Friday, September 19, 2014

Silver Weekly Chart Crash Review.

Silver has crashed through support, and I have been suspicious that it would do that ever since the June 2013 bottom. It was the fast upside rally that was not a clean impulse by any standard of wave counting. Since that peak silver has traveled down in what looks like a triangle or a diagonal 5th wave.   Once we start a count from the August 2013 peak, we now can count  a 7 wave decline. 

Any 7 wave decline is the same as any  corrective phase, which means that eventually the August 2013 peak will be matched or exceeded.  If silver comes to a halt soon then it still can be in an expanded pattern, forcing a sharp counter rally.  But that would also have an upside limit as silver would resume another leg down.  Even when silver was at the June 2013 bottom, there really was no  support.  Silver would find real support closer to the $13 and $10 price level. 

All those bullish silver expert forecasts in early 2011 of $200, have proven false, as silver went the exact opposite direction.  Silver as a store of value has not worked for over to 3 years, and it started this she everybody was buying silver as a store of value.  Another example how silver will never keep acting the same way once the majority are using it for that exact reason.  
Now we hear stories how gold and silver have lost their lustre, which are the same stories they used in late 1999. 

Mini SP500 Intraday Chart Update. Stocks Pointing Up, USD Pointing Up, and Gold Pointing Down!

Many investors may never understand the stock mania we are in, but it has been going on since the 2011 crash.  It's characteristics are very plain, but the majority never pick up on this when it starts to happen.  The divergence started in 2011, when gold peaked and stocks and the US dollar bottomed.   This has happen many times in financial history, but has gone into hibernation from about 2000 to 2011. 

The best way to look at it is that stocks are expensive and pointing up, while gold is cheaper and pointing down.  For the smart and seasoned contrarians it's more obvious but very few are picking up on this. It took me a little while to clue in when it started, but it was easy to track back to what year it started. 

 Sooner or later we are going to be faced with the situation where this could reverse for a short period of time, when the US dollar and stocks crash and gold soars.  In very small intraday chart movements the stock mania becomes a bit blurred, but most of the time when it arrives it surprises all the gold stock investors.  Since 2011 gold stocks have been crushed in price yet everybody is bearish on gold. 

Every new high the markets make can be the last  high, and these zones are always full of buy orders, as investors have been brainwashed to play the upside breakouts.  You can also count on a huge supply of sell orders all the way down, and once triggered can produce a domino effect.  This happens in futures and is one of the main reasons why commodities can drop like a rock from major peaks.  All the short term support will have to be retraced if the next correction is going to be bigger than the little stuff we have had.  The August crash was a good start as the markets will warn you with a 4th wave dip.  Looking back in history the markets have given early warnings many times. 

About the only index still lagging is the Russell 2000 which makes it a leading indicator right now.  We are constantly being brainwashed by the mass media reporting the record highs in stocks but they ignore the Russell 2000.  It's the old smoke and mirror tricks still being use. 

If a short term panic developed, then this could end in another correction, and stocks would roar again.  The swings could also get larger and travel faster as the SP500 Titanic starts a rocking.  Passengers are playing musical chairs "before" the Titanic  has hit the iceberg. 

Russian Billionaires Stung by Ukraine Bristle Over Arrest - Bloomberg

Thursday, September 18, 2014

Gold Crash Daily Chart Update, How's That Store Of Value Thing Working For Us Now?

We have lots of gold hype in either direction, and when the gold price points down, the bears dominate. As soon as everybody recognizes that the trend is down, the gold will reverse at a major turn or fool us and only correct before resuming it's real trend.  Gold has tossed every support level to the side, and now is faced with another potential turning.  My wave count reflects a potential "E" wave going down, but my triangle is not dead as well.  If the present bottom is already at a "B" wave bottom then a "C" wave bullish phase would have to happen, with gold charging back up to the $1400 price level. 

Gold came within  $37 dollars in striking a new bear market low, and many times when it gets this close it usually hits the lower price again. Many have forecasts for gold to fall to $1050, and it may do that, but what good are these forecasts , if we don't know where gold is supposed to go after that price target gets hit?   Which will come first, gold $1050 or Gold $2000? 

Some say this is the longest bear market in gold's history, but I say this is totally false, from an Elliott Wave pattern,as gold had a 19 year bear market.  Even silver when it crashed took 13 years to hit a major bottom in 1993.
Silver also took 13 years to decline into 1932, so a 3 year bear market in gold is nothing. 
 Comparing many other 4th wave bear markets in gold, as a percentage of the decline, we are not even close to seeing a normal correction. 

Our chances that this bear market will be relatively short is the fact that we are at a potential small degree level, from the 2011 peak.  I can change this wave count into a diagonal wave count pretty easily which helps to define a potential expanded flat top for 2011 as well.  

When the public displays it's greatest fears that a brand new down leg is starting then it will make liars out of these experts and reverse. The lower that gold falls the higher the counter rally in gold will be. 

Any market that does "not" display a clear set of declining 5 wave patterns is prone to 100% or more retracement.  Many times peaks happen 5 or 8 years apart, as well as bottoms, so 2016 would give us another 5 year peak to peak move. 

Crude Oil Intraday Chart Update.

Since crude oil dipped  in early Sept, it dipped with a three wave starting pattern. This could be the 5th wave with an ending diagonal in play.  At the same time crude oil could blast up to $95 or so which would fit an expanded 4th wave much better.  With such small degree wave structures the difference in what follows will be great. A 4th wave peak would follow by 5 waves in another leg down. The ending diagonal 5th wave, means exactly that, that the end for this major decline is near. 

Of course crude oil came very close to hitting the Fibonacci $89 price level, so it may have to go back and finish the job and go below $89.  

What does not fit well with me is that the DJIA is massively over bought which contains two key oil companies.  Can Exxon or Chevron crash independently, and crude oil itself  turn into a strong bullish phase?  Exxon has huge problems in Russia, as Putin seems to want to steal all the major oil companies for him and his friends. 

Many stocks in the DOW 30 have worked independently as only about 10 stocks have carried the entire DJIA. 

When I look at crude oil, I always try and do a quick oil/gold ratio check.  Today that ratio has touched 13.37 barrels of oil for the cost of one ounce of gold.  Oil got a bit more expensive, but still very close to normal at a 14:1 ratio. 

Mini DJIA Intraday Chart Update, Who Is The Greatest Fool Buying At Record Highs?

My joke for a DJIA forecast of 17,200 has come true, which doesn't mean much as just about any forecast a few points above any level has a good chance of getting hit.  Where were all these bullish experts when the DJIA was crushed at 6500?  They were too busy telling you it was still going  to 1000.  Of course that never happened and investors were not prepared for the ensuing bull market.  

Investors are never prepared for any turning in the markets even though they know that it is very overbought.  They figure they will have lots of time to get out.  Good Luck with that, as it has never worked before and it will not work this time as well.  It's mathematically impossible for the majority to take profits, when you are trying to sell to the majority.  

Who are the smart ones that are brave enough to buy on the dips? Only the day traders are nimble enough to jump in and out.  Insiders or the contrarians have a much bigger time horizon. They will not touch anything that is at an extreme and pointing straight up.   Trend chasers buy when stocks are pointing up. 

The DJIA has again broken all time record highs and I have lost track in how many times new record highs have been broken. I time I am sure we are going to see many records broken on the way down. 
 I have a small 5th wave blasting up to a new highs, and after every 5 waves that are completed a correction must follow.  In this case 5 waves in Micro degree could be finishing.  We can see that the markets are starting to swing wildly in both directions, and that is the same as running back and forth on the decks of the Titanic.   Janet Yellen opens her yap and the markets rock.  I am sure the markets will retrace all the good news  below the 17,000 price level. At 16,950  the markets have ignored all the good news that Yellen has produced. What they don't realize is that Janet Yellen is speaking with a forked tongue, like every other fed before her.   

Next Tuesday will be the new moon, which can be very bearish for stocks.  The DJIA has lasted for two full moon cycles dating back to August the 8th, matching  a low in stocks as well.  Stocks have to crash through some serious support levels to show us that it means business, and that a bigger correction is due.  This little stuff just does not cut it.  We should get 5 wave sequences that give us a clue that the markets will go into a sustained downward trend.  This has not happened. 

Who is that smart guy that has bought at record highs and thinks he has an army of investors still to come in?  Chances are good the guy that is doing the asking, is already the greatest fool. 

Wednesday, September 17, 2014

Solar Cycle #24 Review And Record Early Snow Fall.

The man made global warming scare keeps on going, even though real world records suggest otherwise. CO2 Records have been exceeded again well over 400 PPM.  When we track all the computer generated scenarios about how fast the earth will heat up, we see that "none" of these forecasts have come true but in fact have gone the other way.

Another report I read is that CO2 looses it's effectiveness as a temperature forcing greenhouse gas, the higher that CO2 levels go.  Even without that knowledge, there is no scientific correlation with the amount of CO2 in our atmosphere to a rise in global average air temperatures.

The forcing is so slim that it is next to impossible to measure clearly.  In many years of looking for this correlation, I have never seen a clear scientific chart that shows this correlation. Five different measurements all show that 1998 seems to be the hottest years, and since then global average temperatures have levelled off and declined.  CO2 never blinked and just keeps right on going producing the yearly sawtooth pattern.

The global warming scientists get funding from the government, and if government funding dried up, these scientists would not have a job and climate change would not be an issue.
 Rapid City Sees Earliest Snowfall in 126 Years : News : Headlines & Global News
Earliest snowfall in 126 years, will get twisted around, and blamed on global warming, just like they did with record cold for the 2013 winter season.

      New all-time satellite-era record for Antarctic sea ice extent | Watts Up With That?
All the stories about the ice disappearing in the Antarctica, has also be proven to be false with record ice coverage so far this year. It is the end of the winter there now, so we should hear stories again how the Antarctic ice is melting, due to man made global warming. In reality it is just the start of summer, where ice is supposed to melt.

The world is not happy about global warming climate change, and crazy schemes have come up, in trying to cool earth.  Be careful what you wish for, as we can plunge into a mini Ice Age when we least expect it.   Global cooling has more of a devastating effect on humans than any global warming we will run into, as even diseases increase with global cooling.

Each warming period corresponded well with peaks in civilizations , and global cooling has proven to decimate human populations far worse than any global warming will ever do.

Here is a picture of the ozone hole in the Antarctic, which isn't a hole but just less ozone.
Ever wonder why it is sitting over the Antarctic and not in all other areas? Maybe because there is no sunlight reaching this part of the world. Storms from the sun creates the ozone, and without it everybody would get huge doses of radiation. This hole has not increased in size dramatically but also, expands and contracts on a seasonal basis. 

New satellites are doing a much better job of tracking the earths magnetic field, as it works like a force field for earth. Without it our greenhouse would not last very long, as all atmosphere would be stripped from earth by the solar winds. 

Just last weekend a double solar CME hit earth and caused some GPS disruptions, as some flights over the north pole were also rerouted. 

The amount of solar flares have not gone above 10 at anyone time and they usually decline as we head to the new moon cycle, and I have seen them drop to zero between moon cycles. 

The little dots represent each months reporting, and the best that I can see is that the solar cycle #24 peaked in early 2014.  The bull market in stocks started with the bull market in sunspot activity. This is not a one time coincidental correlation but bull markets take off after all major solar cycle bottoms have completed.  Even during solar cycle declines bullish phases can start, but we generally will get a major crash just before major solar cycle bottoms. Each solar cycle bottom will also correlate with an index stock price level.   The solar cycle is also to blame for all Elliott Wave count failures, as a bearish wave count at the bottom of a solar cycle will never work.  By the time we reach 2021 wave counters should have a very bullish wave count, as it will surely fail if we ignore the sun and maintain a bearish outlook. 

Here is an updated chart which shows little change, except for a small pattern going up.  Even though  sun spot activity can increase dramatically, if solar cycle #24  has peaked,  we should not see any new extreme highs.  From a major top, and to two major bottoms, makes up the 20 year cycle, and even corresponds well with a single generational season which last about 17-24 years. At this time I believe that we are in the second part of the Winter season with a little less than a decade to go.   

US Dollar Intraday Chart Review.

I have several patterns I can still work with this US dollar correction. One is that the USD rallies with an ending diagonal, or another complete set of a 5 wave move.   Another move could send the USD dropping like a rock, right back down to the 79 price level, ignoring all support, or correcting just briefly. 

That type of move could end at a potential "E" wave bottom, before the USD cranks up again. 
Either way that Sept 9 peak will get retraced before this bullish phase is completed.  I still have one open gap below, with another further on down already closed. Even old closed gaps have power, as they still can provide turning points. 

For gold to go, the USD has to start a larger bearish trend, which would be at complete odds to the GSC and SC degree deflationists.   The GSC degree wave counters need the US dollar to keep going and going and going, otherwise they will be proven wrong again.  Longer term I can see the US dollar still drop below 2011 price levels, and even make another huge double bottom, as a Primary degree "B" wave bottom. 

Gold Intraday Price Action Review.

Gold has been in a bearish mood for well over 6 months, with another recent bottom on Sept the 14th.
The question is, will that $1225 price level hold.  Since the March 17 gold peak at about $1391, gold has created a very choppy and sideways pattern that has an eire look and feel of a triangle at this time.   We can attach any fundamental reason you like, why gold is so bearish, and we can come up with any reason why gold would want to rally.  The gold experts are on the side of the bears as they seemed to be seeing all sorts of bearish technicals.   The more high profile gold bears come out,  the higher the odds are that they are in a bear trap, and gold will be ready to rally.   

If gold still has a smaller bearish leg left, then gold will definitely hit some resistance level and then turn south again. The first resistance level would be $1255, with the next resistance level being at $1280, as that would be my max for a 4th wave rally. 

If the gold rally starts getting very lethargic, or suddenly makes a very sharp break to the upside, then the bearish mood could take over again. 

The best information that will be very bearish for gold, will be if gold stock insiders start selling like crazy, and the gold experts are extremely bullish again.  The odds that gold will climb above it's 2011 peak is still alive, I just don't know when it will break that top.   I am not comfortable in calling any 4th wave bottom completed just yet, as gold would react much differently than what it has been doing since 2013.

British Pound GBP Review!

It's all coming down to the wire and the question is, Will the GBP fly or will it die? 
I don't watch the British Pound very often as I see very little inverse correlation with gold. but it is interesting how it acted during this independence debate.  I have it as a 4th wave but the steeper the decline, it  could stop with a "C" wave decline.  It could stop well short at the 1.40 price level and then turn and roar up again.  Eventually the GBP could fall to the 1.15 price level as that could end on a Cycle degree  wave 4. This would also create another large degree double bottom. 

My two trend lines is just like any megaphone pattern, which is the same as any Scalene triangle I always use.  Right now the GBP is stuck in the cone of the triangle, and it will break either trend line once again. 

Tuesday, September 16, 2014

VIX And The XIV Review!

The Vix took a big hit today as stocks roared. The VIX did not get to fill the 15.60 gap but I am sure it will on a later date. As the VIX crashed it opened a small gap, hardly visible on this chart, which will also get filled in due time. I have two big gaps open below which may get filled this time around as the VIX rally since August the 25th is fairly choppy, suggesting it to may be in a 4th wave rally. 

The 12.40 gap could get filled which only leaves the 10.40 gap open. Secretly, I would like to see that bottom gap remain open for as long as it takes, as that would act just like an "Ace" in the hole when it's time to forecast a big bull market. Two open gaps below and two open gaps above today's price level puts us in limbo, as short term the fear gauge can go both ways.  Longer term there is a lot more fear coming where all resistance will be futile! :) 

I have added this inverse XIV ETN that was created to play the VIX down.  In other words the investors in the XIV will lose their shirts when the stock market gets serious in correcting or crashing. 
Any GSC degree 5 wave decline would wipe this ETN of the map, and they would have to create an inverse split.   There have been some that are bragging how good it is to play the VIX shorting game, which means being long in the  XIV. Any trade that is enjoyed by the majority will eventual die a painful death, as they get trapped. 

The last high was in early July, 2014, which gives us a lower high this month. This XIV can still make a blast upwards but, it's bull market is getting close to ending.  Just like fear in one directing cannot last forever, hope and greed can not last forever as well.  It is hope and greed that takes longer to build and it also last longer, but it is fear that has a shorter life span, as it is a very exhausting emotion. 

Once I looked at the DJIA, it burst to life as I show a new record high on my charts.  The SP500 is well over 2000 again, but still lagging, as well as the Nasdaq and the Russell 2000.  There would still have to be some dramatic moves upward, for the other three Amigos to catch up to the DJIA. 

Crude Oil Intraday Update.

On Sept the 11th, crude oil has made a bottom. Immediately following that bottom two impulse waves took off.  Of course it can also be another zigzag and if that's the case crude oil would break another record low.   I may have far to much of a bearish bias, as this would put me in sympathy with everybody else,  and that never works for very long.  Oil could have hit a very strong bottom, and how well oil takes out the $94-$95 resistance waves, will help to support a bullish outlook. 

Now $107 would be back on the price target list, with the next being $112 and then $115.  I would not be surprised if oil closed an expanded flat type pattern on Sept 11th, then at a minimum the $103 price level will get exceeded. 

Crude oil is a very back futures contract to do Elliott Wave analysis with because the continuous charts are horrible as the do not flow smooth when changing months.  Pattern and prices are radically different between daily and weekly charts, and in this case a difference of 4 dollars. Natural gas also behaves this way.  

US Dollar Intraday Sideways Action Update.

It has been a week since the US dollar topped out. It has gone sideways for the entire time making what looks like a classic triangle. The sideways pattern triangle can also be part of a "B" wave from which it would crash and then turn up one more time.   If stocks rallied, then "stock mania" could come back, and the USD would rally and gold would fall once again. 

I do have an open gap below and this may get hit before the US dollar reverses again.  84.750 would now be my next target to beat if this bullish US dollar trend continues.  Either way we have a very triangle looking pattern, and triangles always force a degree change on us as well.  

As the USD gets stronger US exports become more expensive, which eventually will hurt manufacturing as well.  Going back in time and chart pattern, the 2011 low started out very choppy and this alone indicates that this rally in the US dollar is a fake. 

You would figure that with Obama now being the 4th consecutive president that has bombed the shit out of Iraq, that it would create inflation.  In reality any bomb or bullet fired, is the act of destroying an asset. Any war is just like taking all the tax money, putting it in a big pile and then torching it. 

Mini DJIA Intraday Chart Update.

When I look at that big dip  in August 2014, I see more than a H&S pattern, I see a nose or a beak to an animal, Draw a couple of circles on each side, and you would get something that looks like an owl. 

Many are expecting a correction and rightly so, some have already declared the markets in a bear market as the Russell 2000 started early acting like a leading indicator.  For a larger correction the markets are going to have to act bearish with much more conviction behind them.  This little choppy pattern traveling  back and forth does not cut it, as it looks more like a 4th wave containing a triangle. 

We may get one more push to the downside, before it cranks up again, and even then, it could be a fast  move up,  finish before it hits 17,200, and then resume another leg down. 

By mid October, we are also going to run into the worst month for stock market crashes, and many times we would get a "Black Monday" or a Black Tuesday historic crash. So if the media comes up with another sensational "Black Monday" event then chances are good it will be a big buy signal.

Monday, September 15, 2014

GSCI Sept, 15, 2014 Elliott Wave Count Monthly Chart Review.

This is a commodities index,  where the 2008 bottom did not dip into the wave 1 peak of 2000. In crude oil the 2008 bottom did dip into wave one. This is a dramatic difference between asset class, which has made crude oil much more difficult to count out waves.  I will have to adjust my crude oil wave count, as there could be another crude oil bullish cycle left.

 The GSCI bull market from the 2009 bottom, can also be in a diagonal 5th wave. After the May 2011 peak, the pattern that followed was choppy with many overlapping wave structures. Except for the smallest 5 wave sequences, the last 3 years have been corrective patterns. This would mean,  that the 2011 peak should get exceeded.  Even if the GSCI keeps going south, and drops to 2009 level lows, the commodities will come back and retrace all of the decline.  If the 2008 top is a true wave position, then this  also would confirm that  the 2008 peak will get exceeded.

If the GSCI dropped to 500 then this would still fit into a diagonal,  but then it would be a big ending diagonal.  When choppy declines start then there are many more areas that can act as support, but a big 5 wave decline would break through many of those support ranges.   Some of those larger term support ranges sure seem close to even numbers, like 500,400,300.  Below 300 would be Cycle degree wave 4 territory.

The GSCI also repelled from the solar cycle peak in 2000, and just before the solar cycle bottomed, the GSCI crashed into early 2009.  This is what happened in stocks as well, in most past crashes.

Russell 2000 Daily Chart Review.

All indices seemed to have turned the corner, and all have seen the best part of their highs.  The Russell 2000 had and early start at a decline, but in early July broke into another record high. 

What is very important to remember is that many of the declines are not your perfect impulse waves heading down.  What this means from a wave counting perspective, is that the decline has a corrective bias to it.  Overlapping or choppy waves heading down, means we can be heading down a diagonal "C" wave, or even a diagonal "A" wave. 

Our top could have finished part of an expanded pattern, which could still crush my two trend lines. It would not surprise me if the Russell 2000 was still to make a burst to the upside, and set a new record , just to aggravate all the bearish opinions.  If we start back in early 2014 the Russell 2000 is forming a great looking triangle as well. This would be scary as that would indicate a very short but strong bullish phase yet to come.  Any triangle is just a Megaphone pattern, and if another "ABC" decline is coming then, I would be looking for the bottom trend line to get hit. 

The VIX has made steady progress heading up, but the VIX seems to be struggling.  I have several open gaps below with the VIX so this suggests, that a stock bull attack can happen when we least expect it. 

Sunday, September 14, 2014

Gold Intraday Potential Bear Trap Review.

I can show you a very bearish wave count by just changing the angle of these two trend lines, but then I would be showing you a wave count that is in sympathy with all the bears.  When the chart is pointing down, then that is caused by the majority of gold investors and traders. It's all about mob rule, and the gold bears are winning. The majority can only win for so long, because it is mathematically impossible for the majority to profit, besides the majority will always push any trend too far, and if this is the case, then we should get a gold bull attack. Bulls always strike from the bottom, but we could still be too early. 

The gold decline has been going on for a little over two months, and we can insert any popular fundamental reason that you like.  The "economy is getting better" is always a good one.  I have the decline as an "ABC" decline, but I am going to talk about gold as if it were a 5 wave decline and wave 3   just bottomed.  Invert this pattern and we could be off on a 5 wave impulse, and the bottom trend line would become support.  

This decline is much like the start of the 2007 decline was in the DJIA.  In any larger rally, gold would be fighting many resistance levels all way up, and a few prices would be $1265, then $1280, and $1295.  If my "ABC" wave count is true then $1345 would have to get retraced sooner or later as well.  Gold is well below the 200 day moving average, and it could bounce $20 above that moving average.  

A correction in gold is due, and how many of the resistance levels it breaks with ease, will help to show us that gold has a little power stored up.  Isn't gold supposed to be a store of value?  Gold is a rebel with a "cause", because if the majority use it for a safe haven then sooner or later it will no longer work as a safe haven. If gold is bought for protection against inflation and everybody is doing the same thing, then gold will no longer play with you.  In 1999 the majority hated gold, that barbaric metal was good for nothing, banks were selling, shorting gold at $255 was the place to be.  When gold was in the dumps then, just to spite the majority of gold bears , gold roared and added on over 750% in gains. 

When a trend in any direction gets pushed to far it will reverse and go the other way. 

It can’t make calls. It can’t send e-mail. It’s the NoPhone. - The Washington Post

Saturday, September 13, 2014

Crude Oil Weekly Chart Plan "B" And Crash Review!

On the crude oil futures chart below, I have moved my Cycle degree wave three back to the 2008 peak in the oil price. I have been pushing my small  degree wave counts to the limit, which is the same as running out of degrees.  Any move of any wave position, always  triggers another look and a recount.  The choppy bull market we have had, had many overlapping waves, and therefore would have to be corrective waves.  

If oil has been in a triangle "B" wave in Primary degree, then the problem would be which wave is the  last "E" wave. It would also be the home for my "B" wave in Primary degree. Sound familiar? Yes, it would, as many wave counters may have "B" wave tops in other asset classes as well. 

The fan lines are not drawn to a preordained degree angle, but they are all drawn over the tops of the peaks in the bear market rally.  The top line has about a 15 degree angle to it, with the next angle being about 20 degrees.  The second trend line has given oil support, and this would only be temporary if a bigger bearish trend is in play. 

I am going to explore a potential "B" wave top in Primary degree, and that the first wave 1-2 in Intermediate degree has already completed.  If that is the case then we may be close to a wave 1 in Minor degree.  Looking at the pattern at face value, then it is telling us that wave 1 is a short little thing, strongly suggesting a long wave three and a shorter wave 5.  Where would the support be now? 

All support would melt like butter cut with a hot knife, as my $75 price level would not hold as well. Sure we could see some bounces at that level, but crude would have to keep pushing south.  Oil is also coming up to the Fibonacci $89 price level, and then the next support would be the $55 price level.  We would be looking at a single flat with no expanded top. This "C" wave decline could turn into a regular flat or a little below the "A" wave bottom in early 2009.  From $34 and another Fibonacci decline, would bring us to the magic $21 price level. 

That would complete a nice single "ABC" (3-3-5) correction in Primary degree, with Cycle degree wave 4 coming to an end at the same time.  The 2013 peak also fits better as it would be just under a 5 year bullish phase. This impending decline would not be as steep as the first one, but the steeper the angle, the smaller all wave divisions will be.  If a "C" wave is in progress, then it should also be relentless in it's decline, and in most part ignored by the majority until it's too late.  

If we look at the drillers debt load, and every oil producer in the world stepping up oil production, then the fundamentals are already in place for a world oil glut to happen. I can only describe what would happen if a wave count like this is true, but not to many would think a $21 oil price can happen with all the wars going on.  Nobody thought that oil could crash from $147 to $34 in less than 8 months as well, but it did.   The public is vastly underestimating the power of commodities to crash when the "Geopolitical reasons" suggest otherwise.  Commodities never act in such a manner to allow all those players and opinion makers playing in the most popular direction, to win.  As soon as the consensus opinion is obvious, then it will change and turn the consensus forecasters into babbling idiots.  In early 2008, consensus opinion had been infected with, "Bullshit Fever" and they all became delusional chanting, "Crude oil $200",  over and over again.  

The DOW has been at record highs, and it contains two of the biggest oil companies in the world.  I just don't see how crude oil can stand up to any DOW decline. 

In the bigger scope of things any crude oil crash is not a bad thing, as an oil price crash will do several important things, It will slow the flow of oil funds going to the Mideast and Opec countries,  and second it will produce a huge cash flow back into the hands of  US  oil consumers and the economy. 

The Oil/Gold ratio is still very normal at a little under 14:1, and I would expect that ratio to expand.
When the ratio contracts, say down to 10:1 then you know oil is getting very expensive again. 

Friday, September 12, 2014

Nasdaq 5000. Will It Happen This Time?

They are forecasting the Nasdaq to hit 5000. They may be right, but will it do it this year, or three years from now? Forecasts are irrelevant when we are so close already.  Where were the headlines full of Nasdaq 5000 forecasts, in March 2009? In 2009 they only saw doom and gloom at that time.  I have changed my wave count this time to see if a wave 4 drop will fit. The only way that it will fit is if we are in a diagonal 5th wave.  It would have to dip into the 2007 peak if an ending diagonal was also in play.

Trend lines are very subjective, but a drop to 2000 would confirm a potential diagonal 4th wave drop, and it would have to be a three wave decline as well.  

None of the commercials traders positions are at the extremes, so any catalysts would have to come as a surprise.  Most market moves come as a surprise to the majority of participants, that's why they stay invested before any crash starts.  "Buy and Hold" for the long term has always been the battle cry, as they say it is impossible to time the markets?

On the flip side, I think timing the markets is something that the majority needs to improve on, as any investment is only as good as it's timing.  In hindsight, I don't think you would find anybody that will say that March 2009 was not a good time to buy stocks.  Now we are at the opposite side of the scales again, and they are still saying that it's still a good time to buy Apple shares.  The worst time we can buy is after a 7 year cycle is starting to complete, and the solar cycle has topped out.  In late 2008 the solar cycle bottomed and we have now seen the results of what the markets can do as the solar cycle peaked.

Silver! Potential Downside Breakout!

Just recently silver came within $.24 of creating a downside breakout. If it stops dead from doing this. then the bearish decline for the last year could be a triangle.  I would love to project the trend forward but that could take us to the $13 price level. I have seen other situations like this and the bottom could fall out for silver.  If there is any sort of diagonal 5th wave, or ending diagonal, then those patterns can extend dramatically.  In the last year the declines are  not a perfect impulse waves as there were several little expanded patterns in there as well. 

The surprise move would have silver spike for no reason, break the top trend line and pop back up to the $25 price level.   We are now well over a three year bear market, and I will give silver until the end of this year to show us it's true colours.  Nothing about silvers large pattern fits well into any impulsive pattern, but a diagonal 5 waves can fit with a lot of work. 

Technically speaking silver has to retrace the 2013 June low, as a 3 wave rally started at that time. Any 3 wave move in one direction, gets retraced with a move in the other direction, specific to any degree we are working in.  The silver bear market has not created perfect impulse waves in it's decline so this can indicate that the entire silver decline will get retraced, but it would take an Intermediate degree move to do it. 

The US dollar would have to start on a strong decline as well, as silver physical buying will not spur the price of silver. 

Thursday, September 11, 2014

The Nasdaq is poised to top 5,000 within months - MarketWatch

Gold, Big Picture Monthly Chart Review!

Looking at gold only from a daily or intraday perspective, we can come up with all sorts of support prices.  All of them have failed and even now the $1200 price level would be another support level that could fail. About 5 days ago we crossed a Fibonacci time period of a three year gold bear market, and at this time shows no sign of letting up. 

Bearish forecasts of $1050 or even $700 have been very common, but what good are they if we don't know what is supposed to happen after those forecasts! 

There is a real probability that gold is suffering a three year correction in a 4th wave scenario. There is also a very strong probability that the 2011 peak in gold contains an expanded "B" wave top, much like what happened in the 1975-1976 correction.  

The correction in the mid 70's had a classic expanded flat, from which gold crashed dramatically.  This ended up being close to a 47% correction in a bull market, after which it blasted up to the 1980 spike peak of about $850.  Then another bear market followed which turned into a 20 year ordeal, but was due to the stock mania that started in the early 1980's forcing a 70% correction in gold. Gold ignores any suggestion that it follows the standard 20% bull market correction , as this has never been the case for gold or any commodities.  Bear markets are just corrections to bigger bull markets, and if the bull market from 2001 is just correcting, then gold would eventually have to pass the 2011 peak of about  $1920. 

At present we are not even close to any of the past wave 4 corrections in percentage terms, and anything similar would get us to the $1050 price level. Even at that price level, there is no obvious support from previous lows. Not until we get well below the $1000 gold price level do we see real previous support prices. 

As we can see back in gold's history, gold can move dramatically in very short periods of time, after which complete recovery in prices took place.  Technically any "ABC" correction will always get retraced  by 100% or more. Any triangle is a single correction,  and it would be included when I say, "any ABC".  The only thing that separates them all is the sequence of the degrees we "think" we are in.  Calling any wave count completed before it's time is a constant problem with "all" wave counters, and I am no exception.  Constantly questioning or reviewing back in chart history is the only method that helps to confirm that we are still in sequence. Many think it is irrelevant to review the past, but past wave counts and degrees are in the wrong locations 99.99% of the time.  

I moved my Cycle degree wave 3 forward and this may not be completed at this time. Even if it was then a huge counter rally "B" wave in primary degree would have to happen. 

Gold has not passed the gates of SC or GSC degree wave patterns anywhere, since 2000, which makes all SC and GSC degree opinions and forecasts worthless.  


US Dollar Intraday Chart Update.

I had to push my first wave 1-2 up to the sideways looking August time period.  In the last few days the US dollar created a peak, but the subsequent decline looks to be corrective.  Since all other corrections have not been all that long, we should see more in the next 5-8 days. 

Once the US does complete another correction, then it would push past old daily chart highs before heading south.  It's the USD rally that has been pushing the gold price down, as the stock mania is still in effect.  Stock mania is when the USD points up, stocks point up, and gold is pointing down. 
It has been going on since 2011, but it can also reverse for a short period of time as well. 

We have the potential for the USD to drop some more,  and if we have a sharp steep angle drop then this would help to confirm that an "ABC" type pattern has happened.  I have an open gap just below the 83.700 price level, so I would like to see that gap get closed, before the USD cranks up again.   

I know the fear that the USD can keep right on flying to the moon, but we have to keep it clear that since 2011, the US dollar rally is still in a counter rally, and that no large degree 5 wave impulse can form with the USD index. In a single USD bull market in the future, the only 5 wave sequence we will get is 5 waves up in Intermediate degree, and it would be part of a "C" wave bull market.  

Again, this would still be some time away, as the USD could fall to new record lows before this happens.  The USD rally has crushed the gold price and is set to take out the $1200 price level. 

We know the USD can move up when the time is right, and I am sure that one day gold will do the exact same move. 

Wednesday, September 10, 2014

Crude Oil Crash Intraday Update.

Crude oil is starting to pass the last chance for an expanded pattern to still develop, but if it did it would have to clear my top bearish trend line by a wide margin.  Any weak rally will help to confirm the bearish outlook.   I also will have to look back for a possible extended wave three with my daily chart. I have no open gaps at this time.  Crude oil would have to fall another $20-$30 to come close to my 4th wave bottom price level. 

Even though oil has been crashing along with gold, the gold/oil ratio has remained the same at about 13.83:1.  I use 14:1 as a general average. If crude oil crashed to $70 and I used the 14:1 average then gold could crash to $980!  In the 2008 crash the gold/oil ratio managed to hit 20:1. 20:1 is very cheap oil, which history confirmed with oil rallying back up well over $115.  Hopefully the gold/oil ratio will do the same thing this time, giving us a clue that oil is becoming cheap when using gold as money.  Many analysts adjust everything for inflation, but this produces multiple price levels that most of the time, make no sense.  

Mini SP500 Intraday Update.

The last major peak in the SP500 was on Sept 4th, with an initial plunge, then a counter rally to late Sept 5th, and then another decline to today.  It is the last 5 day decline that speaks volumes.   In the last 5 days there is not a single 5 waves down that I can fit into an impulse, as waves overlap no matter which way I count them.  This means that the market decline so far, is part of a diagonal wave structure. 

Yes it could be part of a bigger decline, but this little pattern is already telling me that, a future counter rally will completely retrace the "C" wave decline, and then even push to a new record high. 
Even if all the counts turn into a massive decline this market will eventual recover and create new record highs. This is also where my diagonal wave counting comes in, as I would have to label it as "ABC1, ABC2, ABC3, ABC4, ABC5". 

All the indices are displaying questionable declines, as the DJIA has overlapping waves, with the Nasdaq also displaying choppy behaviour.  The Russell 2000 is the only one with a clean or "cleaner" 5 wave decline, but it had it's major top back in July 2014.  

This also happened in the first part of the 2007 decline, which gave me the clue that it was going to be a 3 wave crash and not a 5 wave crash. 

This little wave pattern is already throwing the monkey wrench into higher degree wave counts, and it would be futile to keep forcing an impulse decline. All SC and GSC degree wave counts need an impulse wave structure to form, otherwise all SC and GSC degree wave counts will get trashed again. 

Tuesday, September 9, 2014

Nasdaq Intraday Chart Review, Another Record High!

The Nasdaq refuses to correct, except for small corrections. The fast push up today matches Apples big push as well. .  It looks like the markets were just waiting for hype from Apple, and if Apple refuses to die then why should the Nasdaq? Sooner or later reality will set in, once they find out that the markets are over bought by a wide margin.  Stock mania is still alive and well as gold plunges further and the USD is wobbling around a peak. The Nasdaq has now backed off considerably, so another peak may have been established today.  The Russell 2000 is the only one that has been lagging behind but that could be a leading indicator as not all tops stop on the exact same dime. 

Crude Oil Intraday Update!

Drillers have been loading up on debt to drill for shale oil, and I don't think that can last. Sooner or later, they will have to stop drilling if the price of oil keeps falling. 

This Dec crude oil chart can still rally in the short term, but I am looking at a potential expanded wave 4 still in progress, as an "ABC crash has completed. There should be no more newer lows than what we had two days ago.  In this case oil can develop an e wave rally from which crude oil can plunge again.   The last 5th wave can extend dramatically and a triangle in the 4th wave position also, forces a higher degree on us, by at least one degree higher. 

There is a big difference how waves react in commodities than what they do in the major stock indices. In stocks it is always wave three that is the longest, but in commodities wave 5 can be the longest many more times.  SC and GSC degree wave counts are all based on the 5th wave being the longest, which will always make us call a move completed before it's time. 

Mini DJIA Intraday Chart Update.

The DJIA looks like it has a nice H&S pattern, but they can be very deceiving and actually turn very bullish.  Can this be another one of those times?  Since late August the DJIA has been going sideways    to where it could be in a 4th wave correction with 17,000 as support.  To tease us,  17,000 could get tested one more time and even break below it, and then turn up one more time.  The markets have to show obvious lower highs, once we turn into a bear market, and this has not been clear enough at this time. 

Monday, September 8, 2014

US Dollar Intraday Chart Update. Is The USD Going To Run Out Of Rocket Fuel, Going To The Moon?

The US dollar has made a very impressive run, completing another vertical move this morning. 84.750 would be the record high to break since the USD started a bullish phase in 2011.  Whenever a vertical move happens, it can be the ending of a move or another correction, as straight up moves are the fastest that charts can travel at. I wish I could put a speedometer to those speeds as that would be a better indicator than any of the other 40-50 indicators that clutter any chart program. 

The USD opened another gap up, but now I have to keep my mind open to another 4th wave correction.  A 40% "net" drop of a wave three will bring us close to the 82.400 price level, which is very close to my last closed gap at the 82.300 price level.   This would crash and break through the bullish support line, before stopping. 

The USD would have to break much lower to help confirm that this run was part of a bigger pattern. 

Was it a US dollar safe-haven attack, or was it still part of the "stock mania attack"?  Stocks are in a wobbly mood, and if the USD declines, and stocks turn down, then gold could rally as a safe-haven asset. 

In the end nobody will remember a few weeks from now, besides a whole new reason may emerge that nobody sees coming as well. 

The last new moon on the 25th of August most certainly helped to keep the US dollar in a bullish mood. Now we are facing a full moon, with  a Harvest Moon.  Full moons tend to be very bearish for the US dollar, which could last about 13-14 calendar days. 

The big moon has also coincided well with increased sunspot activity, as there were 9 sunspots active today.  This should die down as soon as the Harvest Moon passes. I have seen sunspot activity drop to near zero in just 3-4 days after the full moon passes.  

Last week commercials added to their US dollar short positions, with a ratio of well over 7:, this is the largest spread that I have counted this year.