Wednesday, February 15, 2017

Bonds Update

The Dec 12 post Bond Plunge Done was spot on and we have the medium term correction looked for.

6 mo.chart

click to enlarge
After what appears to be a rather modest retrace of the plunge down, upside momentum has run into trouble at the previous highs, and the 4th wave of lesser degree. 

Best case it now explores the bottom of the more recent range and extends the consolidation another month or two.

From an Elliott wave perspective this sideways structure is exactly what you would expect after a large trending move with many participants, the point of recognition associated with wave 3.
The completion of that primary impulse wave down, the break to new lows, will be wave 5.

 25 yr chart
 click to enlarge

The Fibonacci retrace points in the above chart roughly coincide with 5th wave measuring rules.
I am biased toward the 50% point as the lower number to complete a 1 of greater degree 3rd wave down.
The risk of a very long term change in trend for fixed income is extremely high after 35 years.

Pls do your own research and
This is not a trade recommendation merely Elliott Wave thoughts.

That Old Texas Hedge

Long physical, long futures. The oil market as a whole has got that position on; very high net spec length and very high stocks. Due to the extended sideways move since early Dec, it's at a relatively high number too.
A big bet on SOMETHING.
1 yr. chart
click to enlarge
While a choppy consolidation often breaks in the direction of the preceding trend, and that can happen at any time, there is definitely technical room for further choppy movement down, prior to any run for the highs. 
The overall length in the market, not to mention the prospective future exploration and production, will make tough going of the advance.
News that might propel the market to new highs, like an announcement of a border tax plan, will no doubt be seen as an opportunity to trim length.
3 yr. chart
click to enlarge
Note the Fibonacci  .382 retrace coinciding with the trendline resist around $57.20

Good luck and

This is not a trade recommendation.

Tuesday, January 31, 2017

All Juiced Up, Nowhere to Go, Hangover Tomorrow

Wall Street partied. Me too.  All will be awesome; lower taxes, repatriation, rolling back rules and regs.  Busting up to new highs in a thrust above the trendline cleared out all the shorts. But really since mid Dec, it's been a bit of a slog, with last weeks thrust 50% of the preceding one. 
Market Vanes Bullish Consensus has been at 65% for 3 weeks, and they see overbought as 75%.
 5 Yr.
 click to enlarge
 Note the negative divergence on the 9 RSI (I am pushing it here a little). 

 1 Yr
 click to enlarge
The negative divergence here is on the 14 RSI and clear. 
So at what point does the market realize it might have fully discounted all it's hopes, at least for this year?
How about when it overlaps that last thrust up from 2251.75?

 1 Mo. chart
 click to enlarge
Elliott Wave;
I've got the move down from the highs labeled a possible 1, some degree of a sub wave of course.
That would make the next wave lower a 3 after this consolidation up from yesterdays lows completes 2.
And a 3 wave down through the point of recognition would be textbook.

Just so you know there are NO trade recommendations herein. 

Monday, January 30, 2017

Crude Set Up

Crude is set up to cause a lot of pain. Fridays COT revealed further increases in spec net longs;  NYMEX+ICE WTI  +24 million bbl to 396 million bbl, bringing it up to near record levels.
 March WTI, meanwhile, has been pretty much going sideways in a choppy manner.

5 day chart
click to enlarge

1 Mo.
click to enlarge
While it is possible that this pattern is going to break up in the short term, all the spec length will make heavy work of it. This chart shows no evidence of any impulse wave action to the upside and in fact the pattern is more likely a consolidation of the move down from 56.18 to 51.59

 6 mo.
 click to enlarge
If WTI breaks down on the other hand, putting in lows under the .382 retrace at 51.78, the next Fibonacci support levels will get tested as the weak specs run.

The more interesting question is, will the 26.05 low get tested, or is this structure up from 45 going to have another leg after shaking out some length.
3 yr. chart
click to enlarge

Note the long term negative divergence on the RSI. 
 If this is an abc structure up from 26.05,  c = 50% of a. 
Considering the length in the market, it's going to take some doin' to make new highs.

Tuesday, January 24, 2017

USD UP date

Lately the USD has been taking a breather, hence an UP date.
3 mo. chart

1 yr.

Thursday, December 29, 2016

Nat Gas Update

Back from my travels, and Natural Gas is done loafing too.
If you don't follow me on Twittter @crudewire you're missing out on some nice pics lol.

Note the pithy analysis.

Anyway it's now making fresh highs, no surprise.
AND it seems that the latest move down from yesterday's highs has a choppy abc quality that is characteristic of corrections.

 Note the short term  50% retrace.

This does look like a very possible set up for an attack on the long term 50% retrace at 4.12 .

We will know if it takes out 3.87

Monday, December 12, 2016

Bond Plunge Done?

Almost.  Even freedivers have to come up for air. Please don't get me wrong, after 35 years this looks like a long term change of trend ( please see Oct.17 post Would You Buy This?)
Eventually the selling is done and there is nothing left to do but ...breathe.
 6 mo. chart
click to enlarge
Note the positive divergence on the RSI.
There looks like room on the Elliott Wave count for some further lows and so the Fib retrace points above are theoretical.
3 yr.chart
click to enlarge
Lots of spec shorts in there now as is often the case as the 3 wave matures.

Wednesday, December 7, 2016

Natural Gas Thrust

A thrust of 37% in just under a month for the Jan 17 contract, and an even more impressive 47% on the nearby contract chart, begs the question, " are we there yet?"

1 mo. chart
click to enlarge
Note the negative divergence on the RSI.
Elliott Wave identification; the -3- of 3 is at the gap and the 50% retrace level. 
This wave up is looking very well developed and mature with the current highs -3- of 5 or -5- of 5.
It is likely complete or very soon will be.

Not to say I"m negative on natty, just that it's overdone short and probably medium term.

The natty Elliott Wave structure longer term is in abc structures that are very symmetrical.

 25 yr. chart
 click to enlarge
Fair to say that Mt. Natural has found it's base and may very well be in the early stages of  a new abc structure up, of longer term significance.

Shorter term it has measured c=a resistance at around 3.90, and 50% retrace resist around 4.10
5 yr. chart