Tuesday, July 29, 2014

Tech Companies Reel as NSA's Spying Tarnishes Reputations - Bloomberg

July, 29, 2014 Mini Nasdaq Daily Chart Update!

The Nasdaq has been walking to a different drummer, because it has not followed the SP500 higher in 2007, and it has not past it's 2000 peak of 4,816.  The other three indices have topped their 2000 peaks by a long shot, but the Nasdaq is still a good 820 pints away from achieving a major double top.  Is there something wrong with the Nasdaq? Certainly not if we know what an expanded flat is, and what it can do.  This can only be explained once we go back to a mostly forgotten crash that happened in 1998! Yes, another low ending with an 8.  From that crash the Nasdaq and others roared again pushing to new record highs, before they all imploded with the dot com bust of 2000-2002. 

I always argued that the 5 wave decline into 2002 will never fit into the Nasdaq bear market, but must be something else.  Markets generally warn us that a major change is about to happen with a basic wave 3-4 crash, or parts of a wave 3-4 crash. Even the 1987 crash gave warnings a month or so in advance. 

That 1998 crash and subsequent super rally was an expanded "B" wave move, and the 2000-2002, 5 waves down was all part of  a "C" wave decline.  So the bottom in 2002 ended with 5 waves but landed on a 4th wave bottom in Intermediate degree. All this makes the 2007 peak look like a truncated (shortened)  wave of some type.  I think the 2007 peak in the Nasdaq fits perfectly as a Primary degree wave 3 top, and the bull market from 2009 to now, has all been part of a 5 wave move cleaning up  one Primary degree 5th wave.  

The Nasdaq may have one peak in March 2014 which could be my wave 3 in Minor degree not Intermediate degree,  and it sure looks like an expanded pattern is in progress.  I have more open gaps below than I know what to do with them, but eventual "all"those gaps will get filled.  For now I show two that should get filled by the fall of this year, but that would also produce a base to jump from, as this market refuses to die.  Insane valuations can mean nothing if the markets are anywhere inside a true impulse or a diagonal  impulse wave.  Any, expanded flat crash into a 4th wave bottom is also the first and only warning we get before an even bigger crash.  If all this comes into play then it will be the first time I may be looking at a Cycle degree wave three top in the next year or so. 

Again, it is the years ending with a 5 that will throw a monkey wrench into all bearish wave counts and projections. I have gone back 11 decades and I have not found a single time when years ending with a 5 were not bullish. WD Gann calls the 5th year, "the year of ascension".  Beside Jupiter has entered Leo, which has also been very bullish in the past. 

Even years ending with a "6" have also been known to be bullish years, and we can't forget about the US elections in 2016. The politicians will pave the roads with green paper,  as they march across the nation buying votes.  It is after the elections that things can fall apart again. 

Something exceptional would have to happen, to break all these long term establish cycles. 

July, 29, 2014 US Dollar Daily Chart Update!

As much as I would love to be bearish on the US dollar it sure doesn't seem like it wants to turn just yet.  Right now I have what counts out as a 3 wave rally, and wave 4 and 5 may still happen.  I say "may happen" many times because 3 wave rallies do get completely retraced and more.   Saying that a wave count is "clear" is just a big joke with me, as nothing is ever perfectly clear.  Back in April May, the USD dropped to a new low with a 3 wave pattern, which can fit into a diagonal 5th wave very easily.   I show another "ABC" traveling up but this can also turn into a bigger impulse wave. 

The US dollar also peaked in July 2013 before a major downward trend developed. Will it happen again? Let's hope so as that would be very bullish for gold.  Commercials offer no insight as very little change with my last COT report. They are still net short the US dollar. The commercials are not the wild ones as they have different strategies and they are far more knowledgeable than the speculators are with a lot less risk.  I mention this because many analysts use the speculators as the ones that are the smart ones.   Speculators are the ones that constantly get into a trap as they "chase" the market in any direction.  Speculators are net long in the USD as they even have more long positions than the commercials do. 

My longer term price target was above 81.400 and this will be broken by a wide margin if a small wave 4-5 was still to play out.  This would make 82 the next price target. 

At 83.400 I have yet another lost and forgotten partially open gap. Any rally in the USD keeps downward pressure on gold, and many fundamental excuses are used to explain the US dollars rally. 
Fundamental reasons change like the wind and many times the same reason is used for both up and down moves.  Many times, "safe haven" is used as an excuse, but have any of your friends ever made money trading into safe haven assets?  These are all fear based moves, and those types of moves  can never sustain a trend.  


                   There will be no updates next week as I take a break for a few days. Should resume posting by the first August full moon or sooner. 

Monday, July 28, 2014

Crude Oil Monthly Chart Elliott Wave Count Review.

As I mentioned in my DJIA update which contains Chevron and Exxon as two of the 30 in the DOW.  Will these two stocks just sit by and do nothing as the DOW starts a potential meltdown? The chart above is Chevron pointing straight up and has not followed the crude oil charts down, not yet. Of course that could change in an instant. Many analysts are very bearish and I assume that most SC and GSC wave analysts are really bearish in stocks.  

Obviously Chevron did not stand up very well in the 2009 meltdown, so is it going to be different this time? 

There is not shortage of crude oil in the world, as they say, "inventories are very robust".  That little lone tanker that has escaped from Kurdistan is last rumoured to be heading to the USA!  What a trip that tanker had!Tanker with Iraqi Kurdish crude cleared to unload cargo off Texas | Reuters

 Every major country in that region has plans on increasing production and probably fear is the only thing holding the crude oil prices up. If crude oil is still destined for a crunch then my  $75 price level would  be a good target price level to watch.  If this is the case then there also must not be any more newer highs.   In the Dec futures contract the last record high was on June the 25th 2014 at about  $103 US per barrel. There is no guarantee if oil is finished going higher, as it seems to be fighting through a potential wave 1-2. Any plunge below $97 would help to confirm that the present rally is a bearish rally.   

Any trend line I could draw from the late 1998 bottom points to a potential $70 crude oil  price. It also seems like years ending with 8's can bring rock bottom crude oil prices. Even 1988 crude oil made a deep dip. That means 2018 could also see a severe low price in crude. 

Apple Stock Approaching A Major Double Top!

Apple, Inc's double digit U.S. Mac growth contradicts IDC & Gartner reports of a Mac sales slump. 

This just goes to show how they can get fundamental information so wrong. Many analyst regurgitate this type of reporting.  In fact Apple sales have been stronger than ever. The truth is in Apples bull market.  

It's been about two weeks since I last created an update in Apple, and it is now approaching one little open gap, but is also starting to get to a major double top.  Apple  still has not broken into new record highs, but we can see a good sequence of higher lows reflecting a typical bull market.  If we head into a correction that is much shorter than anticipated, then Apple could just react and decline, just before the double top is even reached. The next correction could only close the previous  open gap,  and maybe hit the 200 moving average. Then it would have the power to come back, and exceed all time highs very easily. 

All somebody has to do is start a false rumour about Apple and the selling could start.  China does this by attacking Apple's products as a spying tool.   Apple fight's back vigorously, and it should always do that when it is under verbal attack.  If Apple made any sudden moves down, and another gap opened up in the process, then that would be a good sign.  

Mini DJIA Daily wave Count Update! Are The Greatest Fools In A Bull Trap?

The markets seem like they are rolling over,  but it has taken a long time to get to this point.  In late 2013 the markets peaked and then instantly dropped before the DJIA worked it's way back up to new record highs. This move can be very confusing if we have no knowledge of what expanded flats can do.  The market peak in 2000 did not contain an expanded flat in the DJIA, but all the other three I cover did. Now we have another potential expanded flat which started in early 2014, and it is a matter of the degree which will determine how far down this pattern can go. 

I looked at many individual stocks in the DOW 30, and 3 or 4 of them have an opening gap already. The Russell 2000 has several open gaps as well, and now if a gap opened in the DJIA, that would help a great deal.  I 'm keeping my wave count in Intermediate degree, as a Cycle degree wave three is not an option yet, and even less of a choice is a Primary degree top. 

Also if the DJIA crashes as long as some expect, then two of the biggest oil companies in the DJIA should crash as well. Crude oil will not stand up to that type of punishment. Even Alcoa which has exploded, must take a hit in any Dow decline. I find it hard to except that the 4 or so commodity companies in the DOW will ignore all others and not get caught in any decline.

I looked back over 100 years in the DJIA, and there has never  been a year ending with a five that has not been very bullish.  If all of 2015 ends up being bearish then it would be the first time this will happen in 100+ years.  

Even years with a 6 have been bullish in the past. Beside who says that the markets can't have an 8 year run?  It certainly could do that if the markets were on an diagonal 5th wave.  2016 is also an election year where huge amounts of money will be dumped to buy votes, and that alone can have a very bullish effect. After the election then things can go horribly wrong. 

The VIX has also spike,  leaving the bottom gap unfilled. At this time I hope it will "not" get filled, as any expanded flat in the DJIA will crash the VIX at a later date.

Commercials are not really all that net short in their positions,  and I would expect a bigger net short ratio if a much bigger decline was to happen.   

There is no way that I can leave this potential expanded flat and ignore it, as these expanded flats wreck havoc with our wave counts. Many times we do not know we are in an expanded flat until it is too late.  The steeper the decline the better, and how deep it can go is not an exact science.  Many DJIA stocks can not handle a multi year decline, as none of them are showing signs of a potential high degree impulse about to be setup.  Either way this should produce 5 waves down in Minute degree and any deviation from that will force an expanded flat review.

My updates will take a break in early August but should resume by the first full moon in August! :)

The last investors joining this party and all those that feel complacent in their returns will get a rude awakening in the next few months.  The pain of "no gain" will become evident and force the bulls to make changes. In futures you would start to see sell stops get hit, further aggravating a bearish decline.

Mini SP500 Daily Chart Elliott Wave Count Update.


There will be no updates in the first week of August as I take some time off, but I should be posting again by the next August full moon! 


It looks like the stock market is making the right moves, but there have been some interesting chart developments already. These developments will throw a monkey wrench into the super bears forecasts.  I am sure all the SC and GSC degree wave counters, will be telling us that this is it, and we are heading into a depression. Isn't that what we've been hearing for decades now?   Even my favourite contrarian is very bearish as he thinks this bearish phase will last into 2017.

Mr. Kaplan talks about being bearish through to 2016-2017.  You never want to bet against him as he can read the markets far better than all Elliott Wave counters can.  This bull market has gone on well over 5 years which is a normal bullish phase, but rare as a bear market rally.  Who says this market cannot travel 8 years before it implodes again?  The Russell 2000 already has 4 open gaps on the way down, which is a clear warning that this market can come back with vigour, and retrace everything.  

The only question is when, as the SP500 does not have any opening gaps just yet.  What it does have is a potential expanded flat which started at the end of 2013, and has been grinding north ever since. These expanded flats if undetected and left uncounted, will wreck havoc with the wave counts, as they can produce all sorts of surprises. 

It is an expanded flat that made the Nasdaq wave pattern look so out of sync from the DJIA and the SP500 wave counts.  I have gone back over 100 years with the DJIA to check all the years ending with a 5 and they all had very bullish periods connected to them. Either the last part or even the entire year, like 1915 were bullish. So if all the claims were to come true that all things will be bearish in 2015, then the markets will be breaking a 110+ year tradition. In 2016, we have the entire US gearing up to spend 100's of millions of dollars, as the candidates traverse the country showering money on all the voters.  US elections are the equivalent of many, Helicopter Ben's"  throwing money at the public.  It's when the party gets into power after the elections, that things can go horribly wrong! 

I also find it hard to believe that the general stock market is heading into the pit of darkness, and gold is just going to wander up the entire time?  It's more like gold could end up supporting the stock market, just like it did in 2009 and even in 2002. 

Other times at major peaks, we would also get some type of a final spike, but this time we can fall asleep at this peak.  All we need is a few gaps to open in the the SP500, DJIA and the Nasdaq and we have ourselves a decline that could stop on a dime and then reverse.  Are the bearish markets going to take down Apple's stock price as well?  Wouldn't that burst all the consensus forecasts of Apple going to $110!  How dare Apple have a crashing stock price before iPhone 6 sales even hit the streets. 

If the SP500 is going for a topple, I don't  think Apple is just going to sit there?  A general market rout will take many other asset classes down as well. This is also easier to see on many of the DOW component companies, which have also opened up gaps on the way down.  Even the DEC 2013 peak in the DJIA fits as a major top, as the rest of the markets action, would belong to the bearish phase already.  Meanwhile the majority has no clue that a bearish phase can strike, but strike it will, as all bullish cycles come to an end.  

As I said, all it takes is for some gaps to open, combined with the open gap in the VIX and a reversal will happen.  I will no longer apply the megaphone pattern on the SP500 as even the worst crash does not have to push the markets below 2009 lows.  

If this starts to happen, then will we get enough insider buying to push the markets higher one more time?   It will also be important to see what type of angle is in the decline,  as that will all help to point to a potential "C" wave bottom in the next few months or longer. 

Expanded flats are the biggest single wave pattern that gets created just to screw up every wave counter in existence. They are just so easy to miss and very few wave counters are actively looking for them  If an expanded flat is in play then no matter how deep or how ugly this market will get, it will stop and completely retrace the entire decline. 

Sunday, July 27, 2014

Gold Daily Chart Elliott Wave Count Update.

Gold Remains Heavily Bearish On The Daily Chart | Investing.com
Gold Continues The Bearish Trend And Trades Below 1300 - Action Forex

As soon as gold made a short drop below the $1300 price level, the analysts take that as a bearish indicator.  Of course gold didn't want any part of that and promptly pushed back above $1300.  Gold bears may all be right, but so far gold has defied the gold bears forecast.  Determining if gold is in a bullish phase by price never works, because it is the pattern that golds behaviour makes that determines if gold is bullish or not. Just because we had a strong rally recently does not mean that gold is set to go to the moon.

That is always easy to say but difficult to confirm at any given time. I prefer it when an asset class is at the extremes, but gold is nowhere near any extreme at this time.

I could draw my trend lines down just as easily as I have drawn them up, and next week will hopeful help clear this up.  I am keeping my wave three at the 2011 peak for now, until I completely eliminate my triangle as a pattern still in progress.   The only thing we do have in gold, and that is a higher low, and in the last month a second higher low.  If gold is still going to impress us, then it has to keep creating these higher lows, until gold points due north one more time. 

If it was actually a Cycle degree wave three that topped in 2011, then we still have a long haul bear market ahead of us.  Even if  Cycle degree wave 4 is in progress, I no longer see cycle degree wave 4 bottom as going that deep.   Worst case scenario could be a stop at the $500 price range, but I stress that this still can be years away before it can happen.  If the stock market declines and gold is up, we could get into another "stock mania" situation, and gold would crash if stocks started to turn bullish again. 

There has been no real insider selling in gold stocks, so there must be something extraordinary that would have to happen to force gold stock insiders to sell now.   Since the 2011 peak gold has not displayed perfect impulse waves which is actually a very bullish indicator in the long term. Somewhere in gold's future would be a 5 wave  Primary degree bull market.  If the 2011 top is only an Intermediate degree top, then we would only get 5 waves in Minor degree. I would love to count out a wave 1-2 already completed, but they generally have a flow to them that gold is not displaying at this time.   In a very bullish situation gold would also have to find support "above" my top trend line, and it would have to break 2011 highs. 

Just a reminder, My updates are going to be erratic this week and there maybe no updates for the following first week in August as I take some downtime. 


Saturday, July 26, 2014

July, 26, 2014 Russell 2000 Crash Review.

This was a report which noticed the small caps take a plunge on Friday. 

On the Russell 2000 charts that same decline caused another gap to open. We already have two open gaps and now we have three of them. Each gap has a 90 percent chance of getting filled again, but the question is how soon?  I am always on the lookout for that illusive expand flat to show itself,  and the Russell 2000 sure looks like it has one right now. It actually started in the beginning of 2014 and even the DJIA can have the same pattern.  Of course we need a much deeper decline to happen before this is all over and done with, as I would need a clear 5 waves down in Minute degree to develop. 

It would be fitting if a few more gaps were to open up on it's journey down. 

Expanded patterns are very popular and have huge forecasting powers built in, combined with the gaps, the Russell 2000 can crash but then make a violent reversal and retrace the entire decline and push much higher again.  How deep it can still go is still a guess at this time but these patterns can go deep.  

US Dollar Daily Chart Update.

As of July 22 the commercial traders were indifferent as no big volumes exchanged in the US dollar. COT reports.

The US dollar has created a rally that all the deflationist need to happen for any of their forecasts to become true. Well good luck with that, as there is so much cash sloshing around in the system that even the 2008  crash did not sustain a deflationary spiral.  Since the early May 2014 bottom, the US dollar blasted up and then corrected before finishing the week up.  This run may have some more to go as I think a small wave 3-4 still has to play out.  Yes, the angle of accent is very steep and for an even bigger run to materialize, the outside of the top trend line would have to become support. 

Right now I can only work this as an inverted zigzag, which if proven true will eventually send the US dollar back down again. 

A little past 81.400 we start to run into resistance that also contains an old gap. I have been waiting a long time for this group of waves to be exceeded, and we are getting close.  Close enough is also not good enough, as if this range does not get cleared this time, then it will do it another time. 

Yes, my present inverted "ABC" can turn into an impulse but we can see what happen in July 2013 after which we had a good 3-4 crash in the US dollar.   The next full moon will not be until August the 10th as this also happen in the first week of June 2014. The USD crashed perfectly with that full moon, and then rallied from a June first bottom also a new moon. It seems that the USD can blast right through a full moon cycle and line itself back up.  Now we are facing another new moon with the USD chart already pointing up.  Time will tell if a short correction is due before the USD pushes higher.  August the first could become very violent as the job numbers usually causes major reversals. 

Mini DJIA Daily And Weekly Chart Review, Wave Counting Under The Dome!

Greenspan says bubbles can't be stopped without 'crunch'

July 24, 2014, 8:44 a.m. EDT

 Just in case we hear ourselves repeating the saying, "It's different this time", we can read the lines of Greenspan's comments. Markets always change but human emotions never change. Did Greenspan just get some kind of a photo flash moment, because creating major bubbles was his specialty?  Greenspan should have picked up an Elliott Wave book , because it would not have taken him this long to figure out that all bull markets come to an end.

It is "when" these bubbles or bull markets come to an end, which is  the most difficult part to figure out. How many times have we declared the stock market ready to crash before it turned and then pushed higher?
How many times have we seen a wave 2 top in Primary degree being declared, before the DOW turned and pushed higher as well.   Knowing when to declare a wave count dead is a big problem with Elliott Wave, and the only way to declare a wave count dead is to review the largest degree in progress all the time.

Hopefully, Fridays  market action  will keep going, but we should be ready for another surprise rally just in case. I see evidence of gaps opening up in the Russell 2000 already.

To understand my wave counting, you have to visualize  an idealized 5 waves in Cycle degree, with wave three being the longest, and this wave three usually is divided  into a minimum of three smaller degrees. Using only two degrees will not extend wave three sufficiently enough.   An idealized wave chart is the blueprint we need so we know what to look for in real world charts.

 All it takes is one wave count and one degree to be wrong, then all other wave counts no longer have a base to work from.  My  base or core wave count is 5 waves in Cycle degree, which has a very specific start at wave zero. This 5 wave sequence will not be completed until all other Cycle degree wave counts are found and confirmed to a Minor degree level.

I am sure you will not find too many wave analysts that have completed 5 waves in Cycle degree anywhere, even though every wave counter needs to find them.

Not until  Cycle degree wave 5 is completed, will we ever see SC degree or higher wave counts.  Roughly all my wave counts are a minimum 2 degrees lower than all wave counts out today, and  I have no plans of shifting back higher anytime soon.

I'm not satisfied that any Cycle degree wave three has completed or is completing in stocks, but currencies could be a different matter.  Since the 2007 peak my largest degree is a Primary degree, and I just can't  start inserting Cycle degree wave counts without all Primary degree runs being finished.

The DJIA daily chart has turned a corner, but if it is the right corner, only time will tell. On July, 16, 2014, Jupiter entered the Leo zodiac, and  July, 17, 2014  was our last record high at about 17,150. One crazy small bounce and the DJIA could hit 18,000 . It has been flat for 8 days already and investors will start to feel the pain of "no gain".  

When they start to feel that no gains are being made then investors will do something, or buyers will refuse to show up. In other words the Greatest Fool, is already holding all the high priced paper! Sadly enough it's always the last group of people to buy into stocks at 5 year record highs. 
The recent decline is blamed on Amazon's spending spree citing a PE ratio of 506. I am sure there will be no shortage of reasons why the stock market is declining. 

Many past DJIA corrections have taken a year or more to plunge, and then come back 100%  and higher. Every "ABC" crash the markets dished out, was retraced and then exceeded. 

  Saturday is the new moon, and new moons can be rather bearish for stocks.  These moon cycles do fail as at times the markets will just charge right through, and ignore the bearish cycle altogether.  New moons can be very bullish for the USD as well, but the USD is already up on the new moon date! Does this mean the USD is going to charge through as well?  

My Cycle degree wave zero starts in 1932, which is also where wave two in SC degree ended.  
This matches all the commodities, but waves act differently in commodities due to all the leverage. 
From wave zero in Cycle degree, no other wave degree can materialize and be valid, as we would be breaking every mayor rule in wave counting, if we allowed a degree out of sequence. 

The markets have to make an attempt at correcting, and how deep they can go is mostly unknown. Any diagonal 4th wave crash can send the DJIA down to my wave 2 in Intermediate degree, before the DJIA starts to crank back up.  What if we get a steep crash, where we end in a running flat? Wouldn't that shock all the perma bears? 
A running flat could mean 5 waves up in Intermediate degree are still to come. Of course they would be fast waves, but they would have to start from a very bearish attitude with investors and analysts.  Any arbitrary price level will not work. 

The  1987 correction had a running flat,  even 1980-1982 was a running flat, but in Intermediate degree.  All this correcting should not take all that long but I am looking at early 2015 as a possible latest turning period. I would have to see solid reports of insider buying on many of the DOW component companies, before I start thinking longer term bullish thoughts again.  

If you think this mythical DOW 1000 price level is the target, I am sure your going to get disappointed.  One reason, is that there is nothing down at that price level to offer support.  They are all 1-2, 1-2, 1-2 waves and from the 2000 peak  they all switched to  3-4-5 waves.  My next biggest 4th wave bottom will be a Cycle degree wave 4 bottom, as I already have counted out wave 3-4 in Intermediate degree.  


Unbelievable collapse in small-cap stocks - MarketWatch

Friday, July 25, 2014

Mini DJIA Intraday Crash Review!

I have no clue in what the majority saw this morning to prompt a sell off. The news will never tell you what type of a market move just happened, and it can't tell you how deep it is going to go.   Some news release will be to blame, and when they can't figure out a reason why something happened, then they chalk it up to "technical selling".   Besides the markets going due south,  it looks more like the market just dealt out another "ABC" 3 wave run.  There is little difference in counting cards in a casino or counting Elliott waves in the markets.  When I get a "run of 5" then I should get a "run of 3" going the other way.   What really screws up a count is where we start our counts from. 

We are on the last trading day before a new moon, but we could be facing a flat type pattern, which means only one thing, the markets have to retrace the entire pattern which started back on July, 17, about 8 days ago.   The markets have to produce lower highs, but this is fairly early to see a difference.  When I look back I see we had about an 8 day bearish market, and the longer no new record highs are made, the sooner investors will feel "no gain".   When the markets go flat to sideways, then it is only a matter of time before investors get frustrated and start to leave for greener pastures. Buy on the dips! Sure that works in a true bull market, but dips in the markets can be the first dips in a sequence of many more dips to come.   Buying on the dips never helped anyone in 2007-2008, not until insiders started to join in the buying party. 

Thursday, July 24, 2014

US Dollar Intraday Futures Chart Elliott Wave Count Update.

The US dollar has seen a nice run up, and gold has gone the exact opposite way. How many fundamental reasons can you come up with, to explain why this happened? If you look hard and search the internet, I am sure you can turn up 5 or 8 fundamental reasons why the USD  has gone on a bullish phase.  The problem with fundamental analysis is that analysts must have a reason, otherwise they would not have a job.  One guy can post a single fundamental reason and dozens of news wires will pick it up. Next thing you know its on all the headlines and everybody is happy because they found out why the USD went up.  Sure, I understand the supply and demand pictures, but I look at supply and demand of emotions as fundamentals. 

On the flip side gold will have just as many fundamental reasons, why it crashed.  Also the problem is, by the time we hear about it in the news its already too late to do anything about it, like make a trade. 

This is a classic "stock mania" move, which has happened many times in past financial history. Since 2000, the next biggest stock mania move started in 2011 and has been drifting in and out on the intraday charts as well.   Will the US dollar tank while stock markets correct?  If it did do this, then gold would rally, and I am sure the generic fits "any" reason "safe haven", will be used.  

The Euro is determined to push south as well, even though the commercials were net long. 

I think the USD is ready to make a correction, by going sideways, or dropping to the 80.450 price level, before cranking  up again.  The USD is crawling along my upper trend line, and I would have to wait until the top line is  breached by a wide margin.  All this against a backdrop of the commercial traders  being net short.  It will be interesting to see if commercials added more shorts this week or if they added more longs, but that info is not out until Friday.

At this time I have to go with my impulse wave count, and it would have to dramatically breach my invisible bottom trend line, before I cry "Uncle"!  The new moon is on Saturday and I have seen the USD rally at the new moon dates.   

Thursday, July, 24 Intraday Gold Crash Update.

It is obvious to the world, or at least to the majority of gold watchers and participants, that the trend in gold is down, and this may end up being very true.   This is about as far as I would like to see gold go, as I am fast approaching my original wave 1 in Minute degree.   Gold still had some downside momentum going, but a potential rally could be near.  At the time that I was posting this, gold was at the $1287 price level, which is only $100 away from all time gold bear market lows.  In just about  7 months gold has only advanced $100.   Not really that impressive as we know gold  should do much better in a true bull market.   Gold could rally back up to my 4th wave at the $1325 price level, and then die again, if a bigger bearish phase is still to play out 

I am looking at this intraday chart with a potential expanded top, which if true would send gold right back up and exceed the  "B" wave top, of $1345.  Right or wrong, I don't like to miss any potential expanded pattern, as they are extremely powerful forecasting waves.    If we get a fast and very violent counter rally then I would say more downside would be on the way. 

So far all the gold bears will be basking in glory, as they have warned us that lower gold prices were still to come. Most of my Google alert stories were bullish yesterday, and in the next few days I would expect more bearish gold news to come out.  

I do show a left and right shoulder, which would not hold as well, if far more bearish downside was still to come. 

Wednesday, July 23, 2014

Another Gold Intraday Update.

Gold is right in the middle of a triangle cone as the lower highs keep forming.  Gold should not break below that June 15th bottom to keep it's bullish momentum going, otherwise we are looking at a bigger correction yet to play out.  The summer doldrums are definitely upon us with no real present extremes. Now it is a test to see which wins out. 

There will be no updates during the first week in August as I will be taking some downtime between the 4th and the 8th of August. 

July, 23, 2014 Hui Gold Stock Update.

This gold market is moving at a snails pace compared to other times, but it is the summer and understandable.  Gold stocks have come off "a" bottom, not necessarily the "real" bottom though.
I have moved my trend lines to reflect a bigger picture, but it also shows the gaps.  One major gap is at  the HUI 320-340 price level, but there is also another gap below at the 220 price level. Which one of the two gaps will gold stocks fill first?  There are many big name gold stock bears out there but, I have no real reports of any insider selling in gold stock related companies.   Until the time that my Google alerts  start sending me news of insider selling, there is more of a chance for upside, than there is downside. 

The situation seems more like a 50/50 chance of going either way, and that is the worst situation we can be in.  I like it when it is more to an extreme side but the markets clearly are not in that position right now.  Gold investors became bullish very quickly since the 2014 beginning, and that is not a good sign, unless a clear wave 1-2 has already completed.  HUI is above the 200 day moving average, right at my gap below me, so a correction filling my gap below could always happen. Of course those types of corrections can be fast and furious, and be over before you finish your Tim Horton's or Starbuck's coffee in the morning.  

We do have a higher low already in place for 2014, but we need some stronger evidence for the HUI to breakout of this funk it is in. It's not late 2008 where the bottom was much more clear than it is now, even the 1999 bottom was more clear than what we have had in 2014. 

Gold stocks have to start performing if we are still in a bigger bullish gold cycle.  Consistent higher lows in the markets is a sign of a bull market. These higher lows are created by Elliott Wave "ABC" wave action.  In other words big and small "ABC" crashes  have to be constantly produced, otherwise these patterns reverse (inverted ABC's) and that would mean the end to a bullish move. 

Many think that gold stocks will perform as the stock market crashes, but this does not always work as gold stocks clearly demonstrated in the 2008 crash.  Right now the early June 2014 bottom is the last higher low to beat,  as that low must hold. 

Tuesday, July 22, 2014

Gold Intraday Elliott Wave Count Update.

Gold has been traveling radically in both directions producing very choppy patterns, mixed with 5 wave runs that look like great impulse waves.  That's not especially a good sign.
Many analysts are using the speculators traders positions as being the smart guys, but I never do that. It is the commercials that look at the markets from a different view point, as for the non-commercials, or speculators, carry most of the risk. 

We had a nice run up in gold and then it started to decline , with a real choppy counter rally. This counter rally is looking more like a potential triangle still in progress with some short term upside still to come before another strong decline.  I have started it with a wave 1-2 but it could be another inverted zigzag as well.  If gold starts any rally and it is struggling then this helps to make a  short term bearish case.  In this case any "C" wave decline could also be the 5th wave decline. I will not know, until we see how the rally from a potential wave two bottom will behave like.   Any rally that does not produce nice clean impulse waves, is under suspicion of being a fake start to a bullish trend.  

US Dollar Intraday Update.

We have approached another peak but I hold no great expectations that the US dollar will all of a sudden turn, and make a bearish move south at this time.  The US dollar keeps pushing higher keeping the lid on gold prices.  I am sure you will find no shortage of reasons why this is happening as many are saying it is due to the economy getting better, Maybe it has nothing to do with that, instead investors could be running to the USD as a safe haven.  Many analysts will tell you that gold is going down, as the hostilities in the Ukraine or Iraq have decline a bit. 

I believe gold is indifferent to many outside reasons for it's decline, as it goes up and down due to the fluctuations of the US dollar. If a big chunk of cash gets injected into the real economy for any reason, the US dollar would decline and gold would go up, but on the flip side, if the demand for cash increases then the USD would rise and gold would fall.   Any inflation figures would be lagging to gold. This happen in 1999 as the Fed dumped massive amounts of cash into the system, (remember Greenspan?). The USD imploded in a 5 wave decline as gold shot up in a 5 wave rally. 

Not until we see a  clear reversal in the trend of the USD will we see a substantial boast in the price of gold.  At this point the USD is traveling against the commercial short positions, and the Euro is doing the same thing, as it is declining as well against commercial long positions.

Is The US dollar destined to take out my 81.47 price level? If It did then it would have cleared one sticky pattern that I always thought it would do. Of course that could backfire as the USD could accelerate it's move up.

Since the 11th of July the USD has rallied right along with the full moon cycle , and  this week we are approaching the new moon cycle. Will the USD be repelled by the new moon? It sure looks like that can happen.

Mini Nasdaq Intraday Record High Review.

The Nasdaq has create new record highs this week, but has left several open gaps in it's wake.  On the cash Nasdaq charts there are many gaps in the charts, which all have a 90% chance of getting filled sometime in the future.   We have three full trading days to go before the new moon, and new moons can be very bearish for stocks.   Many gaps have opened even way before the two I know show and they have all been closed on the trip back up.  If the markets or in this case the Nasdaq were to just close the last two gaps quickly then, that would send a little shock wave of fear into the hearts of investors. Apparently there is nothing around that can spook these mom and pop investors, as the markets have ignored all fundamental bearish developments, and pushed higher. 

This market is looking for that illusive  breed of investor that belongs to the, "Greatest Fool Clan".
What kind of a cave do these guys live in?, The mainstream media has been calling them out with their bullhorns for weeks already.  A war breaks out and those investor clans run back into their caves   for safety.   The majority may be winning in this bull market, but they will be winning on paper only, as the last one in will hold paper that will be falling in value. 

In the age of the Internet it is no longer paper, as we would have to call it something else as everything is just a digital entry in a computer.   As rapid as this move went up, it can come down just as fast, or even faster as fear works much quicker than any hope and greed does. 

Overall the markets are boringly slow and have yet to show a clear trend of lower lows, even though I am getting many inverted zigzags. Inverted zigzags give the impression of a bull market, but are actually displaying  some stages of ending patterns.  Of course all bearish news has been ignored which is a sign that we are still over on the bullish side in the Nasdaq. 

Besides my two open gaps I have right now, the next open gap lower as at the 3680 price level., and another one at the 3300 price level. 

A correction or an end to this bullish silliness is long overdue, but as usual  the markets keep pushing north.   

Monday, July 21, 2014

Mini DJIA Intraday Review, Are We Looking For The Greatest Fool Yet?

I also posted the link above,  but it deals with my Cycle degree Impulse.

The markets are doing everything in their power to fool us, and they are doing a good job of it. Sooner or later this bull market has to finish or go into a good old fashioned bull market correction. 
The media has been harping on this bull market for so long, they don't even know who they are talking to.  To what tribe does the greatest fool belong to, that is still dying to buy stocks at these valuations. Even to Warren Buffets calculations, the stock market is over done.  When the good news no longer pushes the markets higher then we will be slipping into a correction. 

My small wave counts are diagonal related and there is the potential for this market to push higher one more time. This is also where little triangles can come into play. They give me a warning that a degree change is also very close.  These corrections can go deep, and they can go so violently fast, but reverse just as fast.   If this is going to happen then this week would be a nice time.  Either way I am working it as a zigzag rally and the more inverted zigzags I get, the closer we are to another turning. 

Since mid 2013 the markets changed in pattern as they started to tighten up again, with choppy and erratic behaviour.  Inverted zigzags start to show up more frequently  and flats can give us the clues that an explosive rally can happen.  

DJIA Wave Zero In Cycle Degree Review.

I have talked about the start of my wave zero in Cycle degree many times, as it is the basis of all my wave counts. Anytime a market does not do what it should do, it is a fault of bad wave counts from the past. Never reviewing the entire 5 wave sequence in Cycle degree is the biggest mistake all of us wave counters make.  I followed GSC and SC degree wave counts for many years believing they are true or fairly accurate. Nothing could be further from the truth! Once I extend one single wave position, namely the 1929-1932 bear market, then all other wave counts travelling up the chain, were knocked off, as they no longer fitted.  

The majority of changes were wave count extensions, as I look for extended wave three' before I ever  look for extended wave 5's.  In the EWP rules, wave three's should never be the shortest wave, and only two waves can extend in a 5 wave impulse at anyone time. 

I follow the Cycle degree 5 wave sequence, and I have used the expression of a "Cycle degree box".
Another way of describing it is living in a Cycle degree dome.  The Cycle degree dome is just like the Steven King TV series Under The Dome.  That dome produced a very clear start and cutoff point, with no chance of escape. Even the cow got cut in half, and this would be the start of Cycle degree zero.   Sooner or later the 5 wave Cycle degree sequence must end at a Cycle degree wave 5, where you would crash into the dome somewhere to the west.  All charts have a North, South, East, West direction, as charts always travel north easterly. 

Not until all 5 waves in Cycle degree are completed, can we escape or get out of the Cycle degree dome. Supercycle, and Grand Supercycle degree cannot start anywhere in this "dome"  until we reach Cycle degree wave 5.   Every wave analyst has a choice if he feels the need to review the charts going back, and most never do this as it's too much like work. Elliott Wave International has never reviewed their GSC degree wave counts.  Only changing wave counts after 2000 is a cosmetic way of wave counting, which does nothing to help in finding a better fitting sequence.  

Many wave counters are showing me that they are still counting in GSC degree, and maybe even SC degree, but all those wave counts missed the biggest bull market since the the depression. 

Missing a bull market after insiders and smart contrarians have loaded up stocks, should have never happened, as insider buying is public information.  

This is the wave count I am presently working with the start of wave zero in Cycle degree at the 1932 stock market bottom.(Wave 2 in SC degree) Many commodities also bottomed around the same time. By looking at the 1932 bottom,  the markets instantly started into wave 1 in Cycle degree, and fundamentally you could never tell that there was a historic depression in progress.   The biggest point to remember is that after extreme pessimism all markets swing to extreme optimism. Many wars were in progress and wave 2 in Cycle degree coincided with the Battle Of Midway.  To this day many wave analysts still have the 1970's bear market as a Cycle degree wave 3-4,so many will tell you that the markets have to crash back to this level again. The Dow 1000 price forecast is based on a GSC degree wave count which I have eliminated and thrown in the trash heap a year ago.  

I have not been compelled to change it back at anytime in the last year. It is impossible for the 1987 crash to be a Primary degree crash as we can see the physical size does not even come close to Primary degree. 

The chart above only takes us to the 2009 bottom and we can use futures charts to carry on with the wave counts today.  

The 2009 bottom may still need changing, but I am treating the 5 year+ bullish phase as a diagonal 5th wave, with a running flat for a wave 2 correction.  This still needs to be confirmed once we know how deep the impending correction will end up at.  How deep a correction we will get is based on the degree we are at, and 4th wave diagonal corrections can go very deep towards the previous wave 2. It must not go below the previous wave two low, at a max of 11,000.  I can give you several more price levels and all of them would be dubious at best.  I look for large across the board insider buying which will put a price bottom to our next correction. Nobody knows at what price level the insider contrarians will start buying, but we know insiders have been selling for months already. 

At each gully of the DJIA bullish phase, can be a place to look for a potential bottom, but insider buying would have to confirm it.  Since June 2013, the markets started behaving differently again as that also coincided with a gold bottom.  From this June, the markets are looking like an ending diagonal  as wave 4 dipped well into the wave two price range.  Eventually the markets will have to dip below this June price level, and there would be no more support until the 2012 price levels. 

The DJIA has maxed out at about 17,150  on July the 17th, but it is still too early to tell if this will hold. The Russell 2000 has already made a great decline, so it is leading the charge down so far.  With so many traders playing this market short, then they can get into traps very quickly causing the markets to explode.   The markets have in general ignored any war fears, and that dosn't surprise me at all, as it has happen many times before.  Hell, the Mideast could be in flames and the markets could ignore it.  Any news that gets repeated, over and over, usually turn irrelevant by the third time. 

I have mentioned the July, 16, 2014 dates many times, but I was expecting the markets to be at a bottom and ready to start up again. The last time this setup occurred was in 2002, but even then it took a few months after that when the markets hit bottom. This gives us until this Oct 2014 to match the same time lag.  The latest I would expect some type of strong bottom would be in the first part of 2015, which would match 1915 extremely well.  

Sunday, July 20, 2014

Rbob Gasoline Elliott Wave Count Update.

I thought it would be a good to look at the gasoline futures charts and see where the wave count may be. Of course it is so choppy and has overlapping waves exactly at the critical points, when I am not allowed to take them.  Futures charts have extreme leverage associated with them that many times waves overlap just enough to throw out a wave count.  

The commercials are net short on crude oil and gasoline which I think they call, "Blendstock".
The ratio that the gasoline commercials are about 1.40:1, which is nowhere near any extreme. This does not give gasoline the freedom to fly to the moon, but there is still upside potential until maybe late September. 

I chuckle when I look at this chart because of the wild pattern gasoline has produced. Back in 2007, and the following rocket move in gas,  can only fit as an expanded type pattern, followed by the subsequent crash down into the late 2008 bottom. Gasoline bottomed a little after gold and was matched by a glut in crude oil at that time. 

Steven Jon Kaplan from the True Contrarian was calling for a gasoline price crash at that time, with some deep numbers which I can't recall.  I was watching crude oil at the same time and was also forecasting a crude oil crash  below $75. At the "Peak Oil" frenzy, Kaplan's readers were sending him emails saying how crazy and insane such a bearish gasoline forecast was, when we were running out of oil. Readers got very vicious in some of their comments. Needless to say he got it right as he understands this type of  optimism extremely well, and I would say he understands crowd psychology better than most Elliott Wave analysts out today. 

At this time gasoline is a truncated pattern and I would like to see it make new record highs, but it has very little room left to make or break a bullish wave count. At $2.40 - $2.50 a gallon we would be at a critical price level as my present wave count cannot fall below $2.50. Just remember these are not retail prices,  as retail prices would be much higher. Each contract represents about 42,000 gallons.

I am trying a triangle 4th wave in Minor degree and maybe we will get a spike when we end the summer driving season in September. They manufacture driving fuels all the time but import more if they need it.  


Saturday, July 19, 2014

July, 19, 2014 Crude Oil Weekly Chart Elliott Wave Count Update.

I will not be posting any updates for the first week in August as I will take some downtime. 

Crude oil has been in the news since all the massive dislocations in Iraq has spread fear far and wide. Fear  of an oil shortage is a common theme and crude oil has bounced in response. This is a pretty normal reaction, but oil has been in a bullish phase since late 2011 showing consistent  higher lows in the process.  These higher lows are all created by "ABC" crashes. The higher lows are deceiving as they are not pure impulse waves but show dramatic overlapping wave structures. These types of waves fit into a corrective pattern far better than some impulse wave that is supposed to take crude oil prices to the moon.  $150 and $200 priced oil forecasts have become popular again.  This choppy pattern started after the 2011 peak and is still ongoing.It also makes wave counting a real challenge to say the least. 

On top of that charts in futures contracts, from daily charts to weekly charts, are dramatically different from each other. 

Any fears of lost production coming from Iraq is overblown as that entire region is gearing up to produce much more, even during any fighting going on. The Kurdistan controlled region will double their oil production, and even Iran is starting to look to it's area closest to the Kurdistan oil fields.  
Every dictator or terrorist controlled area wants to pump oil,  even to sell on the black market,  as they are all desperate for increasing their cash flow. Blowing shit up cost money, and oil is the perfect vehicle to get revenues from. 

Fear rallies rarely last and crude oil has backed of dramatically. The question remains if this was a short term decline or if there will be more to it.  Any oil price below the $99 price level will help to confirm the bearish side, as any wave two can never be lower than the start of wave 1.  If we are in a 4th wave decline, then I could see another big crude oil rally, but shit that could not happen until next year.  Right now the $75 crude oil price range would be a potential price level to hit, from which oil can crank back up. Then that $115 price level should get exceeded one more time.  After the September long weekend crude oil can make dramatic moves as well, and they usually head down. 

Crude oil would be very susceptible to a decline if the USD turns very bullish at the same time. 
The gold/oil ratio is around 12.7 to one which still makes oil rather expensive when using gold as money.   Either way oil is in a triangle that many call a "wedge"  but they ignore that when fundamentals like a war get in the way.  

Sooner or later all this planned increase in crude oil production could lead to another world oil glut, the only question is at what price level the mainstream medias realizes that a crude oil glut is here. 
As soon as they do figure it out then you know it will be the end of the oils glut and another bullish crude oil phase will start.  This has happen twice before in just 8 years so saying, "that it's different this time" will not work.