Tag Archives: Elliott Wave DJIA

DJIA Bull Market Reality Check

In the last week, the DJIA and other markets have kept moving higher than what my wave count would allow. Our present rally that started after the December crash is looking too much like an impulse that is just now adding a spike to the upside.  We also have an H&S pattern forming, and if this bullish phase is going to continue to new record highs, then any right shoulder that will form will not last. Of course, the opposite would happen if this bullish phase is coming to an end.

I moved the Cycle degree wave 3 over, but that may be a temporary location only. Commercials are still short, but not all by that much so future bullish moves can still happen. When exploring a new wave count it can take months in that new position before the markets make or break it.

It may be hard to swallow that an expanded move can crash this deep, and I am pushing it to the limit. The mainstream analysts just love it as the markets recover from a bear market low and are now escaping this bear market. The market is also getting close to the 200-day MA, so we will see how much power the DJIA really has.

So far the USD, stocks, and gold have been in sync to some extent, so they can all crash together as well. It happened in 2008 and it can happen again. The Gold/DJIA ratio has pushed to 19.60:1 which is still an expensive extreme by any stretch of the imagination. Right after Presidents’ Day, the markets will be at a full moon, which can also produce devastating reversals. March has been famous for major reversals and in this case, it could send the markets south.

This market bullish move, if there is more to it, must at least produce a correction and retrace about 60% of this 2019 bullish move. If down the road a complete retracement develops, then we know our present market bullish moves was a bear market rally, from an Elliott Wave perspective.

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DJIA Intraday Update.

At this time it looks like the DJIA has peaked and the big question is are we heading into another correction or was this fantastic move just a bear market rally?  Rallies that travel at this speed always seem to run out of steam and then turn and head the opposite way. I show a Megaphone pattern which can happen in diagonal moves as well. The 4th wave rally traveling into the wave 2 positions is a dead give away that we are dealing with a diagonal run of 5 waves.

The Gold/DJIA ratio is down a bit from its extreme but yet still far too expensive. I would like to see our present Gold/DJIA ratio get chopped down to 14:1 before I get super bullish on the DJIA. Of course, many fund managers are frothing at the mouth as they, scream, “Buy the Dips”. DowJones_GoldPrice   Gives you an idea about others using the Gold/DJIA ratio over a bigger time period.

The stock market dip? Keep buying, says Bank of America Merrill Lynch

That might work for short term traders, but for a long term hold the DJIA is still going to get shredded.  If the Cycle degree peak is true, then at a bare minimum the DJIA would have to crash below 14,000. Others are as bearish as I am, and I’m sure many of the wave analysts are forecasting big bearish moves as well.

 

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DJIA And SP500 Intraday Bull Market Update

 

The SP500 E-Mini has just pushed to another new high for the month of January 2019. Investors and analysts are bullish while a big group is bearish as hell. My Market Vane report is ending but this week there was only 50% bulls present which I don’t see as extreme. A 50/50 reading is not extreme enough to help determine any potential great move still to come.

I see this entire January run as a bearish rally but once the government clears up the economic backlogs we don’t have any COT reports to help us. I do have the Gold/Ratios which never shut down but are always active.  The Gold/Sp500 ratio was 2.03:1 this morning which it has been in a tight range since May 2018 which had the exact same reading.  This expensive ratio doesn’t make me jump up and down expecting another huge bullish phase to come. Cheap is a .75:1 ratio which means we still have a long way to go before stocks become very cheap again.

 

The DJIA has about the same wave pattern but looks like it has peaked already. This top may not hold as Friday’s can bring some very unexpected surprises which the markets may or may not like.

The DJIA is a bit cheaper when we use gold as a measuring stick, but it is still pushing the extremes at 18.77:1 this morning. 21:1 is the record to beat which happen in August of 2018.

We are at the end of a month and this bullish phase could be just the public stuffing or topping up their contributions for the 2018 tax year.

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DJIA Intraday Bullish Phase Update

For well over a month the  DJIA has been defying gravity. We had another peak yesterday at the 28,400 price level which is also the right shoulder of an H&S pattern. That’s just one indicator that the markets are approaching bull market resistance. Technically, this 4th wave rally can handle more, as diagonal 4th waves can dip into the previous wave 2.   Right now the DJIA is in the midst of a 3 wave move, but two more can develop, pushing to another record high! Gold has also soared during the same time period and this morning gold was close to $1310.

The Gold/DJIA ratio has not changed much as the DJIA is still very expensive at 18.76:1. That is better than the 21:1 ratio we did get and a far cry from the cheap readings of 7.19:1.  Maybe if we are lucky more government reports will come out this Friday, Feb,1, that will include some COT reports. Since Friday would be a new month other economic reports will also come out. All this could produce some very violent moves with the cold winter blast grounding flights. Grounding planes will affect their earnings as well, which could take some time before they report.

Once it gets colder in Chicago than the Arctic, then you know it’s fricken cold out.

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DJIA 1978-2019 Bull Market Review

Looking back in time always gives us a different perspective if we take the time to actually do it.  I’ve done this thousand’s of times, and each time looking for a better fit.  The common question is, “How deep or low can the DJIA fall down to”?  Since the 2000 peak we’ve had more forecasts of the DJIA crashing well below 1000 many times and yet this has never happened. In 2009 the markets sure dipped to a new low and well below the previous 4th wave of one lesser degree.  The DJIA stopped dead in 2009, but nowhere near any previous 4th wave during the 1990’s stock mania.

The reason this has not happened is that all other wave counts are calculated as 5th wave extensions. I will stress the fact that it’s, “Impossiable”  for the EWP to create 5th wave extensions lasting 2 or even 3 generations.

The 2018  peak is a Cycle degree peak which eventually has to be fully corrected before another huge bull market in stocks will start. The public will call it a bear market and the big question may be, “How deep can the DOW fall”?  We have three important turning points, with the 2016 low being just one price area that we can see again. At a bare minimum, the DJIA should slip below the 14,000 price level. Longer term, any price low below 2011 lows, will get us closer to a bear market that is finishing.

This will not happen overnight as it will take as long as solar cycle #25 has not started.

The DJIA has made an impressive short term run that, at a minimum should give us another correction soon or the end of this bullish phase.

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DJIA Bull Market Update

There is a good chance that this DJIA bullish phase is coming to an end. Investors are all waiting for some miracle to happen to give them the green light to jump on board this rally. All it takes is some more “bad news” and this market can switch by selling. Beside that many stop-loss sell orders are piled up below present levels even when we can’t see them. There aren’t too many traders that can handle a 2500+ point decline in the DJIA.

In the long run in order for this rally to be confirmed as just another bear rally, the DJIA has to decline well below the 21,700 price level. With this government shutdown, economic data is rather scarce just like with all the COT reports.  About the only truths we have are the charts and those that don’t know any technical analysis are at a distinct disadvantage.

This market rally is just a Minor degree rally and many analysts are very bullish. Getting fooled by a Minor degree bullish phase will be worse once we start a potential Primary degree bear market rally.

“A” wave bottoms in Primary degree are “buy” signals and they should last a bit longer than just a few weeks. I think it’s impossible to have double expanded tops like what all wave analysts are trying to tell us. Most are looking for 5 waves down in Primary degree which has never happened in over 18 years, and it’s not going to happen this time. The reason they have never materialized is that we are nowhere near any SC or GSC degree wave counts.

The Gold/DJIA ratio is at 19:1 this morning which isn’t that far of from a record expensive ratio of 21:1.  We have a long way to go before this market becomes dirt cheap again as a Cycle degree bear market will take more than a little dip to resolve.

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DJIA Intraday Bullish Phase Update

The markets keep pushing higher, chopping up all the bears into hamburger meat in the process. The DJIA has already gone sideways long enough to where it has broken the bigger trend line that started in 2018. I’m showing a wedge which some even call a bullish flag.  I see a wedge at this time but the DJIA can keep pushing north, but it can also suddenly reverse in a surprise bearish mood swing. Analysts will always find a reason why any asset class goes up and down but can we invest or trade with any single fundamental opinion.

Without a doubt, some analysts are very bullish when the markets are pointing up, and they become very bearish when the markets are pointing down. Only a few have the courage to be bullish when the markets make a big dip like in December of 2018. Most investors didn’t have a clue a market drop was coming in October 2018. To say that Apple didn’t see the slowdown coming is not being truthful as Tim Cook was the expert on China long before Steve Jobs passed away. Apple has a position in the DOW, so chances are slim that Apple will soar when the DJIA reverses its bullish trend.

The Gold/DJIA ratio and the Gold/Apple ratio give us a clue when an asset class becomes very expensive or cheap.

The record Gold/DJIA ratio to beat is 21:1 which happened a long time ago in August of 2018! Today we sit at 18.40:1 which still makes the DJIA expensive. Cheap would be 7:1 but that could be a pipe dream if you think it’s happening now.

I think options are due this Friday which can always cause some unwanted turmoil as well, and we will find out how committed the stock bulls really are. Usually, funds enter in January for income tax and retirement funding, and when the flow stops, stocks can make a huge plunge.  When the DJIA retraces the 21,500 price level then this rally will be confirmed that it was just a small bear market rally, in Minor degree. If any Minor degree rally can trap the bulls then any Primary degree bear market rally will trap many more.

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DJIA Rally Daily Chart Update

The DJIA is now well within 2018 spring lows which can work as resistance for a bear market rally.  Any retracement back below the 21,700 price level will confirm that this rally was just another start to a fake bull market or bear market rally. I will leave the top as is for now, until this 5 wave sequence gets confirmed. In the long run, a wave “A” in Primary degree is in our future where we can get a decent chance at a longer sustained bear market rally.  From a Cycle degree perspective, this so-called”correction” is far from finished, if the markets have a Cycle degree wave 3 top.

If we start from the 2009 bottom the following bull market was about as choppy as they come, which is very typical in 5th waves. 5th waves are fundamentally much weaker than 3rd waves are, but the majority of wave analysts think 5th waves can extend 80 years or more.  Nobody has a real clue what degree we are in but if analysts keep chasing 5 waves down in Primary degree we know that the majority think they are in GSC degree already! That logic does not wash with me, because not a single wave analysts have ever confirmed any Primary degree 5 wave sequence since the peaks in 2000.

Albert Einstein: The definition of insanity is doing the same thing over and over and expecting different results.

This is the best way to describe what has been happening with the majority of wave analysts for the last 18 years.

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DJIA Intraday Correction Update.

Last night the DJIA has started to back off from a wild bullish run which has convinced many to jump back into this so-called bull market. Wednesday is also a good turning day during a week!

Since December 2018 this move may not be finished yet if a bigger bullish move is still in progress, but if the zigzag rally is real then that December bottom of 2018 will not hold. (21,500). This move can be just a small bear market rally, and the best way to confirm that is if we see the DJIA completely retrace this bullish move.  This 2019 bullish move was a very fast move which is normal in a bear market rally but seldom can maintain the move in the long run.

This morning the  Gold/DJIA ratio was 18.40:1 which is an improvement but still not cheap enough by a long shot. I figure that at about 14:1 this market may be cheap enough to sustain another bullish phase, but at this time we are not even close. I have a Gold/DJIA ratio that made the DJIA “Cheap” when compared to gold, which was about 7.19:1.  One day in the future this 7.19:1 ratio could get beat again and if and when it does, I will turn extremely bullish.

With the shutdown no government COT reports have been issued so we only have Dec 20, 2018, as the last time the COT report has been published. At least the Gold/Ratios never shut down as they are always in effect.

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DJIA Rally Update

Since December 26, 2018, the DJIA index started on a rally and has gone on a bit longer than what I expected.  We now have 2 lower lows which are the sign of a bear market in progress. A market plunge next week, followed by another bullish run, could already be wave 3-4 in Minor degree. Of course, we can blame it all on the Apple stock price crash.

Reporters and analysts will always find you a reason why the markets are crashing and if there are 100 analysts, you will find 100 different reasons as well. It’s worse if you are following other wave analysts with the DJIA. You can do an “Image” search, ” Elliott Wave DJIA”,  and you will find a different wave count each time.  Worse yet they will fill the chart with “W, X, Y” waves or leave 5th waves uncapped. Leaving any 5th wave uncapped anywhere clearly shows that the analysts have no clue what is supposed to cap any 5th wave.

At this time I’m going to explore the possibility that we could already be in Minor degree wave 4, which could extend any 5th wave we might still get.  We are still under a “Death Cross”  so my big bearish mood is still being played out. A little Minute degree move can fool the herd into jumping back into the markets as FOMO can produce powerful moves that might make little sense when they happen. Just because something looks “Cheap”  doesn’t mean a bull market is just around the corner.

The January Wave 3 peak in Cycle degree has arrived about 50 years later than what the majority of wave analysts are telling us, so when you change a small part of a cycle degree move, you are basically creating a “Time” jump or traveling in time on paper.  This is just a mild example of  EWP time travel as it gets worse the higher degree we think we are in.

The entire wave counting world is telling us that 5th waves can extend for generations, which is false and has never been confirmed. 5th waves are the weakest waves.

The 2009-2018 5th wave bull market was all produced by flooding the markets by dropping money from a helicopter.

I keep about 28 or so Gold ratios which are impossible for me to track in detail, but I have a good idea when something is cheap to the cash price of gold.  My old record of the Gold/DJIA expensive ratio was about 17.24:1. This record was broken in August 2018 with a new extreme reading of 21:1!

The cheap Gold/DJIA ratio is about 7.19:1 which means it only takes 7.19 Troy ounces to buy one unit of the DOW.  Today this ratio sits at 18.25:1 which is better, but still a far cry from being “Cheap”. The fluctuation of the gold price is irrelevant as the gold ratios are always present and are always being adjusted.

 

 

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DJIA: Another Mini Bull Trap ?

The majority of the world is convinced that the Sept/Oct 2018 peak was a bull market top. What they don’t realize is that expanded tops are more common than what even the wave counters see.  Expanded tops also have extreme forecasting qualities built right in.  For the last 3 months or so we had a bearish phase that still has not completed. This bullish rally soared extremely fast which is common in bear market rallies.  By the end of January 2019 this bearish phase will be 1 year old already.

What any expanded pattern tells us is if the DJIA eventually crashes to 7000, then we already know that this 2018 peak will get completely retraced.  The DJIA will never crash that deep without huge counter rallies slowing it down. Often turnings happen closer to the end of a month like the DJIA is doing now.

Some compare this decline to the 1987 crash which is 31 years old. We are nowhere near those 1987 times as the markets will always do something a bit different to confuse as many investors as it can. The Cycle degree wave 3-4 is still valid and a Primary degree bear market is what is required to complete any 4th wave bearish phase.

The entire universe of wave analysts believes that the markets are in a huge 5th wave extension. One from the 1932 bottom and another 4th wave bottom in 1974.  I’m being very direct or blunt about this, as 5th wave extensions, this long has never happened in 500 years of market history, least of all 86 years long which covers about 3-4 generations or seasons. The crowd of wave analysts has been looking for 5 waves down in Primary degree for over 18 years, and not a single set has ever developed or confirmed.

Short term another new low should happen after which another rally could surprise the investors again. Until all 5 waves down are completed I will remain bearish, but I will have no problem at looking for a Primary degree “B” wave rally in 2019.  “A” wave bottoms are buy signals but it is important what degree of an “A” wave we are talking about.

All the mini or micro mini wave counting  you see is useless work if we keep missing huge bull or bear markets.

 

 

 

 

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DJIA, Just A Mini Bear Trap?

Instead of a Santa rally, the markets gave the worst Chrismas performance ever. It broke some records. I look at this during the holidays and had a sneaky suspicion a counter rally may happen. Sure enough, the markets have roared back from the dead and made up of the price it lost last week. Nobody calls the December decline as deflation, but that is exactly what it is. The USD can now buy more stocks than what it could all year.  Sure we can see some more upside but a good correction should happen as well.  Right now,  I bet we are in a Minute degree wave 4 rally that still may flop around before it resumes its bearish phase.

To confirm that this is just a mini bear market rally the DJIA  has to retrace the entire move below the point of origin, which is wave 3 in Minute degree.  The big bear is far from finished as we are coming off the biggest stock bubble/mania in financial history.  This is my third bear market I have tracked in the last 18 years and each bear market will be different. We are not going to get anything like the 2002 bear market and it will be different than the 2007-2009 bear market. I searched the internet for most of December and there is not a single wave analyst out today has recognized a 2018 expanded top.  One of the most important markets moves there are and the experts don’t see it.

Once the bigger bearish phase resumes we should start running into wave 3 and 4 in Minor degree after which we could be approaching the “A” wave bottom in Primary degree.  Any Minor degree 4th wave can contain a triangle as a triangle always forces a move into one higher degree, sometimes 2 higher degree levels. When that happens I assure you I will turn bullish on stocks.

Oil has also reacted tonight and only time will tell if it has legs to move much higher on this trip. One good thing about watching the markets during night trading is that you know all other ETF related asset class will roar in early trading sessions.

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DJIA, The Big One: 1929-2018 Review

I have been posting small charts which can make my wave positions hard to read.  The fonts may be hard to read but I will not make my fonts on the charts any bigger. Instead, I increased the chart size that I post. This chart is one of the first that are full-sized and I did a printout comparison with my original chart and found little difference. The difference might be the speed of the page loading up. If the change makes the charts clear for readers, and they make better printouts then I will try full-sized postings for the rest of the year.

Learning any EWP is impossible when all wave counting is done on a computer screen. The majority of my wave analysis is done on paper where I can take weeks looking at it before I lay down one single number or letter.

1929 was a wave 1 peak in SC degree and definitely is “not” a wave 3 peak.  Starting with the 1929 peak we have a 1-2 wave count then by 1942 the second wave 1-2 completed. After the second set of 1-2 waves is when the wave 3 can start to extend producing the wave 1-2 in Primary degree which ending 1974!  During the ’70s and early ’80s 3 back to back 1-2 waves developed with wave 5 in Minor degree really kicking in the extension.  I looked at all the wave failures during that time as the majority were all looking for 5 waves down in Primary degree. They didn’t learn anything from that but tried to repeat the same 5 waves down in Primary degree by the 2009 bottom.

I’m sure that the experts are going to repeat the same mistake in 2019 especially if you see major peaks with uncapped 5th waves. When “Any” wave analyst leaves a 5th wave uncapped he or she is sending a clear message that they have no clue where they really are!  So if we give our present decline a few more months and you are searching for other wave positions with any wave 1 in Primary degree then feel free to send me the link.

Our present peak contains an expanded pattern which is the first step in a potential flat yet to come. This flat may end up looking like a zigzag as nobody is looking for expanded tops. Expanded tops are powerful forecasting waves. For an example, if the DJIA crashes down to 7000, I will turn very bullish and will call DOW 34,000 or higher for the next major SC degree wave 3. I have at least 5 major expanded patterns in progress, so all of them will join the new bull market sometime after the 2020 elections. Solar Cycle #25 will also kick in at that time so I’m sure the stock party will return.

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DJIA Intraday Bear Market Update.

I will not spend too much time on my postings but let the charts do more of the “Talking”.  Yesterday the DJIA hit another bottom after which it rallied but also made a wild move that can only fit into a corrective move at this time.  I may be on my last 3rd set of 1-2 waves so soon this process will start to show wave 3 labels.  Wave 3 in Minor degree is the goal which could take into early 2019 to finish.

This rally should not go that high and if it does, I will have to adjust the wave positions as well. This bearish phase is  far from over, but rallies can convince the talking heads that the decline is a done deal. It all depends on the big size of this market correction is going to be. We are in a Cycle degree bear market and what we have witnessed so far, is just a wake-up call for the non-believers.

Yes, in 2018 the markets achieved world record highs and this bear market will not be over until we have achieved world record “lows”.  A big counter rally is coming but not just yet. It may take until late January or even February before this decline finishes.

 

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DJIA Index: Bears Are Still In Control!

I have looked over many other wave analysts work and I haven’t seen a single wave analyst that recognizes an expanded top. The majority will show you intricate wave counts and mostly done using candlestick settings. EWI has never used candlestick in any of their books and neither will I.  I will never post thousands of super-small or super-micro-mini wave counts as that is not Elliott Wave analysis. The crop of new wave analysts are showing you how much free time they have as they are trying to baffle us with bullshit. The Elliott Wave Principle (EWP) is basically a visual technical painting tool. They might paint you a beautiful picture but many times what they paint in their computers, they can never repeat it in freehand on a printout.

I have always done Elliott wave analysis in freehand and still do. Once 2018 finishes, I will only show the late September position as the most important wave to count from. I have Cycle degree specifications I follow and Minor degree wave positions are my most important waves. Minor degree is 3 degrees below Cycle degree. I also work 3 degree levels above Cycle degree, so I end up with a spread of 7 degree levels. Keeping the degree levels down stops us from time warping into the future. Being out by one degree can send us into the future by 30, 90 years or longer, so changing wave positions should be done “Like a Surgeon” not like some person flipping hamburgers. The more they flip numbers and letters around the more obvious it is that they don’t have a clue where they really are.

It is amazing how many wave analysts fall into the trap thinking that 5th waves can extend across multiple generations. 1932 to 2000 would cover about 3 generations (68 years).  At a minimum the markets should have crashed back to the previous 4th wave of one lesser degree, but the markets have missed this 3 times already. Yet they insist we are in a Grand Supercycle degree world.

It may take another few months into the spring of 2019, and as a rough count we can use about a month of time for each of the 3 remaining waves still to come.

 

 

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DJIA Index Update.

 

Sometimes the futures charts don’t offer any special insight. I like this index and it only moves during the day. It can take days to finish a small move and this DJIA ended on a down spike and now has roared back to life!

It may last this week but any correction in this market is far from over. The DJIA is not going to soar to the moon as it will take much more to correct the imbalances in the world. That imbalance is “Debt” and world governments are all leverage to a point they will never pay the debt off. It will be easier to default on any debt than pay it down.

The DJIA may have seen another wave 1 bottom but in Minute degree. The bearish trend is still alive and at 23,300 all support will fail. Of course, President Trump will be blamed and they are even talking impeachment proceedings.

If the markets are very expensive when we use the Gold/DJIA ratio, then I can’t be bullish for any fundamental reason.  My most expensive reading was 17.24:1, which was broken by a new record of 21:1 in early August of 2018. This morning this ratio was 19.85:1 which is better but its a far cry from being cheap. The commercials are still net long but not at any extreme, so I would also like to see those numbers reverse.

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DJIA Index Update

This is the DJIA index from Big Charts which shows some violent moves that have occurred in the last 2 months or so. Many of the asset classes I use also contain an expanded top. I look at some other analysts wave counts and they are oblivious to any potential expanded pattern.

If you see any wave count with any 5th wave not being capped then that wave analyst is “Clearly” telling you, ” I have no clue where we are”.  Even the expert wave analysts leave the 5th waves uncapped.

I’ll be pretty blunt in saying that in January of 2018 wave 3 in Cycle degree has completed and my expanded top pattern is still my best bet. We’re only in an Intermediate degree crash right now, but eventually, it will turn into a Primary degree crash.

I need 5 waves down in Minor degree which has a slim chance of finishing this year. The Gold/DJIA ratio today sits at 19.54, which means it takes over 19 Gold Troy ounces to buy just one unit of this DJIA index. This is only a marginal improvement in stock markets getting cheaper, but this ratio should change by the time the DJIA corrects from a Primary Degree “A” wave. 

All support will fail when the 23,400 price level gets breached and panic will ensue again.  So far, I have 2 sets of 1-2 wave counts completed and if I’m lucky I might see the third set. 3 sets of 1-2 waves will extend wave 3 very well, and the 5th wave can also do the same thing. First sets of 1-2 waves are always the shortest, if they are not then chances are good we have an “A” wave.



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DJIA Index 2000-2018 Review

I love to make this DJIA index using a linear setting, as it shows how wild the bull market has been since that 2009 bottom.  If the younger readers think that it’s a good time to invest then they should figure out how deep this impending bear market is going to go. We are heading into a Cycle degree bear market that will not finish with a mear 20% correction! The general guideline is that markets do retrace to the previous 4th wave of one lesser degree.

How can that work when we have no real clue as to what degree level we are actually at.  The 2016 bottom was only an Intermediate degree correction so the 2016 support level will not even get us close to the previous 4th wave. At the very least, this DJIA index has to dip into the 2007 peak, but most of the time the bottom of the markets go to the lower end of that scale, which would be closer to the 7000 price level.

I would bet that the majority of all wave counts you see out today, are a minimum of 2 degrees higher than what my wave counts are.  They still think that the 1929 crash was a 4th wave crash in Supercycle degree. This makes the bull market from 1932 to 2018 a 5th wave extension!

It’s impossible for this to ever happen as there will never be multiple generations 5th wave extensions. In this case that would be a 5th wave extension lasting 86 years already! 5th waves may be technically strong but they usually are the weakest fundamentally. The bull market from 1932 should show diagonal wave structures which they don’t. It seems that wave analysts just love to talk SC and GSC degree bear markets but to be very blunt about this, we must get a very specific corrective pattern that contains a decline of 5 waves in Primary degree.

Since the 2000 peak, no wave analysts have ever confirmed 5 waves down in Primary degree, so it is mathematically impossible for the markets to be at an SC degree top already.

Supercycle degree wave 3 and GSC degree wave 3 are still far in our future. Of course, only the younger generations will run into that because the boomers are going to be out of the picture.

Flipping numbers and letters around is not an option for me as being out by one degree can mean be wrong forever.

Elliott wave is not what we think we are seeing, as it’s all about how well we can visualize the true idealized pattern. Any wave positions in the past that looks like a simple 4th wave triangle are the simple easy patterns we can see. They are also traps for the lazy wave counters that refuse to go back in history and look for wave 3 extensions.

 

 

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DOW 30 Index 2018 Review, And The Impending Death Cross!

 

 

This is the index which does not move during the nighttime trading sessions. They also produce far better wave patterns than what individual futures contracts do which have contracts space 3 months apart.  This a standard daily chart and is the first place to look for an impending death cross. So far no Death Cross has formed but by the time the next leg down is in progress then we should expect the Death Cross to happen. My 5 waves up, ended with the late January 2018 peak and what followed fits best as part of an expanded pattern that produced the secondary top on October 3rd, 2018. What followed after the October peak was a set of 5 waves in Minute degree which ended on my wave 1 in Minor degree with a double bottom like pattern.

It has now surged further than I would like so, this calls for an instant review for an alternate short-term wave count. The big wave count has not changed at all.

Last week the Fed gave the green light based on the rate increases taking a break. I mentioned this could happen as the Fed has done this at every major peak since 2000.

Investors are not looking at technical indicators, as the Fed decisions are based strictly based on Fundamentals. Fundamentals will “always” tell you the wrong things at the extremes.

When was the last time the Fed mention that a potential Death Cross is coming? That was a trick question as they never mention technical indicators and they never will. The DOW index is getting close to the 50-day MA and may even go above it for a little while. In order for this market to soar, the 200-day MA must become support again, but once this Santa rally runs out of steam then a new record low will drive that 50-day MA into the 200-day MA line, then instantly a Death Cross on this daily chart has occurred. Death Crosses forecast the most bearish long-term moves that you can expect and the Fed has put all those fundamental worshipers into a bull trap. A  Cycle degree bull Trap!

Many good mainstream analysts also have mentioned Death Crosses so warnings have been issued.

Since 2000 each bear market that has developed got worse and lasted a bit longer than the previous bear market. Since we are heading into a Cycle degree bear market, then this decline should also last much longer than the 2001 and 2008 declines. It may not go as deep as the 2009 bottom,  but even if the DOW crashed below 2009 bottoms, it will have no impact on my present-day wave counts. Solar Cycle #25 will kill the big bear just like in 2009, but Solar cycle #25 might not arrive until 2022, some say 2019 could be the end of Solar Cycle #24 but this is far too early.

I have created a free hand idealized poster of the wave count above and I pin it on my office cork wall and take an iPhone picture of it.

 

This idealized chart starts from the 2009 bottom and will last until the 2022 bottom 3-4 years from now. Can you tell which wave 2 in Minor degree, where we could be?  This is another trick question as there is only “one” wave 2 rally labeled in Minor degree on this entire idealized chart. If the market veers dramatically from this, then a new idealized chart has to be made as well. The Elliott Wave Principle is far easier to understand if we have a clear vision of what the basic structure is supposed to look like.

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Mini DJIA Intraday Rally Update

 

In the last 3-4 days, the DJIA has been in a rally which I still consider as being a bear market rally. There still may be some upside to go but this stock rally should run out of steam this week. Chances are also good that the general decline may have to get adjusted as a diagonal wave structure, but it’s not critical at this time.  Either way, I’m looking for 5 waves down in Minor degree which should finish at a Primary degree, “A” wave bottom.  From an Elliott Wave perspective, large degree “A” wave bottoms are, “Buy” signals.

The Gold/DJIA ratio was about 20:1 which my database shows as still being extremely expensive to gold. It requires 20 gold ounces to buy one unit of the DJIA which is a far cry away from the 7:1 ratio it was when the DJIA was cheap. That day will come again, but we may have a long way to go before the Gold/DJIA ratio becomes cheap. There are still too many stock bulls around when they scream, “Buy On The Dips”!  We will get our dip, but there will be many more dips if this is a Cycle degree bear market.

Investors run from low prices in stocks, as they did at every major bottom since the 2000 peak. In the real world, shoppers rush to lower prices but they love to do the opposite in the markets. That would be the same as only buying high priced gasoline at your local pumps.  When the markets start to point down again, then they are also selling when they are in a mini-panic situation. VTX is splitting up so the internal composition of the DJIA 30 will change. If it makes a major change to my wave counts remains to be seen, but most of the time I have noticed no change.

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DJIA Intraday Bear Market Update

After the stock bears stopped for their Turkey dinners, they seemed to have resumed their decline.  At this time my wave positions haven’t changed all that much but there will always be adjustments and fine-tuning along the way.  It may take far more downside before the majority start to clue into the size or scope of the impending bear market.

When the small minority start to see the bearish scenario all at the same time then a mini panic usually occurs. Black Friday shopping and Black Friday stock market panics are not the same things!  🙂

I will keep this update fairly short, but most of the indices I cover have similar wave counts.  Trillions of US dollars has evaporated (lost) in a puff of E-Smoke already,  and I’m sure deeper losses are still to come this year.  Money destruction is hardly ever associated with “deflation” but that is exactly what is happening.  This is now the third episode of money destruction since the 2000 peaks. It’s far from over as the 2016 lows might give the markets some temporary support.

Any market rally that does not act like it’s in a real bull market, will just be another bearish rally. “All” bear market rallies retrace themselves eventually, and the size of these bear market rallies depends on the degree level we think we are in.  Sorry, but any Cycle degree bear market is not going to end in just a few months, or even in a few years, as this could take until 2022 to play out!

 

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DJIA Intraday Downside Resumes!

This is a quick update and it may be the last one before I switch to the March 2019 contract. They run 3 months at a time but the volume is still a bit light in the March 2019 contract. Since Sunday night the DJIA has started to resume its decline after the Minute degree wave 2 completed.  In this case, it is impossible to give any price support forecast, as you have to ask “Support for what”?  The support that will make the DJIA soar to new extremes, or just temporary support that might last a few weeks or so?

If my 5 wave sequence is real then wave [i] support will never hold. Any bear market rally like this always retraces its entire bullish move, and I expect nothing less.

I checked the Gold/DJIA ratio this morning and it was one of the most expensive readings yet! It takes over 20 ounces of gold to buy one unit of the DJIA, from a max reading of 17:1. Cheap would be closer to 7:1, but that will not happen any time soon.

Longer term I think the markets will crash at an “A” wave in Primary degree but that won’t happen until Minor degree waves 3-4-5 has fully played out.  I would need another 3-4-5 wave as Minute degree also needs to play out.

There still hasn’t been an extension to speak of, but I’m sure it will show up one day. This type of 1-2, 1-2 wave count can be the setup for an extended run, but the last 5th wave could extend as well.

The 2018 January peak is the real peak and the third bull market peak since 2000. Each bear market since 2000 has been worse as each bear market bottom was also one degree higher.

This bear market is going to be much bigger than the 2007-2009 bear market was even though the markets may never break below 2009 lows.  This Cycle degree bear market will be a bit longer than what 2008 was. The 1929 bear market only took 3 years, but this decline could take a total of 4 years. 2018-2022.

I can see it already when the talking heads are calling for DOW 5500, you can come back and I will have a DOW 34,000 forecast.

 

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DJIA Intraday Rally Update

 

I looked at all the peaks of the markets that I cover and there is a good case that can be made that the expanded flat was just a diagonal wave 3-4-5 in Minor degree.  Sooner or later the markets will head in the direction it wants, but it should not soar to new record highs. Bullish moves this fast have nothing to do with fundamentals as it is more likely that the “Fear Of Missing Out” and buy stops getting hit is the main cause.

With a new location of the Cycle degree peak Wave 3, we would be starting a new set of impulse waves as well. There is no Market Vane Report for the DJIA but they do have the SP500 and the Nasdaq. Those reports are not at any extreme, and matter of fact is one of the most boring reports I have seen. Even the previous Market Vane Report was starting to get boring. Extreme readings is what I’m looking for, and I didn’t see any at this time.

Most commercial hedger readings were net short but I suspect they added to their long positions in the last few days.  I will not find out until Friday nights reports are published.

I’m still bearish long term but in the short term, the markets can still go up!

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DJIA, Intraday Rally Update.

 

The DJIA finished on the upside last night, but this E-Mini contract sure reversed in a hurry.  I can work an expanded flat for last Octobers bottom but at the same time, I also dropped my degree level down by one. The long run-up sure looks like a good set of 5 waves, so we also may have finished at an “A” wave in Minute degree. In other words, we might only be a 3d of the way through this potential bear market rally. Most of this market rally was just the “Buy” stops getting hit right up to a big a previous high. The DJIA also ended with another spike to the upside and if this is still a bear market rally, then the markets will go back to creating lower lows.

I will keep the postings short today until I get a chance to review all the COT reports that come out every Friday.

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Mini DJIA Intraday Rally Update.

 

Two days ago this Mini DJIA chart ended with a nice long spike to the downside, and since then the markets have been in a rally.  Is the correction over? Not by long shot folks as the world markets are in a tailspin. If we only had a single wild crash much like 1987, then I would turn bullish much sooner. The problem with thinking about 1987 is that the 1987 crash was just a “Minor” degree crash.  This crash will be larger by 4-degree levels and has a good chance of producing a long drawn out bearish phase, which has not happened since the 1930-32 decline.  1987 was 31 years away, while the 1929 peak to 2018 is now 89 years.  I have learned not to ignore the Fibonacci 89 years as that is 1 year short of the 30-year cycle. If I use 60, 90 or 120 years, just divide those numbers into 30-year sections which I use as my time forecasts into the future.

We can be out by a minimum of 61% (.618) In price and time, so I want to be very careful when I move a big degree around in the future.  Imagine jumping 100’s of years forwards or backward in time by drawing a number or letter on a chart! Flipping numbers and letters around like flipping burgers is just like a warp jump going to Mars. It might take until Supercycle degree wave 3 to colonize Mars towards the 2041 time period. 2041 is only a “one” degree jump while many others are over 3-degree levels off.

At the intraday level, it’s a different ball game, but I look for all the Minor degree turns first. All the warnings investors got with this market top, they still think they can escape before the crowd. Some experts are still as bullish as we can get and they seemed to want to ignore the reversal of fundamentals that the Trade War is bringing.

End of the month has arrived and if this bearish market has legs, our present little price support will never last!

 

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DJIA Record High Intraday Peak Update

 

Since late yesterday, the 5 indices I cover all seemed to peak and then started a strong decline. The peak we see in this intraday chart could be one out of a million, but if we don’t locate this peak then all our wave counts will just be a good guessing game.

The majority of investors are all leveraged to the long side and it’s only a matter of time before they realize that the shit has hit the fan, and they too will start to unload. The stock bubble the world is investing in has far surpassed the stock market mania that peaked in 2000.

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DJIA 2018 Cycle Degree Wave 3 Update

 

This is the CBOT Dow index which only updates during the day. The DJIA just recently broke out to new record highs, but only by the slimmest of margins. This fits the expanded top very well so until this market proves otherwise, I will remain as bearish as I ever have.  Sure it is next to impossiable to know exactly what day this may happen, but when it does it could be a very sharp decline initially.

This may not be obvious until the DOW crashes below the bottom wedge line, after which the bottom support prices at the 23,500 price level would be next to get hit. The 23,500 bottom my supply short-term support but jumping in on that dip will prove costly.  Lucky for wave analsyts that see this coming, but the majority of investors have no clue in what is going to hit them in the next 3 years!

We have a full moon today and only 5 trading days left in this third quarter, so shit can hit the fan when investors least expect it.

The entire 4th wave correction could take until 2022 to finish, which would be a deflationary crash. All the crashes since 2000 have taken a bit longer than the previous bear market, so a Cycle degree crash should be the longest in time.  Any “C” wave bottom that ends would get us to the stock market  Primary degree “A” wave, which should produce a Primary degree counter rally bullish phase! First the DJIA has to display 5 waves down in Minor degree, as gold should go up with 5 waves in Minor degree.

The DOW now shows 2 peaks which are very obviuous, but one peak belongs to the bullish side while the other already belongs to the bearish side!

Just like big bear market rallies, small counter rallies act the same way. Every bearish rally will completley retrace itself, so not until the impending decline starts to exhaust itself will it be safe to take a small bullish position.

The VIX is also getting excited as the COT commercial traders are clearly bullish in the VIX! On any of the US indices, the commercials are net short, so a big leg up in stocks is not what I see that is about to happen.

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DJIA Picture Of A Bubble!

 

Once in a while, I like to post the DJIA with a linear chart setting, as that really shows the all-time history extreme stock mania. This mania will end in a major market decline, which could last well into 2022, or after solar cycle #25 starts. If readers think stocks are still going to the moon, or that Facebook is a “buy” then you have little idea about the shit storm that is coming. Investors always forget previous bubbles as it’s, “Always different this time”. They think it can never happen again.

If you take the 30-year cycle serious enough then count backward 89 years from today and we get 1929, off by one year. Cycles repeat and 89 is just one year off a perfect 3 sets of 30-year cycles.

We are definitely not at some imaginary SC, or GSC peak as modern wave analysts seem to be able to time travel into the future with a click of the mouse! If I did that, I sure wouldn’t time travel into the future, I would rather time travel into the past. We can’t flip numbers and letters around like they were hamburgers, you have to treat every position change much like a doctor handles a heart transplant or operation. There are very specific wave counts that must be confirmed if we are in SC degree in 2018.

Some little correction is not going to fix or deleverage the world, as it will take a 70% correction or more. Any stock market crash is deflationary as even in 2008 nothing was spared except for the US dollar. The boomer generation is retiring at a rate of 10,000 perday for the next 19 years! They are going to be busy on cruise lines not beating on their screens or trying to make a “long term” investment.

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DJIA 1980-2018 Review

 

I made this chart up yesterday and started the count from 1980. From a Cycle degree perspective I need to see or use three degrees below any Cycle degree, otherwise I break the sequential chain. The EWP is not what we see, but is what we are supposed to see if we followed the blue prints or our perception of one. I know there are wave analysts out there that have detailed wave positions, but they have no real money behind their convictions. I can see the most elaborate work but if they miss a stock market crash, or worse yet miss an entire 10 year bull market.

If you see any expert wave counts that do not have every single set of 5 waves capped at all times, then that analysts is spelling it out clearly that he has no clue where he is! If you see a question mark or some “X” wave,  then they also don’t know where they are.

I’m sure not a single wave analysts can draw the simple 5 waves and an extended wave 3 if they were to be tested. (With no Book) If we can’t draw our 5 simple corrections and how they fit together, then how in the world do we know what we are supposed to be looking for.

Intraday wave counting is required for the day traders as I only need to know 3 degree levels below Cycle degree and three degree levels above Cycle degree.  SC, GSC, and Subillennium wave 3 are all ahead of us still many decades away.  There are 30 year cycles always in affect and we can count backwards from our present 2018 top. 89 years, 1 year less than three, 30-year cycles, is also a Fibonacci number. 2018 minus 89 years, gets us back to the 1929 stock market peak, and we all know what followed.

From 1929-1932 it was a three year crash and bear market, that contained a zigzag that stretched much longer than any zigzag ever shown in the EWP book.  If it happens once, it can happen again so now I count with super long “C” waves at the smallest degree level.

This chart is still well below the January peak so a potential expanded pattern is taking place. Even the SP500 which has traveled to new record highs is still part of the single expanded flat I’m tracking.  When it pops is never an exact science, but it sure will surprise all the investors when it does. There is a huge deflationary crash coming just like 1929 and 2007, and no asset class will go unscathed.  A market crash sending the DJIA back to 15,000 for starters would fit very well from my perspective.

I think late 2022 will be a major bottom, but after solar cycle #25 starts to crank up! It’s solar cycle #25 that will save the stock market, so if you have any bearish thoughts and bearish positions at that time your bearish view of the future will be destroyed.

Investing at a record bubble high has trapped the majority all the time. They always tell you to stay invested for the long term, just before markets crash 70-89%!

Needless to say, I’m very bearish on stocks but I also know that a huge bear market rally is going to kill the bears off again.

I will not be investing or trading in the general markets, as the gold sector is my speciality where I have enough experience with.

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DJIA Mini Daily Chart Review.

 

I will be avoiding the actual contract months as much as possible as the real trades can distort wave patterns that are not real. Switching between bar and line mode will tell you that, as there are different wave counts between the two.  I try and always confirm my Cycle degree connections by 3 whole degrees lower, which is the same as being three steps ahead of the crowd.

This DJIA chart has not scored new record highs like the SP500 has done, so it still fits my expanded top very well. The rally that started in April is about as choppy as they come, and is usually an indication it’s fighting against a larger bearish trend.  Gold has done about the same pattern already!

The Gold/Dow ratio is at 21.56: but we  have to reverse this and think it takes over 21 gold ounces to buy one unit of the DOW. Expensive was over 17:1 and at 21:1 it is the most expensive ratio I have for 2018.

Investors around the world are in a government-created inflated record stock market high, all based on free money.  Governments are doing everything to keep this inflated bubble growing. It’s not the size of the bubble that’s really the issue, it’s the size of the “needle” that will prick it which will be the problem! Is Italy going to bring the entire world down or is it going be China or even Japan, as they have gone on a record money printing spree in their entire history. Deflation is in our future not inflation, as the US dollar is in a massive bull market that nobody even believes that it can happen.

Just watch the gold price for the next three years, and you will witness deflation first hand.

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