Saturday, April 25, 2015

BGMI Gold Stock 1980-2015 Review



When we look at the Barron's index we have to understand that it only gets updated once a week or so, but it is a good index to see the bigger picture.  The HUI is much the same as this BGMI index is, but the HUI displays more detail.   Even though we are at record psychological lows this does not mean and instant bull market is right around the corner.  

 "A" wave bottom in large degrees would produce the exact same results as "A" wave bottoms are also buying positions.  The BGMI went a bit lower than the 2008 bottom just like the HUI did.  

The BGMI or HUI has to make a very impressive bullish phase to where we see some impulse waves forming. Any bullish pattern outside the parameters of an impulse will only confirm another bearish rally. Any big bearish rally could retrace 60-80% of the entire gold stock bear market to date. 

In a triangle the markets often exceed the "C" wave low but we could be in a running triangle where it would just match the 2008 low.  

Friday, April 24, 2015

Another US Dollar Intraday Review


Since the March peak the US dollar has been going sideways and down. From my Elliott Wave perspective it is the March peak that is important and it is the following pattern that cannot be forced into any impulse wave.  Right now if the USD were to stop dead in it's tracks it could soar north in a final diagonal 5th wave.  

Breaking to the 96 price level the US dollar would also be setting up  for another "C" wave bottom so another surprise bullish phase can still happen. Any price above 100 would do it but a bullish phase from the US dollar 96 price level would not be good for the gold price. 

SP500 Intraday Upside Breakout?


Once again the SP500 is close enough to produce a new record high, and as far as I am concerned it already has but by the slimmest of margins.  This fulfils most requirements but we also could face another expanded pattern from which we should start into another bearish phase.  This bearish phase should have short term limits where any price below 2040 would be satisfied, with a range down to the 1980-1970 SP500 price level.

If the next correction ends with a sharp spike then I can see that we would get another strong leg to the upside. By this time there will be so many short players in the SP500, which alone can produce a massive and very fast counter rally. Traders have to have protective stops in place which are all "sell" orders so when they get triggered prices would fall like dominoes. 



Gold Intraday Crash Review



This morning gold pushed to the downside, but I am also looking at the pattern since the April 6 peak.  This is about as choppy as we can get and fits a diagonal or a corrective pattern. This has all the look and feel of another potential zigzag in progress, as we are heading down to a "B" wave. 

The easy thing to say would be that gold is heading down for a new low this time, but gold would still have to come back and retrace all peaks between my two trend lines.  That counter rally would be satisfied at the $1225 price level. 

Another wild "C" wave bullish phase can send gold soaring much further as a potential "E" wave up before gold succumbs once again to a bearish phase.  If the worst case scenario becomes true and a wave 4 has already completed then gold could drop like a rock in a very short time, but then it would also be facing another massive counter rally. 

Since the $1400 gold price level gold has created corrective or diagonal looking waves, which will all need to be retraced in a counter rally. Besides $1225 being the first serious resistance price level, the  $1300 price would produce another resistance level. 

The gold bear market has gone on long enough without a clear sustainable bullish phase as each bullish phase has died, this all leads me to believe we have a potentially bigger bearish phase than we expect.  The best would be that we are correcting down into a wave 2 bottom which would be rare for the summer months. 

Thursday, April 23, 2015

Traveler snaps epic shots of Chile’s erupting volcano - MarketWatch


Euro Weekly Chart Elliott Wave Count Review



From its heyday peak in 2008 nobody was contemplating a Euro meltdown, but yet that is exactly what happened. From one extreme down to the next extreme is the way the markets work. Even now the Euro can still be working through a smaller degree 4th wave before we can find a strong bottom. 

Any strong bottom should not start with overlapping wave patterns as they are a signalling another bearish rally.  As great as it all looks, I can turn it all into a leading 5 wave "A".  We could be closer to another "A" wave bottom, but one degree higher in Intermediate degree. 

Either way once this 4th wave is completed we should see a rally starting which is much bigger than anyone would expect at this time.  Bullish phases start from very bearish bottoms so it is always important to look for the signs that can give us a clue. 

US Dollar Intraday Review: Is It going Up Or Down?



Since April the 13th the US dollar has been going down, but that is only a very small part of the picture.  The start of the US dollar correction started a month well before that in March 2015, also very close to the 13th.   Since the March 2015 peak the US dollar has displayed corrective type patterns with a potential zigzag starting right out of the gate. 

Technically speaking this first zigzag should get retraced by 100% which should force the US dollar well past 100, one more time.  Then we switched into an inverse correction, which should also get retraced by 100%  one more time.  That would send the US dollar closer to the 96 price level and a potential 4th wave bottom at the same time. 

Since the April peak I can fit the US dollar into a diagonal decline and we would be at the 4th wave peak right now.  Any US dollar plunge would be good for gold and even oil but it would not be a sustained move for what I can see at this time.  Even if the US dollar never saw another new record high, it would have to do it at a later date as all of these peaks will eventually get retraced. 

I would like to see the last 6-7 week US dollar correction get resolved otherwise any gold rally will also be a fake. 

I am not working the US dollar as a triangle but more like a potential running flat with a zigzag opener! Even this wave count can still turn into a diagonal 5th wave then the my top trend line will get hit first.  Right now there is a 50/50 change which trend line will get hit first and only time can answer that question. 

Wednesday, April 22, 2015

Canadian Dollar Crash Daily Chart Review:





Cross border shopping has come to a halt as the exchange rate no longer makes it worthwhile.  With the CAD crashing as it did, the majority will not charge back into the Canadian Dollar even though  the exchange rate you got 20% extra.   Since 2011 the CAD has also started another leg in its bear market matching the reversal of the US dollar gold and oil. 

Even though this rally could be another 4th wave fake I will have a bullish outlook with the Canadian dollar.  Just the fact that the CAD looks so much like an "ABC" crash is enough to be bullish longer term.  

The CAD has also stopped a bit short but a 5th wave could still take us to the 76 price level. 
I am sure oil and our Canadian dollar are linked and one will not travel north without the other. 

I may have to knock all my degrees down by one level as all this may still be part of yet another bigger 4th wave.  Longer term resistance may give us problems at the $89 price level but technically our CAD could surpass its 2011 price level peak. 

DJIA Intraday Price Action Review:


For just about 7 weeks now the DJIA has not pushed to a new high but all the patterns it is making still looks corrective in nature.  Since April the DJIA has displayed what looks like a diagonal 5th wave in progress from which it can still travel and create a new record high. Hopefully it would also be the last record high we may see from the markets for sometime.

Many others are also talking about the DJIA not falling until Apple is ready to crash. It would not take much to send Apple's stock price reeling, as all it would take is one bad news report.   Apple has three big open gaps below at $110, $100 and $75 so the downside possibility is there. 

The way investors are focused on Greece looking for a Financial Armageddon, maybe it will come from China instead. Usually it takes some severe liquidity issues to bring the markets down but we may not see that until well after it actually happens.  Trillions of oil dollars have evaporated and this still has not taken the markets down. 

We have well over a week before the next full moon arrives so the bullish mood can remain.

The VIX is at a $12.50 base but chances are good that, that will not hold as the $12 price level would close another important gap. 

Crude Oil Intraday Chart Review: Is There One More Wild Trip To The Upside?



The last bullish phase in oil started around March the 18th and in the last few days has been what looks like a correction.  I would be fighting the entire move to get it into a pure impulse wave pattern, therefore it is starting on a bigger diagonal or it is ending on a smaller diagonal "C" wave. 

What it can mean is that the crude oil rally for the last three weeks or so has been a fake and nothing but a 100% retracement is going to happen. Worst case scenario is that my 5th wave is already completed and the trend line will not hold the price. 

Tuesday, April 21, 2015

Mini Nasdaq 100 Intraday Chart Review



The Mini Nasdaq 100 is only 50 points away from breaking another record.  We have had two patterns that look much the same back to back but the present on looks like a diagonal 5 waves which still should force the chart to a new record high.  Just like Apple's chart is full of gaps so is the Mini Nasdaq 100.   Two gaps opened just on this one move today, so those two gaps will get closed again soon. 

This up/down sideways action gets boring after a while but overtime it breaks to a new high it can be shorted.  The best of this market is over as it stagnates in what looks like a permanent high.   They said the same thing in 1929 and 2000 but in the end reality set in as the markets crashed. 

How deep of a correction this new reality will take the Nasdaq is uncertain but it may not go as low as the DJIA or the SP500 could.  If the Nasdaq is on a giant "D" wave as well we could end up seeing a shortened "E" wave bottom.  Sooner or later this will break to the downside in a big move and not stop until everyone is spewing bearish news. 

Gold Intraday Chart Action Review



Gold has been performing lethargically at best which is not very bullish for the bigger picture. 
Gold at a triangle apex should force gold into a make or breakout situation.  In this case it can go either way. The way gold has only trended short distances and then any long trends have been down, keeps me thinking that and gold upward move is just part of a bigger bearish picture still being played out. 

When an impulse is set to go it does not fool around as it compounds one 5 wave sequence on top of another one.   The entire gold bear market has been dragging on long enough but still gold has not corrected deep enough to match anything we have had in the past.  Silver crashed much more in percentage terms than gold ever did and I would say silvers decline is more the norm than golds decline. 

The gold rally that started last month started out great but has now turned into a sideways pattern with no clear direction that it wants to go in. 

My ideal move would have gold going to $1305 before it plunges again and breaks a new bear market low. (Below $1132)

The US dollar still seems to be in a corrective mood as I believe it has to break that $100 price level several more times. 

George Carlin and the new retirement minimalism - MarketWatch


Monday, April 20, 2015

Russell 2000 Weekly Chart Review:



The last high of 1277 happen on April 15th which is still far too early to say that a top has completed but I will keep using it as soon as we get another newer low. 

I am looking at the Russell 2000 June 2015 contract which has been "acting funny" since the start of 2015.  You may laugh when I say, "acting funny" as it all depends what we are comparing it to.

"Acting funny" is just another description for wave patterns that do not confirm perfect impulse waves which usually means they are diagonal waves. Most diagonal waves are found in any 5th wave  and in any "C" wave or rarely in a leading "A" wave.

When this finishes I will use my "D" wave in intermediate degree from which we must travel into an "E" wave decline in Intermediate degree.  It matters not what degree I have at this point as I can replace all of them by bumping them up one degree. What matters is that I do not allow my wave counts to gain a degree anywhere between the "D" wave and the "E" wave otherwise, I would instantly bump into a Cycle degree world.

If stocks crashed to 2009 price levels does not mean I have to increase my degree level.  As a sequential counter I cannot do that no matter how tempting it may be.  To confirm my "D" wave top I need a leading "A" wave and then a counter rally "B" wave in Minor degree, followed by any alternate type of a "C" 5 wave decline in Minute degree.   If the markets start to go wild and produce alternate patterns that make no sense to my script, then an instant recount is due.

I can have a "high" leading "A" wave, or average or low so there are usually three choices. The book says I can have about 5 choices, sometimes they blend in so well that it looks like you had no choice at all. The 2008 crude oil crash is one example as it only produced a "Flash Counter Rally"

In this case the Russell 2000 would be great if it were to stop at the 600 price level for a half time show but all the waves could be the same size. If that turns out to be the case then I will look for a count of 7 or 11 waves.

Any future bear market in the Russell 2000 cannot go that deep as we are looking at a potential flat type bottom in a triangle.

Sunday, April 19, 2015

Crude Oil June Contract Weekly Chart Review




This is a fairly important wave count review making our present wild move into a 4th wave with an expanded pattern crashing to new record lows.  Whenever I have an expanded pattern and not some other diagonal pattern then that low will get exceeded. If my expanded low ended at $43 then oil will exceed that during the 5th wave process.  We can argue about all sorts of support price levels and all of them will mean nothing when an expanded pattern is hidden inside a 4th wave or inside any corrective wave. 

The wild ride of 5 waves we got after that expanded low is also very choppy which can fit well into a "C" 5 wave bullish phase.  The so called impulse would come to a grinding halt as they all do and then plunge with no real support until crude oil got past $35. At $34 we would have a perfect flat type pattern which crude oil can then fly north taking out all resistance price levels in the process. 

Technically crude oil would eventually exceed 2008 peak levels one more time.  

For oil to still plunge like they all say it will,  I cannot see gold staying at $1200 as the gold/oil ratio would then go off the charts. This June contract is only about one dollar away from being the same, which gives us a gold/oil ratio at about 21.61:1

Right now oil can still charge to $60 but its days would be numbered if my 4th wave scenario remains true. 

Saturday, April 18, 2015

DJIA Daily Chart Review From 2011-2015



In Oct 2011 the markets turned under extreme pessimism with retail investors selling and running from the markets. Meanwhile the insiders were buying. Insiders do not buy on a whim and when they do buy it usually takes a long time before they are ready to sell. Insiders also loaded up during the late 2008-2009 bottom which was a clear indicator for all the bears to get out of their short positions as the bulls were destined to come back.  Besides solar cycle #23 stopped and solar cycle #24 started.
Any solar cycle has a good chance of producing at least a 5 year bullish phase, so it was silly for all of our wave counting to try and forecast the end of the bull market. 

This also happen in 1995-2000 as that ended up being 5 years long as well.  The solar cycle bottom will destroy every bearish wave count we can dream up.

Since the Oct 2011 bottom the market has kicked into what I have always called stock mania, where two other key assets also came into play.  Since 2011 Gold started its bear market and the US dollar charged north from another bottom base. 

Now we have basically reversed where stocks are pointing up and gold and the US dollar are still struggling in their respective trends. The mania will be harder to see when we switch major trends. 

Since late 2014 the DJIA has changed its pattern again, with a tight and erratic pattern that is impossible to describe right now, but fits best into an ending diagonal. In a fit of madness the DJIA can still make a dash to new record highs, even though it looks like the party may be over. 





Mini Nasdaq 100 Intraday Chart Review.



The recent drop with the Nasdaq 100 can be a corrective pattern. As it dropped, the Nasdaq 100 open up with a big gap which I think still has to get closed before the big one starts to happen.   Anything Nasdaq related has many open gaps open to the downside which acts like an invisible draw. Just in the chart above I have three open gaps with 3650 being the lowest one at this time. 

These are all future bearish indicators and the fact that Apple's stock chart has just as many open gaps below tell me that tech related stocks are going to take a big hit during the next financial type crisis. 

All it would take is even a small liquidity trap when no buyers show up and the one's that did show up find out that they were the greatest fool.  I am sure there are the groups around that are just getting into the markets, but the only way they would be doing it is if they have been smoking something. 

Waiting 5 years before we think that the market is safe again will never work as it has all been tried before. 

The VIX made a jump on Friday but it did so with an open gap below.  This could indicate that stocks in general may start to soar again in the next few weeks, or sooner. 

Friday, April 17, 2015

Crude Oil Daily Chart Review



The rally in crude oil has stunned many as the experts have been saying that crude oil is supposed to be heading down.  If the time is near when lower crude oil prices are out to show themselves then this is as good as any other time to do it. Mind you oil can crash to $50 with a wave two bottom and then roar and take off again. 

The chance that the recent spike is just a small "C" wave bullish phase completing the 4th wave then there would be no option but for crude oil to a new bear market record low.   Only time will tell, but I will watch crude oil to see if a potential corrective pattern starts to play out. My grandson works in the oil patch and as of this week he still has a job, but he sees many layoffs happening around him.  

On a gold cash and crude oil cash basis the gold/oil ratio is about 21.23:1 This has been a good shift towards normal but still we have a long way to go. Normal crude oil price would be closer to $86. 



SP500 Intraday Chart Review


Finally we have another bearish move in the SP500 which was triggered from Chinese news sources.

The SP500 has already been in a correction so this is best when news can bring something down or act like a trigger. Also it is the last trading day just before a new moon.   There should be more downside to come as I believe another impulse wave is forming and I still need wave 3-4-5 to show itself.

US Dollar Intraday Review



The US dollar made a strong reversal with a spike.  Since March 13th the US dollar is making a pattern that still looks corrective in nature or it is a leading pattern into another higher degree "ABC".  Any ending pattern would still need to breakout past 100 one more time, but that also would be the last time it will do it. 

There is a good chance that the US dollar will not hold at present support but close lower to the 96 price level.   The SP500 has been crashing this morning along with Chinese stocks as the Chinese are playing with deregulation in allowing fund mangers to sell short.  That is a good thing as it will get rid of stocks that should never have been out in the index in the first place. 

Thursday, April 16, 2015

Quick SP500 Intraday Review



There have been no new record highs since February and to top it off, all patterns seemed to fit corrective waves as well. This means a new record high can still happen. 

Diagonal waves would be more like it as that is what can also be in progress. At this rate this can go on and on for sometime but could turn when we least expect it to.  At one time the SP500 came within 20 points of breaking a new record top. 

The markets seemed to be waiting for some news to give it a boast, but that may never work if the liquidity is becoming an issue.  The new moon is on Saturday so we have a few days left for the markets to decide if they are in a bigger bearish mood. 

Tuesday, April 14, 2015

Oil-Rich Nations Are Selling Off Their Petrodollar Assets at Record Pace - Bloomberg Business


Is Crude Oil $100 The New Peak Oil?

                     
                        Three reasons crude oil isn’t soon going back to $100
http://www.biznews.com/global-investing/2015/04/11/global-investing-three-reasons-crude-oil-isnt-soon-going-back-to-100/

Over and over we can see that many are saying that the $100 price level is not going to happen.
I guess that would  make the $100 crude oil price the new Peak Oil Price.  To make this forecast they are using all the fundamental variables of supply and demand. Fundamentals will always tell us the wrong things at the extremes and one fundamental number the all ignore is the gold/oil ratio.

I also think they are ignoring the ability of the US oil storage systems to absorb much more crude oil than they think. With refineries cranking up for summer driving fuels they can suck on oil for many months giving the US much more crude oil storage room.


Oil has started a different pattern once it bottomed in Jan 2015 which I have as a diagonal wave 3-4-5 . We now have a 5 wave sequence that is a borderline impulse pattern, but I would like to see more height in the coming days.  All oil has to do is bounce up past the right side of my "B" wave top by a few dollars and then we would be right back to $100 again. 






So far the SP500 has moved like I hoped it would but nothing is written in stone.  In the longer run that 2040 price level should still get retraced as the big rally from the 12th of March is a corrective pattern.   It has been about 6 weeks or so since this bearish market began and we need some very bearish news to come out without pushing the SP500 south.  Bearish news can send the SP500 south but also a quick recovery should be close behind it.  This I have not noticed at this time. 

Both patterns above suggest that the SP500 should break the 2040 price level, but it may take the rest of this week to happen.  It's Tax Day tomorrow and by Saturday we will hit the new moon date as well.  This is not exactly a very bullish setup at this time. 


US Dollar Intraday Review: Finally Turns South!



The US dollar has made a good move down but how many times has it done that and completely recovered?  It has been exactly a month since the last strong bear attack as the US dollar has not broken any new records to the upside since then. The US dollar has been in a bearish phase for a month and it is still not finished.

For the rest of the week I will be looking at a potential ending diagonal sequence to play out but the US dollar would have to push higher one more time. At this time these groups of peaks should all get retraced technically speaking , so even if the US dollar carries on with its decline we would be faced with a much bigger rally at a later time. 

Let's say the USD crashes to 96 then it would be in a potential triangle pattern from which it would have no problem running past 100 again. 

This recent drop is a fairly steep drop so it alone suggests that another correction is in play. 



Saturday, April 11, 2015

Oil Rigs Tumble Again With Crude Oil Daily Chart Review:


http://www.bloomberg.com/news/articles/2015-04-10/oil-rigs-tumble-again-showing-the-cuts-aren-t-over-yet
It's hard to believe but the crash in rig counts can't explain it any better even though it has done little to the production at this point.  Production does not have to drop, but demand by the refineries must pick up, which understand they are starting to as refineries push for the maximum output


http://www.wnd.com/2015/04/expert-crude-oil-could-hit-15-by-year-end/

Even though oil has made an all together different pattern and size they are still oh so very bearish on oil. My answer to all of this is that,  "fundamentals will always tell you the wrong things at the extremes".  Extremes like this have all happened before and against all the fundamental news, bullish or bearish, the crude oil price has gone completely the other way.

At the 2008 crude oil peak we were running out of oil and nobody saw a crash coming.
Eight months later we were in a world oil glut that none of the fundamental analysts saw coming as well.  They were all wrong in their assessment of a world oil shortage as the crude oil bull market was all related to the crashing US dollar, not the supply and demand of crude oil itself.


Even though crude oil crossed into a new low as a 3 wave pattern this could be the completion of a diagonal 5th wave.  If this is correct then we should not see anymore more new lows for crude oil.  If crude oil is to soar lower than it has to do it now, not some weeks from now.  I am looking for a "C" wave bullish run that can explode and break all old highs again,  as crude oil is in a diagonal 5th wave in Primary degree. Oil does not have to go to $34 but it can stop anywhere and a "C" wave bull market will follow. This would be an "ABC" diagonal 5th wave that would have to play out. We will not know until this pattern for this month makes a clear and definite break out past the $58 price level. 

Oil crashing to even $15 without gold falling below $1200 is not an option as gold will not stand still for that. At present the gold/oil ratio stands at 22.56:1 which is still an extreme by any measure, yet a crude oil crash to $15 would send that ratio to 80: 1, even at a $40 oil price that ratio would have to stretch to 30:1 . All are extreme ratios to say the least.  There is no way for gold to stand up to this as the US would have to explode in price to support such a bearish case in oil. Fundamentals are not the main driving forces as without the US dollar none of it will work.  Now we are in the same situation where the US dollar can implode which would send crude oil and gold soaring. Fundamentals are all lagging indicators to something that happen a long time ago and it is only now that the majority are starting to see it by reporter reporting it. 

When everybody sees the low crude oil prices already then who is getting on the bearish bandwagon to push oil south much further?  Futures traders alone cannot do it but only if they have the rising US dollar on their side. 




VIX: Complacent As ever!



The markets have been pointing up lately and the VIX is reflecting this perfectly as it is heading down. It is also running into resistance every step down the VIX makes.  It is shortly away from closing the second of two remaining open gaps. Will the last one at $10.50 close this time? 

It really does not matter but the gap at  the $12.00 price level would be nice if it got filled soon. 
Commercials are net long with the VIX so that supports the bearish outlook in stocks. 
This may all still wobble around but you can bet on it that the price high of $30 in the VIX will get exceeded and should get exceeded by a large margin.  Even $48 could be another target price level. 

Right now we have a Scalene triangle in action and the VIX is coming to the lower side of this triangle. This is the same as a Megaphone pattern but into the cone of the apex. Just about any triangle like this will spit out a fast and furious bullish phase out the other end, so you don't want to be bearish on the VIX much longer. The VIX would eventually have to blast through my top trend line like it never existed. 

1995-2015 SP500 Chart Review: (D) Wave Tops Are Bull Traps!



On the intraday scale I am waiting for the counter rally correction to complete which I think it did on Friday.  Our last high was back on February 25, 2015 at the 2115 price level. From my Elliott Wave perspective this means the SP500 is in a correction or a bear market already and any "Bad" news can be a trigger.  The thing is every correction can turn into a full blown bear market catching all the participants by surprise as the crowd is usually thinking that this time it's different and the trend will never stop. 

All the stock crashes we have seen since the 2000 top, ended up being corrections which was followed by an even bigger bullish phase.  The SP500 just barely cleared this but it would help to confirm that the 2000-2002 was a one type of an "ABC" crash.  The public does not know the different between a true bull market and a bear market rally from an Elliott Wave perspective. 

The public eventually starts to believe all bear market rallies are bull markets and once they see they are stable enough they start to jump on the bullish band wagon thinking that the trend is the friend that will go on forever. Nothing could be further from the truth as all trends must eventually end. When they start to get ready to end the wave pattern starts to act differently, even though the general public may be pouring in the funds. 

We may get a triangle 4th wave or a diagonal 5th wave type that indicate a change of direction is coming. With a triangle a degree change will also happen, but a diagonal 5th wave just indicates a swift reaction. The ending diagonal is the ultimate indicator as 5 waves of "ABCs"usually bunch up to create this.

A big switch in attitude came in 2011 as this is when stock mania kicked in exactly when the USD started a big bullish phase and gold started its big bearish phase. This has happen many times before and will happen again and again which gold investors have to understand. The last time this happened in a big way was from about 1995 to 2000 when stocks made one of their biggest moves up, and gold and commodities made their big moves down. 

Below I show the 1996 stock base which actually represents a major solar cycle bottom, add 13 years and we have another solar cycle bottom in 2008-2009. This gives us two large scale (degree) bottoms that create very strong support.  These I call solar cycle support price levels which most people ignore or think it is too wild to follow. Think again as when solar cycles bottom powerful stock rallies occur after, this was the main reason for GSC degree wave counts destruction in 2008.  At best we are still about 5 years away from the next solar cycle bottom, and we usually have a crash or correction 1-2 years just before the bottom.  On any upside of a new solar cycle I would say that a minimum of a 5 year bull market will occur, which would match my Primary degree wave 5, once wave 4 in Primary degree has been more positively confirmed. 

I view EWP as a process of constantly eliminating wave positions that don't fit well into my idealized script , either I do it first or the markets will surely do it for me. With 5 patterns, made up with 5 numbers and 5 letters, and 15 degrees for each we have the same amount of combinations that the Enigma machine had in WWII. 
The Imitation Game (2014) - IMDb  This gives you a good idea how many combinations that we can have,  and I think it gives a fair representation of real events that happened at that time. 

I took me years to figure this out so I started to eliminate all the higher degrees first, and now I'm using Primary degree wave 3 as my top for the year 2000.  To do this you have to go back 300 years.
 Since any higher degree can only happen when all lower degrees are completed it is mathematically impossible to be anywhere near GSC, SC or even Cycle degree wave counts until all Primary degree wave counts have been found.  The book says I always have the possibility of 3 types of corrections, as I don't consider WXYXZ waves as a new pattern of a group of 3's. They never made sense to me when I first started wave counting and they make even less sense now 15 years later. 



Any of these X wave combinations can be replaced with "ABCDE" as they are also all three wave combinations.  No WXYXZ wave can have a stand alone single 5 wave sequence in it. 






We have been hearing over and over again how much worse the next big one will be. If this is the case then I guess we have to look at what is realistic so we don't come up with something that can't complete by 2020 or even 2021, which is about 5 years away.  Is the SP500 going to switch to a 5 year bear market run when the longest has only been a little less than three years?  

That would mean that the next trend line down would be much more shallow than what we have had so far.  I would say about the same angle as the 2000-2002 decline.  From a (D) wave top down to an (E) wave bottom I need another ABC pattern in Minor degree before I would call anything completed.  This would put the SP500 well under the 600 price level before it would be completed.  

Nobody will think this is possible but many wave counters on the planet are telling us that this is exactly what is going to happen.  You can look at any wave count produced today and if you see the use of any WXY wave positions from 2009 forward then they are telling you, even though they may never talk about it, that a complete retracement of all price levels will  occur.  In other words the 2009 price level will not hold in the future. 

I am well within my limits of a corrective top travelling to new highs as I allow 38% for that (1.38 times above the 2000 peak) It's that funky corrective pattern from 2010-2011 that gave it away as I can put that into an expanded "B" wave pattern within a zigzag. It also means I have a longer "C" wave not the perfect even zigzags that are shown in the books. 

I would be just guessing but the support for my "A" wave would have to be low enough to force everybody out when the counter rally "B" wave begins. Of course I have about 5 price levels that any "B" wave can rally to, but it should not make another new record high.  Any support at the 2010-2011 price levels would work for an "A" wave correction bottom.  I am only talking about the simple possibilities as there are others that can happen, but in general it's a three wave decline that I will be looking for not a 5 wave decline.  Now if we end up with 7 or 11 waves, then yes that would work as well as an "ABC" retracement.  

After all this has been played out then a minimum 5-8 year bullish phase should start, and this bullish phase should be the real thing with much better defined impulse waves. 5 waves in Intermediate degree would send stocks to a new record high as solar cycle #25 unfolds. I think it would be closer to another Roaring 2020s type era. 



When it comes to a potential triangle in Primary degree then no 5 waves in Minor degree must form anywhere but any 5 waves  must all be in Minute degree or smaller. Any wave counter that is counting 5 waves in Minor degree is at a minimum one degree higher than anything I am using. 
The "E" wave decline in the template above would also count out as 11 waves. 



Anybody that can fill out the pattern above completely, then feel free to send it to me and I will publish it if I find no sequential errors.  You can even change the big degree level on your left if you like but any degree you use must still be kept in sequence. 

  Just like Mission Impossible, this offer will self destruct by April, 30, 2015













Friday, April 10, 2015

US dollar Intraday Review:



The US dollar still can be playing out a 4th wave but it can be a diagonal 5th wave already in progress. If the US dollar dipped back into my wave 1 then that will help to confirm a potential diagonal 5th wave.   Of course the US dollar can also be in a triangle and an e wave drop can still happen. We don't want to ring the death bell to the US dollar to soon but the US dollar party is going to end. When the US dollar party ends then the gold party will get serious. 

April this time of the year I am very busy so my updates will be slim during next week. 

Gold Intraday Will The $1200 Price Level Hold?


Gold is one good example where traders and investors have picked a number and the bulls panic when it drops below that number.  Gold ignored the sellers below $1200 and it quickly blasted past $1200 and now is closer to $1211. From my EW perspective the $1200 price level has no special meaning as gold can still break below $1200 many times to flush all the gold bulls out. The markets love round numbers anyway so it's not a surprise that this is happening.   There may be a chance that we are in a 4th wave so I have to see if this plays out by next week. 

The US dollar just spiked again so any downside to the US dollar would be bullish for gold.  There is a strong chance that gold may still create a new record low but if gold keeps compounding they way it has then this will be less of a scenario, in the coming weeks. 

In the next week I am going to be busy as April at this time has many things happening so my updates will be a little slim.