Thursday, July 30, 2015

Crude Bounce

Is this bounce a dead cat, or is it sustainable?
Do equities crater in China, does the USD continue it's move up? These are the factors.
CLU15 Contract
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CL Nearby
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It does look like a potential 5 waves down. It IS oversold. But there is no real positive divergence on the RSI, something good to have in place for a pivot.
 So far no evidence of impulse wave up structure, it looks more like an abc corrective structure. 

However the short term can evolve and there is a .78 retrace on the above nearby chart.
Jack be nimble.

Monday, July 27, 2015

Monday Morning Indu Blues

Leading the way in the US, the INDU is about to make new lows for the last 6 mo.s, since Feb 3 to be precise, as it takes out 17,354.
 Is it any surprise really? The worlds 3rd biggest equities market, China, has been essentially non functioning for the last 3 weeks.

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Trailing the Dow , doesn't 1968 look like it's just begging to be tested?

Friday, July 24, 2015

INDU / SP Fibonacci Update

Does this stuff work? Yes but ....
Lots of buts in the world of waves and Fibonacci relationships, not to mention massive world wide Central Bank interventions completely distorting price discovery usefulness of markets, etc still take a gander;
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SP mini
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The Dow found support yesterday at the .618 retrace and the E mini at the .382 retrace.
Presumably the Dow is leading, or at least weaker, and both are responding to Fibonacci "magic".

Looking a little further both charts record a sideways range market over the last 9 mo.s- not easy to interpret. Is it a consolidation prior to new highs and how strong will that move be? Or are these charts reflecting an exhausted market failing to respond to CB intervention and rolling over?
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The Dow is weaker so perhaps leading the way. 
In the W structure c= .48 of a.
X = .48 of W.

In the Y structure c= .55 of a
Y= .49 of W

Obviously new lows under the July 6 17354 would indicate at best another X wave underway, but also perhaps a failure at the highs July 16 and all that implies.
Between here and there, taking out the .618 support, which it is playing with as I write, will be negative and esp. the July 12 low of 17536.  

Monday, July 13, 2015

SP Poised After .618 Retrace

Elliott Wavers alert! After a 1st wave down the SP has retraced .618 of that, as of this morning, to complete a 2nd wave. And we all know what happens next; 3rd waves are typically a significant multiple of the 1st and that was 87 points.

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A 3rd wave of Fibonacci multiple 1.618 from this mornings high of 2084 targets 1981,
and  if 3 = 2x 87.5 than its 1909 etc.

My hot tip for buy of the year;

Tuesday, July 7, 2015

China Shanghai Comp 50% Retrace

Yes thats right, at the lows of today, the comp has retraced 50% of the last years move up. That is a common rule of thumb measured target for a correction, and certainly a Fibonacci number.
Beware shorts. Under that 3200 as the .618 retrace and 3050 4th wave of lesser degree offer support.

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Unfortunately for the Chinese (and the rest of us), that is merely a short/medium term picture.
Longer Term the risk of continued downside is high.
 15 Year Chart / Qtr. Bar
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The "B" wave on this 15 year chart is a classic abc zig zag structure in Elliott Wave theory, retracing a Fibonacci  .78 of the A leg down. 
The "C" wave down measured targets are;
C=A at 718 
C=.78 of A at 1700
C=.618 of A at 2422
Entire History of Comp
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Note the lows on this very long term chart are overlapping the preceding highs, suggesting an abc structure history.

Why do we care? China craps out crude craps out.

Thursday, July 2, 2015

Crude Chops Lower- for now.

I've been negative on WTI since early May, see May 12 post WTI Hits Target etc.
I believe it still has a couple of bucks of downside in it, but so far, the move looks corrective and choppy, rather than a new primary wave down. (How that fits with a VERY negative outlook for world equities I don't know .)

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Meantime looking for continued weakness to the .618 retrace level, nearly c=a, and then I go neutral.