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

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:
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

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. 

Thursday, April 9, 2015

1998-2015 DJIA Review: Has The DJIA Hit A Brick Wall?

It has been well over a month since the DJIA has broken any more records to the upside, so late comers to the game are only going to gain if stocks travel much, much higher. Whenever there is a bullish situation markets are being setup to trap as many participants as it can, by telling you that the trend is your friend. Every smart contrarian knows that any trend will never last and they look at many indicators to help them decide if a market is getting top heavy. 

The majority are hooked on the price of something yet market mania is telling us that price is not important, the only thing that is important to investors is that stock prices keep going up!  

I use the EWP which is supposed to teach us how markets behave or how they act. Just because something has gone up does not mean it is in a genuine bull market but can be in just a big bear market rally. Any bear market rally we can usually expect 100% retracement or more from where it started from. 

Most degrees that EWP analysts are using are far to large as this comes about by always calling a move completed before its time. Anything related to Cycle, SC or GSC degree is just a myth as they have never been confirmed by anyone.  Just calculate how many 5 wave runs you need in primary degree to make up a GSC degree triangle. Even SC degree needs at least one set of 5 waves in Primary degree somewhere, yet not a single 5 wave run in Primary degree has been confirmed anywhere since this bear market began. 
The most difficult situation for wave counters is the big bull market from March 2009 to present March 2015. We have all counted this pattern as a corrective pattern which means a big bear market rally in the shape of a zigzag. 

If the bear market rally scenario is actually true then this market will eventually suffer complete retracement and would establish a new low below 2009 levels.  For now I will work it as a "D" wave top in Intermediate degree as "D" waves act much like any large degree wave one or "B" wave would. First waves, B and D wave tops are all considered bull traps in the EWP book yet the general public is buying in as fast as they can. 

The market could still wobble but any sustained move to the upside is pretty well the lowest expectation on my list. There will either be a correction or a downright failure of the entire percieved bull market.  A smaller correction would barely get the bears excited to come out, but a major reversal would be a whole new ball game especially if we have a three part move. (ABC) Any "E" wave decline  requires a 3 wave pattern, which can shape shift into several different types where it will be hard to recognize the "B" wave counter rally at all. 

There is no speed limit or time period here, but the longest decline so far has only been around two years.  Even if the next decline only took three years then it would travel through the next election with no sympathy at all to the new president of the United States.  If the new president starts to raise havoc then this will start to happen in early 2017. 

I have mentioned it many times that when all the markets are pointing up, I build wave counts for the markets going down. If I pick a first part 50% correction then it is a big difference if I use 50% of the net move or 50% of the gross amount which is about 18,250 with the DOW. 
I will be using net calculations as gross calculations have never worked for me.  It is also very important to see where previous major turnings have had support at as a simple retracement number will also not work. 

I have presented my bigger outlook more than talk about pattern action but a present ending diagonal cannot be ruled out.  I follow my idealized script and use that as a guide to what  I am supposed to be looking for, not what the wave pattern in the markets look like.  

Wednesday, April 8, 2015

Gold Daily Chart Review : What If?

As I was looking at the gold daily cash chart, the decline from January 2015 to March 2015 sure can fit into a straight wave two correction.  Besides being completely wrong it is important that I use it because impulse waves do fall apart quickly when they are wrong. I always use my best wave counts first as EWP is all about the process of elimination.  Confirm it or dump it is the name of the game.

This wave count will eventually leave the $1300 price level in the dust, which is hard to imagine when the planet is still bearish on gold and oil.  It has all happened before as disbelievers dominate the bearish scene just before it blasts off and makes a 50% jump! 

At present we still may need more correcting in gold but any move below the  $1143 price level will destroy this wave count instantly. 

Gasoline refineries go full throttle to tame record U.S. crude oil glut

DJIA Intraday Chart Review: Still Some More Upside To Come?

Since the Mid March bottom the DJIA produce two sets of 3 wave patterns in a row, and now what looks like a 5 wave run with the 5th wave still to play out.  In short the DJIA should break the 18,000 price level before it is ready to tumble again.   The first 3 wave set is already telling me that the big double bottom will not hold which would be the 17,580 price level. 

Crude Oil The End of A Run Or Just Another Correction?

Crude oil broke my ending diagonal recently but only by a slim margin.  By mid March crude oil bottomed and then proceeded with a rocket 5 wave move that by itself I can only fit into a smaller diagonal.   Oil could gyrate back and forth but I will be looking to see if a correction starts to develop  before oil breaks another bear market low.   I would like to have seen oil completely clear the $58 price level at this time but I am sure oil will clear that $58 price level in the future. 

Crude oil broke its record low with a 3 wave pattern which could be part of a diagonal 5th wave as well, I just can't fit it into an ending diagonal.  It is pretty obvious now that crude oil is developing another pattern and much bigger in physical size as well.   Don't let the physical size difference fool you as 4th waves have a bad habit of doing exactly that. 

On the cash crude oil chart in which I can only show weekly and line charts, crude oil has blasted past all important highs already pushing the gold/oil ratio to 22.27: 1 If the ratio was about normal crude oil should be around $86. 

The March crude oil low could be a major low for oil and the cash chart confirmed it but only time will tell us if that major bottom will hold. 

Tuesday, April 7, 2015

Silver Intraday Review:

Silver is always a real challenge to keep wave counts on as its largest pattern is not a true impulse but  diagonal waves one after another.   Gold did not confirm silver which seems to be the norm between the two.  I think I am working one more diagonal "ABC" decline which also contains an expanded pattern.  One more wild little dash to the upside and that could complete my smaller ending diagonal. 

This gives silver a Head and Shoulder pattern from which it can get pushed to the downside, but we also know big bull cycles can start from H&S patterns. 

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US Dollar Intraday Review: Buying On The Dips?

              Dollar Drop Signals World’s Best Forecaster to Start Buying - Bloomberg Business

Yesterday I read this showing us that professionals see the US dollar bull market dip as a buying signal.  In the short term they may be right but buying at the top of a bull market that is starting to wear out gives you very little room for profit, but you would be carrying maximum amount of risk.

Everybody on earth already knows the US dollar bull market, and when this happens ask yourself, "Who is left to get in?"

When the above posting came out the US dollar reacted quickly which looks like a nice 5 wave pattern at this time. This tells me that Alvise Marino has a large following as it seems to have moved the markets. Commercials have increased their net short positions and they are still net short by a large margin. This reminds us that the USD is fighting against winds that are shifting from the SW to blowing from the NW.

Short term downside support may be at the 79.00 price level if a correction ensues soon. If we have one zigzag already completed then the US dollar should exceed the top of that price level sooner or later. Sure we have lower highs but that can be wiped out very quickly.

Any bullish move in the US dollar would keep gold on the depressed side, short term bear traps not withstanding. What many do not see is that the USD is on a big bear market rally and the majority do not know the difference between a bull market and a bear market rally. Experts are bullish after 6-7 years of US dollar bullish behaviour and a potential "C" wave bull market. 

The vertical move in the US dollar since May 2014 is not normal and in the longer term should get completely retraced. It's part of an inverted "ABC" with a base at the 79 price level.

Monday, April 6, 2015

Gold Intraday Price Action Review

Gold created a double top and then instantly turned back down. Just before the gold price exploded it also open up a fairly large gap. That open gaps sits just a bit above $1200. The $1200 gold price is starting to become very popular and some even say that if gold stays above $1200 that this is bullish. 

Those kinds of forecasts sound good but from my EWP perspective mean very little.  Price has little to do with any Elliott Wave pattern as pattern is far more important than price. The gold move since mid March looks like an impulse wave but so can any expanded pattern with a "C" wave tail to it. 

If gold were to keep compounding impulse waves we could be very lucky and be at another wave 1 peak from which we could see a 60% or more correction if gold was in a weak pattern. 
Silver did not confirm the extra low like gold did on March 17 so this bullish run can be very deceiving if it were an expanded "C" wave. 

There has not be sufficient clarity in gold's decline to say that the real bottom has already occurred and even if gold still soared much higher I would still to classify it as a bear market rally. 

Any gold price decline breaking new bear market lows would defiantly help in clearing up the choppy pattern that have developed. 

Today the gold/oil cash ratio topped out at a bit under 25:1 which is still extremely cheap  when compared to gold.  Last time the gold/oil ratio did this crude oil jumped from being in a world glut to $147. 

HUI Short Term Bullish Review.

 The HUI is still breaking all the rules of an impulse wave. I have no choice but to look at many of these waves as diagonal waves. These diagonal waves are full of 3 wave structures and it all depends on where you count from.   We are in a small inverted Megaphone pattern and the cone is forcing the HUI to move to the extreme lines.  Make or break the trend lines is the name of the game  for triangle trend lines.   I gap opened up to the upside with several more still open to the upside but I believe the recent gaps has to get closed before the HUI starts a bigger bullish trend. 

The 150 price level represents the bottom of the 2008 crash as we are sitting at a huge double bottom going on 6 years. The thing is with double bottoms I don't trust them anymore as double bottoms are just an invitation for the markets to wreck them.  Any double bottom is drawing card for all those who love to play the downside breakout game. 

Even if the HUI does not break low as I would like and a big bullish move just keeps building to the upside, I still could not fit the HUI into a super bullish phase. 

SP500 Explosive Rally Review:

After a few days of rest investors had time to mull any bullish outlook but in reality chances are good  it will turn into a false rally.  The really reason for the rally was a bunch of bears got caught in a bear trap and that they were more like in a panic as they took stop losses.  

I still have my 7 wave count going up not being retraced just yet and I believe that markets will still do it this year.   A soaring diagonal wave just starting out will certainly do it but we can see we have some very violent snappy moves which I have not seen too many of except in the last few months. 

The market must eventually die or correct as there are still too many bulls around right now.   We are also in a small dual H&S type pattern which can be very bullish at least in the shorter term.

In this case we can always be in another correction which the SP500 would  eventually trash my top trend line.  In late March we had another smashing bullish move that can only fit into a correction so eventually my wave 3 bottom in Subminuette degree must get retraced. 

Apple investors also made a leap of faith as it pushed higher on this opening as well.   It would take a sustained financial crisis to take down the markets and the woes of oil is not going to do it just yet.   Of course I don't waste my time reading endless stories of which sector is the worst sector, besides the trigger could be something completely off the radar screen at this time. 

Friday, April 3, 2015

Donation Thank You

I would like to give a big thanks to Mark.B for the $20 donation.

Crude Oil Daily Chart Ending Diagonal Review

This is the June crude oil contract and since the beginning of July 2014 crude oil has imploded or has crashed. The entire crash since July 2015 produced no significant counter rallies time wise, but now since Jan 2015 crude oil has made a bigger physical move and much longer in time than another move since July 2014. Does a bigger physical wave also force a bigger degree change as well?  Not from my EWP perspective as I follow the idealized wave sequence That I am supposed to get in a potential "C" wave crash! 

Many times the end of a "C" wave crash will grow an ending diagonal with 5 overlapping waves very tight together.  The 5th wave can extend dramatically as well but any new low would sure help to confirm what I think is developing at this time. 

All the bearish low forecasts are still being regurgitated with $30 oil also being repeated.  How can they go wrong with a $40,$30 and $20 crude oil price forecasts yet to come? How can they go wrong this time around when all major price targets are used up? Repeat the prices long enough like a parrot,  and many people will have those numbers burned into their minds. 

Many people in the street can tell you that they expect oil to fall to $40.  This all may happen but what they will "never" tell you is what will happen to the price of oil once it achieves $40? 

Will they say with confidence that the crude oil bear market is over and it's going to roar as it is finishing a major 6 year bear market? (depending on where you count from) I doubt it very much as I have never seen consensus forecasting be contrarian in nature.

Even though we have been swamped with crude oil bearish news, crude oil has been able to pull off some dramatic moves in both directions.   The more oil ignores the bearish news the closer we are to being over on the bullish side.