Wednesday, February 24, 2016

Gold Targets

The original commodity is attracting well deserved attention lately, including my own.
Basically it was the 50% pullback and subsequent solid support as it was retested.

Anyway well into a rip up through previous highs, the question arises; where to?

 In the above 6 mo. chart pls note that c= .382 of a, very likely completing a 4th wave consolidation
in a little triangle.  That formation suggests a market with a lot of pent up buying interest. They can't wait.

Looking at the longer term chart, the first fib resistance .236, and the trend lines on a channel dating back to 2013, are both being taking out now.

So if we are expecting a bog standard 5th wave the general rule is 5=1 OR .618 of waves 1 through 3.
It ain't going to be 5=1.

So  5= .618 of 1 thru 3 at 1330.
Seems a little tepid considering the circumstances (world wide central bank impotence) and obvious pent up buying interest.

5 = 1 thru 3 at 1417, slightly exceeding the .382 retrace.
5= 1.382 x waves 1 thru 3 at 1492, that is also a 50% retrace.

The look of this next break up, it's volume O/I and relative strength will indicate what to expect of wave 1 up.

Now just playing around in the realm of what if. What if we get 1492 and then a wave 2 pullback of 50% ? If  that was followed by another wave up that was 1.618 of 1, you would be challenging the old highs around 1828. Again just playing around here.

Tuesday, February 16, 2016

Crude Oil Rip; Head-fake or Real?

 The WTI rip up from the $26 downside target (see previous post) has covered a lot of ground,
$5.54 or 21%, in a very short time. The Fib .618 retrace was tagged in what can be counted as 5 waves up, and the last 2 bucks was done in low volume. A pullback could be expected.

It is possible that the $26 low was an "a" of a forth coming diagonal triangle 5th wave. That would make this move up an X wave and a series of slightly lower lows possible before a real pivot.
Notice I said slightly lower lows.

 Nearby WTI is already challenging the downward sloping trendline, and the roll into April will very likely help that along. Even if this move up is merely part of a short term consolidation, 34 to 36 looks very much in play as part an alternative abc count up.

There's a ton of shorts out there, both paper, physical and probably systemic by now.
Risk is now heavily to the upside and pullbacks should be taken advantage of.

Note that the above chart is the Apr WTI. The 50% pullback is at $31.25, in the support area of the 4th of lesser degree.

Tuesday, February 2, 2016

Crude Target Update

As Crude resumes the downside after bouncing 30% it worth another look at targets. Just how low can it go?
After making a classic short covering abc ,  the slide down from $34.82 has the look of an impulse wave so far.
Note the support at $30 in addition to the round number; the beginning of wave c and Fibonacci .61 retrace of bounce.

Taking that out will of course signal the retest of the lows.

 Under the lows we would expect the rule of equivalent legs to come into play; the A was a 78% decline from the $148 high. An equivalent for C from $114 will hit at $25.80.

Additionally the RSI is showing repeated positive divergence on a variety of charts.

Monday, February 1, 2016

Shanghai Comp Review

The following post was first published July 7 2015, and all the projected Targets are still relevant.

The "C" wave down measured targets are;
C=A at 718 
C=.78 of A at 1700
C=.618 of A at 2422