Monday, December 24, 2012

ZeroHedge Hits New Low

Outrage and sadness on Christmas Eve.
 As a regular reader of ZeroHedge ( the worlds most read economic blog) I've come to tolerate a lot of right wing ideological opinion, however the following highlighted clip sickened me, and marks the last visit I will make to that blog.
 On Christmas Eve morning?

Friday, December 21, 2012

The End is Nigh- Merry Christmas

YES! The end IS nigh. And I dont just mean year end. The much hyped Mayan Calender harmonic cycle thingy....that would be today yes. Now why would anybody pay the least bit pf attention to that you might ask.
Well the last time one of the Mayan Calender cycles ended (dont ask me which one) was like Aug.20 1987 +/- a few days. (I'doing this from my phone).
Those old enough will remember that event as being marked by significant media hype to get people to hold hands around the world in some sort of effort to affect the positive cosmic outcome.
Whew.
That weekend also marked the high of the INDU prior to the decline that culminated in Black Monday Oct.19 1987.
Merry Christmas.

Monday, December 17, 2012

Crudewire Prize: Crude Oil Analyst of the Year

Announcing The CRUDEWIRE Prize for Crude Oil Analyst of the Year.
The prize will be awarded to the Crude Oil Analyst with the most accurate and spectacular, documented market forecasts for the preceding year, as determined by an anonymous panel of industry peers. Don't ask.
The CRUDEWIRE Prize will consist of 2 case's of private label CRUDEWIRE Hot Sauce ,  and a large jar of Tums.
The Prize will be awarded on New Years Eve, and all documentation must be received by Dec.29th.

Now on this one somebody beside myself has a pretty good chance of winning. 
I posted very little over the last year on Crude Oil,  having not had a clear idea of how the Elliott Wave count might resolve itself  but, as it turns out,  neither did the market. Still the WTI/Brent Spread work was hot.

January 9
WTI/ Brent
February 9
WTI / Brent Update
May 3
WTI/ Brent Update
August 20
WTI Medium Term Elliott Update
December 6
WTI Medium Term Elliott Update

Come on, somebody out there must have done better than this.
Happy Holidays
Guy Bishop



Thursday, December 13, 2012

Crudewire Prize: Natural Gas Analyst of the Year

That's right;  Announcing The CRUDEWIRE Prize for Natural Gas Analyst of the Year.
The prize will be awarded to the Natural Gas Analyst with the most accurate and spectacular, documented market forecasts for the preceding year, as determined by an anonymous panel of industry peers.
The CRUDEWIRE Prize will consist of a case of private label CRUDEWIRE Barbecue sauce, a case of Heineken, and a large jar of Tums.
The Prize will be awarded on New Years Eve, and all documentation must be received by Dec.29th.

And to kick things off, I hereby nominate.....(drum roll please)....myself.

Apr.1
Natural Gas Hits Long Term Target
May 1
Natural Gas Catches a Bid
May 17
Natty and Chesapeake
June 28
Natural Gas Update
July 1
Natural Gas Hits Target
Aug.9
Post #1001- Natural Gas Update
Sept. 3
Natural Gas Seasonal Low?
Oct.2
Natural Gas Target Update
Nov.15
Natural Gas Elliott Targets
Dec. 1
Natural Gas Elliott Support And Targets

Comments of course are welcome, along with any and all nominations (which I guarantee to publish) .

Merry Christmas
Guy W Bishop

Monday, December 10, 2012

Equities Sellers; Your Time is Now.

That's right , this is where the indexes, esp. the INDU are most vulnerable. After a really decent bounce, nearly a Fibonacci .618 retrace, the hourly relative strength is showing negative divergence and we are fast approaching the end of the year for those needing to lock in.  If selling is going to show up this is a really likely point in time and price.
Adding to the risk here is the overall picture of a potentially completed corrective structure up from the 2009 lows, followed by an initial wave 1 down,  and now 2.   And so, a wave 3 down is possible from right around here.
Hourly
click to enlarge

Weekly
click to enlarge
A 3rd wave down, of course is usually characterized by multiple accelerating sub waves that eventually 
carry it to a Fibonacci multiple of the 1st wave...1.618 or even 2.618 .
A 3rd wave would = 2.618 of 1 around 10000 in this case.



Shorter term; 
taking out the 1300 level ought to raise the red flags.


Of course as pointed out in previous posts this COULD just creep up in a choppy slow painfull reiteration the wedging action seen in W and Y waves to double top next year. 
Our future should be revealed soon.

Thursday, December 6, 2012

Crude Oil Outlook

Been awhile since Crudewire turned attention to crude oil...for good reason ...there has been nothing to report except nothing to report.
Weekly
click to enlarge
WTI has been trading for the most part between 75 and 105 for 3 years and is now smack in the middle of that range.
Normally a flag would be expected to break to the upside. Less sure in this case though. For all the previously argued reasons.
Daily
C will = A at around 74

Brent might have a cleaner Elliott wave structure to look at.
Weekly
click to enlarge
The Y= .95 of the W, giving significance to the related nature of the 2 legs and suggesting that the structure is complete. 
Shorter term a test of the low of  the range has a slightly greater chance of being seen , but it can well be just part of further sideways consolidation lasting several more months, rather than the beginning of an extended wave down.
Daily








Wednesday, December 5, 2012

INDU Elliott Update

The INDU presents a simpler  Elliott count.  The probability of the count being correct is higher when it is clear and conforms to more of Elliott's Principals.
Daily
click to enlarge
There are no overlaps in the 5 count down. The 3 wave is 1.5x the 1 wave, and the 5 wave is 1.5x the 3 wave.
So far it has had a simple 50% retrace of the 5 count down . The corrective move up has overlaps and can be counted as an abc up.

In this count if the upward abc correction is complete,  risk of an accelerating move down is very high from here, in ether a 3wave of larger degree or ( less likely) a C wave.

Weekly
click to enlarge
The next major support (really has to hold for the bulls) is 12017. An accelerating 3 down will go through that like butter.

Next few days ought to be " inerestin".

Saturday, December 1, 2012

Natural Gas Elliott Support And Targets

In the Oct. 9 post, I targeted around 4.00 for Natty and more recently the Nov.15 post Natural Gas Elliott Targets concluded; "after 7 months of a bull stance on Natty.....to the sidelines." 

That post also asked:

"Why not go short?
The long term ABC down from 15.78 to 1.90 has not been seriously retraced yet, in either price or time.
Fibonacci .236 retrace of that 6. 3  yr move of 13.88  hits at 5.17, and the 7 mo.s up is negligible.
Additionally the structure up has prob still got another leg to complete following a consolidation under 4.00. "
Weekly

click to enlarge
The prob that NG may get a short term consolidation under 4.00, to be followed by another thrust toward 5.17 to complete an ABC up, has receded somewhat. 
The "c = 1.616 of a" and weekly RSI negative divergence increases the odds that an initial "abc" up is complete.
An X wave retracement of Fibonacci 50% or .618 has to be allowed for, so downside targets are 3.00 and 2.80.

Monday, November 19, 2012

SPX- Last Chance Gas

After a relentless month of selling, the SP has hit the .618 retrace of the Summer rally.
This is where it needs to bounce. Fibonacci resistance at 1405 for a correction.

click to enlarge

Note the "Y" wave has now been retraced Fibonacci .382 on the Weekly chart below.

Weekly


INDU Weekly
click to enlarge
The Dow has already taken out the .618 retrace of the last little 'c' wave up.
It is now at the .382 retrace of the "Y".  If there is to be another iteration of the corrective structure up up toward 14000 this is where it needs to show up. 
Note the last "W" corrected Fib. .382. 
The RSI negative divergence and of course the long term trend line breakdown suggests its's not going to squeeze out another move to new highs but ... 
if it were get a Z wave , it would equal .618 of the Y wave @ 14,277.




Check out the RSI.
C=A down at 5950

Thursday, November 15, 2012

Natural Gas Elliott Targets

Please take a moment to check out the previous posts beginning with the last one of  Oct.9;
Natural Gas Target Update

"The Y will equal the W at 3.96. The 50% retrace of 6.11 to 1.90 hits at 4.01. 
The 4.00 area is really the hurdle both technically and of course fundamentally, and for that reason is begging to be tested.
So another short term pullback or consolidation that retests the break out should be seen as an opportunity. (that would have been 3.29, it only made 3.33)
Y = 1.382 of W at 4.48 also the .618 retrace of 6.11 to 1.90
 Y  = 1.62 of W at 4.81 "

Since the  April 19 post, Natural Gas Hits Long Term Target, Natty has had a 100% move. 
As can be seen below there is some Fibonacci resistance right here at 3.83, and of course just overhead at the 4.00 area (Y=W @ 3.96, 50% retrace 6.11 to 1.90) .  The entire ABC down from 15.78 is retraced a Fibonacci .146 at 3.92
Also the late autumn seasonal high for Natty over avg 20 years is late Nov.
   

Weekly

click to enlarge

Note the slight negative divergence on the RSI.
So ....short / intermediate term caution all the way to neutral. 

Why not go short?
The long term ABC down from 15.78 to 1.90 has not been seriously retraced yet, in either price or time.
Fibonacci .236 retrace of that 6. 3  yr move of 13.88  hits at 5.17, and the 7 mo.s up is negligible.
Additionally the structure up has prob still got another leg to complete following a consolidation under 4.00. 

But after 7 months of a bull stance on Natty.....to the sidelines.




Monday, November 12, 2012

SPX Update

Is this the genuine article, the resumption of the  Grand Super Cycle correction down? Finally?
The high made by the SPX at 1474.50 is mighty close to the measured targets of 1478 and 1487 discussed in the previous post, SPX Elliott Wave Update, Alert, and Targets from Oct.19. And that IS the most important consideration.
Check out the chart from the Oct 19. post;
click to enlarge
The .618 Fibonacci relationship of each successive leg to the preceding leg is obvious and telling. 
During the run up from 1993 to 2000 each successive leg was Fibonacci 1.618 of the preceding leg (thats a bull).

...However... (there's always a few qualifiers)
Daily

click to enlarge
The move off the very highs does not really count well as an impulse wave. Yet.
It also left a number of potential continuations of the abc structure up unexplored, as well as not quite tagging the 1478 to 1487 area (not strictly required by any means).
 In any case, remaining open minded about the market's ability to pull out one more upside iteration has certainly payed off over the last couple years.

Meanwhile note the 50% retrace achieved last week and somewhat oversold RSI.

Short term a little bounce certainly could be looked for, with resistance at the 1400 area of course, and above that, the  .618 retrace of the last leg down from 1432, at 1412.
These will be important levels to watch with early resumption of the down move signaling an extension and acceleration in a good ole -3- of 3 scenario.

On the upside, if it can overlap 1432  it will likely try to test the 1487 level. If it does count your lucky stars and run.




Friday, October 19, 2012

SPX Elliott Wave Update, Alert, and Targets

Hmmm kinda sorta SOARING no matter what! Could it have ANYTHING to do with a certain Nov. 6 event....naaahhhhh! Yes it may be ridiculous transparent manipulation.. and yet it is still perfectly encompassed by Elliott Wave principals.



It is important to note the repeated Fibonacci .618 relationship of the major legs up from the lows.
W was an abc up with c=.61 of a within that structure. And within the a of that structure -c- = .61 of the -a-
Y = .61 0f W at 1487
The current "c" (from 1266) of Y = .61 of "a" at 1478
more to come.....




Tuesday, October 2, 2012

Natural Gas Target Update


Check out the last natty post from Sept. 3 Natural Gas Seasonal Low?

"The low print on Wed the 29th ( Aug) of 2.575 was right on the 50% pullback looked for in the August 9th post,
...So given the big picture....(see  Natural Gas Hits Long Term Target)  seasonal and technical support,
the avg rally following the seasonal lows of 115%, and the 13 year low in the rig count, upside risk is 
much greater than downside.
In fact, the timing is probably perfect for very long term, opportunistic plays like lease acquisition. "

That was published a month ago.

Daily
click to enlarge

Very short term it's looking a little overdone, but as yet there is no evidence of exhaustion or negative divergence.
Note that on the weekly chart Natty has retraced .382 of the entire move down from 6.11 to 1.90.
And, though not really a head and shoulders fan, there is a measured target up around here.

Weekly

click to enlarge
So some definite resistance in evidence around the 3.51/ 3.55 area that IF taken out will signal an extension of the move. 
Medium term it does seem likely that the current move up will structure as another series of abc's for the Y  , and it looks like we are still in the middle of that.
The Y will equal the W at 3.96. The 50% retrace of 6.11 to 1.90 hits at 4.01. The 4.00 area is really the hurdle both technically and of course fundamentally, and for that reason is begging to be tested.
So another short term pullback or consolidation that retests the break out should be seen as an opportunity.
Y = 1.382 of W at 4.48 also the .618 retrace of 6.11 to 1.90
 Y  = 1.62 of W at 4.81 







Saturday, September 22, 2012

Why Buy Real Estate?


Inflation maybe? Check out this gold chart;

Daily
click to enlarge

Gold is a often viewed as the ultimate inflation hedge. It certainly is very sensitive, and possibly its price is
the earliest indicator of future inflation expectations. 
The breakout above the downward sloping trendline was back tested successfully and followed by a powerful thrust up.
Note the RSI index at the top of the chart and the MACD index at the bottom are indicating an overbought condition shorter term.  
This longer term chart puts it all in context; 

Weekly
click to enlarge
Note that neither the RSI or MACD are overbought.
The weekly chart illustrates a  breakout above a longer term downward sloping trendline.
The choppy sideways consolidation lasted roughly one year. It is quite likely that the upmove following that consolidation will last as long or longer (See the preceding patterns of consolidation and upward break outs).

Hello inflation.

Some of the great things about real estate as an inflation hedge ; 
its actual utility as shelter, 
it can generate income, 
the US gov. PAYS you to invest in it, 
leverage is super cheap, 
there are no margin calls, 
and if the system fails you possess it (ask the folks caught in MF Global's failure about that).
Finally it is the most undervalued asset class out there.





Friday, September 14, 2012

SP - Blow off Top?


 Daneric Elliott Waves has a good summation of the Alt counts on the various equities indexes including a discussion of ending wedge formation characteristics.
There are three potential long term alternative counts labeled in his chart below .

click to enlarge

My count and Alt. is simpler;  the nominal 2007 high IS the Grand Super Cycle high, rather than an irregular B wave high. 
The 2009 low IS the primary wave 1 ( alt. A), and currently this high is ending the 2 wave back ( alt B wave).
Splitting hairs on the various counts does not effect the short and medium term.
The preponderance of likely counts with extreme risk to the downside, wedge failure characteristics, bullish sentiment, breadth and volume on the move up; all suggest a sharp and explosive 3rd wave downward acceleration is imminent.




Tuesday, September 11, 2012

Chinese Crude Imports Crater

 From Zero Hedge;

 click to enlarge

At the moment it's roughly at the 50% retrace of the 2009 11.5 mm metric tons low
and  the 2012 25.5 mm metric tons high.






Monday, September 3, 2012

Natural Gas Seasonal Low?

The low print on Wed the 29th of 2.575 was right on the 50% pullback looked for in the August 9th post,
Post #1001- Natural Gas Update
" while still really liking NG for the long term, it is looking vulnerable to a Fibonacci %  pullback following the ABC up from 1.90 to 3.27. 
There is a seasonal low window in mid Aug. normally followed by an avg. 115% rally and , while it has not been much in evidence the last couple years, it could exert influence anytime especially following a sharp move down to Fib. 2.58, or 2.42.
So medium term risk of a deeper pullback as in an X wave, offering longer term opportunity for another abc up."

Got that.    
Daily
click to enlarge

It may be that the 50% retrace of 1.90 to 2.27 is only the first part of a larger pullback to say 2.43, the .618 retrace, or perhaps an "a" of larger degree within a flat correction....BUT

The c = .50 of a, the 23 yr avg seasonal low is right in here, the downward sloping trendline shown above is penetrated, and the MaCD looks like it wants to turn up.

So given the big picture....(see  Natural Gas Hits Long Term Target)  seasonal and technical support,
the avg rally following the seasonal lows of 115%, and the 13 year low in the rig count, upside risk is 
much greater than downside.

In fact, the timing is probably perfect for very long term, opportunistic plays like lease acquisition. 



Monday, August 20, 2012

WTI Medium Term Elliott Update


WTI is likely at or very near its top on this move up from 77.28. That is based on the apparent series of 2 abc's up from the lows that are related to each other by Fibonacci 1.618 , that is the second series = .618 of the first. Corrective moves are usually structured as abc's of course, and it is very difficult to see this move up as anything but.
Additionally the total retrace of the move up off the lows is very near the .62 level at 97. 56.
 Daily
click to enlarge
Note the lack of negative divergence on the RSI.

So what are we looking at then? At least a collapse down from this structure ....confirmed by putting in a new low under 9180, the beginning of the last "c" wave up, and a test of the 77.28 lows at a minimum.
Weekly
click to enlarge
If the move down is a "c" wave within a larger abc down from 110, the c = a @ roughly 65.
 c= 1.618 of the  preceding leg @ roughly 43.

So the 92/ 91.75 area is going to be very interesting.  

 Gasoline Daily
click to enlarge
And since crude is almost all about this, a quick look might be in order.
Note the c = a on the corrective move up. Of course this chart has already rolled over, overlapping the high of the "a" wave. Taking out the .618 retrace of the "c" will be another confirming milestone on the resumption of the structure down.
If this corrective move up from the 2.44 lows is complete, and the next leg down is equal to the first leg, for c=a,  it will target 2.11
Of course it could also be a Fibonacci 1.618 of the first move down , targeting 1.51
Tough for crude to rally in the face of a gasoline sell off.




Monday, August 13, 2012

SPX Death Watch

As they say in Texas....this thing's fixin to slide like sh#t off a hot shovel.
I mean I really really really really really hope it doesn't ( one of the unfortunate effects of a market collapse is it hurts just everyone) but it's right at that point.
 Super complacency; VIX is at 14 and change...the last time it saw those levels was the very last trading day of March, followed by the 150 point drop....zippo volume, high positive sentiment all around. Oscillators spinning off negative divergence..etc
Now this sucker HAS been kept up here remarkably well, and the world hopes to whistle right past the obvious and all , but gee remember what followed the last Olympics? DJIA was cut in half over the next 8 mo.s....not that there is any causation there...but maybe its that 4 yr Presidential thingy..
Whatever... bottom line is September cometh ...
And while the SP might eke out a little further gain to say 1426 , that would be a very high risk 20 points.
Either the SP has just completed a minor 2 wave and starts down this morning basically, or it is completing a 3rd abc for the final Z wave of Primary 2.... chopping slightly higher to aforementioned 1426 area. Leaning towards the latter interpretation as it IS August.
Charts to follow.
Daily
click to enlarge
Note the very minor and recent negative divergence on the RSI.
The c = .81 of a, , c will = a at 1426
The more commonly found count is reflected above with the Primary 2 wave completed end of Mar. at 1422, that really requires almost immediate failure from here.
 It is also possible that the 1 is an X wave and the structure chopping up is the final Z wave of  Primary 2, as mentioned above.
In the most benign interpretation the chop up is a b wave of an X, and thus subject to only a 150 point  drop as c=a down.

The most bearish  targets are sub 666 for the c or 3 down ( of equal degree as the 1578 to 666 wave 1 or A).



Thursday, August 9, 2012

Post #1001- Natural Gas Update

It's been awhile so a little review might be in order.
 Natural Gas exceeded the resistance levels of 3.05 to 3.10 noted in the previous post from July 9 Natural Gas Hits Target, by 17 cents.
While it did run through that zone, hopefully readers were long from the 1.90 area ...pls see Natural Gas Hits Long Term Target  , from April 19, to capture 1.15 /1.20
At this point while still really liking NG for the long term, it is looking vulnerable to a Fibonacci %  pullback following the ABC up from 1.90 to 3.27.
Daily

click to enlarge

There is a seasonal low window in mid Aug. normally followed by an avg. 115% rally and , while it has not been much in evidence the last couple years, it could exert influence anytime especially following a sharp move down to Fib. 2.58, or 2.42.
So medium term risk of a deeper pullback as in an X wave, offering longer term opportunity for another abc up.

Short term ranging 2.80 to 3.00 with today's storage report maybe giving a little help for positioning. 

Monday, July 9, 2012

Natural Gas Hits Target

From the preceding June 28 post;
"This move up is structured in abc's, not unexpectedly. It may be nearing completion with y=w around 3.05 and currently looking a little overbought.

Daily
 click to enlarge
Note the negative divergence on the RSI and MACD.
 And  from the  May 1 Natural Gas Catches a Bid
" If the leg down from 5.00 is a complete 5 count, then a .382 retrace to 3.09 would be a modest expectation, EVEN IF this is merely a corrective upswing."
 Weekly
 click to enlarge
 Of interest is that the 1.90 low x 1.618= 3.06
 
Is that it ? Are fresh sub 1.90 lows next on the horizon?
Maybe but there is a pretty good chance of an X wave or abc down of greater degree to be followed by further upside. That 1.90 low is of significant long term importance.
 
Also from the May 1 post; 
 "there is reasonable doubt that this (move up) is corrective; again see  Natural Gas Hits Long Term Target
Note the weekly RSI and MACD have lots of room to continue moving up. (still the case)

PS the .382 retrace of the entire ABC move down from 15.78 to 1.90 comes in at 7.20
Is that likely? I wouldn't have thought 13,300 on the Dow likely 2 years ago."
 
 
 

Thursday, June 28, 2012

Natural Gas Update

At the time of the previous post, Natty and Chesapeake from May 17, NG was trading around 2.65.
Basically the analysis was looking for an imminent pullback and viewing it as a buying opp prior to at least one more move up.
" So 2.27 and 2.20 can be seen as excellent opps for entry, especially if the move down is choppy."
Not bad, so far. But ....
 Daily
click to enlarge
Note the negative divergence on the Daily RSI.
This move up is structured in abc's, not unexpectedly. It may be nearing completion with y=w around 3.05 and currently looking a little overbought.
A close watch on the nearby Fibonacci retrace points will be useful, and an overlap of 2.68 ought to raise red flags for the current move up from 2.50
Will that be it ? Are new lows under 1.90 around the corner? 
A huge collapse in equities markets would no doubt exert serious pressure, and an X wave down can be deep. 
However another series of abc's up is very plausible given the long term importance of the 1.90 low.
So once again a Fibonacci .62 pullback to around 2.30 would represent an excellent entry opp prior to another abc up.  

From the  May 1 Natural Gas Catches a Bid
" If the leg down from 5.00 is a complete 5 count, then a .382 retrace to 3.09 would be a modest expectation, EVEN IF this is merely a corrective upswing.
And there is reasonable doubt that this is corrective; again see  Natural Gas Hits Long Term Target
Note the weekly RSI and MACD have lots of room to continue moving up.

PS the .382 retrace of the entire ABC move down from 15.78 to 1.90 comes in at 7.20
Is that likely? I wouldn't have thought 13,300 on the Dow likely 2 years ago."

Monday, June 18, 2012

Perfect Fade

After a classic zig zag correction up, the SP presented the perfect opportunity for a fade overnight.
That opp still exists, although it is slightly below it's overnight highs as I write.
Daily
 click to enlarge
It is possible to count 5 subwaves down from the highs of 1422, labeled wave 1.
The corrective 2 wave retraced roughly 50% of that move down. It is no longer oversold .
And now we come to the main point; the next wave down of similar degree will be a 3, commonly the most dramatic move often achieving a Fibonacci multiple of the preceding 1st wave.
So 1.618 x 155= 250 SP points, Or 1097 from the overnight highs.




Wednesday, May 30, 2012

SP 500- Trend Resumed

OK, hopefully everyone's on the right side of all this. There was ample opportunity.
Pls see the previous post from Mon. May 21st. Opportunities Abound
in which  the slight corrective action of last week was both anticipated and qualified. 
More to the point.... what now?

The equities markets look ready to make new lows, after a pretty classic consolidation, and the only question is by how much.  On the daily and weekly charts they are not even oversold, let alone showing positive divergence.

Daily
 click to enlarge
The bounce DID retrace  .618 of the preceding leg, quite unusual for a 4th wave, so potential for the bounce to be another (2) wave of lesser degree has to be considered;  that would imply considerable downside as the 3rd wave unfolds.
Weekly
click to enlarge
Keeping it simple lets say the bounce was a 4th wave of something.
Note how SPX found support at the .382 retrace of the Z wave as labeled in the preceding post
New lows for the 5th wave of -1- of 3 might find support at the 50% retrace of Z, around 1248.

But whether 1250 or 1150, between Europe/ China/  JPM .and the very long term Elliott count, corrections from oversold conditions at this point should be eagerly awaited as the increasingly rare opportunities they will become.

From the April 16 post SP500 Alert

"The 50% retrace of the last move up from 1078 is around 1248.
The .618 retrace of 666 to 1422 is at 955."



Monday, May 21, 2012

Opportunities Abound

All the markets I cover are experiencing some corrective reversals after hitting various resistance / support points ( discussed in previous posts).
Notice I say corrective. In most cases it is far from certain that the first initial impulse structure is complete,  whether Wave 1 or A, and hopefully the extent of this retrace will shed light on that, and by implication, the evolving structure of the move.

 SPX Weekly
click to enlarge
Please note the RSI and MACD just committing to the move with plenty of room to go.
SPX hits the .382 retrace and lightly overlaps the bulls hoped for 1st wave high ( my label a).

SPX Daily

 click to enlarge

 If the SPX is in a -3- of 3 count then retraces will be minimal, likely limited to 50% of the preceding subwave, or in this case 1325.
An overlap of the 1343 area would negate that count, and overlapping 1360 suggests potential for a new high. However the long term count shown above on the weekly chart, strongly suggests that no new highs are coming.

USD

Basically the same count as the SPX but up not down obviously, and has the same issues regarding the development of the count.
Daily
 click to enlarge
RSI is overbought , but not diverging.
The thrust up is most likely an impulse wave out of a triangle formation rater than the -c- of  b  wave
within larger correction; that would be characterized by low volumes and chop.
In fact the thrust can be counted as a 1, 2, -1- (maybe) implying a minimal pullback to like 80.80 followed by a rip through the double top. Keeping it simple an initial 1 up could pullback to test the .618 retrace around 79.80 or even the break out line, so how far back it goes will help define the count.
Euro short interest is of some concern but.
Weekly
 On the monthly there is plenty of room to go on the RSI etc.
The 50% retrace of previous structure down is well penetrated and the USD yet to reach the .618 retrace .
There is justification for a long term bottom in place.
See May 8 post
 USD Strength

More on Natty and Crude later but see Thur.s Gasoline post Gasoline -corrective bounce due?
on this theme.





Thursday, May 17, 2012

Gasoline -corrective bounce due?

Short term it looks like it might be.
After carving out what can be counted as 5 sub waves down for a 1st wave, hitting the Fib. .382 retrace around 2.82 , and driving the RSI into oversold territory....
yeah it might be.
Daily
click to enlarge\
But this is one bounce you want to fade... around the 4th of lesser degree at 3.15 and  the .618 around 3.18.
Why? Pls see RBOB Top? from May 2nd.

Natty and Chesapeake

I've been traveling so this update is a little late but....
Natty has likely achieved 5 sub waves up from the 2.44 low to the 2.63 high, and the .62 retrace is at 2.50.
Watching that point closely to see if this retrace back down is of larger degree, potentially carrying further for a 50% or even .62, of the entire move up is key.
15 min.

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It's not easy to count 5 full impulse waves up from the 1.90 low yet, but if that were the case a 2 back can be deep. It would however, likely be followed by at least another structure up,  a C wave, even if this move up were to be followed by fresh lows. 
BTW the 2.63 point represents a Fibonacci 38% move up from 1.90 low.

All in all higher targets are expected as discussed in Natural Gas Catches a Bid
 from May 1st. So 2.27 and 2.20 can be seen as excellent opps for entry especially if the move down is choppy.
 Daily

Chesapeake Energy;
The Chesapeake situation has had so much negative coverage it's begging for a closer look from the buyers pov.
 Daily
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Note the positive divergence on the RSI above.
Can be counted as an abc.

Weekly
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No positive divergence but oversold RSI.
 The move down from the 35 area can be counted as 3 series of abc's
Like Natty, even a corrective bounce that retraces a minimal .382 would represent a significant % increase in price. A 50% retrace of 35 to 13 is a target of 24 or an 85% return
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The entire move down from the 2008 high COULD be seen as an abc structure with a and b certainly complete.
 If this move down is a C wave, then when is complete, whether at 13 or 9.90, upside targets would include new highs exceeding the 08 high.

 So CHK is now either completing a C wave or an X wave, with risk to the upside very high.
Can it go lower? And the answer is, as usual, of course; the classic zig zag pattern would call for a low under the A wave 10.00 low. But.
Don't be short this stock.