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.  

   

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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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Gold Intraday Sideways Action Review.

 

GCY00-May-18-2016

 

Since the May 2016 top gold has gone sideways to down, but has displayed anything but an impulse. This can fool us all if we ignore the potential for a diagonal decline.

Any low could put us at an “A wave in Minute degree from which we could get another zigzag.  In diagonals many of the critical waves overlap into another critical wave, stopping every attempt at counting out a clean impulse. This is irrelevant if it is going up or down. In this case gold could swing wildly, but should end lower if the diagonal scenario is true.  Eventually, gold should still go below $1257 as the rally from the May 10th bottom seems to be an inverted move. This is a short review as not too much has changed since yesterday. 

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HUI Bull Market Review

 

HUI-May-18-2016

 

The HUI has been on a trip heading north since it bottomed in mid January 2016.  It would be nice to paint a perfect impulse on the way up, but impulse waves would subdivide far better, and not give us what looks like a wave 1 extension. In order for the HUI to head north on a much larger scale, we should get a much bigger correction.

This bullish phase is getting stale as the media keep talking about it. The louder the parrots sing or squawk, the closer we may be at a top or corrective top. In short, I am still looking at this from a “C” wave bull market perspective, until the market tells me otherwise.  

Right now this pattern has already started to go a bit sideways, but more is needed to help confirm that the beginning of May 2016, may have been a strong top. The HUI also contains 3-4 open gaps below present prices, which all should get closed off. The only question is when?  Gold stocks eventually will have to hit the top trend line again, but the HUI may have already started to roll over.  On the way down everybody will be looking for support levels, as that is what we must get to bring on another major leg to the upside. 

The problem with the flock or herd type thinking is that they know nothing about “C” wave bull markets, or big bear market rallies. In a bear market rally, or “C” wave bull market, there will be no support level that will work, no matter how hard we try. You can try a 40%, 50%, 60% or even an 80% correction, but the market would end up taking 100% or more.  

The 210 price level would be the first important level to crumble, and any other support level will also crumble, if this rally ends up being a fake. If this rally ever returns below from where it started, then the markets will have confirmed that the HUI rally was a fake. At the peak of the gold market in 2011 everybody thought we were in a secular bull market sending gold stocks to the moon, yet they were all proven wrong as the XAU and ABX made a complete 100% retracement of its entire bull market. 

Nobody cares to wave count the XAU, as the HUI was far more bullish looking and easier to count out, but it was the XAU that gave the strongest warning that it was on a fake run, which the EWI analysts got right!  They warned that the XAU was a fake, but I fought with the wave count anyways, as those choppy and erratic waves serve as a warning, if we are  paying attention.   There is nothing wrong with trading fake bull markets as you can always turn profits from a fake market into real cash!

If I saw this market correct into a decent zigzag and then hold a bottom, then I would turn extremely bullish one more time.  Any diagonal 5th wave decline can also cross to new lows with a zigzag, so we can have dual patterns, but with each having  a different path. 

The gold/hui ratio made gold stocks a bit more expensive, but not by a big number. At about 5.59:1 we are in the middle of the range. The range so far has been 3-10 which makes small shifts hard to judge. If the ratio drops, then gold stocks become expensive when compared to gold., but if the ratio expands, then this indicates that gold stocks are getting cheaper when compared to gold. GDX would work just as well as the HUI would, but a new high and low ratio would have to be researched before we can use it effectively.

Hits: 21

Gold Intraday Review And Inflation Stories.

 

GCY00-May-17-2016

 

I spend about an hour every trading day morning scanning about 30 charts to see what has happened. I also do this on the weekends when markets are closed.  The work of research in any asset class never stops, if we want to create a half decent wave count. Of course every wave count can only work for a fleeting moment, and gold is no exception.  Since the 10th, gold has made another of its great bullish moves, but it sure does not fit into an impulse type movie.  Besides gold

being in another small degree diagonal 5 waves up, we could be in a larger degree diagonal 5 waves down.

For the bearish case gold would still have to break below this $1258 bottom we see on the 10th and maybe even more depending what the US dollar is going to do. If stocks go on a panic sell off,  in their mad rush to the exits, then they can sell off everything, which could put a demand on cash for the US dollar. 

Since this gold bullish rally started in 2016,  deflation was in more stories than inflation was. Now, after 4 months of a rising gold price we get stories how inflation has come back dramatically.  This has been a 4 month lagging indicator at work and now investors will see this lagging indicator, and think much more inflation is to come and they will buy gold as a hedge for inflation.  Of course, this will happen just before the price of gold crashes confusing everyone why gold has crashed with inflation.

This happened in 2011 in gold and the exact opposite happen with gold back in 1999. Nobody saw inflation coming in 1999 as everybody was bearish on gold. Yet near the Peak Gold they were all telling us to buy gold as a hedge for inflation.  

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US Dollar, Do Or Die Intraday setup.

 

DXY00-May-17-2016

The US dollar is so close to making or breaking a 4th wave situation, that this can still go either way. What I would like to see happen with this potential pattern is another shot higher, above the two previous spikes. This would put it into the 95.200 price level, if the 5th wave were to appear.  

Even then we would have the completion of a pretty good impulse, which could be at a new wave 1 peak.  Sure, there are many stories out that call for the US dollar implosion and it may happen. One single fast down move in the US dollar is not going to give gold the power it needs to sustain another bullish trend.

The only thing that will help gold move up is a long time trend south for the US dollar. Since the USD bottomed in May it has been going up. This is not what the US dollar bears need to see.  The US dollar has already crashed for a long time, but this move was a diagonal type of a decline, so the USD cannot be trusted to keep heading south.

Either way, I will be looking for corrective patterns when the USD heads south, as “ABC”crashes are the patterns that will tell us that the USD is going to head much higher.  

Hits: 6

E-Mini SP500 Intraday Price Action Review.

 

ESM16-May-16-2016

I would love to see this so  called bull market come to an end, but the diagonal waves can keep us guessing in the short term. If you were playing short then you were well in the red once the blast north started to take hold.  There is still a high chance that another diagonal, or 5th wave ending diagonal still has to form and even push the markets towards another new record high. If that were the case I would push my Primary degree “B” wave over. 

Especially, if a triangle has formed that started in late 2014, which I have as a Minor degree 4th wave correction.  This 4th wave ended in mid February 2016.

My wave 2 rally is not completely dead, just yet, as this present rally can be very short and then still would fit well below any major tops. There are many major tops that will need sorting out as it will affect the outcome of any  wave decline. 

Hits: 9

Gold Intraday Mini Crash Review

 

GCY00-May-16-2016

It sure looks like we have had some sideways action, but in a diagonal anything can happen because patterns reflect zigzags more in a diagonal. Gold crashed this morning as markets opened up with positive news. News runs 24/7 so it could have been anything that set gold off in a decline. Most of the time I pay no attention to fundamentals as the public does that for me. Besides, any Elliott Wave is contrary to the herd as well, and you have to buy when fundamentals are very ugly for gold. The fundamentals for gold were  extremely bearish in 1999 yet the gold bull market soared from $255 to $1920.  As of 2016 nobody hates gold like they did in the beginning of the year, but their tune sure has changed. 

This could all still work out as a triangle, so we have to be aware of that as well. Otherwise the diagonal decline can be in effect, which is what can create an extremely choppy decline. Since this last move looks like an inverted move, then gold should still fall below the $1260 price level. 

 

 

Hits: 17

Min DJIA 2015 Review.

 

YMY00-May-16-2016

Recently I showed a potential “B” wave top in Primary degree, but we have the basic nightmare of wave peaks, that eventually have to be sorted into where they still belong to.  The bullish side (still correcting) or if we are already over on the bearish side. Expanded tops can always fool the best wave counters, and with so many peaks we have to be on the look out just in case. 

One scenario the DJIA can push to a new record high, and the other scenario is that the DJIA must not push to new record highs. Talk about flipping the coin. 

Of course the reports that Warren Buffet has bought parts of the DOW with the last quarter, March 31 purchase of IBM and Apple stock could add an extra boost to these stocks this morning. This week  should tell us more, but until it really happens, we will never know.   Could there be this “Thrust” after a triangle? Sure, but if we are in a big bear market rally it may be pretty rare when we can be so close to an end. 

Hits: 5

Comment On: Goldman Surprised by Sudden Oil-Market Turn as Glut Vanishes

Again and again it has been proven that when markets are at the extreme, fundamentals will always tell us the wrong things. The experts get surprised more than anyone, because most of the fundamental news you hear, are lagging indicators. Chances are good that all the experts have no clue how high the price of oil may eventually go, but I am sure the parrots will come back and tell us that $200 oil is just around the corner. Good luck with that, because if crude oil ever got close to $200 then the next price crash will be down to $10.

Goldman Surprised by Sudden Oil-Market Turn as Glut Vanishes

http://oilprice.com/Energy/Oil-Prices/Oil-Markets-Balancing-Much-Faster-Than-Thought.html

CLM16-May-16-2016

Terrorists keep trying to blow up the energy infrastructure in Iraq and other places, so world oil supplies can remain choked.  One thing that makes a difference in the long run is that higher prices bring on more supply and when any bullish phase, runs into exhaustion, buyers usually don’t show up,  and prices implodes.  

This rally still has a long way to go before we get close to the potential “A” wave that I am after. So far this rally is more like a diagonal pattern, which would fit into an “A” wave. At this time, I would expect the “A” wave between the $60 or $90 price levels, which is close to the $55 and $89 Fibonacci numbers I always use. 

We don’t want to get too far ahead of ourselves, as many may misunderstand it, and think that it is going to happen right now. When we look ahead, we are just looking up or down the idealized wave count, and describing what we see as best as we can.

The gold/oil ratio Just dipped to about 26.75:1, which is still very cheap when compared to oil. When oil falls below 20:1 we have to be on the lookout for another corrective top.  

 

 

 

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Quick Apple Update: Crashing Like A Zeppelin!

 

AAPL-May-15-2016

 

Apple’s stock chart has rolled over a long time ago, as the trend lines show.  If the markets are on a general Primary degree “C” wave decline, so why should AAPL not do the same thing?  In a bearish phase all the ugly news will become front and center,  so if AAPL continues south, then expect more bad news.  This will be news that the mainstream dream up, but recent news from the Apple Insider, sure still look good. Apple still dominates, and overall it is a good company. 

AAPL could be of the same type of a path as the general stock market is, but where and when it will bottom is next to impossible to estimate. With all the buy backs and stock splitting antics we could be dealing with new numbers that will stun us, in how cheap AAPL stock can get.  Going back to 2007, at what previous gully (bottom) is apple going to stop at.  Any expanded flat type move will definitely send AAPL back to record highs but we would go broke in trying to stay in to see that happen.

Until we hear news about insider buying, investing in this stock price, will be a disaster. I am sure we will see the $70 price yet, as a huge gap will be closed by then, and even $30 is not ruled out. 

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Mini DJIA And Mini SP500 2007-2016 Review

It has been about a year since the markets topped, followed by a sideways pattern that gave us one wild ride and kept everybody guessing as to what the real trend can actually be.  I was bullish at the beginning of 2016, and now we have had a run that started to stall and even reverse.

For both indices and since the 2009 bottom, it has been a constant back and forth effort, counting between a diagonal 5th wave and a “B” wave bear market rally. All this back and forth has to eliminate some probabilities and hopefully this has started to happen. Connecting the 5 simple wave patterns in their right sequence is the key to helping us figure out where we can be, in the bigger scope of things.  As I have mentioned, my work  all comes from looking at the markets from a Cycle degree perspective.  The trouble is, we have to find out where the wave three may have actually peaked at.  I spent years, counting in GSC degree and then dropping it down to Supercycle (SC) degree for a few years. They both made no sense as I always had more patterns left and big bullish moves were missed 

I did see a big improvement when I switched down in degree levels, but SC degree was not low enough. Since about 2013 I no longer chase that SC and GSC degree dragon, but chase the Cycle degree dragon instead.

The entire work of this blog will be in looking for and chasing the entire 5 wave sequence in Cycle degree, without it we can never travel into the SC or GSC degree worlds. Many have tried and many have failed, besides Cycle degree comes before SC degree, so why waste our time on a degree level that still could be decades into the future.

YMM16-May-14-2016

 

With this wave count I have switched my Cycle degree back to the 2007 top, creating the “ABC” crash into 2009 as my “A” wave in Primary degree, possibly topping in May 2015. This keeps the 2010-2011 correction as a running flat inside the “B” wave bull market.  Since I am chasing Cycle degree patterns, the wave pattern I would need is 5 waves down in Intermediate degree, of any type. Chances are very high that diagonal waves will dominate all the way down, and it will not be a walk in the park to catch all the turnings.

What we see now can be the first wave 1-2 that we would need and then we have to see if the wave 3 ends up being extended. This is where  the 1-2, 1-2 wave count would come in, and it would all have to play out when it got close to a double bottom or even 6000 before it ended.  If and when this gets completed, they may still be calling for it to get much worse or even calling for DOW 400-1000.  This is when I will be  “EXTREMELY ” bullish as we would have just completed an expanded flat.

Expanded flats are very bullish wave counts depending on the degree we think we are in, and they seldom have very long extended “C” waves.

From the 2000 peak to the 2009 bottom we had about 8 years, now from the 20017 to the 2015 peak we have had about 8 years.  Could we have a decline that takes about 5 years? This would put us at the 2020 time period. If we use a potential 13 years as a bear market for stocks, then from the 2007 peak plus 13 years, gives us the 2020 time period. Is 13 years long enough for a Cycle degree 4th wave correction? Of course it sure can be as it fits very well into whole Fibonacci numbers.

Besides this 2020-2021 time period, we also have solar cycle #24 ending, which are always  followed by a 4-5 year solar cycle bull market. I cannot stress it any more, if all the wave counters, and others are still showing you bearish wave counts, then you will miss the bull market bandwagon again.

For the short version, we are looking for 5 waves down in Intermediate degree, with wave 2 possibly already completed.

 

ESM16-May-14-2016

 

This is the Mini SP500 with the basic same wave count. Many times there are differences, but they all end up in the same place sooner or later.

Are we heading into a depression? No, I don’t think so, but another wicked recession sure cannot be ruled out. When they  start calling it a depression, chances are good the next bullish wave 1-2 will be ready to start.  All we have to do is go and look back to 1932-1942, when we had a complete Cycle degree come and go. If you did not read your history books, but looked at stock market charts you would never figure out that there was this big depression in the 1930’s. 

Since rolling over, the markets have been struggling to push higher so this is always a good sign of a bigger potential bearish move to come. 

Can the anticipated (not confirmed ) 5 waves down go to the 2009 bottom price range?. You bet it can! It can even go a bit lower, but the idea of a long drawn out “C” wave going back to the 1970s or even 1930s price levels is not in the cards at all.  The SC and GSC degree wave counters will be in their glory as they will end up being proven right if this decline is real.  Technically speaking a SC degree 4th wave could be completed so all the SC crowd must turn super bullish when this decline has fully played out 

What is dramatically different is the degree levels we think we are at. Being out, by just one degree is like being out a mile, or out by a “Fibonacci multiple”, would be a more accurate description. 

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HUI, Gold Stock Review 2011-2016

 

HUI-May-14-2016

 

As much as I hate to be bearish on gold stocks, the HUI and GDX have slowed to a crawl recently, and in order for the next leg up to happen, we need a good correction. The trouble with that is, that this decline can also give us a zigzag like pattern. If a flat were to develop, then one would stop before going to new market lows, and the other “should” make a new bear market low.  Gold stocks could fall in sympathy with the general stock market, as people will panic and sell off everything once they realize that even gold stocks can drop like a rock.

Any 5th wave down should be short as wave one is fairly short as well. Wave 3 is the extended wave. Besides the index can’t go to zero nor should there be any inverse splitting. I can get the entire gold stock bear market into a diagonal 5 waves down in Intermediate degree, and we may be finishing the 4th wave. If any decline proves my scenario right, then we have a good chance of getting a full fledged bullish phase pop out the other side, but only after any 5th wave down has completed. 

In other words, we could be looking at a move with 5 waves in Primary degree, heading to new record highs. It sure did not take the HUI that long to reach a screaming high in 2016, so we know what we can expect once the HUI cranks up again.  

It would be useful to develop a record, what the gold/HUI ratio has been, as that may be helpful in figuring out when gold stocks become expensive or are cheap. Just taking a few quick measurements today, it seems that an expensive ratio has hit 3:1 and a cheap ratio did hit 10:1, At present we are sitting around 5.75:1, not exactly an earth shattering ratio, as it is not anywhere near the extremes.

For the time being I am  very bearish on gold stocks, even though I have had no earth shattering news about insiders selling. In mid 2013 insiders were buying gold stocks left and right.   

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HDGE, Crank It Up!

 

HDGE-May-13-2016

 

I will make it short on this HDGE, but once I studied most of the other indices, this HDGE may have seen a major low, and it has much further to travel.  Again, it ended very close to the end of April, which is also the low for 2015. Now we have to look forward to the high of 2016. Markets do not travel in straight lines like I have shown, as this was drawn in just for dramatic effect. 🙂 

I have no clue to what that price will be, but what it ends up with will have to happen late enough in the year, so it has no more time to move higher. 

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E-Mini S&P Midcap Intraday Review

EWY00-May-13-2016

I also made some changes to the S&P Midcap index, as it has one of the best fitting impulse waves that I have run across.  It looks like it has turned the corner  in late April as well, so now we have to be patient to see if the trend continues.  The short story would be a 5 wave decline in Intermediate degree finishing a potential Primary degree “B” wave top. 

The only way this will work is if the rally since the 2009 bottom was in fact a bearish rally, which would make it an expanded pattern. Expanded patterns are extremely bullish after the 5th wave decline has been fully exhausted. This must be lower than the 2009 bottom, even if it is only by a few points. So if this is all real, and I’m not chasing another mythical dragon, then this S&P Midcap could end up closer to the 400 price level, when it is all done. 

Of course, anything can still go wrong and hopefully we will be alert enough to catch any big mistakes.  

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WTI Crude Oil Bullish Phase Review

 

CLM16-May-13-2016

 

This is still the June contract, but I am displaying it in line mode, which can dramatically change the wave count. It is one way to look for alternate wave patterns, and I need all the help I can get. Counting this out of what I expect may happen is not going to be a picnic or slam dunk deal, as there are at least 6 various zigzag patterns that can happen.  I eventually need a three wave bull market in Minor degree,  which ends up being one move or one “E” wave in Intermediate degree.

At this time I don’t think we are anywhere near the first “A” wave in Minor degree that I need, so hang on as this market can turn pretty wild.  It looks like a diagonal is in progress, which can move around for a long period of time, and not change direction, until we least expect it. Any diagonal can plunge without much warning and panic the herd in the process.  I look for setups that will panic the herd, as this can produce moves that force all the players to jump from one direction and then jump into the opposite  direction. Traders cannot handle the drawdowns so they are forced out of their positions. 

The big picture is that I am working a triangle “B” wave in Primary degree and we still need one major leg up to make this a reality. 

The gold/oil ratio between gold cash and the June oil contract, is about 27.60:1. This ratio is still very healthy and oil is still cheap when compared to gold.  No reason to get into a panic at this time. I will also try and post the big oil wave count review this weekend.  

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Mini SP500 Daily Cash Chart Review

 

ESY00-May-13-2016

I posted the DJIA with a new wave position for the 2015 peak as at this time that peak is the high to beat. Of course, unless we are going to slide down the slippery slope of 5 waves, that 2015 peak must not get touched anymore. This gives us a very small window of error, but being a small window can also help to eliminate a wave count.

Unless something dramatically changes the picture, I will run this wave count for the time being. This would also make the SC and GSC degree crowd happy as they finally would get their 5 waves down in Primary degree. But what if it is only in Intermediate degree? Ah, that does make a huge difference, as our price expectations would be radically different.   Five waves down is a setup for  failure to be ready for another bull market that will be sure to follow.  Chances are good that the majority of wave counters will be oblivious to this fact as they may still be chasing  SC&GSC degree wave counts.

This is an ugly wave pattern at this time with an expanded pattern for the “B” wave correction, so we still need to on the lookout for other possible wave counts.

Right or wrong, I always like to prepare readers as sometimes changing herd thinking is like trying to stop a speeding truck going down the freeway, needless to say they don’t turn on a dime.

 

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Mini DJIA Daily Chart Review: Friday, 13, 2016

 

YMY00-May-13-2016

 

Is Friday the 13th going to be a bad luck day for stocks? If anything, it’s always a good story, especially if I review my largest degrees that I have been using. I am making a big change to my wave count as this sideways choppy market has taken far too long. I can start to make an impulse fit, but it will be part of the diagonal family.  This wave count turns the May 2015 peak into the “B” wave in Primary degree, and it would push the Cycle degree back to the 2007 peak. 

This has the same effect as jumping into the future, but with a paper or electronic time machine. 

We are coming up to just about a year since the 2015 top, and from it we can at least give it 2-3 years to play out. If this is the start of the “big one”  that everyone has been waiting for, then it could still take a few years to get to the bottom. SC and GSC degree wave counters will be jumping up and down with glee, as their big 5 waves in Primary degree has finally started. Except there is one small problem with that, and that is the degree of this decline. Even though it may only be a difference of one degree level, it will make a big difference once the bottom is near. Being out by one degree is like being out by miles in sequential wave counting.  

  I will create a bigger wave count later on the weekend, but changing our thinking or keeping an open mind is necessary, as we could be in for 5 waves down in Intermediate degree. The markets can still fight us all the way, or an ending diagonal may also still form. Either way I’m going to use the Primary degree “B” wave until further notice and we have little room to move to the upside with.

With a “B” wave top it would be the first and only expanded flat top, which are very bullish wave patterns in the long run. They also don’t run that deep, but it must surpass the 2009 low to get confirmed. DJIA 6000 or bust, but all the SC and GSC degree counters may be calling for DOW 1000!  This DOW 1000 forecast will never happen!  If this crowd is setting up for another failure will not surprise me, as the herd never learns, and make no mistake about it, wave analysts travel in herds! Maybe they travel in flocks as they parrot each other   

  This also means Apple the big elephant in the DJIA room, should have much further to fall as well.  

 

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Gold Intraday Crash Review

GCY00-May-12-2016

Gold has imploded again today after a wild spike to the upside. I sure can’t count the last peak as part of an impulse, but it still may be a diagonal bullish phase.  The June contract has already pushed much further south, so that $1256 range may not hold, and it would put the potential diagonal wave count back into inventory. 

Today is a shorter commentary  as Friday may give us more answers.  I also try and keep posting on gold regularly during the week, but rarely at set times.  I would like to post on many more different things, but find I am always hard pressed for time. It may look simple drawing up wave counts, but you can spend double the time doing the research before you even get close to make the first letter or number.  I will not post most Sundays, Canadian and US holidays but occasionally review the bigger degree wave counts during those times.  

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E Mini Nasdaq 100 Intraday Decline Review: Walking To A Different Drummer!

 

NQM16-May-12-2016

This Nasdaq 100 and the full blown Nasdaq sure walk to  different drummer it it seems to be the odd one in the bunch, That is ok but it also requires that there may be a possibility of an Intermediate degree wave 1-2 already completed and we are working the slippery slope of potential wave three.  Right now we could be in a wave 2 rally, but only in Minuete degree as any wave 1 in Minor degree would still be too early.

Of course, anything can go wrong, but we don’t want to miss this because we got our heads stuck in the DJIA or SP500.  If any future move ends up crashing straight down and not go to a new low, then I would have to change my mind very quickly.  So this anticipated rally will be the key, as there may be a chance that the pattern is part of an  expanded pattern as well.

One other pattern could that the Nasdaq 100 sinks with a zigzag as the opening to a Primary degree “A” wave. That would mean that my Cycle degree wave 3 may have topped already.  A big zigzag leading into a Primary degree flat makes sense to me, but we must always be prepared with alternate tools in our toolbox of wave patterns.

My toolbox always contains a minimum of 5 different types of idealized waves, and we can combine all those to make 8 more patterns for a total of 13. Complex patterns out number the simple patterns by a 40/60 ratio. (.382/.618)  I do not consider WXYXZ waves as being any use as they hide diagonals and triangles very well.

Short term I am a bit bullish but only until this next anticipated rally burns itself out.

 

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