Monday, October 24, 2016

USD Update

After a terrific run up of about 4% over the last month, the USD may be due for the pause that refreshes. 
6mo. chart
click to enlarge
Note the negative divergence on the RSI. 
After breaking to new highs and successfully back testing that area around 97.50,
it is looking like a rather complete wave count on the leg up from 95.00. 

1 mo.
click to enlarge
Backing off for a modest retrace and consolidation could be expected. Clearly the 97.50 area is important.
This is likely either a complete 1st wave or  -3- of 1. In the latter scenario 97.50 the 4th of lesser degree, would likely hold followed by new highs for a -5- of 1. 
I lean toward the 2nd scenario looking at the BP and Euro.
A slightly higher high to complete wave 1 somewhere shy of 100.00, will also allow a more serious and lengthy wave 2 correction before the USD rips through long term resistance in a powerful wave 3.

Monday, October 17, 2016

Would You Buy This?

Looking at this chart; would you be inclined to buy this?
5 yr chart
click to enlarge

Maybe the next chart will help.
25 yr. chart

click to enlarge
Maybe a related contract will further inform us.

 3 yr. chart
 click to enlarge
25 yr. chart
Admittedly not my area of expertise BUT, 
this is all that matters now for every market really, and it is NOT encouraging.
Will the Fed raise rates? Does it matter?

Wednesday, October 12, 2016

USD Targets

USD exceeded the previous July high of  97.61 yesterday. Last Thur it took out  96.50, a point previously mentioned as confirming a significant new structure to the upside. Pls see the Aug. 31 post USD Time?

click to enlarge
A discussion of the lengthy sideways consolidation, it's possible wave structure, and why it is over, can be found on the hyperlink above. I encourage taking a look at it.
The risk that a new, trending, primary wave up, is now beginning, has increased significantly.
(Please note that shorter term the RSI is looking pretty elevated. )

 Targets for a Primary 5th Wave
 25 Year USD chart
 click to enlarge
The Elliott 5th wave measuring rules is that it will very likely exceed the termination of the 3rd wave, it will have a .618 Fibonacci relationship to the preceding structure or equal the 1st wave.

5= 1 @ 112.71
5= 1 thru 3 x .618 @ 112.34
5= .618 of 3 @ 107.51

In the meantime a pullback to test the breakout at 97.61 would certainly be looked for and even a retest of 96.50 would be quite normal.
However, given the very lengthy consolidation,  pullbacks could easily be short lived.

Tuesday, October 4, 2016

Indu Whipping Dollar Ripping

Could Be DB.
1 month

Obviously a break either way at this point will signal next major leg.
Unless it's a false "throw over" followed by a rip in the other direction.
Seen that many many times actually.

The SP has already taken out that support trendline at about 2143.

In my mind the 2134 level which was the 2015 high needs to be taken out on the downside to be confirming a new leg down.

Crude; Nothing Changes if Nothing Changes

WTI has been trading between 40 and 50 for the last 6 months, a range roughly 11% either side of 45.
As there really hasn't been much in the way of new information, merely old  information spun up a little differently, it's no surprise the same old numbers are repeatedly appearing before us.
6 mo.

click to enlarge
One of the key factors no doubt is hedging next years production, and as I write this, WTI cal 17 is just over 52 with CLX at 4860 . That level and slightly higher, has seen active hedging interest in the past.

Taking out the highs would suggest something WAS changing, but until that happens, the risk is greater of a return to the lower end of the range. 

Extraneous factors; USD strength, election tightening prior to Nov.8, consumer strength, DB, weather?

Monday, September 26, 2016

Equities Update

The INDU appears to be leading in terms of  pattern development on the charts. At least it's weaker.

click to enlarge
The Fib .618 retrace at 18033 is a critical hold for bulls, and an overlap targets at a minimum, the lows of the range at 17822.

Generally the comments from the last post Sept 13 hold,
"The above bounce is likely a 2 wave which is often a deep retrace of the 1st wave, it could well have another leg up, for an abc structure (or not).
Risk of an accelerating move down is high in this scenario, and extreme care should be taken.

If an Elliott Wave 5th wave of primary cycle degree is complete, even a normally modest .382 retrace will be dramatic."

In Dow terms that's around 14000.

Tuesday, September 13, 2016

Uh Oh Equities (and everything else)

The precipitous fall Friday was clearly the beginning of something as opposed to the end of something, ie a correction down.
This is the most important factor at the moment for Elliott Wave analysis. It will color the interpretation of developing sub waves and their implications going forward.

Why was it clearly the beginning of something ? Volume Friday in the SP was about 50% higher than it has been running, and breadth was heavily broad. Additionally it decisively took out all the previous lows over the last 2 months.  This followed a month of weak attempts at new highs capped off by the Thursday Sept 8 Key Reversal Day (including overnight trading); a higher high, lower low, and lower settle.

click to enlarge
Note the repeated RSI negative divergence.

All the above paint a picture of an exhausted up move, and a hot move down.
It is very very seldom that an initial impulse wave in either direction is NOT followed by AT LEAST 
one more significant wave of Fibonacci relationship to the 1st wave down.  And it if it is a 3rd wave (rather than a c wave) it can be expected to be a multiple of the 1st wave, ie 1.618 or 2.618 of the initial move. AND this has the potential of being the beginning of a move lower of MUCH higher degree.

click to enlarge

The above bounce is likely a 2 wave which is often a deep retrace of the 1st wave, it could well have another leg up, for an abc structure (or not).
Risk of an accelerating move down is high in this scenario, and extreme care should be taken.

If an Elliott Wave 5th wave of primary cycle degree is complete, even a normally modest .382 retrace will be dramatic.
BTW chart opinion only NOT a trading recommendation.

Friday, September 9, 2016

Natural Gas Surfaces

Haven't weighed in on NG in over 18 mo.s on this's just been too far down for too long BUT..
 I love it!

It's consolidated in an abc pattern (sorry can't add text on chart) in a relatively shallow retrace of preceding leg and is heading back up.

If it can start to make new highs it may well be confirming the beginning of a very long term structure to the upside.

 click to enlarge
Time to buy some wells.
Just an expression.
Futures and options trading is only suitable for professionals and the truly deranged.

WTI Whip It Good

WTI  Cracks that whip  once again as hedgies battle hedgers.  The spike up spurred on by yesterday's inventories, is only the most recent in a series of sharp reversals seen over the last year, albeit of lesser range. This is more evident in the chart of the contract rather than the nearby continuation chart.
This suggests a market testing direction and is not uncommon at turning points.
 1 year
 click to enlarge
The legs back and forth do appear to be structured in " abc"s, characteristic of consolidations/ corrections. Most likely the WTI wave structure is in the middle of this, and will take more time prior to clarity, however these swings should start stretching out as it resolves.  

1 month

As stated in the preceding post, risk is somewhat greater medium term to the downside in this set up, 40 before 50. 

NOT recommending anything except go sailing!