Sunday, August 31, 2014

Apple Potential Bull Trap Review!



Apple has passed it's old all time record high established back in September 2012. Once it reached it's present double top it also closed a little opening gap. This process took a little less than two years to complete, but it finally achieved that goal last week. Look what happen after the Sept 2012 peak!   Apple ignored all price forecasts at that time and started to turn south. Since about early August 2013 Apple has been on a move that looks like a great impulse wave,  but it has some key patterns that overlap, with the biggest problem being several gaps still remaining open below present price levels.  GSC degree wave analysts are expecting the big one in the main indices, so how do you think Apple's stock will react, once this all starts to go south? 

Apple is not going to remain an island of bliss, as the rest of the financial world takes a beating.  I think the entire bullish run has been part of a bear market rally, and that this bear market rally is going to make a correction.  Of course chances are good Apple can make a correction much bigger, that will surprise all the bulls.  It would be a good old fashioned bull trap if any part of the pattern contains an expanded 'B" wave.  We have an open gap that would close at the $75 price level, with another open gap at about $63.  Bears always attack from above, and they will do it when the Apple bulls are most complacent, like during product launches. Every time Apple breaks a record, analysts crank up their price forecasts. 

Apple also showed us what happens when an expanded pattern is anywhere in the past. The expanded "B" wave will always get retraced and get exceeded.  What if Apple is in another expanded pattern right now, but crashes down to the $75 price level?   I am sure that the peak will be exceeded, as when Apple turns again,  it could be on a "C" wave bull market.  

I have Apple in a Cycle degree bear market, but I may have to knock it down by a degree or two in the future.   Since any larger pattern in Apple is a wave three extension, I don't expect a major long  Cycle degree wave 5.  Besides it will take many more years for any Cycle degree wave 4 bottom to play out. 





Saturday, August 30, 2014

Grand Supercycle Degree! Hunting For The Lost Five Waves In Cycle Degree.


Recently, Elliott Wave analysts have solidified their GSC degree wave counts and a price forecast for the DJIA of 1000 or less. Any price forecasts by Elliott Wave analysts are based on their wave counts and their reality.  If they have false wave counts then any price forecast associated with that wave count is also false.  Publishing a wave count that only has three degrees associated with it, is all fine and dandy as I can see the need to keep these wave counts a top secret.  

Nobody other than a knowledgeable wave analysts can understand what all these numbers and letters mean.  Many times I say that, a move in the markets in one direction "must" develop 5 waves down in a certain degree, or the markets "must" develop 3 corrective waves up in a specific degree.  Five or three waves up or down must have a degree linked with it otherwise, mass confusion arises and any forecast associated with these wave counts also becomes irrelevant.  Most wave counts are irrelevant or become obsolete as soon as they are posted, and a new wave count has to be found. 

The chart below is a GSC degree wave count that shows wave 3-4-5 in Supercycle degree (SC), which then must terminate at a GSC degree wave 3 for the 2000 peak.  In reality if all this is true then we should have "no" problem finding all the little waves in-between, right? Since the majority of wave counters are already in GSC degree, then where are all the other missing  wave counts that should be checked off and confirmed.  For a price many wave counters will give you the secret wave count as their wave counts are better than the other guys wave count.  As soon as one wave count does not work, then with a few changes, we can take any old dead wave count and make it new again. 

Any wave count that does not confirm a minimum of 4 lower degrees is worthless and all it's price forecasts also become worthless.  Staying in one degree that even hints of being wrong should be discarded instantly, and the next sequential wave count should be produced.  This involves going back in time to the last highest degree wave 1-2 location, and your wave count would have to start again. 




These numbers represent the impulse of a wave 5 in SC degree, and it's wave four base was in 1932. 
There are many questions that any wave count like this will never answer and that is, "where are the 5 waves in Cycle degree"?  Where are the 5 waves in Primary degree or Intermediate and Minor degree  wave counts?  Remember that wave 3's are never the shortest waves, so for any part of the wave count to have credibility we need the next two minimum wave counts. Five waves up in Cycle degree  must be completed otherwise we break all the rules in wave counting.  Who can find the top secret 5 waves in Cycle degree?   The above wave count needs the 5 waves in Cycle degree filled in, to have any credibility. With this being the most popular wave count I am sure there should be many that will love to find and fill in all the 5 waves in Cycle degree.

Once you find any Cycle degree wave three and four location,  you will see that you have another 5th wave being the longest wave. 

It is the general theme that any GSC degree wave count is based on 5th wave being the longest wave  as the only wave they have extended in 300 years is wave 3 in GSC degree. 

The problem with GSC degree is that it is so large they never have to change. They can keep GSC alive for many, many decades and always be right.  If the markets are supposed to crash down to this mythical "A" wave in SC degree, how high must the counter rally be?  What the GSC degree wave counters will end up with are three expanded "B" wave tops in a row! Not on this planet can we have three expanded "B" wave tops in a row, yet GSC degree wave counters are telling us exactly that is what's going to happen.  









Friday, August 29, 2014

WTI Crude Oil Update.



Futures charts look very different between daily and weekly charts but I always try and work one section at a time and right now it is the oil crash that has been going on since the June 2014 peak. 
The rally we presently are in looks corrective but still could hit $96 before it turns again.  There are no shortages in oil even when ISIL sets the oil wells on fire. Even blowing up a few pipelines may only cause a short term blip.  This still keeps the $75 price level in my target, as the last 5th wave in commodities can extend dramatically. Any decline that starts and does not produce the required 5 wave divisions would have to be treated as a correction going down and another higher high will be produced.  

US Dollar Weekly Chart Update, Cycle Degree "Reboot"



I was pushing my luck when I dropped down to the Intermediate degree level for my 2008 bottom. I have now switched back to a Cycle degree wave three bottom in the USD cash chart above. I usually need about a month when I make a change, but I always try and make my readers aware that a strong change has been made.  We would be looking at a potential triangle for the "B" wave which should flow between my channel lines. Our present rally is getting very close to this resistance line as well, and on the intraday level it should not break higher anymore.  The 75 price level would be my first cause of concern as the "D" wave may not be completed.  Any sustained drop in the USD should give a big boast to the gold price.  I am sure "Geopolitical"  reasons can be used for any movement in any asset class. 




Min DJIA, Are We In A Bull Trap Now?


I have been reworking my large degree wave count, as I had to eliminate one wave back in the 1970's. This effectively pushed all my wave counts back up by one degree.   I have not filled in all the fine details below, as it is much faster to do wave counts on paper than it is in the computer. 

The problem is that the entire DJIA bullish phase since 2009 until now, has been choppy as hell , and I have to respect that. Trying to force a diagonal 5th wave into a potential inverted "ABC" will also never work.  Only at the extremes does the market supply us with the best opportunity to find a better fitting wave count.  I don't like to make cosmetic changes, as that is a real bad habit to get into, but going way back in chart history makes a huge structural impact.

Making structural changes is the only wave to fix past inconsistencies, and I had to go back to 1929 and review it all again.  My wave 1-2 in Primary degree is back for the 1977-1982 time period, which makes the 2000 peak a Primary degree peak.  This change would place all my wave counts, only three degrees lower than all GSC degree wave counts for the exact same peak. 

     In effect I started another "Reboot" in Cycle degree,  as my largest degree. 


During the 2011 market correction something happen as the pattern changed and then crashed into the 2011 bottom. With this 2011 bottom a stock mania took off, as the US dollar turned into a bullish phase, and the gold world came crashing down.  I now also have a "B" wave top but it is also three degrees lower than any GSC degree wave count.  If I am right then we are going to see how a little minor degree move can create a lot of damage.  It should force every bull to switch his thinking by the time this market gets oversold. Take your pick of the fundamental reasons as "Geopolitical Reasons" works any time.  I am sure the terrorist can bring down the stock market, as all it would take is the smallest wave over into the bearish side already. 

What this wave count needs is 5 waves down in Minute degree, as the GSC degree wave counters need 5 waves down in Cycle degree. One of these wave counts is going to bottom before the other and it will be interesting to find out which one it will be. 

I have a range for this wave count bottom, and if we get some open gaps along the way the better. We already have open gaps below us even if the DJIA is lacking a few, other markets will join in once the bears are in obvious control. 

To my 2011 peak I have a net move in the DJIA of about 6400 points. Once a bottom is reached then I would add the 6400 points to get the next peak in the DJIA for a "C" wave bull market. 

  

Thursday, August 28, 2014

Nasdaq Monthly Chart Review!


http://www.marketwatch.com/story/get-ready-for-sp-500-at-2150-top-market-timer-says-2014-08-27
It is amazing how some of these forecasting models can forecast price levels in the SP500, but many ignore the Nasdaq. 

GSC degree wave analysts have determined with their count, that the markets are going to implode in a "C" wave Cycle degree bear market sending the DOW to the 1000  price level.  If the Nasdaq is to keep up with the DOW on this hypothetical wave count, the Nasdaq would go below zero.  This is impossible making any GSC degree also impossible.  DOW 1000 will only take us to the peaks of the 1970's bear market, and if the Nasdaq kept up, it would be well below 200, if not well below 100!



The Nasdaq is coming up to some very stiff resistance as it is a little less than 800 points away from creating an all time new record high.  It would have to keep going vertical without stops to achieve this, unless we have a wild correction first, and then create the new record high.  The last thing I want to see is a truncated Cycle degree wave three. The entire Nasdaq bull market since 2009, fits  into a diagonal 5th wave better than all other indices, but when they crash, they crash together, like 2002 and the 2009 bottom. In May 2000 the Nasdaq found brief support just below the 3000 price level, before a wild rally and then crashing down into 2002.  The 3000 price level would be one of the price targets but a crash to the 3600 price level would also work.  Any move outside these price levels will force me to look at Cycle degree wave three being completed.   Any Cycle degree wave three should be short anyways, as the markets created a short Cycle degree from 1932 to 1937.  This gives me another clue that Cycle degree is an extended wave three and not an extended wave 5. 

All GSC  degree wave counts have not extended wave 3 but have only extended wave 5.  This is not what happens in the general stock markets, and even then it is usually the last degree that does the extending.   We are coming up to the fall trading and markets tend to pick up speed so anything is still possible. 

Since the bottom of 2009 my wave one is pretty long (about 1000 points) this should match any last wave 5 in Intermediate degree adding another 1000 pouts as well.  If the Nasdaq dropped to 3000 then it would have to add well over 1800 points to break a new all time record high.  

The higher this market goes the deeper it will crash but the lows of 2002 and 2009 are going to be pretty hard to break.  Even any Cycle degree wave 4 decline will have a tough time exceeding those two price levels. 

US Dollar Intraday Update.



It took no longer than 2 days from the top and we run into what looks like an expanded pattern. Five waves in the leading "A" wave and then an expanded part which should be followed with 5 waves down which should finish next week.  That would finish off a corrective move, and technically the USD would produce another leg up.  It could also be leading into my wave 1 as the start of a bigger diagonal decline. 

Any down move in the US dollar that does not give us a sustained trend will keep the lid on gold prices.  Any US dollar decline could still take us down to the 82 price level where this pattern would be played out.  Even oil has started a choppy rally, making me suspicious that it to may be the start of a bigger correction. 

Wednesday, August 27, 2014

JPMorgan, Four Other Banks Hit by Hackers: U.S. Official - Bloomberg


Gold Daily Chart Intermediate Degree Update.



I am still working gold's entire bear market as a potential 4th wave decline, but where we are in this 4th wave is still a million dollar question. There are several reasons why I think this gold market is in one big correction and that is the overlapping wave structure,  and I have read about no gold stock insider selling.  They may start to sell on any next major high but this also remains to be seen.

Gold is starting to act very bullish and it would have to continue this trend, as we could be in another potential inverted zigzag. If it is a zigzag then the "A" wave and the "C" wave should be fairly even.  My initial "A" wave in Minute degree moved about $180, and when I add that exact amount again to the bottom of the "B" wave then I end up with a target of about $1450-$1500.

I also now have three higher lows which also helps to make the bullish case at this time. The US dollar looks like it may have turned already, and we have to see if the USD peak holds.

Even if a future "E" wave decline can happen, this does not mean that gold will end up creating some horrific low, but a triple bottom can happen as well.  Many times the "E" waves create truncated patterns stopping short of any trend line.  If any gold move is dominated by investors running to gold for "any" fundamental reason,  then I am sure gold will have it's limits and then gold will crash again.

It takes a sustained down move from the US dollar to maintain a steady bull market in gold, not these reports of actually gold buying.  Reports of physical buying is always the lagging indicator,  not at the leading indicator.

Gold may rally as the stock market declines, but watch out if stocks hit bottom at the same time gold hits a top! It would be a prime setup for  a "stock mania" attack!

 I have mentioned it in several USD updates that I believe the USD will go down,  before it starts to fly like an eagle,  as I am also looking for a potential 4th wave top in the US dollar which still may take some time.  In the fall markets tend to move much faster than in the summer so anything can still happen.

Grand Supercycle Degree VIX Or Just A Primary Degree VIX?

I have gone back far enough in the VIX to show us the 2007 bottom and then the late 2008 top. Yes the VIX topped out about 5 months before the stock market hit bottom and smart contrarians knew this at that time. Insiders were already buying so there was a high degree chance the markets would turn.  The VIX below topped out in late 2008 exactly with the bottom of the solar cycle, and I am sure it will do the same thing at the bottom of the next solar cycle. This is still a long way away and is not going to happen today or tomorrow. 


GSC degree wave analysts see that fear is coming back in a big way as a "C" wave crash in Cycle degree is about to unfold.  This is a massive amount of fear that is supposed to come back and since it  is supposed to be the worst one in history, then where is the VIX supposed to go?  For starters any VIX GSC degree move, will send the VIX blasting past the 2008 price level by a large margin. 

This will not happen this time around but we can see that the 21-22 price level will start to offer some extreme resistance.  


If the VIX is actually far smaller in degree and we are  travelling 5 waves down in Intermediate degree, then another new low can still happen.   Look at all the vertical spikes the VIX created over the years and one main reason is that the VIX always travels with inverted Elliott waves. All VIX rallies are fake bull markets, and will always die after a vertical move.   By the time any strong bullish VIX move can raise the top trend line, but that would only help the bottom trend line, as it would become more even.  


SP500 Record High, The Pain Of A Bull Trap!


The markets love even numbers and sure enough, the SP500 did not disappoint us, as it stayed above the 2000 price level for a little while.  Many jump up and down, as they are convinced that 2100 is achievable.  At any major top that has been talked about for a long time, I always wonder, who is still left to come in?  Who is the lucky group that loves to buy into the markets when it has just gone vertical? 

Below the SP500 present price levels there are "all" the sell orders, sell orders that are supposed to protect all of the bulls gains.  Of Course the VIX is at another bottom, and has already turn north as I write.
The VIX did not close the big gap below, and I would like to see it left open. I also have several open gaps above the VIX's  present price level.  

In the wave count below I am working it, looking for an expanded pattern, and at this time that expanded pattern may have it's roots back in late 2013.  I know all major wave counters have counted out the 2009 bullish phase, as a big bear market rally with fancy "WXY" wave counts.  I have counted the entire SP500 bull market as a bear market rally as well, but there was always something wrong with it, as every bearish wave count ever tried, failed and the markets pushed higher.   I was in the same trap, but I also called many bear traps whenever I saw a potential "C" wave  form. 

The GSC degree wave counters are now at a potential "B" wave top in Cycle degree, and are expecting a "C" wave Cycle degree decline?  Any wave forecaster that does not show you or does not tell you exactly what the market is supposed to deal us next, is just guessing as I am sure GSC degree is a wave count with a lot of makeup on. More like special effects makeup!  With a Cycle degree "B" wave top, the markets "must" deal those GSC degree wave counters a five wave sequence in Primary degree, and since it would be resuming the largest trend, we should get a perfect 5 waves in Primary degree.  Anything less is not an option, because if this mythical 5 waves, does not develop for them, then their entire GSC degree wave count is wrong again. 

Any Elliott Wave analyst that thinks we are in GSC degree already, has not made a single structural change to their wave counts, but are just regurgitating the same old one over and over. 

Yes, I also have a potential "B" wave top, but my "B" wave is not even close to a Cycle degree "B" wave. My "B" wave is three degrees lower than what the majority are using.




I have a triangle working up to a new record high, but it is just  part of a "B" wave.  It would be an expanded triangle, and technically I would need 5 waves down in Minute degree. 5 waves down in Minute degree can create a very painful bull trap.  Expanded flats, once completed,  are actually very bullish, as many times expanded corrections turn into the running kind as well.  

If the SP500 still keeps running then all the wave counters will be back to the drawing board as the SP500 just crossed 2000 again.  I have two strong price levels where this wave count can find support at, and one of them is just below the 1600 price level. At the 1740 price level we would have a perfect flat, if not a running flat.  Any expanded flat is just part of  an "ABC", and  the markets always retrace this entire drop. 

This market has fooled the bears time and time again, and it will keep doing this if we do not change the sequential structure of our wave counts.  



China’s falling real-estate prices trigger protests, clashes - MarketWatch


Tuesday, August 26, 2014

Mini Nasdaq Monthly Chart Review. Does The Nasdaq Still Need to Reach 5000?


I am one of the few wave analysts that have not been brainwashed with the constant barrage of GSC degree wave counts. These wave counts in the DOW have the markets crashing down to the 1000 price level, yet this mythical price level will not technically confirm any previous 4th wave of one lesser degree. 

Another way of looking at it, is that the DOW 1000 brings us back to the price levels of the market peaks of the 1970's.   Where do you think the Nasdaq is going to end up, if the markets all drop to 1970's price levels?  The Nasdaq would have to fall off the chart below,  and still not even keep up to the DOW.  Sound ridicules? You are right if you agree, because after the 2000 peak we have not past any GSC degree territory anywhere on earth. 2000 was not a GSC degree top because I see it as an expanded flat pattern.  So is the 2009 to 2014 top a Cycle degree "B" wave as well?  The markets must deal the GSC degree wave analysts 5 waves down in Primary degree, because if it does not, then this will end up being another huge blow to GSC degree theory. How long are GSC degree wave counters going to take before they realize that the Nasdaq will not play their game? A month, a year or another 5 years?  

The Nasdaq has been pushing higher and higher, but still has not matched the DJIA and others which broke into new record several times. 
The big question remains,  can the Nasdaq still travel well above 2000 price levels before it joins the  bigger bearish mood?  The markets are due for a peak or a wild correction which will allow the Nasdaq one more push to new record highs.  That price peak to cross in the Nasdaq is 4816, on my charts.  Can a truncation happen with the Nasdaq as wave three in Cycle degree?  




There still could be a little wild correction coming  which would help to push the Nasdaq past that 2000 price level. The issue is what wave count the 2000 peak is now.  If the "B" top is true then technically it does "not" have to go much higher, but it would start to correct into Cycle degree wave 4.  Markets tend to fall to the previous 4th wave in one lesser degree, and sometimes a bit less as well.  If the 2009 bottom remains as my 4th wave in Primary degree, then this is the price range I would expect Cycle degree wave 4 to find support. 

Even after Cycle degree wave three has been confirmed, the Nasdaq may never cross it's 2009 bottom price level,  and only fall to the 1500 price level.  If we start finding price support at 3000 then this could be the support level for another last little wild run up.  Even when we end at my Cycle degree, we can have the same issues as another  expended flat "B" wave can form again.  

From the August 8th low, the Nasdaq now contains 4 open gaps, so I would expect those gaps to get filled soon. A much bigger gap is open at the 3680 price level so this also makes for a good fitting  bottom price level. 





Monday, August 25, 2014

Euro Daily Chart Update, Let The Bear Trap Snap!



The trend is down and there would be no reason not to expect another wave 3-4-5.  Markets do not behave in obvious fashion, as that would be far to easy for the majority to figure out.  It seems like the decline took forever, but what if this Euro decline is actually a  zigzag. It could be the ending to a triangle which I would have to call an "expanded running triangle". If my decline in the Euro is a zigzag, then the Euro has no choice but to retrace it's entire move down.  The Euro also opened a couple of gaps, so this also helps in the ending phase.   There is very little room to wiggle out of this wave count, but a strong rally would help to confirm my zigzag.  

On a bigger scale I am working the largest degree with the Euro, as Intermediate degree wave 4, and I don't think wave 4 has arrived yet.  What the Euro should produce is a set of 5 waves up in Minuette degree, but I may have to scale it again.  The end result is the same, as the Euro would have to head to my top bearish trend line.  If the Euro is still in a bigger diagonal 4th wave rally, then it must not breach my top support line, as that is where my wave 1-2 can fit. 


We have been told by the GSC degree wave counting wizards,  that the USD has to rally in a deflationary attack. Where do you think the Euro is supposed to go? It would  go down, as everybody would be running to the USD for safe haven.  

The Euro has no room to move down a full Cycle degree "C" wave.  I see next to no evidence that a "C" wave decline in Cycle degree can fit anywhere at this time.  Sure I can see a Euro crash much lower as well,  but the entire bear market in the Euro suggests they are all corrective waves.  

US Dollar Daily Chart Update, Let's Get Vertical!



The US dollar has made a very impressive run from the late June bottom to our present late August top.   This run has been very impulsive and looks like a clean 5 waves up.  The USD is coming up to some stiff resistance, and is due for a correction or something much bigger.  At the 81.200 price level is where I would expect another 4th wave bottom to show itself. That would be the easy call, but it has cleared that mess of waves below, which had one peak back in Nov 2013.  That mess of waves can work as a triangle and what we had in the last month or so could be a blow off "C" wave. 

If this happens then gold should go for a nice little run up, as the US dollar tanks! It also means that the USD may find a bottom before another reversal,  that may even be faster than what we just had. 
Since my triangle pushed to a new low before cranking up, then this an indicator that the USD should fall below 79.  Any triangle is always a signal that my wave degrees will change by at least one degree higher,  if not two degrees higher. 

The entire pattern could end as a flat type bottom, which would send the US dollar north one more time as well. That could terminate at my Intermediate degree wave 4 top followed by a 5 wave decline in Minor degree.  

The US is not in a GSC degree wave count, but they need the US dollar to fly north with rockets attached, as that is a sign that deflation is about to start.  This is not going to happen as the USD has a far greater chance of crashing below it's 2011 bottom price range.  I also am pretty confident at this time, that the US dollar may even surpass it's 2008 low.  That final low would be my new Cycle degree wave three. 

The new moon was today, yet this is supposed to be bullish for the US dollar, but the US dollar is already pointing straight up. This conflict with wave counts happens regularly and I like to see my wave count win this time.  

At the intraday level in the last day or so, the USD opened up two small gaps which should get closed soon. If and when any decline in the US dollar starts then, it will be important to see if more gaps start to open up. 




Can Earthquakes Bring Down the Stock Markets?



I think earthquakes can bring down any market if the markets are over into the bearish side already.  Depending on the amount of damage and who has to pay the insurance costs. Warren Buffet is one big insurance company and Berkshire Hathaway would be one company that may take a hit.  Huge amounts of insurance transfers would have to take place, and cash would eventually get dumped on the streets as they start the repair procedure. The US dollar would crash sending gold north bound as inflation would get created. 

Chances are good, that this quake was not big enough to create major insurance claims beyond what is set aside just for these natural events. 

As we drift down solar cycle #24,  earthquake and volcanic activity should also increase and volcanoes in Iceland are also starting to react.  How bad it will get is a guess at this time, but we should hear more reports in the next few years. 

Now if this same earthquake just happened in Cushing where all the oil sits, then Cushing could become a big flaming inferno.  I am sure WTI oils prices would explode, even if only for a short time period. 

Is The VIX Going For The Gap?



I was hoping my lowest gap would not get filled this time, as it sure looks like the VIX is heading down to do just that.  All the GSC degree wave counters need the VIX to go up not down, as it has been doing. This means that the complacency of market  investors is still alive and well as they see no fears that will make them run from the stock market just now.   To confirm the biggest fears that GSC degree analysts are saying that is going to happen, the VIX at a minimum, would have to blast past the late 2008 peak by a very large margin.  We know we have several gaps still open above our present prices and the tallest one is at the 21 price level.

The SP500 and the Nasdaq are two indices that have cracked new record highs as the DJIA and the Russell 2000 are still lagging a bit.  This may still take a few days to clear up but markets have turned this morning a bit already.  If the VIX stopped short before the bottom gap is closed then this would be ok, but the VIX would have to break out of the top bearish trend line soon. The VIX would also have to keep going and going, producing very few open gaps.  Good luck with that,  as it is pretty hard to maintain the fear levels required to play out a Cycle degree "C" wave decline.  

If it is one index that will prove GSC degree wave counters wrong again and again and that is the VIX.  The commercials have been net long in the VIX but they had no problems adding on short positions.  This gives us a clue that the VIX commercials can become net long on the VIX with little problem. The last thing that GSC degree wave counters would want are the commercials turning net long in the VIX before any wave 1-2 in Intermediate degree is ever reached. 



Sunday, August 24, 2014

Crude Oil Weekly Chart Elliott Wave Count Review!


Any large daily or weekly chart updates I am going to release after 1 PM Sundays PST,  as I also like to look at the commercial positions first. I don't always have to use the commercials but if they are net short by more than a 2:1 ratio then upside in crude oil will have it's limits. Commercial traders are net long in Brent crude oil so there is a difference between two sets of commercials.
The commercials on the Canadian Tar Sands oil commercials are also net short. 


 Many on this planet are counting waves like we are in GSC degree already after the 2000. This does not compute in the oil market or any commodities that I cover.   When I see the attempt at constantly preaching a Primary degree run anywhere, and always fail,  then I know that, that  wave count is part of GSC degree wave count.  Trying to force a GSC degree wave count in a few asset classes does not work. EWP is far more organized than that, as it is a repetitive sequential based on a strict 5-3 pattern. 

Many GSC degree wave counters have never seen where wave 1-2 in GSC degree is, yet they follow it religiously.  Any wave count can be crushed with very little work, and I crush my own wave counts on a regular basis.  Better fitting wave counts can only come from the past,  as they will never come in the future. EWP is all about constantly identifying what and when a pattern has completed, with a good understanding of the 5 wave idealized sequence. 

Wave counting in commodities must be treated differently than the general stock market as in the commodities 5th waves have a habit of extending more frequently.  In stocks it's the third wave that can never be the shortest wave.  Even then in stocks it is usually the last small degree that does all the extending. 



I don't see anything in my wave counts that suggest we have crossed the GSC degree line with the 2000 peak or the 2008 peak in crude oil.  The largest 5 wave sequence I can have after the oil 2008 peak is a 5 wave sequence in Minor degree. If I move up just one degree on purpose or accidentally, then my wave counts will not do what I thing they will. 

The crude oil pattern has been a real challenge and since it's May 2011 peak has declined in a 7 wave decline. 7 wave declines are corrections, and any always get retraced sooner or later. That 7 wave decline has not been retraced so I am sure it will still happen, but it would have to past the $115 price level to do that.  The expand pattern I had on the daily chart translates to a little bump that has been running for most of 2014. A zigzag with an expanded flat could have bottomed last week, from which we can see oil blast higher in a "C" wave bull attack. If the "C" wave takes us over the $115 price level this time, remains to be seen.  In other words I am working an ugly flat with a diagonal "C" wave, that may turn slightly expanded. 

Then the move following any newer oil peak could be a "C" wave crash that can take crude oil down to the $70-$75 price level again.  This should produce a nice base from which a 5th wave in Minor degree can start from. 

Of course the worst that can happen is that oil will crash to the $70 level right now. That would happen if the USD kept on flying north.  There has been a lot of bearish oil news out and when there is too much of it, the markets tend to go the other way!  None of the fundamental analysts saw the 2008-2008 oil crash coming, which even produced a world glut at that time.  Look how far oil rallied during the last glut in 2009, and then again during the glut in 1999. What a joke that was, as in 8 years oil started from a glut and then suddenly turned into a shortage with fears of Peak Oil in 2008. 
There was no shortage then and there is no oil shortage now.   

Consensus fundamental analytics will never work, as it has been demonstrated time and time again. 
The gold/oil ratio is normal at about 14: 1, so that ratio would have to shift lower when oil gets more expensive.  I am sure if my price target gets hit we will read stories about an over supply of crude oil, and even the words "oil glut" may be mentioned. When they do mention another oil glut then, the glut will be over,  and prices will already be rising. 

Every nation in the conflict zones wants to increase crude oil shipments, and this can produce yet another world oil glut. 



Gold Weekly Chart Elliott Wave Count Review! Its Not A GSC Degree Bear Market!

At this time I have removed all my Cycle degree wave three positions in all asset classes that I cover.  
With gold, I still have the 2011 peak as a wave 3 in Intermediate degree, with the potential of a triangle 4th wave bear market, which may not be finished as well.  I think that gold still has to create a vertical move, before it hits a potential "D" wave or 4th wave top. It will still be necessary to shuffle wave positions around, but each move in one direction will force a recount on everything from the 2011 peak. 

GSC degree wave counters need gold to crater to support their claims of a deflationary depression. 
How can that happen when gold stock insiders, have not sold as a group.  Bearish gold wave counts in 2008 were also proven wrong, and I am sure they will be proven wrong again.  I shake my head every time I see a wave count that is so far from reality,  that it seems more like standup comedy to me.  My largest degree I am working gold with,  is in Intermediate degree, as Cycle degree wave 3 has not been found to my satisfaction. 



Even if gold drives up in the next few weeks or so, only gold stock insiders selling would add to any bearish outlook at that time. Any gold decline could be part of a stock mania move back up.  This has happen many times before, and gold's bear market decline has been caused by stock mania, which took off after the 2011 stock crash bottom. 

Even  crude oil can make another run higher, so this time, gold and oil seemed to confirm each other. Of course any rally may be fundamentally fear oriented, and if that becomes true then gold's rally will be short lived.  It would take a sustained US dollar decline to push gold to the moon at this time. 

The gold/oil ratio is sitting at about 13.81 to one, which is just about normal, and not extreme in any sense.  I used to use 15:1 as normal but 14:1 will do as well.  Any $5000 gold price forecast is based on a mythical number, because by simply checking with the gold/oil ratio, would give us a $357 oil price.  That may happen on a different planet but the world is flush with crude oil inventory already, and it is only going to get worse as all the conflict nations want to increase their crude oil exports. New oil fields are being discovered or opened. Bottlenecks in Cushing are being reduced and other terminals are even selling $10 below the Cushing price.   The Largest Oil Storage Facility In The World. Cushing Tank Farm









Saturday, August 23, 2014

US Dollar Weekly Chart Potential Bull Trap Update.

I am going to review and post weekly and daily charts mostly on the weekends, and usually I will release them on Sunday after 1 PM PST.   With the weekly chart below, and going back to the 2008 bottom, I have dropped my Cycle degree wave three and replaced it with an Intermediate degree wave 3.  Pattern wise, I am working the USD as a wave 3-4-5 in Intermediate degree, and I don't think my wave 4 in Intermediate degree is anywhere  near completing just yet. 

I think the 2008 bottom has been called too early, and definitely in too high of a degree.  Anybody counting in GSC degree is forecasting a major deflationary event, and there would be no way that we could avoid a depression if DOW 1000 is true.   BTW DOW 1000 means going back to 1970's stock prices. 

By the time they actually figure out that we may or may not be in a depression, this hypothetical depression would already be over, and a new bull market would be underway.  At this time I see no chance that the US dollar is in any part of a GSC degree move, but GSC degree wave counters need the USD to fly to the moon, as it would represent the increase in purchasing power. By 1932 everything was deflated as stocks cratered and silver made it's final 13 year bear market bottom, at the same time as stocks.  The stories that gold will protect you in a deflationary crash is a myth, started because it was a government fixed asset, during that time period. 

Fundamentals like depressions or massive market dislocations do not show in charts, as most of the time a bull market was in full force in the worst part. You look at a chart of the DOW from 1932, and the DOW jumped right into a bull market after the 1932 bottom.  How long did the worst recession since the 1930's, last on the stock charts in 2009?  It took the herd of investors close to three years before they started jumping back in! In 2011 they jumped back out, just before a massive stock mania started! 

The GSC degree wave counting experts are counting the US dollar as if it was in GSC degree already, but I think they are making a huge mistake again, by calling a move completed before it's time. 
Calling something completed before it's time is the number one trap, that all wave counters do. It is a constant struggle to make sure we catch these mistakes as soon as possible. The higher the degree, the longer it takes for us to figure out we have a problem, and working in lower degrees gives us a clue that something is wrong sooner. 

My intermediate degree bottom is now a, " full 4 degree levels",  lower than anything GSC degree wave counters are  contemplating.  Any Elliott Wave regarding the US dollar is always inverted from normal, putting the source of all wave 1-2 combinations on your left side of the chart stretching back 100 years or more.  Waves in the USD "always" trend  down and any rally in the USD is always a correction.  There is not a chance that the USD can suddenly start into a move of 5 waves in Primary degree, but the GSC degree crowd keep trying.  All their attempts at counting out 5 waves up in Primary degree have failed. 

Besides counting real world waves, It is more important to count the Idealized waves that we are supposed to get, and the Idealized waves in the past.  Since I count all my Elliott Waves from a 1-2 base, I also count how many 1-2 bases I would need in the US dollar.  This is a technical and an Elliott Wave mathematical question that needs to be very clear, and since it is a mathematical and sequential question, we can't cheat.  GSC degree wave counters are cheating with their Elliott Wave sequential math! 

Since I am now working 4 degrees lower, then I must have 4 sets of 1-2 waves in the past history of the US dollar. These 4 sets of 1-2 waves must also be in their correct sequences. 

In stocks the entire process is flipped back right side up, and to mathematically confirm my degrees, I would need to find all of my 4 sets of 1-2 waves in the past.  I have done this many times already in  the DOW, and others. 


I am calling my Cycle degree wave three bottom as uncompleted, but replaced it with Intermediate degree as I am sure I missed an extension.  This new wave position is also very good for gold , but it works like a monkey wrench thrown into the GSC degree wave counting juggernaut!  The EWP is a financial weapon of mass destruction, (FWMD) as all it takes is one degree out of place, and then the  higher degree, and all it's related assets become worthless.  How many US dollar bearish bets went bust in 2008? 

The last little recent rise in the USD looks like it wants to go to the moon, but we could also be in a diagonal and a zigzag.  This week we should see a top forming and then plunge down to my 4th wave bottom in Minute degree. The 75 price level would be my maximum that I can take as I would then be in my first wave of the diagonal "C" wave.  So a move down, and then a move up, before a good long trend down into a potential wave 3 in Cycle degree.  

This also helps to keep looking for the gold 4th wave bottom in Intermediate degree. This is a good thing, as it would crush all those deflationists baseless rhetoric. I am sure we are going to  get deflation of some type and it will show up in the US dollar first, but this could all be deflation if stock mania returns. 




Friday, August 22, 2014

Crude Oil Daily Chart Review. Potential Bear Trap?


To put it mildly crude oil is a very difficult asset class to wave create wave counts with as their are no good cash charts until we switch to weekly charts or higher.   From the March 2014 low I count out 7 waves to the June 2014 peak. Then the crude oil crash which looks like a perfect 5 waves down.  Any count of 7 waves is a corrective move and part of an expanded "B" wave pattern.  If this is true then oil can rally and blast past the old high of $104 and even a bit higher.  The decline would have a 5th wave extension which is common in commodities, but not in stocks. 

Elliott Wave in commodities is completely different than what we see in the general stock indices, and it has to do with any 5th wave.  In commodities we will see more 5th wave extensions, as in stocks it's wave three that gets extended most often, or wave three should never be the shortest wave. 

GSC degree wave analysts have produced their forecasts all based on the 5th wave as being the longest wave which translates as 4th wave base. I work all asset classes from an idealized wave one-two, one-two base. 

Of course this wave count can fail, and if crude dances with a choppy and erratic steps, then just another correction will be in progress.  I cannot tell you what fundamental reasons will dominate if such a move was to happen, and frankly they are irrelevant. Let the mainstream media waste their time finding all the fundamentals.  If a lot of oil fear related news comes out, then we know crude oil's upside will top out.  Maybe a hurricane will come out of the hot African sands, which can really push the fear factor. 

US Dollar Intraday Review Bull Trap Or Just Another Correction?

The US dollar is very important if we want to understand where gold will go next. Any decline in the US dollar index will be beneficial for gold and gold stocks.  The fundamentals why the US dollar has rallied are really not important, as they change as fast as the wind can change directions.  If the USD is rising because of safe haven status, then the US dollars rise is an emotional rise based on fear. 

Trends created from or by fear never last for very long, and eventually they reverse and even can completely retrace it's bullish move. 


I was concerned that  the US dollar was going to add another small leg up after a running triangle did complete.  I am counting the entire move as an inverted zigzag, but the last 5 waves are looking a bit to long. A long  trailing "C" wave in a zigzag is not particularly unusual, as they are the same as any start to a 1-2-3 wave.   With an inverted "ABC" I would like to see this entire rally get retraced and even fall well below the 79 price level.

My support line at the 81.200 price level is where I would expect the USD to show support for another 4th wave bottom in Minute degree.  Any move below the 81 price level will help to confirm my present wave count.

We have seen some very bearish wave counts from the GSC degree wave counting wizards, and to put it frankly, the GSC degree decline in stocks is an extreme deflationary move. What is supposed to happen to the USD in a deflationary move?   The USD would rally beyond description as that is exactly what happen during the early parts of the depression as all the stocks already had deflated by 1932.  The GSC degree wave counters need for the USD to rally and surpass all other US bull markets since the 1970's. I believe it is impossible for the USD to rally 5 waves up in Primary degree as all USD rallies are inverted patterns. Besides, the USD would have to have bottomed at a GSC degree wave three bottom in 2008.  Not on this planet, and not at this time. Chances are good that the US dollar could even break a new world record low, before we see an extreme USD rally.

There is also no room for the USD to crash so much that they say will push gold to $5000 or higher, as those gold price forecasts are also a figment of somebodies imagination.  The Euro and our Canadian dollar would also take a major hit as any big  deflationary move would roil world currency markets beyond description.  What has a good chance to send the USD higher is another stock mania attack, but that may happen after a stock market correction.

Any GSC degree wave pattern in any asset class fits less now then it ever did in 2007, so a Cycle degree "C" wave decline will fail.


                                                           











Thursday, August 21, 2014

Solar Cycle #24 July 2014 Review.




I think Solar Cycle #24 had it's peak closer to February 2014, as after that we had a steady decline in sunspot activity.  Recently solar activity spiked, but so far has only produced a little bump.  Notice their forecasts, putting the next major solar cycle low well after 2019.  It takes longer for the solar cycle to go down,  than what it takes going up. Some studies I have read say that it has a Fibonacci ratio as well. (.382/.618)



The wave action in solar activity have all the same characteristics as Elliott Waves do in the stock market, but once the solar cycle has completed, we know no new highs can form. This chart shows the  next solar cycle bottom after 2020, which will match the 20 year cycle I have talked about.

The solar cycle is what I call the, " Elliott Wave Terminator", as it was the main reason why GSC degree failed in 2009!  The solar cycle will also be the main reason why the next attempt at a GSC degree wave count will fail.  One of the worst SC degree crashes in history only took 3 years to complete the entire cycle, including any bear market rally in early 1930.  1932 was also a solar cycle bottom, and there is usually a crash just a year or so before most solar cycle bottoms. 

Are we supposed to get a Cycle degree bottom that may take another 7 years?  I doubt it very much, as most of the time a super counter rally breaks the down cycle into two parts.  GSC degree wave counts cannot have a super counter rally as they need 5 waves down in Primary degree.  If they don't get it, then their wave count will not get confirmed again.  What else is new? They have been trying the same old wave count several times before, and have failed each time.  

Every solar cycle bottom has a stock market price attached to it, and since 1932 markets have never bottomed below or past two solar cycle bottoms.  In general they matched the 1996 solar cycle bottoms. Any GSC degree wave count being forecast has the markets crashing through 5 maybe even 6 solar cycle bottoms.   Every new solar cycle sends the markets into a 5 or 8 year bullish cycle, and our recent market cycle has lasted well over 5 years so far. 

For the markets to  fully crash below the last solar cycle bottom, they would have to go just a little past the 2009 lows.  It has not been since the depression, when markets crashed through two solar cycle bottoms, yet GSC degree wave counts are saying we are going to crash through 5 or 6 solar cycle bottoms.  

The 20 year cycle I pay attention to, started in early 2000, and will end when solar cycle #24 bottoms in 2020 or 2021.  Stock manias  seem to occur during the upswing in the solar cycle, and the first time it came back since 2000, was after the 2011 stock market crash. 






SP500 Daily Chart Review. It's Not A GSC Degree Crash!



Many wave analysts have been working the SP500 as a GSC degree pattern. In the last several weeks I have though about this mythical GSC degree crash, and from my perspective it fits even less today than it did in 2007. The GSC degree wave counting herd are calling for close to a 98% asset decline. Just for the SP500 to keep up to this super  DJIA GSC degree related crash, the SP500 would have to fall well below 80 and it would have to do it within 3 years. The same crash in 1929-1932 only took 3 years, and that was only one degree lower. 

Any GSC degree with a "B" wave for their present top must develop 5 waves down in Intermediate degree, and just like 2007 there is not enough room for a full 5 waves in Primary degree to develop. 
This applies to the Nasdaq and the Russell 2000 as well. Even the Nasdaq could still see the 5000 price level before it completely dies.  Besides the SP500 GSC degree wave count,  has two expanded flats in a row, separated by one degree.  These are extremely bullish wave counts and many times they produce a running flat bottom. Everything about GSC degree stinks at this time, as indices cannot fall to zero. 

I have the potential expanded flat wave 4,  back into play as the SP500 pushes to new record highs.  This would produce a sharp correction, and may not induce hoards of insider buying this time. 

Any major reports of insiders buying would only help a corrective wave count.  We are approaching the new moon this week,  and new moons can be very bearish for stocks.  I don't like to see it when the markets are this slow, but there is nothing we can do about it until shit hits the fan. 



Gold Intraday Crash Review!


Stocks and the US dollar have been on a bullish run, as gold is crashing.
This is a classic stock mania symptom at the intraday level. It also happens on a bigger scale which really got going after the 2011 stock crash and the 2011 gold peak. The best way to monitor this is with all three asset classes, as just one will not be enough to notice this action.

Obviously my last bullish wave count did not hold, but what developed seems to be a very choppy decline down, which looks like it contains a triangle. 


I have many overlapping waves which also can be a diagonal decline. The late July and August choppy pattern should all get retraced and push up for another new high. Even that may have an end to it as pure impulse waves seem as rare as hens teeth.  We need the USD to trend down, as that is the main asset class that pushes gold around.  Fear buying or safe haven buying will not maintain any trend for very long.  If that were the case then gold should be blasting upwards as the wars rage on in the Ukraine and the Mideast.  When any group is using gold for a reason, then that reason will sooner or later not work anymore. A prime example was in late 2011, when the majority of gold investors and banks were buying to protect against inflation.  As soon as all the bulls were trapped, gold proceeded to crash (deflate), completely ignoring any inflation numbers. 

In the short term gold may rally as stocks crash, but the US dollar would have to decline as well. 

DJIA, Grand Supercycle Degree "Reboot"


In the last month I have been looking at a very popular wave count put out by Elliott Wave International and many others.  I can find two identical GSC degree wave counts from two different sources very quickly.  I am very familiar with the GSC degree wave counts, as I spent over 8 years shuffling GSC wave three between several peaks.  Another few years using SC degree wave three and a few more years, using Cycle degree wave three, for the 2000 peak. 

The beauty about the EWP is that it is scalable by degrees, but we cannot be out by a single degree anywhere.  Keeping well over 15 degree levels separated is extremely hard to do, but not impossible. 
A few years ago I would not have been able to say that. 

Any comments in this posting, I switch into GSC degree mode, and have duplicated the standard issue GSC degree wave count.  This popular GSC degree wave count is an illusion, or a myth and has broken a few key rules in the EWP!  The reason they can get away with breaking the rules is because the majority of investors do not look at the big picture, or do they know what to do even if the saw the big picture.  To understand GSC degree you have to find and use a DJIA chart going back 300 years! 

Most importantly of all, a full understanding of the idealized 5 wave impulse is the key to keeping the degrees in sequence.  Knowing how to count waves, never having wave three as the shortest wave, is explained in the little blue book.

In stocks wave three is never the shortest wave, except in the last final degree of the move.  If I see that any wave count is based on the 5th wave constantly being extended then I know this wave count has a major flaw in it.  Any flaw in past wave positions work like a computer virus, and we can adjust wave counts all we want, but in reality we are just making cosmetic changes. 

Recent changes in the GSC degree wave count,  where all cosmetic, as it has been tried before many times. 
Most Elliott Wave analysts are "cosmetic" wave counters, as they can spend years constantly adjusting the same wave count. 

Many times I may mention what a move has to do, or it has to develop 5 or 3 waves, in any up or down moves. All this has to be specific to the degree I am working in.  In the charts below my largest degree that I have passed in 2000 is GSC degree. All corrections must always be smaller in the degree levels.  What all "C" waves have in common is that they all contain 5 wave sequences, except in triangles.  GSC degree cannot be a triangle, but I am sure they will try and make one out of it. 



There are many things that do not make sense in the GSC degree wave count, and only one of these reasons is the physical size differences between the 1987 Primary degree crash, and the 2002 to 2009 Primary degree crash.  Physical differences also creates time differences, as the 1987 crash was over in a few months, but the 2002-2009 cycle was closer to 7 years for the exact same degree. 

They are also telling us that the 2007-2009 decline was a 5 wave decline as it is a single expanded flat, leading into the 2009 "A" wave in Cycle degree.  The move from 2002 to 2007 took 5 years, between two Primary degree points, but the move from 2009 to 2014 took a bit more, but one complete degree higher between two points.  One complete degree difference, taking the same amount of time? This makes no sense to me.  Of course, from 2009 to 2014, the mysteries "WXY" waves appeared out of nowhere, yet none showed up during the previous Primary degree "ABC".


All this points to an expanded GSC degree 4th wave, but expanded waves are very bullish, and many times they produce a running flat as well.  Sometimes they may just barely squeeze past the last "A" wave bottom, before they crank up again. (double bottom)  How many times are they still going to adjust the Cycle degree "B" wave top?  I am also looking for a Cycle degree top, but that may not happen just yet as well. 

This mythical "C" wave Cycle degree decline,  must contain a pattern for the entire drop. This pattern has to have 5 waves down in Primary degree, otherwise any GSC degree wave count will fail again and again.  As soon as the ink dried, the GSC degree wave count above has already failed. 

Just like 2009, the smart contrarians all bet against the GSC degree wave counters as insiders were buying as fast as retail investors were selling. Even Warren Buffet yelled, "Buy stocks" in late 2008! 

Will Warren Buffet or the smart contrarians prove the GSC degree wave count wrong again?  Yes, I am very confident that they will. 

The expected "C" wave down in Cycle degree should not take any longer than three years to complete, as even the worst in 1929 only took 3 years.  There is only "one" degree  difference between 1929 and now.  Even when this GSC degree bottoms, they figure it will only be at an "A" wave in SC degree. I doubt this will ever happen as well.  "A" wave bottoms are buy signals, as 2009 clearly was. 



This is a duplicated GSC degree wave count, and it shows that the 5th wave is the extended wave. Also any Cycle degree 5 wave sequences have been left off, and they also are counted as a 5th wave extension.  My red ink is a potential 4th wave bottom in GSC degree.   In 300 years of GSC degree wave counting they have only extended "one" wave three.  Wow! Talk about ignoring the EWP rules!