Tag Archives: Elliott Wave SP500

SP500 Intraday Peak Review

Investors had a bit of downtime on Monday but the SP500 peaked out on Friday, January 18th.  Since then the SP500 has been slowly grinding down. The entire move since late 2018 sure fits into a 3 wave move which can be just a bear market rally.  On Sunday we also had a full moon which can act like a bull trap at certain times.  The world sad state of affairs will not get fixed with just a short correction as it will take years to unwind the deep debt that all governments are presently in.  At the 2680 price level, we also have a very tall H&S pattern being set-up which would be very bearish if the bear market rally is real.

The trend lines are there as it also looks like a rising wedge at this intraday level.  Not until the SP500 crashes well below the 2580 price level, can we still be in a bigger bullish phase?

The question I always have for the stock bulls is, “Where is this bullish phase going to”? Is the “bottom in”? Is it a bottom for a return to a multi-year bull market?  I’m looking for a bullish phase as well, but this is not it no matter how bearish the stock bears become.  Insiders would also be buying their own shares back and I don’t mean using shareholders money to try and manipulate their own stocks.  Buy-backs manipulate earnings with only a temporary effect even though they waste shareholders money. Companies that pay dividends or buy their own shares back are sending clear signals telling  you, ” We  have nothing better to do with investors money”.

Apple fits that description very well and once it started paying dividends under investors pressures, its innovations declined.  When we read countless stories about insider buying their own shares back then we might see a potential bottom for a big bullish move. Insiders did this on a massive scale in 2008, and they do not buy on a whim, and they most certainly don’t sell on a “Whim”.  A bottom with insider buying lasts much longer so if you were still bearish in March 2009 you will be left holding a wooden nickle like all the wave analysts did.  Thinking back to 2009 can give most investors brain cramps as researching that far back sounds too much like work. Talking about the market peaks in 2000 would be 18 year ancient history.

Solar Cycle #24 was underway by early 2009 yet all the wave analysts ignored this fact as in 2009 they all had very bearish wave counts. The wave analysts that are still chasing 5 waves down in Primary degree are living in La-La Land as they have learned nothing in the last 18 years!  Expert wave analysts are also telling us that 5th waves can extend 50 years or more which I think is impossible as 5th waves always contain the weakest fundamentals. Besides that, not a single 4th wave bottom in 1932 or 1974 have the markets ever retraced back to. The reason this has never happened is that 1932 was not a 4th wave bottom in SC degree.

2020-2021 could see the arrival of solar cycle #25 and being bearish when a solar cycle starts to crank-up will put investors right back into a bear trap much like early 2009!  Solar cycle studies were in the books of EWI, yet at that time they ignored solar cycles just like they ignored insider buying.

 

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SP500 Intraday Update

So far the SP500 is keeping its bullish trend while the VIX created a huge decline.  I have only one trend line which the SP500 is starting to cross or roll over. Any bigger dip will help confirm that the SP500 could be losing it’s power, as buyers take a rest. Markets are just big auction sales which always gets sold to the highest bidder and I see the markets reacting the same way.

I can’t get a correction out of the VIX as it looks like 5 waves down. I’m sure the VIX will crank up again as the VIX could be on a “C” wave decline.  All this might still take the rest of the week to play out, as little choppy waves stretch time. US government shutdown has killed any COT reports and once the government gets up and running again, we could get a COT “Data Shock”. My last report will be a month old by January 20th so positions could make dramatic shifts when it gets released again.

The Market Vane Report I still get is a private report, which shows that 47%-48% bulls were present all last week. There are still too many bulls around to keep fueling this bullish phase for another major leg up. Our 24 month high was 73% bulls, which is not as extreme as it can get, but enough to kill the stock bull. The basic logic is when the majority are bullish then who is left to get in. Is it a tribe that just came out of a cave or just another greater fool chasing a bull market? FOMO is a popular bull trap

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SP500 E-Mini Daily Chart Update

I will stay with the big wave structure until this wave count shows me otherwise. Fast moves like this tend to never last that long as most moves like this are just emotional moves. FOMO or unstable algorithms producing flash crashes is part of the landscape that we can’t avoid. The SP500 is starting to flatten out a bit so it’s just a matter of time before some mentally unstable algorithms start to freak-out.  I’m just having a bit of fun here as algorithms are not human but very few people can tell the difference. Algorithms are created by humans just the same.  Traders can’t move as fast so spikes are produced which usually develop at turnings.

The bigger the spike the bigger or longer any counter rally will last. Since the 2018 January peak, we’ve had more spikes that we can count and each one produced a reversal.

In candlestick form, you would have to count all the “Hairs”, (Wicks) and always know the price of each “hair” tip.  If this rally is a bearish rally then a new low below 2040 should happen. Many analysts are very bullish at this point, but they were also bullish at every major top we’ve had so far.

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SP500 2000-2018 Review

The debate about what degree level we are in continues, as the majority of wave analysts all have different wave positions. The Elliott Wave Principle is not what you think you are seeing, but it’s what you visualize what the idealized pattern is supposed to look like. Every major wave analyst has 5th wave extensions when in fact wave 3 does most of extending in the stock markets. About 5 years ago I switched to looking at the markets from a Cycle degree perspective because I also tried GSC and SC degree for many years.

The 2000 peak is an Intermediate degree peak while the majority have the 2000 peak as a GSC peak or SC peak. An intermediate degree is a minimum of 4-degree levels lower than every major wave analysts has today. Most wave counts published today are nothing but a “Dog and Pony” show or a great “Smoke and Mirror” magic act. Elliott Wave is not about flipping numbers and letters around like we are flipping hamburgers, but it’s more like being a surgeon where you must think out any moves with great care.

Every number and letter also represents time,  so when I see switches being made between a GSC and SC degree wave count we can jump 50-100 years into the future without realizing it. Cycle degree is basically jumping back in time which puts any SC, GSC and Submillennium degree in our future. The 2000-2002 decline took about 30 months while the 2008 decline only took about 17 months. That’s a big difference and is mainly due to the type of corrective pattern we get.

Before we ever get there this market has to suffer through a bear market for a few years before a new major bull market will start. This may take until 2020 or after the US elections before the markets start to crank up again. Every major bull market peak for the next 100 years will terminate with a wave 3 position and since Cycle degree wave 3 is used, the next major peak will be wave 3 in SC degree.

Our present bearish phase can still last into the spring of 2019, after which we should see a rally in stocks that will convince the majority that the bull is back.

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SP500 Mini Intraday Update

A few days ago some analysts have declared that a bottom was in. They were very bullish but this chart would have to soar soon for the stock bulls to be in control.  I doubt anybody is in control right now but once this E-Mini SP500 chart breaks below the 2590 price level then we know that the bears are in control.  Those reporters that are still super bullish are going to find out the hard way which direction this market is going to head.

Commercial traders are net short, but not at any real extreme just yet.  There is a slim chance this 5 wave pattern I’m working, will finish by the end of this year. It may take until February or even March to clear up. We know that January can be a critical month but March has also produced some amazing reversals.  The Gold/Sp500 ratio is 2.13:1  which is still off the charts for being expensive.

Some asset classes are in a funk as some investors are still undecided.  It could take very little to get a herd into a panic.

 

 

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Mini SP500 Daily Chart Death Cross Update

 

With the wild moves going on in late trading this March 2019 contract charged up and then down again when the bears attacked again. This time the 50-day MA sliced across the 200-day MA which is the classic technical indicator called a Death Cross. I have a slew of Death Crosses forming and now we have another one. These Death Crosses forecast long-term declines and the Death Cross on a weekly chart is way down at the 2340 price level. My best bet is that any wave 3 decline could slice right through that price level with ease. This fast drop could have ended at my first wave 1-2 in Minute degree then I would only look for 1 more set in Minuette degree. I might need an electronic scanning microscope to see the smaller waves. If the wave three extends then even the 5th wave could extend so this bear party is not over by a long shot. Don’t blame President Trump for all the problems, as it was the Fed that took the alcohol away from the stock partygoers.

This is nothing new as I watched different Feds do the same thing twice before since the 2000 peaks. Since late January, we have 4 bottom support prices showing, and each one of them will get trashed, or rectraced. That would also confirm that from that February bottom up and down again was just part of a bear market rally.

All those misguided investors that just finished putting billions into the markets are now sitting on a Death Cross. Think of anything above the 200-day MA as a group of partygoers all standing on a porch and there are too many on the deck! When the deck legs buckle and snap, then it’s too late to do anything about it. Not too many people listen to a technical analyst, but investing blindly right before the Death Cross is strictly FOMO driven so who cares about some mythical Death Cross!

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SP500 Rally Death Cross Review

 

So far the stock rally has performed in the last part of November, but that doesn’t mean it can’t stop on a dime and reverse. So far the counter-rally was a little more dynamic than what I  expected but it will still fit as a bear market rally.  This year we have had about 5 bottoms at various price levels, and if the bigger bearish picture is real then there is no chance that any of these bottom prices will hold. Prices rarely ever hold for very long but a good wave count bottom can.

Sure we could see this move turn into a year-end bullish party and we have to wait and see if this becomes the case. The Gold/SP500 ratio is about 2.25:1 this morning which is still about as expensive that we can get.  One ounce of gold can only buy 2.25 units of the SP500, so we want that number to spread as stocks become cheaper. Just because they did get a bit cheaper doesn’t mean a bull market can keep it going.  Another super leg up is pretty hard for me to accept as nothing is oversold from my Cycle degree perspective.

 

 

I applied the 50-200-day MA lines to this daily chart when the 50-day MA is going to cross the 200-day MA, which they call a “Death Cross”. Investors should never ignore these crossings but I know most of them to do, as they are fundamental analysts first.  The 50-day MA can now supply resistance, so combine that with the “Death Cross”, we have a very bearish situation going into 2019.

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Mini SP500 Intraday Rally Update

 

Obviously, the bullish crowd sees the midterm elections as a positive thing, otherwise, the markets would have tanked far sooner. Wild bullish charts like this virtually look vertical on a daily chart, so a correction should be near. If the bigger trend is bearish then a complete retracement of the October bottom will happen. We also have the potential for an H&S top, which the SP500 is running up against. This is a classic textbook retracement move, but we have to see if it’s real!

This is the E-Mini SP500 COT report that shows the commercials having a bearish outlook, while the speculators are in a typical inverse position. Speculators or managed money always seem to get trapped as they are not the smart money crowd that media makes out to be.

 

On A different note, the pages read on this blog have exploded dramatically in the last 3 days, as over 6000 pages were view in a 24 hour period. I was set-back by these numbers but it may be just due to many people being off work and voting. It’s nice to see these numbers, but only time will tell if it’s not just a freaky one of a kind type of move.

I will not post on Remembrance Day for obvious reasons as I take that day very seriously.

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SP500 E-Mini 2000-2018 Review: Bear Market 3.0

 

 

I thought I would post this chart to show that there is also a huge wedge at play in the markets as well. Call it a reverse Megaphone if you, like but the recent bearish moves are up against a big support trend line that is going to fail. The 2007 peak was much smaller and sure added to the confusion, if 2007 was a “B” wave top or not. Join the Primary degree wave 3 with the Primary degree wave 5 (Jan 2018), The same parallel bottom trend line might give us some support, but eventually, that trend line should not hold as a Cycle degree bottom would trash the Primary degree trend lines. Analysts are worried about some 10% or 20% correction before the markets soar again. I’m sure they will argue for years trying to sort out the 3 tops in this SP500 chart.

It took me years, and not until I switched to Cycle degree wave analysts over 3 years ago did things start to make sense and fit better. I will never switch to a higher degree as that is happening by itself already!  We are lucky as every major dip only took about 5 years or so before new record highs were achieved again. Supercycle degree wave 3 could take much longer, to surpass our present peak of 2900.  We have 2 major price support levels that very few think can even happen, but more and more are joining the bearish trend.

Things have changed dramatically since the January 2018 peak as the moods have turned bearish. Just because the stock bears are shredding bullish investors accounts does not mean a contrarian buy signal has arrived. I will remain bearish, until at least a potential “A” wave in Primary degree arrives, and that may not happen for months. Commercial COT reports show that they are net short in most of the 5 indices that I cover. Until they start to build net long positions a real bottom is going to be hard to justify. Bear markets and crashes are just part of bigger bull market corrections just like the 1929 crash has demonstrated.

Since 2000 this will be the third crash I am attempting to count down and chances are it will be my last one. My goal is to get most of the indices down to a Cycle Degree wave 4 bottom, but after that, this blog may shut down.

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SPY Crash And Impending Bear Market Update!

 

 

 

This SPY ETF is one of the most popular single ETFs that traders and investors use. Last week we had well over $70 billion traded in just one single day, so when the SPY heads down you can bet there is going to be insane volumes show up. The real top was in January 2018, not 8 months later that the majority use.  An expanded top is not some rare top as they do happen at smaller scales. Most wave counters ignore expanded patterns, but I try not to. Some peaks are impossible to sort out in the beginning, but we should get 5 waves own in Minor degree.

What we had last week is just a little wake-up call, and once investors see the SPY to continue to crash, they will no longer be as eager to but SPY ETF stock!  The $250 price level may give us temporary support but that should not hold in the long run.

Hopefully, we can find that “A” wave bottom in Primary degree, as that would give investors a better support base to work with. Again, if those analysts are calling to buy on the “dips” then those analysts have no clue how deep this bear market will eventually get. No wimpy 10%, 20% or even 40% correction is going to do the trick, as that will never make a dent into this leveraged world.

Real estate is the most over leverage asset class you can imagine, and it is even worse than the leverage with any 100-ounce gold futures contract. Give this big bearish phase 3-4 years to play out, but watch for the ending of solar cycle #24, and the start of solar cycle #25, as that will produce the next bull market.

The last thing we should do is to remain bearish when solar cycle #25 starts to poke through the northern hemisphere on the sun.  No trend lasts forever including bear markets, but if you’re not following the solar cycles now then, you will gain no confidence, once 2008 like bottom arrives again. Solar cycle #24 produced this bull market and 2022 should get us close to another exact same set-up!

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SP500 1980-2018 Bull Market Review

 

The 1980-1981 time period was a pivotal year of some major turnings. In 1980 the gold price peaked and then crashed, while stocks were ready to soar. Stocks soared for a 20-year run until the dot-com bust in 2000!  The year 2000 was just an Intermediate degree wave 3 peak and followed by the 4th wave bottom in Intermediate degree. The 2007 peak was weak, and just barely fit into wave 3 in Primary degree. During the 2008 crash, nothing was left unscathed, as all asset classes took a beating, except for the US dollar, as it exploded in price during that time. 2008 was only a Primary Degree deflationary crash, but since the January 2018 peak, we are facing a Cycle degree wave 4 crash that will make 2008 look like a garden party!

Any crash will not happen in one move but it will take 3 moves to complete and should be a longer decline than in 2002. It should also take longer for the Cycle degree crash to play out. This will be my third bear market crash I will be counting out, which looks like it contains an expanded pattern, that most wave analysts, ignore or they are not watching for any of these expanded flat patterns to occur.  The Intermediate degree “C” wave decline should stop at the “A” wave in Primary degree, which could see a move down to the previous 4th wave. This still could take the rest of the year to play out.

2022 will be the expected bottom, which could end up well short of breaking new record lows. Megaphone and single trend lines are pretty useless in forecasting a bottom, as the markets will always try to fool us, doing something nobody expects. 2008 was also a solar cycle #23 bottom which was the main power that sent the markets soaring again.  Most big market crashes happen 1-2 years before a solar cycle bottom, and the exact same situation will be setting up by 2022 when solar cycle #25 starts to crank up. If you don’t think that the sun affects the markets on earth then, I suggest you do a few hundred years of research as it has happened many times before.

1932 was another one of those times, which makes 2022 a 90-year bottom. (3, 30-year cycles) 30-year cycles dominate the commodities world, and to some extent, the stock markets also have this 30-year cycle. The world has been building into the most inflated world in financial history, much like the 1929 time period.

The demographic shift of the aging boomers is going to be the main reason why deflation, and not inflation will be the real threat. Since 2011, 10,000 boomers are retiring every day, which should continue until about 2030. It’s not rocket science, what these boomers have to do as they will not leave their money tied into stocks, and they will have to start selling off their investments. Boomers already took a beating in 2008 but were told to stay in it for the long term. Yah, Right! Who in their right mind can handle a 70% or 80% stock market crash?  Nobody can build a “bullet proof” investment portfolio, unless you can jump into cash, in a very short period of time. F.O.M.O keeps investors in the markets until they are so scared and ready to throw in the “white towel”, when the crash starts to get serious.

When that happens then chances are very good that the markets will turn and soar in another 8-13 year bull market, with 2029 being a potential Primary degree wave 3-4 correction.

 

 

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SP500 Record Top Update.

 

 

Stocks seem to find no real top as records are still being broken. Investing in at the top of the biggest bubble in all of financial history, is very popular.  Investors seem to ignore all the fundamentals with a “who cares” approach.

The biggest and worst advice we are getting is, “Stay in for the long run”. At every major top like 1929-2000,2007, 2018 they always coach you to stay invested for the long term. Tell that to the investors that got wiped out during the 2008 crash, or the 1987 crash.

Stay invested and keep buying the dips, as this market has a long way to go, is the general advice. Only the very inexperienced can do that, but for the millions of boomers retiring it would be financial suicide to stay invested. 10,000 boomers are retiring every day for the next 19 years, so where is all the money going to come from that will push the markets to the extreme? The world has a Titanic anchor of debt hung around their necks and they will get thrown over-board the first time the SS SP500 springs a leak!

The expanded pattern I show, is not just on one index but we can find it in the top 3-5 indices. This expanded pattern would just be a lead into the bigger “A” wave bottom in Primary degree, that is sure to come.  Every wave analysts would be screaming to get out if they new how deadly this pattern actually is. We will know only when it hits, as something will set the herd of investors into a panic.

The VIX tells us that much already, because commercial traders are about as bullish with the VIX as you can imagine, while the speculators are in another bear trap with the VIX. When it changes then expect some violent moves in the VIX as we have seen that happen many times before.

As long as all the expert wave analysts don’t see this expanded pattern their wave counts will get trashed. If all wave analysts don’t see this crash coming then what good is all that wave counting? They sure could not hit the 2009 bottom as that was screwed up as well.

 

 

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SP500 2000-2018 Review

Many smart analysts have compared ourpresent 2018 pattern to the 2000 peak pattern, and yes they look very similier. The valuations today are about twice as much today as when the dotcom mania of  2000 imploded.  Will it implode again? Of course it will, this hyped up, max leverage world is going to reverse and deflation is going to ravage this world which we have not seen in 100 years. Any asset class that is not secured or protected will take a hit as prices will start to crash.

This is going to be a Cycle degree wave 4 crash, just like gold and since part of a flat is the same as part of a zigzag, I can see the markets syncing up with gold later this year.

Gold and stocks may even rally together once we start on the “B” wave rally in Primary degree.  Then gold and stocks will dance together in a 1-2 year decline that could send the sp500 down to 750 and gold below $500. Sp500 below 1500 is the bare minimum and that just gets us into the previous 4th waves, not even near any bottom.

Gold should dip well below $800 and when this gold price stabilizes bit then the markets should not be too far behind gold. We could see a wild triangle rally in both SP500 and gold, which will seal their fates for the 5 waves down in Intermediate degree.  The whole world is invested sitting on top of Death Crosses, so it will be a big deflatioary crash that not to many investors think that can happen. Gold will always have 30 year cycles, so the markets will just weave in and out during the same time period.

Why such a big deflationary crash is coming, is due to the world wide fertility rate decline, which has been in full swing since the 1950’s. Birthrates also crash after each stock market crash so smaller and smaller generations numbers are being born. This has happened many times and most notable in 2010 when I read a fertility crash after a market crash.

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SP500 Intraday Top Update!

As we can see the Sp500 made a quick reversal today which could hold.  All bear market rallies get retraced so I hope investors are reading this as a bearish rally. After all no new record highs have been recorded in the SP500 in 2018.  Any wave 2 rally in any degree is a bear market rally so this move should clear all 2018 lows. I cannot stress it enough times and that is. I am swamped with Death Crosses below present prices in just about everything except for the US dollar. Major metals as well, which means it’s all going down together! This setup feels just like the top of 2008 and the following gold crash down to $700. This all spells extreme deflation is coming our way and any asset class that’s not safe and secure will suffer devastating price declines. The inflation party is over as most world currencies are imploding making the USD the place to be.

Real-estate prices should take a major hit in the next three years leaving people trapped in their homes as the price of their homes crash. Just checking the futures lumber prices, they have been on a crash course, which the ETF (CUT) also confirms. International Forest Products (IFP) a company that I worked for most of my working years also has a crashing stock price.

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SP500 Bull Market Or Bear Rally?

Getting tired of this so called “bull market” yet?  This market has been keeping us confused as to what direction it really wants to go. Price is never going to tell us anything useful  becuase if it did, every average Joe and Jane investor would have been buying everything in sight at the 2009 bottom.

Many think this is a bull market because its still  going up in price. The sad fact remains is that there are always bear market rallies at every degree level. If the experts don’t know the diffrenece with a Minor degree counter rally, then they sure are not going to know when a  Primary degree bear market rally is in progress.

The rally for the last 2 months has been frusturating to say the least, but what stands out is that this rally is going against the bigger trend.  I just had to draw in the wedge which is another very useful indicator when used at the right time.  A potential “C” wave bullish phase could be finishing off, so investors are going to find out the hard way about the effects of a bear market rally once it resumes its bigger trend.

There is always a chance one more dash to the upside will happen, but I think this market is running on fumes. The 2550 price level doesn’t have a chance of holding, as any wave 3 declince will just rip through that support range with ease. To confirm any Minor degree run be it up or down, this wave two peak needs 5 waves down in Minute degree to help us identify the location we think we are in.

Not until we get another push to the downside, investors will remain oblivious to the depth of this impending bear market.  If we don’t suspect that a Cycle degree correction is coming then all support forecasts will be useless to say the least. We have to be open to the fact that any opening zigzag requires a 5-3-5 run so we have a long way to go. Another 4 months or so will get us to a potential bottom by September or October. Any counter rally at that time will also produce another fake bull market.  It may seem a bit long in this counter rally but I have no doubt that this could all pick up in speed in a dramatic fashion.

As each stage happens then they all help in pointing us to where we are in the bigger picture. Talking about any move early is the key because after it happens, its pretty useless information. Fears of a depression will be in the news but markets do the opposite of fundamentals like they did in March of 2009.

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SP500 2009-2018 Bull Market Review

This is the index for the SP500 and does not move during the night trading sessions. I will try and only use two types of  trend lines with both trend lines being even. In this case the trend line is based on the top trend line and then it is duplicated with the bottom trend line. At times I do add a third parallel line in the middle as it can track trends that are one degree lower. I don’t believe in this perpetual bull market going on forever as “ALL” trends always come to an end, and they come to an end when nobody expects them to end. The herd of investors that surged in last week, are already losing money. They have been brainwashed to buy on the dips, but they are buying on the dips for what?  They are hoping for the bull market to return which tells me that they have no clue how deep this next correction will be.

The monthly ETF outflows have not slowed down last month.  ETFs Register Outflows For 2nd Month In March | ETF.com Those that are selling seemed to be more knowledgeable than the investors jumping in, so this does not send any overwhelming bullish messages to me. It all depends on what you believe, what the peak 2018 stock market wave count is, because that determines on how deep this market can eventually go.

I’M looking for a Cycle degree correction, not just some short blip in an ongoing bull market. At the very minimum any 5th wave will get retraced, and that might be the end of the correction, if we just finished a wave 1 in Intermediate degree. I have seen wave counts that called the 2009 bottom a wave two in SC degree, but then we would have to be at a wave 1 top in Cycle degree now! The markets are not ending in a wave one, they are ending on a 5th wave, and a very choppy 5th wave it was. In an entire sequence of 5 waves, the 5th wave is always fundamentally the weakest, even though they can extend and look very strong.

The majority of all expert wave analysts are working from a 4th wave base. I think it is impossible for a 5th wave bull market to survive three or more solar cycle seasons. The SP500 didn’t show any triangle between the 1970 and 1974, but at that time period, it sure fits into a wave 1-2 in Primary degree.

In our little “Blue Book” (EWP) a big correction can crash back down to the previous 4th wave of one lesser degree, and sometimes they travel a bit lower like the 2009 bottom did. To even get close to entering any part of the previous 4th wave of one lesser degree, this SP500 chart has to go below the $1576 price level.

If nobody knows where the previous 4th wave of one lesser degree is then even that forecast will be worthless and irrelevant. Since 2013 my goal has been to hunt, find and confirm all the 5 waves in Cycle degree. Until the 5th wave has been found and completed, there is no mathematical chance to slip into the world of SC and GSC degree wave counting. Every letter or number we change sends us traveling forwards or backwards in time. When we are counting in SC degree, then we’ve made a time “jump” from Cycle degree at the same time. In short a SC degree world is in the future and its’ forecasts mean nothing in our present day Cycle degree world.

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Mini-SP500 Intraday Gyrations Upate

At this time it looks like I will have to run different wave counts in about 3 out of 5 indices. The wave counts are dramatically different with the tradeable contracts than from the indexes, which only move during the day. Futures that are traded have a wild and wooly look and feel that can distort the wave counts.  It could all smooth out a bit, which I have noticed in other future contacts as well.

This Mini SP500 contract did not travel to a new record high which I can’t use as a truncated 5th wave, but it must belong to the bigger bearish phase already.  There could be some real violent moves in both directions later this week as any Fed announcement can send markets into a dizzy spin.  I will not be happy until this market takes out all the lows of last month, but it could rest just before any downside breakout may occur.

Wave 2 in Minor degree may be finished and I’m sure I don’t need to draw out the rest of the move. By weeks end things could be different if diagonal wave structures are involved. It’s still too early to tell if a big flat or a big zigzag will dominate, but the big triangle can still be ignored at this time. We don’t have enough time before solar cycle #25 starts, for any triangle to completely play out.

I’m bearish no matter what we get, even though I may turn bullish at some counter rallies.

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SP500 Intraday Rally Review

This week may be the last week, that any March contracts will be finished, after which I have to jump to June contracts with most of the indices I cover.  From Friday’s decline the markets found some joy and soared in hopes things will not be as bad as it seems. As long as the media is conducting a trade war, the chances for the markets to go down outnumber and reason that that this market should go up!

Trade war fears are not going to go away, as this kind of action has worldwide domino repercussions. 30-Day Fed Fund rates still have downside potential, which means that rate increases, are still to come during 2018.

We need the markets to clearly show lower highs, but these can happen in any 4th wave as well. This is what happened in the  2015 correction.  If another small degree wave 2 rally is in progress, then the SP500 cannot go higher than my “B” wave in Minor degree.  (Blue).  This “B” wave I’m showing is the start of a potential zigzag in intermediate degree.

This would be the start of a Cycle degree zigzag wave 4 correction, which the majority of analysts will call a “bear market”.

We can have market crashes without the bear market, as that is exactly what happened in the crash of 1987. The 87 crash was over in a few short months, but it sure will take longer in today’s markets. The 87 crash was only a Minor degree wave 3 crash, which the majority of wave analysts have used as a Primary degree crash. My 1987 crash Minor degree wave count,  is a “Full” 2 degrees lower, in what the experts have used.

These contracts that trade during the night, do produce some erroneous spikes that don’t show up, when switching this chart into line type charts.  The markets are still heading higher as I post, but we can take a bit more. We just can’t clear the “B” wave in Minor degree.

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Mini SP500 Intraday Crash Update!

I’m showing a Minor degree “AB” wave with the “B” wave ending just before the end of February. This was also a full moon date and the news about the president Trumps war on cheap imports, became front blog page news.  They couldn’t find a fundamental reason why the markets should crash as all the fundamentals were still bullish.  They sure have their fundamental reasoning now!

Fundamentals are lagging indicators not leading, indicators so any bearish news would pick up the declines intensity.  This “B” wave that I labeled, would belong to a set of diagonal 5 waves down in Intermediate degree, which can only work if this Cycle degree crash turns into a zigzag. I may run this for the month of March, or until it gets trashed, whichever comes first.

The recent talk about steel and aluminum import duties that president Trump has started, has brought this to the front pages. This has all happened before folks. The Smoot-Hawley Tariff Act of June, 17, 1930 was the last time a tariff war was conducted and it was one of the main causes of the 1929 crash and 193o-1932 bear market decline. At that time the markets gyrated everytime the Tariff Act was discussed in Congress, which was well documented in the book on “How The World Works” by Jude Wanniski.

Will this all produce a “depression”? I say “no” because in order for that to happen the US dollar needs to charge up into a major bullish phase and all stocks “and” commodities would have to crash down together!  All prices must get cheaper as the US dollar would increase in purchasing power.

With Jerome Powell indicating that three rate increases are still coming this year, this combination of bad fundamental news was enough to give the kiss of death to a bull market. Sometimes I use the 30 and 90 day simple moving averages on 90 minute charts which gives you many “Death and Golden Crosses”.

With a 30-90 day setting, we can see the Death Cross happening much sooner than when we use any 50-200 day SMA. There was one Golden Cross last month, and in March we now have another Death Cross!  Of course, this all becomes unreliable if I make any changes in any of my settings. Right now the SP500 is approaching the 30 day SMA, which could produce some resistance. With a 50-200 SMA my search for Death Crosses on daily charts has been largely a futile effort.  I think if they showed up more often the mainstream analysts will notice them and report them.

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Mini SP500 Intraday Gyrations Review

The SP500 is far from breaking new record highs. It is only the Nasdaq that is getting close to breaking out into new world record highs.

Just incase I have beaten the Cycle degree flat drum too long, the above chart would be the beginnings of a zigzag in Cycle degree.  The markets would have to show us another 5 waves down in Minute degree which would then end up at wave 1 in Intermediate degree.

Any top trend line is worthless to use and any invisible bottom trend line is still a bit away from getting hit.  Another Shock&Awe move would help to confirm the bigger bearish phase, but I would throw this wave count out the window in a flash, if these markets do not perform like a bearish phase should.

Dow tumbles nearly 300 points on new Fed chair’s comments | New York Post

Jerome Powell is the new man in charge and the mass of investors, listen to his every word, when they want to!  They didn’t care that much when Janet Yellen was raising rates, but now they seemed to care. If rates are not an issue just yet, then this market could still soar.

If good news no longer pushes the markets up,  then we are over on the big bearish side already. Tomorrow is the full moon and employment numbers should come out on Frida as well. These reports can send the markets into a tizzy, but other times they get completely ignored.

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Mini SP500 Intraday Rally Update

The Mini SP500 created a peak and now has started to back off. This doesn’t mean the stock party is over as another small leg up can still happen.  This rally has turned right at a small bear market rally peak, creating a potential H&S pattern. No sooner had investors injected record amounts into stocks in January, and as soon as the markets dipped, they started pulling out record funds.

Stock-market tumble sends investors fleeing equity funds – MarketWatch

They will always find someone or something to blame for the intraday crash, and the VIX is a prime scapegoat. It’s never the fault of crazy investors who get themselves in a trap situation. They also start to cry that manipulation is bringing this market down. Just about anything that goes down, they will blame on market manipulation.  These guys that believe in market manipulation, figure that markets should never crash.  All trends eventually come to an end, but only a very small amount of contrarians know this fact instinctively.

Insiders are long gone out of this market and only the emotional investors remain. My method of operation, is to always build the wave counts down when stocks are pointing up, and then build the wave count going up once the bear market has shown itself to the rest of the world.

I think it is far more important to catch a major stock market low as only a very small percentage of traders can take advantage of a decline by betting short in the market.  Besides smart short players do not need any wave counts to tell them how to bet short. By late 2008 the markets already signalled that a reversal was coming. The VIX had already peaked at 90 and was about to implode.

As I post the markets are still pushing higher, so this peak so far may not hold. There are spikes that show up, but they have more to do with high speed computer algorithms than human clicks of the mouse. “Algorithms Gone Wild” is more like it. One thing that is always certain and that is, large amounts of protective sell stop orders are piling up below present prices. Eventually they will all get triggered sending the markets to a new record low.

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SP500 February Meltdown Review: How’s Investing For The Long Term working For You Today?

The markets got serious this afternoon as another near vertical decent move played out. The January meltup has not turned into a February meltdown. This is a classic move with a counter rally in progress. This could be just a small rally but should produce some sideways action for a little while.   I still can’t see wave 1 in Minor degree, but I’m sure it will show up by next week or even sooner.

The VIX blasted up to just under $40 with a massive spike which must correct in time. No spikes opened on the way up so that is actually a good thing.  I may still have a small degree 4th wave rally that needs to play out, but when we do switch into a higher degree, the counter rallies will be bigger and take longer. In the first few days the markets lost about a trillion dollars and I bet this has just tripled in the last 3-4 hours of todays trading sessions.

You’re not going to find this “lost” money  in the lost and found department, because this money has disappeared in a puff of electronic smoke.

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Mini SP500 Intraday Rally Update

I think our present little rally doesn’t have a very long life span as we just completed a potential expanded zigzag type of a move. Since diagonal wave structures can act about the same way, which should be ready for some hidden surprise moves as well.  In the last year or so I have developed a damn paranoia about markets, reversing and charging to new record highs. Once the entire January rally is retraced we might get a better feel if this market is already over on the bigger bearish side. It’s still better to catch a crash bottom that has turned into an “ABC” crash than not catch it at all.

I’m sure every wave analyst goes through the same situation. This is also a great reason to keep intraday wave counts at the smallest degree levels because it makes us more sensitive to the moves that are going on. We are now on the 5th day of a market meltdown, which many only think is a correction, so buying on the dips is being encouraged. Little do they know that this impending big correction will be the, ” The Mother Of All Dips”.

At every major top in 2000 and 2007, the analysts all mentioned buying on the dips, but these dips turned into Grand Canyon like gorges.

I’m looking for a Cycle degree correction and for a potential 3 waves in Primary degree I would need a specific wave count in order for the entire move to confirm itself.

I need 6 sets of 5 waves in Minor degree, 5 sets of “ABCs” in Minor degree and just one set of 5 waves in Intermediate degree.

Sure, we’ve seen all the fundamentals improve, which is expected in a big bullish price move, but 5th waves are always the weakest compared to wave 3 bullish phase of any bull market. From March 2009 the SP500 enjoyed a 430% gain, which only the true contrarians of this world can take advantage of.

The two major tops since 2000 are all wave three peaks that must be completed with a “higher” degree sequence. 2000 was an Intermediate degree wave 3 peak followed by a Primary degree, wave three peak in 2007 and now in late January,  we are faced with a wave 3 in Cycle degree. Sometime towards 2029, we could be faced with a Supercycle degree wave three peak.  Each 5 wave sequence leading up to any wave 3 peak must also be in sequence with the right degree.  The 5 waves up from the 2009 bottom were 5 waves in intermediate degree, so the next bull market must contain 5 waves up in Primary degree.

Flipping wave counts around like a line cook flips burgers is not an option. Most wave analysts refuse to go back to 1932 and start a fresh count,  as that sounds too much like work. Most wave analysts could not draw out an extended wave three because if they did, we sure would not be counting waves in SC or GSC degree.

The SP500 is resuming its downward trend as I post, so get ready for the wild ride to continue.

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Mini SP500 Intraday Bearish Phase Update

We really can’t call the start of this bearish phase a crash as this isn’t deep or long enough to make a difference. As choppy as this decline is, it can come back with a vengeance at anytime. This is what’s happening as I post, so by the end of the day this wave count could be trashed. 1987 was a single crash, but 1929-1932 was not. 1929-1932 was a single crash “and” a bear market.

I will keep any updates short as I’m working through the flu as well.

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Mini SP500 Vertical Spike Update.

At the rate the SP500 is soaring we will be in the stratosphere before too long.  Of course, investors will freeze to death long before this can ever happen.   The VIX hasn’t crashed, but has joined the SP500 for this rally. If the bears attack stocks again, then the VIX could keep right on going north for much longer. 

When a new vertical high is forming, I look for another potential reversal to be setting up.  A bull market correction would have its downside limit, but must establish a low, from which another leg up would have to develop.  Just incase a much bigger degree correction is lurking inside the crystal ball, all the support prices we can invent, will never hold.  

At a minimum a good sizable correction will go “off” the charts heading south not north. 

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SP500 2000-2017 Intermediate and Primary Degree Review

Idealized Cycle, Supercycle And Grand Supercycle Degree Review | Elliott Wave 5.0

The above link was posted late August. It shows three sets of idealized wave counts after Cycle degree wave 3 is completed. In the SP500 chart below, we already have 2 sets of wave 3 tops with the third top in Cycle degree still in progress. 

I look at the markets from a Cycle degree perspective with wave zero of 5 waves in Cycle degree starting in 1932. Cycle degree wave 2 ended in late 1942, while Primary degree wave two ended in 1975.  Intermediate degree wave 2 followed by a bottom in 1983, and then a Minor degree wave 2 ended in 1984.

The 1987 crash was a Minor degree wave 3 crash while most analysts working on SC degree, called it a Primary degree crash. This is a full 2 degree difference from what I have. 

At the 2000 top I was a full 4 degree levels lower than what the majority of wave analysts were using. Between one single degree level, we can be out by 61%, and if we are off by 4 degree levels, we could be out 4.618 times. 

The one big 5 wave sequence that separates Cycle, SC and GSC degree, is 5 waves down in Primary degree. Since the 2000 peak not a single set of 5 waves going down in Primary degree, had developed. In fact the exact opposite happened, when all that developed were just corrections. After each correction the markets soared to new record highs again. This should have been a clue to high degree wave counters that something is wrong, but they refused to change or go back in time and work on a new wave count. 

Since 2000 we have one set of 3-4-5 waves completed, but in Intermediate degree. At the 2007 top wave 5 in Intermediate degree completed with a new wave 3 in Primary degree, on top.  From the 2009 bottom the markets churned up in a wild and choppy fashion, which most of the time would not fit into any great looking impulse. I labeled it as an impulse to keep it simple, but 5th waves can be diagonals which act like a location indicator.  

Since the 2009 bottom wave 1 and wave 3 were the two extended wave’s, so the final 5th wave up must be the shortest wave. Right now it seems the market will never end, but we are being sucked into a bull trap.  The main reason for this market top being much harder to count out is that it is a higher degree than the other two were. Any SC degree wave three top, will be harder yet to find,  because there is a natural tendency to slip into a higher degree before they are actually due.  

The Elliott Wave Principle is not about what the pattern looks like, as those are the easiest wave patterns we think we are seeing. It is the shape of the idealized pattern that tells us what to look for, as those easy waves are just traps.  Sure 5th waves extend, but they don’t extend for several generational seasons. A 5th wave extending through the Boomer, Gen X and now the Millenial generations can’t happen, as 5th waves usually have much weaker fundamentals.

With 2 sets of 4th wave bottoms under our belt a Cycle degree 4th wave bottom should be the next one in the sequence. Just like each wave three top, must increase in sequence by one degree, each 4th wave bottom must also increase by one degree increments.  

In the last 20 years I have counted the markets in GSC degree, then moved down to SC degree. This was still not low enough as I had to drop down to a Cycle degree before it started to make sense.  The lower the degree the more sensitive to the markets we become. Higher degrees do the exact opposite as the 2009 bottom clearly demonstrated. 

Without finding “All” 5 waves in Cycle degree first, it is impossible to move into any SC degree world, and even less possible to be in a GSC degree world. 

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Mini SP500 Intraday Rally Update

This morning the markets continued to rally, which had started late last week and has now pushed into the previous wave two of the same degree. What looked like the start to a good looking impulse, now has to be thrown out, and then replaced with the diagonal wave counting method.

To really throw a monkey wrench into the Elliott Wave count, the SP500 could just keep right on going and then break new record highs. Any new record high is the last thing I want to see, but until this market shows that it can no longer create new record highs and start to a big bear market could be delayed again.

The VIX has also dropped like a rock, but it left a big open gap in its wake, which is very bullish for the VIX in the near term. When there is any bullish outlook with the VIX fear gage, then this is very bearish for stocks. Constantly thinking inversely between the VIX and SP500, many investors may have real problems with it. Seasoned contrarians understand this very well, and take advantage of it as much as they can.

In the long run, we want the very last high for 2017, and then fall deep enough that the market no longer has the time to recoup its losses. Other indices are still leading the charge down, so those are good signs that a bearish phase may have started. When a market turns early we can then use it as a leading indicator as others would soon follow.

Any single isolated top will help keep everything separated, as double and triple tops makes it far more difficult to find the start of a new countdown.

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Mini SP500 Crash Review:

Now that investors think that stocks are not the place to be, the stock markets are starting to rally again. It would be real nice to see if this opening shot has any staying power. A rally seems to be underway, and at the same time the VIX seems to be on a mini decline as well. 

A fairly well formed 5 wave sequence seems to the logical pattern unfolding, but diagonals in a diagonal world can react very violently to the point where the present rally comes right back well into my present wave 2 in Micro degree.  In other words, we could have just finished an “ABC1” count and we get a 60-70% rally. 

That sure would throw all those pretty Fibonacci retracement ratios into disarray.  Any 4th wave rally will have a limited life span,  and I usually look for the previous dip and rally to see how far a 4th wave can travel to.  There is not that much I can add today, but the VIX may offer some more insight.  

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SP500 Supercycle Review

I spent more than 10  years, counting wave structures in Grand Supercycle degree (GSC), then I moved down the degree stack and counted everything in Supercycle (SC) degree for a few years. I even started another blog just dedicated to SC degree wave counts. When I saw that the majority of expert wave analysts missed an 8 year bull market, I knew that SC and GSC degree wave counting had major flaws in it and that it must be thrown out. 

This flaw is the lack of understanding that wave 3 is always the longest wave in the general stock markets. 5th waves do extend, but they are rare and usually involve the last degree before a top. In the 1900’s I believe that the markets developed a Cycle degree diagonal 5th wave, ending with the peak in 1929. 

I don’t think a multi generational 5th wave extension can even happen, as 5th waves are generally the weakest as well. Yet every expert wave analyst counts with extended 5th waves. Those that count from a 4th wave base, will always move into a higher degree level long before it is supposed to arrive.

I will be talking about Supercycle degree (SC) from time to time, as technically the general stock markets, are still in an extended wave three in SC, and GSC degree. SC degree wave 3 has not completed anywhere, and it may not arrive until the 2029 time period. The Elliott Wave Principle is not about flipping pretty numbers and letters around, as any kid can do that. It’s all about how we visualize the idealized wave structure. Each time we label a position on paper or in our computers, we are also technically travelling in time. To time travel, I like to go back 100 years, and then look forward 100 years. Four generational seasons make up a 100 year cycle, and most economic cycles repeat themselves in 100 years. 

The short story is by “Ignoring history, we are doomed to repeat it” which is especially true in the financial markets.

Below is a chart of the SP500, which does not update that frequently, but it gives us a good long term picture from the 1929 top.


All the super bearish forecasts that will be mentioned in the future are irrelevant, if we think we are in some mythical SC or GSC degree world already. From my perspective, we are a minimum of 2 degrees lower due to the fact that wave 3s have never been extended. At times at the 2000 peak, my wave counts were about 4 degree levels lower. 

Readers must understand that I see the EWP as just one big ” Idealized impulse” wave structure, and that these wave structures are extended wave 3s not extended 5th waves. The peak in 1929 and the 1932 bottom is my wave 1-2  in SC degree, and not a wave 3-4!  Just being out by 1 degree can throw any forecast off by a minimum of 60%. (1.618) 

The same problem shows up in the 1960-1975 bear market, which the majority assumes is the location of Cycle degree wave 3 and 4.  To recap, the majority use a 4th wave base from the 1932 bottom and then another Cycle degree 4th wave base in 1975.

Labeling 1932 and 1975 as 4th wave bases would give us about an 85 year long SC degree 5th wave extension so far. That’s almost three generational seasons long, for a 5th wave extension?  Technically, this cannot happen, yet the majority of wave analysts all count from a wave 4 base.

 It’s also the main reason why experts missed the biggest bull market since the depression. (2009 -2017). How many expert wave analysts posted any wave count that was extremely bullish in 2009? No wave analysts that I was reading at that time could say with great confidence, that a multi year bull market in stocks was coming.

As long as the wave analysts believe that SC and GSC degree, are here already, then wave followers will continually  miss major bull markets. This happens because they have never gone back in history and looked for alternatives.  Going back 100 years and starting fresh, is too much like work, so until they want to do the work, the same setup that happened at the 2008-2009 bottom will happen again at the 2020-2021 time period.

The start of any new solar cycles are bear market terminators, as they will trash all bearish wave counts and related moods. The studies of the sun and the real impact on the stock market is not rocket science folks, as many have made the same connections.  

‎www.ez3dbiz.com/2016_stock_market.pdf

The link above is just one link to a solar cycle study.

 

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Mini SP500 Intraday Record High Gyrations Update

The SP500 is down just a bit from the last record high of 2480. There is a 50/50 chance that one more attempt at a moon shot could happen, so I don’t want to be too bearish in the short term.  Long term this market is going down, but crying “crash” and the markets keep going higher gets pretty tiresome after a few months or more.   Since the 2009 bottom the markets have been in a diagonal 5th wave in Primary degree, heading towards a Cycle degree wave 3 top.

This huge bullish phase would now be 2 degree levels higher than the 200o peak, of Intermediate degree.  Many in the mainstream media are calling for a correction in the markets and I agree with them. The trick is knowing approximately how deep this so called anticipated correction can go. Any 70% crash sure would be a bigger dip than the majority expect.

When they do realize this then fear could really kick into overdrive. I couldn’t give you an exact bottom as well, but this market will flash oversold conditions long before the SP500 will ever hit the real bottom.  Once the stock bear market is completing its bearish phase, then we should get a 5 or 8 year bull market, as solar cycle #25 will be the real driving force behind the next bull market.

Any 20% correction would just work like a little bee sting, as we need the majority to be very bearish on stocks before any true bottom arrives. The end of any Cycle degree 4th wave may take until 2021 to play out as it will definitely not happen overnight, or as fast as the 2008-2009 bear market.

Either way I’m sure that we will hear all sorts of SC or GSC degree forecasts, calling for the SP500 to fall to 400! My analysis says it will never get there, and if the SP500 clears that 666 bottom level I will be pleasantly surprised.

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