intraday Crash Review.

 

GCY00-May-19-2016

 

Gold has most certainly crush the $1258 price range and just this morning has made another bottom. If this bottom holds and the 4th wave is still a reality, then we could still see one more big bounce to the upside.  Gold related stocks also took a hit as they made a fairly fast down spike type of a move.  I think it is a good idea if we can to keep a gold/Hui, or gold/gdx ratio, but until we do some backtesting research, we will not know what the extremes have been.

Right now we have a gold/gdx ratio of about 52:1 which I suspect is somewhere in the middle of the extreme. Gold is getting to the point where it will no longer support any corrective scenario so it has to show us what it can do, or should I say “still can do”. Looking at the daily chart, $1310 or $1320 could still be a target for the bullish wave count. 

If this bigger trend has finished, then below $1200 would be the next price level to break.  Hopefully it will not take too long to make or break this potential reversal. Any downside price target is sheer speculation as it all depends if gold and silver have been on a fake run. $1230 or could would be the next lower level to break, which would also produce a nice H&S price level.  

 

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Mini DJIA Cash Chart Review From A Daily Chart Perspective.

 

YMY00-May-19-2016

 

It is always a good idea to look back further into the past. We need to see if things still seem to fit well into the big pattern, that we may think we are on. If this is the big one then without a doubt we have to look at diagonal wave counting  for the entire decline.  Sooner or later it would also have to pick up its pace because it would be the most long and boring decline we may have come across.  We could get the same mess that gold stocks have given us since their 2011 peaks. 

Some of the longer or bigger time cycles would work pretty well with a diagonal decline.  The markets may be in flux due to the rate hike that may be becoming, but  the markets have gone down for a year already. I am sure another fundamental reason for stocks decline will become front page news.   Just listen to the parrots as they will squawk louder and louder, and surely will give us a reason. Of course, as soon as they start doing that the markets will turn and go the exact opposite way.   

Don’t forget what happen in early 2009 as very few people were bullish yet the markets charged up for about 6 years.  So far May 2015 can be a major peak in stocks so now all we need to do is wait patiently for extreme oversold conditions.

 I have mentioned it many times about the wave 1-2 that we need, to form in the beginning as first waves should never be the longest wave. If they look like the longest wave, then chances are it’s part of an “A” wave and not an impulse. 

Time is not on the side of the bullish investor if he is buying on the dips, at these price levels.  Overall, if we are in this big expanded flat, then this is actually an extremely bullish wave pattern once the bear market has fully played out.  It will be a time to become extremely bullish and chances are good it may just pass the 2009 bottom by a slim margin. 

Looking at this market from an expanded perspective, then, eventually the markets will exceed the 2015 highs one more time.   The decline may take until 2021 with many twists and turns so we have to be patient, when we don’t catch any of the good intraday turnings.  

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E-Mini SP500 Intraday Bearish Price Action Review.

 

ESM16-May-19-2016

 

The markets have slowly pushed lower with no real impulse pattern anywhere to be found. There is one last chance that this still may be a 4th wave type of a correction, but that window is starting to close fast.  It would still take today and tomorrow to see if a bottom will happen, otherwise I will go back to my diagonal wave count. If I need to  go back to the Intermediate degree wave three as a diagonal, then something has to break as we need far more distance to travel. 

We have our basic H&S patterns and a downside breakout, so what more can we ask for to join the bearish crowd. Of course, as soon as we would jump on the bearish bandwagon, the markets will turn bullish and put us in an instant red position.  We may have to play this game for awhile yet, but if the big one is here, then the markets have a long way to go down.  Not only stocks that have gone down, but so has gold and oil with the US dollar still rising.

The full moon is just one trading day away, which can be very bullish for stocks until the new moon arrives. Most of the time the moon cycles are not reliable enough, but other times the markets swing with the moon cycles. After all moonlight is just the sun reflected back to us. 

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Profile on BC Housing Bubble!

 

VH-May-18-2016

 

When I saw this chart I was pleasantly surprised, as it showed far more wave detail into this Vancouver Housing Bubble. Only people that are in the market don’t know that they are in a bubble, otherwise they would not be in it. The public still has the RE Fever! 

The two red arrows are my only edits and the main idea is to get you to focus to this wave positions as it sure looks like a 4th wave flat or even an expanded flat. This came to a screeching halt right at my bottom red arrow. Once this 4th wave was completed the bull market pattern changed.  This change came in overlapping waves no longer showing the normal  impulse type waves,  I take this as a diagonal 5th wave possibly ending in April, about three weeks ago.

We can never be exactly sure when this may pop, but I am sure it will. What needs to happen is for the price to start stalling or slow dramatically. Volume starts to increase and the flipping wars are on.  Flipping will be a race against time as sooner or later less and less buyers show up.  Many offers of higher bids would have to dry up as well. If and when the news breaks that buying with higher bids has dried up, then panic can set in as people find themselves in an upside down mortgage, and falling Vancouver house prices.  

Let’s say that sometime in 2016 this chart clearly pops, then if another future price leg is going to come quickly, then it will depend on the type of decline it makes.  Bubbles have a really nasty habit of crashing very deep and with most of them, they completely retrace their entire bullish phase.   I sure don’t expect a full retracement but we could look at three main areas that can supply us with a potential  support range.  My bottom red arrow is one of these first support areas with the other two, falling between 2000 and 2010. In the long run when this bubble bursts, then I would be very surprised if the average prices are “not” sold for under a million.  

Any major decline in prices can be stopped or halted when the next solar cycle bottom arrives.   Prices and the economy will eventually follow the sun, which can be about a 4-5 year up cycle.  This solar cycle should end close to the 2021 time period, which is still 5 years away.  

I think it was 1926 when the Florida real estate bubble burst, and at that time it only took months and all the buyers refused to show up for the spring of 1926. Needless to say prices crashed. This scenario may not happen exactly as described, but all it will take is a little price correction which can turn into a big price correction at any time.

I think any turning will be more secular in nature and will take much longer to play out so don’t expect this to happen overnight.  

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