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.








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