this is a ‘nice’ Gartley SELL pattern and, to be honest here, would sure like it to “work” as I want (hope (a strategy)) for a move lower down into 110’s to complete 6+ year triangle … as we have discussed, triangles have 5 legs a-b-c-d-e and, right now, my hope ( a strategy) is that we are carving out the “e” wave and then .. game on for an explosive move w/ the USD versus the YEN.
if we blow thru “d” will have to get out the eraser and take a peak …
either way, believe 2022 will see the USD EXPLODE HIGHER against the YEN.
in that post we did some “basic” work using EWT going w/ Wave 1 = Wave 5 and some “basic” retracement work. as you can see below there was a LOT of math and geometry coming into this level … fundamental frequencies, square root targets, geometry, extensions, etc. all made this an “interesting” area for sure.
where are we NFLX?
if you go back to a couple posts of NFLX you will see that I called it a “chart of the year” because of the very “ray charles” like count of 1,2,3,4,5. we blew thru the target zone by 3-4% probably because my ego got the better of me in coming up w/ that title (digression complete) but either way, we completed 5 waves up into 700 … and we just completed 5 waves down.
what is so important about that?
5 waves either complete a corrective C wave (they are ALWAYS 5 waves) and now we bounce OR they could show a change in trend. certainly believe it’s way too early to be calling for a change in trend for NFLX but our thesis, for now, is the 700 level was a potential big top. so, w/ 5 waves down we need to pay attention.
anyway, our targeted zone held as support (note there are at least 9 different methods showing this to be a good zone of support) and it appears our rally is on … from an Elliott perspective, a guideline (NOT a rule) is that a counter rally will go to the vicinity of the previous 4th wave of a lesser degree and we can see a LOT of math coming together in that zone/area. I do believe that area will work as resistance but I “expect” that the higher target will ultimately be the rally point as this entire NFLX bull run has had a lot of momentum …
so, for now, let’s see how this PATTERN plays out and watch the 625-630 area and also 650-660 for now …
also, note below, that Palladium also hit the target zone and found support …
Palladium rallies .. so does tech … so watch a potential really in Palladium also …!
bottom line – this rally “makes sense” and the math worked … so now, we WAIT and look to put a short on NFLX in the coming days or weeks.
thanks for reading and rock on, ok?
also, got a 4/3 wetsuit today … it’s just got plain cold in the Pacific and with a long period swell and a favorable tide, I could stay out there ALL DAY but cold got the better of me …
in the last post, looks like the “percentage” or “log AB=CD” worked well and led to a 40% ish decline … that was wave 3 (orange)
today, we completed the first AB=CD in the entire run … we have a little gap left open but net-net this was a very nice BUY pattern and looking at the count, certainly can make the case that we are going to start a run to new all time highs for TSLA .. then, well, 5 waves complete. will try to update targets in the coming days/ weeks but lets watch price action for now in/around this pattern level.
the target zone ID’d in the post above missed the target by 5% but has been selling off the past few weeks …
a VERY clear 5 wave count is present so I’ve done my best as providing some “guidelines” to formulate a gameplan.
the “thesis” is that we have completed 5 waves up on NFLX and are correcting based on that move …
a lot of times, not always, 5=1 and that comes in around 580 .. .we would like to see that hold and bounce up in 3 waves to prepare for a short … so, hold your powder dry and I expect, in a few weeks, it might be time to put your toe in …
as you can see, Palladium is tracking down into our level ID’d above back in September. additionally, you can see that they track each other pretty nicely. it’s NOT exact but the general trend and flow is pretty much the same…
during this sell off in Palladium, the NASDAQ 100 has held up pretty nicely and we are approaching a level on the Palladium chart that represents the LARGEST corrective move in the past 15+ years. this measured move is key …
time to play IF and THEN …
IF we hit the level below on Palladium AND it holds THEN I would look to be a buyer of the NASDAQ 100. note, we have a LOT of thrust coming into this level so let it shuck and jive and look for a weekly signal reversal candle on palladium (in this case the HIGH of the candle that makes the low (the wick is included) on a weekly close above is a signal reversal candle or SRC)
note the thrust coming into this very important .786 retracement node. additionally, we have a 1.618 projection a little lower sitting right on top of .841 retracement. (1/1.1892 = .841 equal octave scale of music ratio) and we can throw in some polarity and bullish divergence so would expect some support or a pause.
that being said, I enjoy doing ratio analysis so here’s AMZN / BABA. the first graph below is back almost 4 years ago when I did the same relative strength look because, at the time (believe it or not) BABA was stronger that AMZN. don’t believe me? look at the ratio … it had been going down for a couple years as BABA climbed but then guess what, measured moves and retracements and a bunch of pattern stuff gave AMZN the support in the ratio and off it went and the rest is history. (note, did I mention – once – anything to do w/ sales, or revenue, or anything like that? nope …just numbers and patterns for me)
if seriously trying get long BABA I would watch for a daily or weekly SRC before entering. when I look at those relative strength ratio charts it looks like BABA is about to get smacked even harder so caution warranted … wait for an SRC.
below is our ratio .. if you remember my last post, we were talking about a monthly or weekly close BELOW the consolidation and the market would take off … it started but jumped back into the channel and has been climbing ever since.
what has happened in the market? some interesting selling … but is THE TOP IN?
honestly, have no idea nor do I care if it is or it isn’t. all we know is we now watch the top of the channel … if that gets attacked and we get a weekly/monthly close ABOVE then a health meltdown could occur.
for now -just in the middle of the channel folks. looks like it wants to go higher to hit the upper channel – that’s what its been doing – so why not? higher means some more volatility / selling but nothing to freak out about, yet.
so what do you do? here’s something easy … if your a bul or like buying then BUY the TOP of the channel and if your a bear and like to sell then SELL at the bottom of the channel.
it’s going to be very interesting. hit me w/ any questions …
we last blogged about the “1.618 level” and the fact that we are in the continuation phase of completing a LOT of 5’s or we completed it at the AB=CD.
that is one heck of a bearish “wick” on that candle folks … but it’s also a LOT of thrust into the AB=CD so WAIT but if your long Transports might want to start paying attention to them …
and then I think ..
“now that I see a MAJOR pattern completing (yes folks they do fail – please remember that) I think of what could be the “news cause” of actually really thumping the transports that, after a little sell off, have weathered the pandemic actually pretty swell ….”
the game plan/strategy is to BUY the first PATTERN in a “new” trend and if it works then probability is that the trend change is real …
Energy, Ags, etc. are exploding of late and GLOBAL shortages that are becoming apparent pretty much every day are REAL. so, if one thinks (trade what you see not what you think) that Nat Gas prices are due to continue to rise then we have UNG that will give you exposure.
if we break thru the low at 13 then I would consider this a failed pattern but we have some MAJOR support coming in/around 15 for the BUY to get long nat gas and, perhaps, hold this position for a LONG time …
it’s all probability folks …
below, you will see a MONTHLY on UNG since inception. wanted to post this chart so you could see why I wrote the above .. have we broken out in Nat Gas? have we begun a new bull trend? full disclosure, I’m long UNG down in the single digits and will be looking to ADD to my position at this pattern completing – if it ever does.
take note of the volume picking up and the fact that the RSI is at it’s highest level .. the key here, in the coming ongoing pullback, is where the RSI finds support … if we find support on the BULL ZONE (around 40ish) then we can start giving our change in trend some more probability … but, for now, we are speculating that a very investable low is in place .. don’t throw the farm at this one .. nibble at it … as we will see the breakout occur and there will be more time to get LONG if the “low in place” thesis is correct.
additionally, the “length of the base equals the price target potential is also nice here .. we’ve been basing for 6 years and, if you want to split hairs probably 10 years once that low was put in place 2012. bottom line, if this things goes higher, it’s going to go ….
another way to check trend is via long term LOG charts .. LOG’s help you understand rates of change and are very good at giving first hints of big changes in trends or inflections …in looking at this on the long term log scale, certainly appears to have broken the long term log trend line …
last, when you are building a position, it’s wise to see how “strong” or “weak” that security is compared to high fast flyers .. in this case, for no other reason than randomness, I chose UNG/NFLX.
yup, Natural Gas has out performed (on a relative strength basis) NFLX for all of 2020
as you can see, the NFLX AB=CD failed by, roughly, 4% and w/ this price point one would have some pretty big exposure if playing single shares ….. I considered that PATTERN failed.
that being said, it was a PRETTY HUGE pattern (hence I called it chart of the year) so I went back and looked at the “form and proportion” of this move up into the high and I saw on a daily that we had some more “count” to go and a projection smacked us right into the high (for now, it’s all probability)I realized my ego got in the way here, putting something out like “chart of the year” … I can’t stand when NFL or NBA players make a big deal out of play … why would I fall into that trap? my apologies.
that being said, this is a pretty big target zone so I do think we need to take this top seriously. however, a REAL change in trend would be a MONTHLY CLOSE BELOW 600 as shown below on this DAILY NFLX chart.
in order to fully understand the SRC or Signal Reversal Candle please pay attention to the chart below:
as you can see above, the SRC is a MONTHLY close below 595. a REALLY conservative play … however, you could do an intraday 60 minute SRC or daily, weekly, etc. it all depends on your risk tolerance.
holy smokes .. the underlying BULL market that we have right now is pretty amazing …
I went on to chat w/ JC of @allstarcharts.com a couple months ago and we talked a LOT about IWM. we went over the MATH of why it stopped where it did and, folks, the math on multiple time frames and multiple techniques was PERFECT. he still hasn’t “published” our podcast – maybe because he knew it was going to break out? 🙂 who knows …he’s a lot smarter than I am but still a GREAT dude. follow him peeps!
and guess what ..IWM pattern, it wasn’t WRONG but it certainly wasn’tRIGHT.
BOOM- we broke out today so guess what? I have to get my eraser out and start over and, unfortunately, that’s happened many many times. 🙂 why should I be surprised? well, keep reading.
the market went up to our target area and hit in/around 233. as we describe above, in an irrationally exuberant bull market, WAIT for the SRC and the signal reversal candle was finally hit the week of my birthday (note a fun fact – the HIGH on crude oil hit on my birthday 7/11 – shown below- synchronicity?)
I show the Crude because of my birthday but also because of the PROBABILITY of what can and can’t happen when a TON of math comes together.
folks, MORE math came together (see the last post linked at the top) on IWM .. so only being human I EXPECTED it to dump and the rest of the market to, well, at least follow along … ? unreasonable?
well there it sat … and sat … and then an SRC
Here is the SRC for IWM:
more than likely, a short would have been initiated and we would have been stopped out ….
end of story – right? well from a P+L perspective, yes. folks that is ALL that matters.
from a form and harmony and balance perspective this IWM continues to amaze me.
please see the chart below:
if you have been reading the blog you know we had been targeting this price zone for a while and when it hit you know I (most of the time) say WAIT for a signal reversal candle because it’s probability – right? of course … so sometimes the pattern will act as support or resistance (this is what IWM did for 233 days but ultimately it failed.) and sometimes it will work and inflect to your favor or it EXPLODES continuing the trend … it’s all probability. but I think I’ve shown that “stuff” happens around the patterns – fair enough?
what’s key for me, even though we are dealing w/ probability, is I KNEW there is still a “beat” or “rhythm” to it … that’s why the patterns help you manage risk, right?
so, at the end of the day today, I saw that the market was up again and I thought … “I bet (no kidding, I KNEW this was the case in my gut) we made the PRICE high the same many days (TIME) ago … “
there you have it above … 233 calendar days ago the price HIGH was hit and is it any coincidence that we BROKE OUT when PRICE equals TIME? NO – that is how it works. our job is to figure out what the key master has in store for us regarding the harmony and balance of what we are dealing with … it’s all based on math and music but it’s also a multi dimensional chess game …
why would I type that last sentence?
well, 233 is a Fibonacci number as shown on the chart above … the Architect, what a sense of humor she has ….
there was and still is (for those who have the PRIVILEGE to do it) something so amazing about the feeling of going BONS (Boots On Non Skid) of a US Naval Aircraft Carrier.
it wasn’t a ‘bravado” thing as people would believe from the characterization of Naval Aviators but – for me – it was simply amazing. being on the flight deck as engines were turning, the ship was moving and everyone from 18-50 (?) was moving in elegant and frictionless dance .. it was that amazing.
and when you walked up to your jet and there was an AMAZING YOUNG SAILOR (note no identity needed because WE DID NOT CARE) told you your jet was ready you simply took it as fact .. how cool?
so you would jump into the jet and get this multi-million dollar tax payer funded rocket ship ready for the catapult shot and – I believe EVERYONE – asked themselves before Mr. Toad’s Wild Ride “have I done enough to manage the risk” and “yes” was always the answer and for me … BOOM I shot off the pointy end of American Diplomacy. What an amazing privilege and honor.
what does this have to do w/ NFLX? EVERYTHING ….
folks, we have an near perfect AB=CD, a 1.618 extension into the target zone … and, at least for me, an Elliott Wave count that breaks NO rules is present on multiple degrees …
maybe it’s time to PUT your money where your mouth is Bart when we reach the 650-660 area?
if your someone trying to get short – sure looks like the bar is eating you …if your trying or are long looks like you are eating the bar … man, this is interesting.
1/ as a PATTERN recognition expert I can say that the PATTERNS for selling equities FAILED over the past two days.
2/ as an intermarket musician I try to look at everything ….
3/ so lets do that ….
the PATTERNS have failed
Palladium really looks like another leg down … Palladium down has been equated to NASDAQ down and, to a certain extent, equities down
NFLX … man, that pattern is REALLY close …
Banking Index – again, a MASSIVE pattern a little higher …
XLP/NYA – certainly might have BROKEN DOWN (equity strength) of the 7 month channel …
so what do we do ..
sitting on my hands and looking for a simultaneous 1/NFLX target hit and 2/ BANKING INDEX hit and 3/ XLP/NYA target hit and then SHORT the NASDAQ w/ a vengeance ….
until those 3 criteria are hit I’ll continue to lick my wounds on MJ 🙂 but … seeing the “numbers” come together for NFLX makes me think I might have to break out my timing work … as a side note I recommend you go and BUY Connie’s book (novel, war and peace) the 32nd Jewel .. it’s mind blowing and I’m only on the 3rd chapter because I find myself against a wall and then I go and “find” (I wonder how I find them) books on number theory and Planks constant and inverses and … the rabbit hole just spirals so I’m reading Robert Edward Grant’s “Philomath” and – total mind blown – but it’s helping me go back to Ms. Brown’s expose and the TIME factor becomes understandable but – it’s still elusive in nature – so when I get a bunch of numbers coming together I work backwards to figure out – what- exactly – is the VIBRATION that NFLX is rolling along with …..
the KEY is the DATE of the IPO and, I think (I’m still learning) that first “long term” pullback from the initial impulse move … that is where the rock hits the water and the height of the drop, the weight of the rock , the wind, the moon, the tide and ANYTHING that is PRESENT and PHYSICAL interacts w/ the waves to create the moves we see … it’s really that simple.
IF (and trust me it’s a BIG IF) that’s the case then wouldn’t the mathematics of the ancients (note, probably you and me and anyone else present right now … ) that govern natural harmony work on the markets?
YES .. join me going deeper and deeper and deeper into the rabbit hole …
love that saying from the Big Lebowski … what a great movie.
so, here we go folks .. I’ve just ran thru the DJIA, NASDAQ and S&P 500 and ALL have sell patterns.
what does that mean? well, nothing … right? it’s all probability …
but, that’s what we play, probability …so, we have Gartley SELL patterns across the board – they will 1/ work or 2/ not work.
also, our favorite ratio is banging against the bottom of the range that it’s been swimming in for months .. but, take a look , at this lower level you will see an AB=CD, a 3 drives to a bottom and a butterfly BUY on the ratio. so, when the ratio goes UP then the market usually goes down …
we break down below our XLP/NYA level this puppy could rocket ship higher and, then again, the sell patterns work, the XLP/NYA level holds and we start selling off again …
most people think “equities” and that’s it … there are many asset classes that are just starting multi year (decade (?)) runs …so while stocks are correcting and seem to be pretty stretched taking a look at the current environment and just looking at the news we can see their is a BIG battery shortage coming.
usually, a shortage means higher prices … LIT has been on a tear, up almost 380% in the past 1.5 years…. I haven’t even been paying attention till my two Rugger buddies were texting about it last week.
I found an ETF, LIT, that looks pretty liquid and has been on a tear …
trying to get into a moving market is hard to manage risk so, for now, looking for a correction to try and get in … this will, again, be a multi year hold.
also, if your not convinced, I did LIT/NASDAQ and sure looks like we’ve bottomed out and are about to break out and take off from a relative strength perspective.
I’m a Cannabis BULL and out of my portfolio, right now (knock on wood) the only thing losing money is MJ …
so we “survived” by hitting the .786 from the all time low and bounced and now (intraday) we are setting up for a BUY pattern in/around 14.40-14.50 BUT, folks, this one looks like I might have to eat some crow.
hope is my strategy at this point so if we close (weekly basis) below the .786 will probably take this one to the donut shop and eat it … we’ll see.
hope and change baby hope and change ..
I “hope” we find support and go up from 14.33 and also hope that the intraday buy pattern holds and we “change” trend ..
yeah, that worked out great the last time so … probably going to take a loss on this one.
as you all know, I watch the XLP/NYSE Index ratio for key inflection points .. when the ratio goes UP then “staples” (think risk off) have more relative strength and when the ratio goes DOWN then the overall market (think risk on) is stronger from a relative strength perspective
with the recent market action … one would think the ratio would have exploded higher .. well, yeah, no – it hasn’t. still stuck in the range it’s been trading since FEB 2021.
so, for those max BEARS you might want to watch this .. need an upside break out above the red line to get the party started and for the max BULLS need it to break down below the green line …
no idea which way it will go BUT I will tell you I was surprised when I took a peak at it during my nightly cruising of the charts … my “thinking” was that it would have been higher, much higer.
but we trade what we SEE not what we think … so, until the ratio closes above the red line I’m going to say this sell off is a much needed correction that will ultimately need to be bought … and if we break BELOW the green line, then, perhaps game on for another run.
note, Palladium did not take out the low from a couple days ago BUT sure does look like a dead cat bounce . that being said, corrective forms are usually 3 waves so perhaps we go up again to finish off the correction or we just dump lower from here .. that is the question.
either way, the amount of selling and thrust right now begs of caution if long but you might want to perk up as we go into the 1500-1700 level on spot palladium.
also, don’t need to catch a falling knife so watch this level, let it bang around an, perhaps buy on a retest.
think about it … went to a long term Palladium chart and was able to calculate the low of 80 ish in Jan 1991 (yeah, 30 years ago) and then figured it was close based on the sell off .. well we hit it and YAWN HO HUM I would expect it to EXPLODE off that level … certainly looks like a dead cat bounce to me … hmmm
I like the lower blue level for BIG support and then, perhaps, a chance to buy or get the bounce and exit before it really gets ugly. (hint hint – it isn’t yet)
I redid my NASDAQ chart at the request of a friend .. the other night, when I posted it, I just drew the “AB=CD” and figured I would tighten it up over the weekend …I did tighten up the target w/ some more precision.
the AB=CD has been hit.
how did we get this target?
from the low in 2002 we label A. The most recent 2020 highs are B and then C is the low after that pretty quick drop (note, it was one of the fastest percentage moves drop in history) from there we can calculate the AB=CD target. Appears to have been hit ..
from the all low on 10/03/74 we draw the radius of the circle all the way to 2000 .. that’s a BIG rock hitting the water, isn’t it?
from there we draw our circle … once we have the circle we can create the square based on said radius and that is bolded in BLUE.
speed or fan lines originating from the all time low and being based on the geometry of the first impulse move are pretty powerful. as you can see I divided the length of the square into the usual ratio’s and then drew the fan lines from the all time low … take a look at the result.
there is a lot going on w/ these lines and there is a lot more geometry that can be drawn but I don’t want to clog up the chart.
so, net net, pay close attention to the NASDAQ in/around here, fer shure … if the AB=CD pattern fails to the upside there are other targets that I’ll update but for now, this looks like something that we should REALLY pay attention to …
tomorrow, have the opportunity to sit down w/ JC and continue our discussion around Fibonacci and vibrations and patterns …I’ll post the talk after its completion and believe it’s also live streamed on Twitter. We’re doing it after the market closes …
in the last episode he specifically asked that we spend time on the “rock hitting the water” or the “initial ripple” … below, you’ll see the chart that gave us an “idea” of a POTENTIAL stopping point and it’s the “regular” technical analysis. this is the chart that I blogged.
but, in order to REALLY get an appreciation to why this LEVEL is so important and how, perhaps, one can start making that little move towards the cliff to jump into the rabbit hole w/ me I show some more of what’s really going on … not meant to confuse anyone but to visually show what I mean when I say I’ll usually look at 11-12 things before making an investment … I didn’t blog the last two charts because I think it’s just too much information. honestly, that’s the only reason.
Is IWM going to breakout or breakdown? YES. NO. Have no idea but whichever way it DOES GO it’s going to be a wave to catch and surf … fer sher. also, it never hit my Signal Reversal Candle. (SRC) who the heck knows when it’s going to blow …
as the market continued to climb to new highs, if you look at the chart below you’ll notice that it did not move to new lows. no, in fact it has been basing since Feb .. almost 6 months. in a truly bullish environment, it would be game on and this ratio would continue lower. it did not …
in fact, it appears to have some strength and starting a breakout to the upside.
THAT, is not a bullish equity move … so, keep you powder dry. if you have been following my blog for a while you know how powerful this ratio (XLP/NYA) has been at warning about inflection points … yes, we have lower targets from the last post, but, for now, certainly appears that the ratio is/has bottomed and a “risk off” mindset appears to be taking hold ..
one last, I went in and fiddled w/ my settings and everything and can’t figure out why all the candles are green? maybe it’s that I’m using a “ratio” but I’m not sure, so I do apologize for any confusion. for whatever reason 4 candles are red …?
well, it went and hit right at the top – exactly I think – of our target area and is built a series of 3 higher lows (daily) …but we do have an entire “zone” of support in/around 24-28 so this could be a dead cat bounce. give it time …
but, this count is valid and, dare I say, AMC is off to the races …?
they lead us UP and they lead us DOWN. the banks, financials … it’s that simple.
that being said, the move since March 2020 has been strong and straight up .. kaboom that’s a face ripper higher and, frankly, caught me off guard. why?
well … the ZIRP, the multiple trillions (yes I just typed MULTIPLE trillions) of sovereign debt is beyond anything that we could EVER imagine. folks we are in unchartered territory. again, we are in the vapor ware of experiential historical construct and, from where I sit, it’s UGLY.
but, the band plays on … right?
so, I present, more than likely the most important chart out there .. the banking index.
I had the opportunity and that is what it is .. an an opportunity to sit down w/ JC yesterday and chat … it was blast. but what came to me is while I have all these followers – thank you!- nobody really knows what I’m showing so I’m going to break it down …
BLUE VERTICAL ARROWS – they are measured moves .. every move UP has ended at their conclusion .. so, note around the 155 level – make it simple
DASHED BLACK LINES – just showing you where we take the key nodes and EXTEND from those points … NOTE that 149-155 we have some confluence.
ELLIOTT WAVE – love it, when it works … seriously. if your going to go down that rabbit hole, just learn the corrections … anyway, a VALID (trust me, doesn’t mean it’s a correct count LOL) count shows us finishing 5 waves in around the level sighted before. NOTE – the orange lines is the current wave that we are counting and 1=5 in our target zone.
so, 149-555 BIG DEAL for the financials ….
now .. go on … rock on, capture your stoke folks …
well, underwater on TBT. I’ve shown my entry and man did that look like a NICE one .. but, it’s all probability. folks there was a TON of math coming together in /around 17-18 and it got wiped out. but, we have some support holding at the .707.
I’ll cut half my position on TBT if we lose 16.06 to the downside on a DAILY close below.
I’m still bullish RATES but … trade what you see, right? let’s give it a couple more days and then might need to throw half a towel into the ring on this one …
also, I’ve done the 30 year continuous futures contract INVERTED to show the same picture at TBT and to also see if there is some support that might be found on this one … hmmmmm. can’t win em’ all …
investing is like golf .. learn how to play out of the rough and the sand and you will be a good golfer! I’m still learning!
above is one of my first forays into Harmonic Pattern Recognition … it’s PFE way way down in the low teens. believe I was looking for 13-14 as the low. anyway, when looking at PFE today it reminded me of that chart …
anyway, based on this vaccine stuff and a boat load of cash, looks like PFE is off to the races. some nice resistance above on the weekly and then a “final” target at a double AB=CD and 1.27 extension. that should stop it or at least provide some stiff resistance.
that was QUITE the pop today and we are getting close to resolving “one more leg lower” or was that it …
either way, my BULLISH outlook on Bitcoin remains … the chart below is the bearish option and the one I’m going w/ for now … but, we will know soon.
be ready to shift to the “low” is in place and we are advancing in a 5th wave (foot stomp) but the move should be big ..
so, in the more near term bearish you can easily see we did 5 waves down and now we are simply doing a 3 wave B move and then a BIG C wave to come …
I’ve noted a very important level for resistance .. if that holds and we start down lower then it should be impulsive and powerful (like a classic C wave) …
I want to see that “resistance” level noted above to being take out to the upside before going long. truthfully, would love the a-b-c to be in play as it will give us a better AND a rule of life is that the C wave HAS TO BE 5 WAVES (EWT) and it’s usually very violent and harmonic and pretty easy to count so when we do go long, we should have a very risk controlled entry to go long.
yes, big spike today, but don’t get fooled or too bought into the bullish case, just yet.
hope makes sense .. let me know if I’m missing anything.
if the blue measured moves tell us anything … corrections usually occur at their completion. right now, we are at that extreme and we are banging up against a 1.27 extension. would use that level ( or a little higher) for stop out point and would look to sell on a close below 44.50.
the masses are at “play” here w/ AMC and what a better laboratory to test harmonic patterns than on THIS stock …
the only caveat – it’s all probability. that being said, w/ the balance of thousands upon thousands of our fellow retail traders holding 2 shares portfolios at risk, we can enter w/ a defined point and another defined point of where we are wrong …
so, the GARTLEY PATTERN buy is 28.80-30.98.
the red lines are back from the weekly/monthly and are horizontal lines placed upon former resistance that should (operative word) act as support .. the polarity principle.
anything below the above and this puppy is cooked …
TBT has fallen into the bottom level of BUY zone and I’m long TBT in/around 18.
A lot going on w/ his chart but wanted to show you some “other” geometry that I was working … you see, we can make arcs and develop trend lines using the geometry of the chart but also, using the TIME and PRICE to define the vectors.
in this case, we take the all time low and draw the bottom of the square to intersect the “time” of the high. that will define our arcs and the square. the most important aspect of a square is the 45 degree angle (red line) and that line we then “copy” and “paste” to the bottom right of the first square and, well look at that … it intersects the LOW almost exactly. we also draw another square (and we can/will keep drawing these squares to find the trend lines running the show) and notice how the two 45 degree angles TIMED the low almost exactly .. (FWIW, this was a precise 1.618 AB =CD and a .618 retracement along w/ the same percentage corrective move that drove price into the all time low … came in around 21-22 percent decline.
so, while we do have the traditional “slap a retracement grid and look for the .618 retracement and a whole lot more …
take some time to study this chart .. try to understand it as it’s very helpful, indeed.
and, w/ all this work, I’ll consider it “wrong” if we get a daily close below 16.08 (.786 retracement)good weekend to everyone …
lot’s of pressure on the Coin … certainly doesn’t look like the low will hold and will plunge into the 20k’s.
here’s the deal, this smells, feels (I’ve been “scrambled” (surfing term being caught inside) by a C-Wave before) and while it’s a fools game to pick tops or bottoms, I’m trying to find the pattern that will give us the best entry.
I’m long the Coin and getting some egg on my face (see scrambled above) but am going to hold to look for some support and the possible low to be in place to begin the march higher … what do we have going:
Note (3) up near the all time highs .. I REALLY LIKE when a new high is made on 3 waves. that is a classic “b” Wave into the new high and then C wave wipes everyone out – like right now.
the wave count (if this is correct) shows 5 distinct waves down from the high … a “guideline” NOT A RULE is that when 3 extends (in this case 1.618) then 1 = 5 (blue arrows into/around 23K)
a RULE is wave 4 (we are in an expanded flat wave 4 correction right now – if correct) is it cannot go below the end of 1 .. (dashed green line) around 15K. If we go thru 15k to the downside then wipe out the count and this is 100% wrong.
I threw a “basic” retracement grid up there and highlighted the blue box for a support zone that would 1/ finish 5 waves down, 2/ finish the C-wave and 3/ end (4) and then we go UP into the 70’s to start …
also, threw in the fundamental frequency targets (dashed purple lines) and also used the largest percentage correction (dashed red arrows to find the mid-20’s looks like a stopping point to give another a shot ..
it’s all about the data folks … in this case we have a monthly continuous contract of Copper Futures. the PATTERN into the low back in 1990-2000 (yes it took 10 years to complete .. read that again – 10 years) is hard to understand w/out anymore data to the left of it’s beginning so it’s hard to figure out if the high in 2010 was a big 3 or big 5.
thus, I’m going to outline two scenarios ..one bearish one bullish.
BEARISH: replace the big bright orange question mark w/ a bigger 5. IF that is the case THEN the most recent high was completing a B wave and we have started a C wave down … C waves are freight trains of beauty and a wonder to behold .. leave nothing in their wake. stand by …
now, hold the phone, what if the big bright orange question mark is/was a 3? then, the BULLISH scenario is we just finished wave 3, are correcting wave 4 and copper is a BUY into new highs … it’s still working it’s way thru the corrective PATTERN that will appear so it’s hard to make a projection but we should NOT go below (1) as that will violate a rule …
so, for now, take note of the blue arrows .. the all time high was, yup, an AB=CD staring from May 1999. It smacked right into that …
kind of in no mans land from a count perspective due to data but expect the two red horizontal lines to act as support due to the polarity principle …
Happy Fathers Day …
also, note EEM .. smacked into a nice target zone in/around 58 and the second chart shows the daily sell signal on EEM.
minor EEM sell pattern on the daily …
last, note the synchronicization between copper and emerging markets … pretty nice correlation.
last, note the FXI (china) has NOT made new highs while Copper and EEM have .. below you can see that high/low inflection points are nicely timed by the Chinese ETF …
so, for now, expect copper weakness for the next couple weeks then we can figure out where we might be from a count. if anyone has really long term copper data please let me know.
below you will find the SHORT DOW ETF called SDOW. it’s pretty fascinating if you think about it or look at it .. your preference.
basically right around the start of the pandemic around the week of 02/14/20 the volume was HUGE and the SDOW went on a nice run higher. well played … but since then it’s down basically 10X and there is still a lot of buying …
look to the far left and this ETF fell so far and nobody was interested and then last year hit and someone/somebody has been buying and selling this security …
now, of late, if you look closer to the last couple candles and corresponding volume you’ll see that the most BUYING volume ever has come in AND the price as pretty much stabilized at/around the low 30’s ….
alert went off last week and the upper target zone on the DJ Transports has been hit ..on my monthly chart that level is 16180 and while I know a lot of you will just see a NUMBER and that’s cool but when you play w/ numbers EVERY day you see 1.618 … you study sooooo much that you understand “why” we don’t need decimal points and what they actually mean so you can move decimals point around.
if this is the high, I really have no idea if it is or it isn’t then the Architect has a really FUN sense of humor. think about it .. the “low” during the financial crisis on the cash SPX was 666. not kidding .. check it out. now, w/ one of the MAJOR indices topping out on the Golden Mean … well look at that.
the chart below is the “bearish” short term case … as you can see from the title, right now, we have been making the stair steps of “higher lows” but it’s not a THRUSTING or MOMENTUM move like the one we saw off the low in/around 30K and the geometry/form is starting to “look and feel” like a 4th wave triangle …
so, need the 38,340 and 40,000 to get taken out to the upside by momentum and a daily close else we are going to be under some more pressure …
the good thing .. we have a clue where we are w/ both scenarios so we can plan accordingly.
in this case, the triangle, they “usually” occur in the 4th wave and then have sharp reversals … mid 20’s can be expected if the bearish triangle is in force.
if not, then the “stair steps” should hold and we are beginning a move into the 70’s …
the chart below is the chart we are currently working off .. in this case we are following the bullish case that the spike low in/around 30K was the end of the C wave and we are going to advance …
need to see some thrust/momentum UP to validate the low is in place … so far, that is our running gameplan.
truth in advertising, always, on my blog … the bearish triangle gains traction the longer we just limp along like the dead cat bounce this might be …
LOVE the Loonie … as you can see below, IF (the big IF) you can catch a wave this FX pair likes to run .. in either direction. well here comes a wave …
at 1 we have the classic AB=CD and, at least for now, it is holding …
at 2 we have a lot of MATH coming together along w/ a corrective (dashed red line) move that has present on most EVERY major corrective pullback.
w/in both above (1 and 2) we have the TIME dashed green line … that’s pretty key to me. Something (hint hint look up at the sky at night) has been responsible for the corrective TIME of EVERY MOVE DOWN since the beginning. a measured move in time, if you will. if your wondering, the dashed orange line is of course harmonically related by fibo .382.
guess what, I’ll WAIT for that … and that’s the end of the summer, and I’ll table the Loonie but I wanted to show the power of TIME and PRICE combined. Guess what, if it doesn’t work, there’s 50+ other currency pairs. I’m trying after so so many years fighting to make this easy and enjoyable …
in the last post we created two target zones w/ the “basic” AB=CD and 1.618AB=CD projection technique. doing some rudimentary wave counts I’m going to call the low as a corrective move being complete but I’m updating my count to show that this is still wave 3 of 5 that we are in …
what does this mean?
we “should” (from current levels) move up into the mid 70’s or 80’s and, depending on the chaos of the masses maybe even higher but it is going to be the final wave higher w/in this BIG 3rd wave.
then, expect another nice shake down WHICH SHOULD BE BOUGHT for the final leg that should take us into the 100k’s …
today, the ratio went and smacked right into an hourly pattern SELL (yellow highlight) and a 15 minute butterfly sell (light blue) …
when the ratio goes DOWN the market goes UP. pattern hit perfectly and the rally ensued …
now, it’s time to WATCH the next day or weeks action to see if this pattern fails and the sell off continues OR the ratio continues down causing sustained rally. I don’t recommend being LONG any indices right now as we are in a TIME and PRICE window that might prove significant.
today’s “Musk Induced” Sell off certainly smells like a C wave … that supports a zig-zag correction and it certainly smells like we are in a 4th wave correction … targets of low 40’s and, depending on thrust into this level forewarns of a move below into the low 30’s … we’ll just trust the patterns and the count.
but, for now, the lower targets are opening up nicely …
watch the levels shown on the GBP and the EURO and USD Index to get a feel for what might be coming this week.
IF we hold these levels then expect dollar strength .. EURO and POUND weak.
IF we FAIL on these sell patterns for the EURO and the POUND then the dollar will take a pounding and go right into the level we have been waiting for what seems like a LONG LONG time … stay tuned tonight.
personally, WAITING and have a “hunch” that the levels will fail (USD weakness) and go forth and attack the lower level shown on the USD Index which is the SAME level equal to EVERY move lower in the USD in the past 30+ years. worth waiting for … don’t you think?
our last post on Bitcoin ID’d multiple patterns … multiple AB=CD, a 3 drives and a butterfly sell all in the 65-68 area. in my original post I just took a look at the chart “real time” and said 66-67 but did some work on the intraday charts and 65-68 is the zone. honestly, I wasn’t worried about being too precise because I’m generally looking for this wave to end and 4th wave correction to occur so i can BUY again. right now, I’m going to say that based on the gap down today, that we have a Wave 3 complete and are correcting in Wave 4. again, there are targets a little higher but I’m not going to worry about that now as it appears that this gap down has things going in the 4th wave correction direction.
also, note on the 60 minute chart, that we can certainly label this an island reversal and – if that is the case – then we can expect lower over the coming days and weeks.
now, am I screaming the top is in w/ the Coin? absolutely not … I’m looking to BUY again but found that the risk of continuing w/ my position outweighed the downside. now the hardest part – trying to get in a moving market. that part, for now, is TBD.
please see chart below … ultimately, it’s about risk control and how much risk one is willing to take.
our thesis is the 14-15 dollar low was a BIG low and we are very early in a multi-year (multi-decade (?)) rise in interest rates. yup, you just read that correctly …so to manage risk, one must understand that there is a potential that the trend has changed and we now have 3 different levels to enter …
here and now … GARTLEY 222 pattern complete at the low however, a nice gap down warns of lower prices. gaps into a level beg of caution …
19.14-19.42 …realistic w/ that gap down and lands basically on the top of the channel w/ polarity in play.
18-18.50 .. a lot of ratios and polarity principle (red line) … that looks good.
so, if the low today was the low but you don’t like the gap down then WAIT for a daily/weekly CLOSE above 21.50 for confirmation and BUY or if you do not think the low was today then WAIT for the two levels below.
either way, risk is basically in the 16-17 former cluster or the low at 14.28. that’s the true support zones. the lower breaks then the entire thesis is 100% wrong.
Bitcoin has made, as expected new highs and there is probably some more to go … that being said, the count has worked thus far so I’m sticking with it. always open to get the eraser out, as many of you know, but for now we are advancing in the 5th wave of a bigger wave 3.
I closed my position at 57k and have been sitting on my hands TRYING (it’s hard) to not be greedy and let the waves come to me …
as many of you do and some of you don’t I absolutely LOVE SUP Surfing and I had a board member from my non-profit (www.thesupvets.org) in this weekend and he said it was his “best day of surfing – ever.” peeps – it was amazing.
why? reading the waves on which one to take, which one will clobber you (there were plenty of those and which one is a better L or R, etc. same thing goes w/ the market. it’s all number, vibration and … well waves. the chart below is the bigger picture – updated w/ an RSI and commentary. so far, the “set” coming in looks like it could be ridden.
what do I see nearer term(note: trade what you see, not what you believe)is the following:
RSI: note the stair steps higher, in the bigger picture chart above, as this is the “transition” technicians see when the RSI finds new zones of support and resistance that correspond to a bull or a bear case. in this case – bullish longer term but we also have bearish divergence (new highs in price and lower highs in RSI) that is present in the 5th wave advance of a move … key. so, we can see bearish divergence that corresponds to a 5 wave count and, of course, PATTERNS.
the chart below is, frankly, a work of art. the synergy that is coming together is remarkable. we have, pretty much, ALL OF THE PATTERNS COMING TOGETHER in/around 66-67. AB=CD, 3 drives to a top and a BUTTERFLY SELL Pattern. WOW.
so, all this means is this level is REALLY important. if it holds we’ll probably get a BIG correction (the one I’m waiting for) OR BITCOIN WILL EXPLODE HIGHER. it’s just a pattern but man is this one important.
at this point, to protect a position, if you have one open, move stop to entry level at .8475.
you can see the “polarity” principle in play where the support in the spring of last year is now acting as resistance in the spring of this year …. hmmmm.
anyhoo … I’m looking for an initial target to take some off in/around 8850.
note the 38.2 and 50% retracements, largest measured move correction (dashed red line) and he polarity principle again but this time highlighted by a darker/bolder red. why? this level held as support for MONTHS and when it finally gave away, it gave away big …
note, depending on the form of the correction (if it even stops here) I might be looking to add on a pullback into the 8550-8600 area.
taking a look back at Uber we have reached the objective discussed a couple months ago ” in the low 60’s”
note the SAT trend line .. yes, that is SATURN HELIOCENTRIC. Nice little band it’s been banging into from a support and resistance perspective … certainly looks “toppy” and one could easily draw “another” H+S formation from the beginning of 2021 and most recently … key neckline as shown below.
I’ve had a couple people text me over the past couple days regarding Natural Gas and UNG.
well, right now UNG is definitely a dog and I went a little red today but I’m going to stay w/ this one because 1/ this is a LONG TERM play and 2/ I’ve been watching a SUPERB BUY pattern on the Natural Gas futures as shown below.
certainly looks like it wants to go down and tag that level … I’ll hold LONG UNG until that level is tagged. it DOES NOT need to go down there but it’s a valid pattern BUY ….until that level is taken out to the downside on a daily/weekly close I’ll remain my bullish outlook on Natural Gas.
will I add to my position w/in UNG if it goes down and tags that level … NOPE. as a pattern recognition investor/trader I have been taught to never add to a losing position. so, I’ll WAIT for it to become positive before ever thinking of adding anything and if it blows thru the BUY PATTERN to the downside then I’ll take a loss. that loss NEVER exceeds 3% of the total trading capital.
checking in on CSCO we are at a VERY important point as CSCO is showing the completion of a near perfect SELL SIGNAL but due to thrust, if the pattern works, would wait for a signal reversal candle below 50.
if the pattern fails then, it’s quite possible that we have begun the parabolic leg up the opposite side of the mirror image foldback. it sure has tome thrust fueling its rise so this pattern is REALLY important for the Bulls/Bears.
also, one last, if you take your AB as the all time low to the all time high and then project .618 that length from 8 dollars you smack right into the last high in/around 58.
the 50’s … appear really important for CSCO
tomorrow is either a “gap and gone” higher or a “big stiff wall of resistance” for any further advance ….
turned bullish on Bitcoin down around 6-7K and off it went….
the past couple weeks have been interesting as it’s been hovering around the 50-60K mark.
I’m still bullish.
as for – right now – I see another leg up to make a newer high and then a BIG 4th wave correction and then another big run higher – 100K+ not out of the question.
closed my entire position at 57k ish and now am just going to WAIT and do nothing and watch my thesis shown in the chart below work out what’s going to happen next.
Elliott Wave, as I have OFTEN said, is AWESOME – when it works. it’s hard, no doubt, but learning the corrections is key.
using the guideline of alternation, looks like a zig-zag for wave two so I’ll be expecting (not a sure thing at all – it’s a guideline) for a flat or a triangle perhaps but either way, I’m going to hold …
also, note, we have some big time volatility here … so as long as the coming correction does not go below the big blue 1 then we might conceivably correct 70% and STILL BE BULLISH.
also the BIG 3 is projected to end around 68K. it doesn’t need to get up there – at all. but that target puts a very nice 3 drive to a top in play …
I’ve been monitoring the ratio, daily, for a while as I really wanted the ratio to go down into the “major support” area as I could then feel probability was on my side to take a crack at shorting the market. yes, shorting the market …
if you’ve been reading my blog for a while and for those newer blog readers you will find out/know that the patterns on the XLP/NYA ratio have been exact and helpful in understanding the flow of funds in the big institutions. KEY.
so, I noticed the “key trend line” last time I blogged and noted it but, honestly, haven’t been paying that much attention to it .. just had the lower “major support” level on my hand but, the “key trend line” looks like it has tagged the ratio and provided some much needed support for this falling knife.
now what – well – we are kind of in no mans land … but, I’ll be watching closely and, keep the “major support” level a little below in the back of your head …
that’s the great thing about patterns … they work or they don’t.
WHEN they do, they tell you something.
conversely, when they DO NOT work, they tell you something.
I’ve been showing a 5 wave count in IWM for a while and, just recently, it went up and tagged our target zone. it’s one of many target zones …
the question is “is this the one?”
I don’t know … but we have an intraday BUY PATTERN and if this is a bullish corrective move then this level SHOULD hold … yes, a correction can go into the 210’s but in this case we have the classic AB=CD, 1.4142 extension and the .382 retracement all right here, right now.
IF bullish, THEN this level holds and goes higher …. we’ll see
update: rolling into a BUY zone for both futures and UNG. IF the thesis that a BIG low is in place THEN we should find support and then continue upward.
take time to look at the long term Nat Gas Continuous Contract chart … you can see the “major” trend line which is acting like resistance .. a weekly open and close above that trendline could signal game on for the bulls.
if major support breaks then we could be looking at the 7 dollar level on UNG. needs to find support in the area shown …
note, on the monthly, looks like we will start the month closed below the key trend line from 2007. and he market accelerated upward.
that being said, we are approaching the “target zone” for a lot of math and I also want to call your attention to the monthly RSI and the support zone that its approaching …
I went back and checked .. the last two times it touched this low of a level in the past 15 years was 05/2018 which was part of a -40% ish correction and 07/2007 and we knew what happened during that time frame.
if you have been following my blog, you’ll remember the big measured moves that were around when the dollar was carving out THE low. they have appeared/are appearing again. w/ a wrinkle … using “basic” monthly cycle tools you can see that we have a BIG cycle coming in this month which lines up w/ the measured move target zone a little lower in the index. this could be a BIG DOLLAR MOVE higher ….
below you’ll find the chart that started the dollar bears growling and stopped the dollar bull in it’s track. the form, proportion and balance are amazing and exact. take time to study this chart
since then, the USD Index has basically been carving out what looks like a flat correction and then higher … you can read prior posts to see if this was an A-B-C correction or 1,2,3,4 (in work/finishing) and then higher in a big 5th wave. we are getting a little below the end of wave 1 which breaks a rule if your a purist but it sure looks like we are bottoming. then, the last chart is an intraday chart showing a possible mathematical derivation of wave length based on fibo relationships that could get us into the target zone … so, stand by, as this is a BIG level coming up on the USD.
it’s time to really start paying attention to the market across the board.
in this case, there is a high probability that this count is correct. I was able to use some of the data from the peeps at http://www.elliottwave.com. I enjoy their newsletter and while sometimes too early, in the end, they have proven to be correct.
I’ve found that when my count matches their count AND we have a turning point in the Martin Armstrong cycles things do happen …
bottom line … I would fasten your chin straps and get ready for Mr. Toad’s Wild Ride … folks, I love SUP Surfing.
and, believe it or not, I see the waves and look for patterns and fractals of the waves that are coming in my Pacific Ocean playground. all I can think about is a tsunami to describe the wave that is approaching our shores. I’m not even sure if this wave is one that anybody could ride, it’s that powerful.
call me crazy, many continue to do so, but we are entering into territory that NOBODY alive has ever experienced.
as you can see, the ratio hit this level, held and the market sold off for a couple days. the market strength the past week has been impressive and, with that, the ratio “failed” at the level indicated and, as you can see, we have a pretty big candle that is closing at the low, for now, so it sure looks like the pattern failed.
that being said, I’m not overtly bullish here, right now. note the key, dashed black line, trend line is approaching and then below that we have 3 ratio’s, an AB=CD (dashed black line) and the all important measured move from the 2003-2007 time frame. MAJOR SUPPORT for the ratio … also, of note, is the 14 period RSI is approaching a key support level …
could the market continue higher from here – of course – but there are some other sell patterns present on other indices so I’m just going to be flat/neutral here.
one last, note the TIME of the corrections .. on this leg up from 2007 the corrections (blue rectangle w/ ‘time’ written on top) has been nearly perfect and, if that is the case, then this current leg down, from a timing perspective isn’t ready, yet.
could we be at the start of a parabolic move higher? let’s wait and see what the “MAJOR support” level does before we get too far ahead of ourselves.
the PATTERN failed this AM and the market pushed higher. for a correction in the market to continue in earnest, you can see we need the .786 level to hold. right now, the low back in late/mid January should not be taken out to the downside w/out a little more pullback in equities.
also, note the blue measured move arrows. probability says we sell off a little if that level does get hit as it has reacted that way the past two times.
XLP/NYA hit a nice buy pattern on Friday and based on the entire days action, there is another “minor” buy pattern appearing. if both of these hold, then the staples should continue to outperform which traditionally causes equity weakness.
if we lose the levels, then we have the .786 ratio a little lower … either way, the ratio should NOT take out the January 20 low, for now, as that was a pretty big target. sure looks like probability favors more upside for the ratio next week.
we have a very KEY level of support on the XLP/NYSE Index ratio.
as you can see below … we have the measured move (dashed red line) equal to the largest correction in the ratio since the low in 2007 and w/ that the lowest level on the RSI in 12+ years. note, a bullish divergence does not appear to be needed for the ratio to find support …sometimes there was some bullish divergence and other times it just hit the support level and reverse higher. I do think it’s necessary to to take this into account.
then, we have a significant amount of math coming into this level w/ the .786 retracement from the last swing low hit last week.
lastly, we have key trend line support a little lower … this is a “good” trend line because you can see that it was respected as resistance when we copy/pasted the lower trend line onto the higher prices to create the blue trend channel … bottom line is to expect support in the ratio.
so now to the IF and THEN statement of using PATTERNS.
IF the ratio does find support THEN the equity market should correspondingly correct/move lower. ELSE, a blow thru to the downside of the ratio will make the market continue higher and, perhaps, w/ force.
we will be in that key decision making process – next week.
the second chart is just showing the NYSE Index overlaid on top of the ratio .. as you can see when the ratio finds support, the market corrects – every time.