Thursday, August 10, 2017

RING RING RING

That's right, I'm ringing the bell.
 1 yr.
 click to enlarge
Note the repeated negative RSI divergence. 

5 day
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Winding up for a (3) of -3- down? 
If the -3- is  2.618x  the -1-  it will take out the previous support and lows at 2400.

Oh yeah almost forgot;
The highs on Tuesday were part of across the board Key Reversal Days.

And then there's this; Consumer Comfort Reaches 16 year High



Friday, August 4, 2017

Natural Gas... Rally Potential?

Reports this morning of paper buying 6000  ngx 320-350cs @.02 had me take a look at ole natty charts again.

From an Elliott perspective there could be a set up for a rally from this mornings lows;  ngu tagged the 50 % retrace point of the 2016 move $1.61 to $3.90.
5 yr.
click to enlarge


 1 mo.
click to enlarge

Note the RSI positive divergence.
Pretty close to equal legs down on the above chart, .23 and .24 respectively.

If there is a new upside structure, confirmation points are of course overlaps of previous highs, the first being 2.846 and then 2.99.



 The risk of trading futures and options can be substantial. Trading foreign exchange and energy derivatives carry a high degree of risk, and may not be suitable for all investors. 
The above is merely an abstract theoretical discussion mostly for my own entertainment, not trading advice or a recommendation.

Monday, July 24, 2017

Crude; More Will Be Revealed

Longer term price direction, and for me more importantly, clarity on the Elliott Wave count will become clearer over the next month .
For now, the count I am going with suggests a continuation of the move lower.
 1 yr.

 click to enlarge
Note the proliferation of abc structures (corrective) and equivalent legs.

5 day
Shorter term the structure down appears to be a 5 count, and that of course needs at least one more leg to the downside to complete even a corrective structure. It will be interesting to see how far north this bounce goes.


 The risk of trading futures and options can be substantial. Trading foreign exchange and energy derivatives carry a high degree of risk, and may not be suitable for all investors. 
The above is merely an abstract theoretical discussion mostly for my own entertainment, not trading advice or a recommendation.

Thursday, July 6, 2017

The Big Picture Post

Big picture perspective can be illuminating, especially if it's been awhile.
The view from here;

BONDS
 as QE is seen as most significant driver the last 8 years.

The last leg up, the C wave, is clearly finished with a retrace in excess of 78%.
Elliott Wave Theory then would NOT be looking for an additional up wave as an extension of the preceding structure. The overlap of the A wave termination point confirms that. Therefore it is most likely a 3 wave ABC up; a corrective structure.....and very likely complete.

Context is everything.


If the recent corrective move up is done...the bottom of the range comes into play, as these flag structures are typically exited in the direction of the previous trend.
Note that is a 5 yr chart.

And so on to the 20 yr. chart

Long Term Head and Shoulders Top pattern break down with a bounce failure at the neckline.
New lows take out support going back to 2010.

SPX
with rates going up can you really extend higher?
After all wasn't this a QE driven phenomenon?


Note the trendline penetration.
IF the is structure is to extend, the .382 retrace cannot be overlapped. That is because it would also be an overlap of what would have to be a minor -3- wave in any subsequent extension.
If this leg up, sometimes referred to as the Trump Bump, is rolling over in the face of rising rates, than we need to ask, "where are we in the Elliott Wave Count of larger degree, and what are textbook pullback rules?"


                                                                        20 yr chart

The Big Picture; 5 Elliott Waves up from 2009? Maybe not quite yet. It's a long way down for confirmation of that BUT....rules pinpoint the 4th wave of greater degree as support as well as Fibonacci retrace points.

CL
Just because Bonds and Stocks might be getting crushed does not necessarily mean WTI will be.
Currencies, geopolitics, taxes, drillers going out of business, however...
The action up from the 26.05 low does not currently look like an impulse wave up. Not a V bottom.



 Note the recent low of 42.05 overlapped the low from Nov.16 of 42.20
Most likely it is in a corrective structure, perhaps with more to come, even to the upside, but testing of that 26 low is a high risk esp if it is in a long term basing mode.








Wednesday, March 15, 2017

Crude: Retrace or Trend Change?

The sharp drop in Crude over the last week suggests a new trend after a prolonged period of stability and relatively tight ranges. But is it?

 6 mo. chart
click to enlarge
Above we see the sudden widening of the Bollinger Bands, an oversold RSI, and a Fibonacci
.618 retrace. Short term risk of at least an upside correction appears high.

In this longer term chart please note the choppy nature of the up move, hitting resistance at the Fib 81% retrace of the last structure down. If the move up off the lows is an abc, c= 50% of a.
Some of this is discussed in the preceding posts of  Jan 30 and  Feb 15.
 The risk of a retest of the lows is high in this scenario.
1 mo. chart
click to enlarge
The fist hurdle for Crude to regain momentum will be the resistance at 50, but really it will need to exceed the .62 retrace at 52 to give the bulls breathing space. My guess is, a weighted avg for the spec length still out there, is just over that at around 52.50 as well.

Wednesday, March 8, 2017

The Real News; Bonds Resume Sell-off

Yup Sorry to folks but it's true; this morning the 10 yr. officially put in new lows for the month and year, after failing to break out on the upside. See Feb. 15 post Bonds Update.
 6 mo. chart
click to enlarge
The recent COT report suggests that the trade is pretty crowded with large specs and leveraged funds
definitely on the short side, and that may limit immediate follow through. 
The 14 day RSI is in neutral territory and showing no divergence.


 The recent low end of the range and previous lows from 2016 will very likely be tested in the short term. 
25 yr. chart
Measured 5th wave target comes in around 118, as does the support trend line and the .382 retrace is  around 119. IF it's a -5- and doesn't extend. The move down off the June 2016 highs could well be and most likely is, a 3rd wave of the new long term trend down. If that is the case then what we would be seeing is the possible sub wave  (1) of 3 nearing completion at the 118 target.

At the end of the day this may be the most critical news out there. A  reversal in the 35 year long trend of cheaper money will have global systemic effect. Some may identify this as a reflection of demand caused by an uptick in overall economic health.  Maybe. I suppose that"ss to be wished for and probably how it starts.



Monday, February 27, 2017

Natural Gas- Are We There Yet?

Natural Gas is off 32% from the Dec 28 highs of 3.902. Not a little. We are now in the period, Feb/Mar, during which NG often finds seasonal buying of a couple months duration. The question then,   "Are we there yet", once more arises.
 3 yr.chart
 click to enlarge
The answer I think, is the usual, "Not yet but we' re close. " 
Just under the previous lows in the above chart is the Fibonacci .618 retrace point at 2.48
With an internal sub wave measured move providing support around 2.50, new lows under 2.64 should run out of steam in that area, with shorts covering on all the above factors. 
It would be nice to see some positive divergence showing up on the RSI at that point as well.

1 month chart
 click to enlarge
Shorter term the choppy action since the Feb 22 low of 2.64 is typical of corrective waves and would be expected to resolve to the downside. That's not to say it will not have another little push to the weeks highs around 2.80 before heading lower.

Natty may well be making a very important pivot at the discussed levels with substantial upside potential based upon the very long term chart basing history. Stay tuned.

 25 yr. chart
 click to enlarge

Not a trading recommendation. Do your own research. Good luck.