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Weekend Report – July 19th/20th

As for the current setup, there comes a point where an asset just reaches its limit, and it is where I believe crude stands today. Right now, a Cycle Low is well past due and technically it is just so far oversold that I would (even by crude’s extreme standards) be surprised if a Cycle Low didn’t come on Monday. But then again, the caveat remains, crude marches to its own beat and is also in free-fall.

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Weekend Report – July 13th/14th

As for the current setup, there comes a point where an asset just reaches its limit, and it is where I believe crude stands today. Right now, a Cycle Low is well past due and technically it is just so far oversold that I would (even by crude’s extreme standards) be surprised if a Cycle Low didn’t come on Monday. But then again, the caveat remains, crude marches to its own beat and is also in free-fall.

7-13 crude daily Continue reading

Midweek Market Update – July 9th

Today, crude is down over $1.40 and falling, but now at a point where it’s difficult to see the declines continuing for much longer. That’s mainly due to the Daily Cycle, at Day 46, it’s just far too deep and ready for yet another reversal of the short-term trend. Crude is also technically deeply oversold, so that combination creates the perfect setup for a sudden reversal.
7-9 Crude Daily Continue reading

All Fireworks and Smiles

Without a doubt, the current week 21 top will remain the high of the current impressive IC.  So with a top already in place, attention can turn toward the declining portion of the Cycle.  Our focus should center on where the Cycle might eventually find its low. 

Price is difficult to predict, but the timing suggests that there are at least another 3 weeks to go to a bottom.  Technically, there is plenty of downside room available here, with the prior 21 week rally opening the door to a sizable counter-trend retracement.   Something tells me, though, that the coming bond market ICL will correspond to a much broader equity market top, as we witness one final asset rotation out of bonds and into this blow-off equity market.

7-4 bonds Weekly

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Nothing to Fear

This has been a long, sweeping Daily Cycle.  On the chart below, it's easy to see that the Dollar has formed a classic arching Cycle pattern almost twice length of a normal cycle.  Both the rally to the top and the decline since turning over were longer than normal.  At 35 days in, the Dollar is almost certainly no more than a session or two away from a new Daily Cycle.  

The Cycle has been in an extended decline, and the Dollar has finally arrived at oversold levels below the lower Bollinger Band – this is consistent with past DCLs.  A rally to begin the 2nd Daily Cycle should be coming shortly, and could begin as soon as Monday.  Since short Cycles generally follow long ones, the new DC should be relatively short, likely just 15-18 days.

6-28 dollar daily

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Midweek Market Update – June 25th

I mentioned within the weekend report that crude resembled the equity markets in how they have attracted speculative action while melting higher.  I understand there are geopolitical issues which is driving up crude, demanding some form of risk premium.  But at the same time, crude always has some level of risk priced in as a default, simply because a geopolitical crisis in the Mid-East is seemingly always around the corner.

This remains a situation where the price action in crude is simply not following the expected pattern based on its historical Cycles.  There is just far too much bullish speculation and upside bias here on crude.  And I know never to argue against the price action of an asset, especailly the often volatile crude Cycle.  All powerful speculative moves (long or short) are an awesome force which should never be challenged. 

Which is why too many (based on COT and sentiment) expect a continued upside move here.  We know enough to let crude continue its extreme move, but I know that my Cycles analysis calls is screaming for a crude decline into a deeper Cycle Low.  And likely much sooner than most believe, crude will fall sharply and the process of unwinding that massive long position will amplify the decline.

6-25 crude daily

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The Right Turn

Considering that Gold has risen $80 off its low and the precious metals Miners have screamed higher, it's surprising how little bullish cheering we've heard.  My discussion forum, Bull & Bear Talk, is very sensitive to Gold, but has barely seen an uptick in traffic during this move.  In past moves out of ICL’s, BBT has had an immediate surge in traffic and a significant rise in the number of excited posts.

This is just a small sampling of sentiment, but I think it's telling.  We've had a 3 year bear market in Gold that has battered and beaten the bulls into complete submission.  All speculative interest and fond memories of the past bull market have been completely erased.  This lack of interest was evident in the recent 3rd test of the bear market low – the volume and volatility was much lower than during the first two retests.  The bear market has achieved its goal – to clear sentiment on a longer timeframes and lay the foundation for a real change in trend.  The view of Gold and its sentiment on longer timeframes is a picture perfect example of the ebb & flow of Cycles. 

The $40 "recognition day" this week was obviously more than enough confirmation to declare a new Daily Cycle, but it was powerful enough for declaration of a new Investor Cycle as well.  This is the development we’ve patiently waited for.  However, on shorter time frames, Gold has pushed the Daily Cycle into an extremely overbought state, so a $20 or more retracement is possible. 

6-20 Gold Daily

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Gold Market Update

Gold Market Update

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Midweek Market Update – June 18th

Well, we just knew not to discount this market; there was just never any justification for selling it short.  This is and will remain a powerful bull market that is likely in the process of completing a multi-year blow off top! 

This is why it was not at all surprising to see the S&P not only exceeded the previous highs today, but also closed above them.  Although we don't have much resembling a recent DCL, the timing of this all-time high surge is almost certainly a new Daily Cycle.  And as the equity markets continue to run-away and become parabolic, it’s exactly this type of upside surprise I said will become commonplace and not at all unexpected. 

6-18 S&P

 

 

 

 

 

 

 

 

 

 

 

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Expectations are Brewing

Many of my long term members are Gold bulls and are starting to get excited again.  No matter how many bear market curve balls and bull traps Gold might throw at them, Gold fans can be stubbornly optimistic.  I don’t mean this in a negative way – this time around there’s constructive action in Gold that warrants optimism. 

The primary boost Gold’s bullish case is the continued evidence that the bear market ended 12 months ago.  Current action in Gold resembles underlying accumulation and base building…of the type that typically occurs before resumption of the primary (secular) bull market trend.  On shorter timeframes, I’m further encouraged that we’re – at worst – in a 5th and final Daily Cycle and just weeks away from an ICL.  So although some short term declines are likely, massive upside potential is now just ahead of us.

6-14 gold daily

 

 

 

 

 

 

 

 

 

 

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