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 blog...it'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! 




Thursday, September 1, 2016

Crude Flush

The move lower today has taken out some telling Elliott Wave points, signaling medium term weakness and bolstering the case for limited upside risk.

Specifically the Fibonacci .62 retrace of the last leg up provided only brief support yesterday afternoon and there has been an important overlap of a previous high. 
1 month chart





click to enlarge  
That overlap negates the possibility of this pullback being a corrective 4th wave to be followed by a 5th wave to new highs. 
In the current structure the risk is much higher now that the move up to 49.36 was part of a larger corrective structure and counter trend medium term. Testing the 40 low and even exceeding it are now definite possibilities.  
 1 yr chart
 click to enlarge

Very short term bounces can be expected of course. Here the Fib .382 is sitting on the 4th wave of lesser degree and that 50% retrace point really looks like an area that can be revisited.
No trading advise here friends purely bs