Thrilled to be a part of the upcoming Chart Summit hosted by the infamous wine connoisseur, sushi expert and occasional chart geek JC from @allstartcharts.
I owe a lot to JC as he is the one who got me blogging years ago and I am extremely proud of everything he has done for his business and the advancement of TA in the GLOBAL marketplace. He has NEVER changed his character and zest for life .. keep it up dude.
I’m going to present on harmonics, vibration, music, geometry and all that ‘other’ stuff that has no place in the market and doesn’t work. Trust me, I get it, but it’s the only way I know how to manage risk. ZERO business school classes (my first 11 years out of college (if you want to call it that – USNA) were flying fighters and then software and some consulting and I just kept going down the path of “the numbers where a stock, currency, bond, commodity inflect MEAN SOMETHING.”
Trust me, they do or don’t trust me .. do what works for you as I honestly wish everyone the best of luck managing risk.
So, when this AMAZING and HILARIOUS chart of “everyone dropping their porn and running (where??) when they thought a missile was going to blow them up and then going back at “it” when they realized it was a false alarm” came across my desk this morning I immediately saw 5 waves up from the bottom, a flat and a zig zag correction and time symmetry between the extremes of 1/thinking you will never get to use your John Thomas ever again to 2/ the euphoria that you still got “it” had perfect time equality of 16 minutes (4*4 = 16 (a natural square)) I HAD TO CHART IT.
In the way I look at the market I see that human emotions (sound, vibration) are present in the natural law that governs the universe. From Bitcoin to Boners PATTERNS ARE EVERYWHERE.
Technical analysis works …
Look forward to the @chartsummit. Sign up here and it’s truly free: http://www.chartsummit.com/
01/03/2018 – our low forecasted in September below came in ‘on time’ and I’ve been waiting for the next pattern to appear. Please see below and consider:
- this is a PERFECT BUY pattern but just like the XLF sell pattern a few months ago they can and will fail! so, we are pretty much here, now, for a BUY DOLLAR. If it fails, much like the XLF took off to the upside, the dollar could accelerate to the downside – big time. so, let’s see what happens …
- also, if you look ‘way’ down this blog you’ll see the question around is this an A-B-C correction that started back in 2008 OR a 1,2,3,4,5 with a monstrous bull trend in the dollar? one of the 3 rules of Elliot Wave is that 4 can’t go below (or above) the end of 1 .. right now, if we are in a bull trend THEN the $$$ index can’t close (weekly or monthly for me) below the dashed red line. It’s sitting around 89-90.
- also note the updated dashed yellow boxes … in all but 1 (the purple box) of the bounces off the cycle low they pretty much did the same thing and then took off. That fractal pattern appears to be in play here … so need to see some nice thrust and strength out of this BUY pattern to give the bulls a warm fuzzy.
- went down to a 4 hour chart to show the geometry and ratio’s at play in this BUY pattern.
stayed tuned and thanks for reading ….
09/12/2017 – since the last Dollar post in May got smoked I stepped back and let this puppy run. I’m still in the “I don’t know camp’ with regard to the dollar finishing a multi year A-B-C advance and this is the beginning of the end for the US Dollar (low probability) OR we have finished a 3 w/ another 5 to go …
but that being said where are we now:
- deeply oversold
- hit a .5 but most importantly the .382 retracement from the all time low
- note a ‘basic’ – not perfect – time cycle working out .. shows “now-ish” to be a potential low and the next move to come?
- RSI is the lowest since the all time low in 2008
- we have measured moves (dashed blue arrows) hitting our current level
so, believe it’s time to watch the USD Rally .. note, in all of the highlighted boxes it took weeks IF not months for the USD Index to consolidate and start moving higher. No reason to believe this won’t happen again as it certainly appears time. Here’s the weekly:
On a MONTHLY chart it’s key to look at the RSI for a hint of the support …
- note the top dashed red line – that is RESISTANCE in, thus far a long term BEAR MARKET in the USD Index. Again – LONG TERM. While we did spike above it briefly, we have still been contained to the upside.
- Note the dashed green lines .. basically, at these levels, the USD (if it was to go up) has found support and began higher. We have a little lower to go (perhaps this will set up a bullish divergence on the weekly) but we are basically at the level where the dollar needs to get going higher or we break critical support …
- the KEY LEVEL in all of this is basically 88-90. If we are doing a 1–2-3-4 then we can’t go below that on a monthly close. That will mean here comes a 5 and the dollar starts up now’ish. If we have completed an A-B-C correction from 2008 (a possible case) then, after a slight bounce, we will penetrate those two read lines and things could get really ugly.
so, if a dollar bull, start looking to work it in around these levels.
05/29/2017 – warning, this is going to get geeky. sorry …
first chart below is of the Euro. Much like the Chief, sure appears that it’s ‘time’ for the dollar to rally. Note below, the time component of the rally off the lows. folks, this isn’t easy and I’ve talked to multiple people this weekend about “is the dollar toast” or is the “king dollar going to roar again”. I DO NOT KNOW … but, in the next couple weeks, w/ sentiment down at 8% dollar bulls we are do for a pause or a dollar rally.
I want to insert this chart on the dollar index, I posted it a couple months ago and it was showing the mathematical harmony. This is important because the ‘high’ that occurred a couple months ago ‘made sense’ in terms of resistance. the math was perfect …
but here is the rub … have we completed an Elliott Wave corrective A-B-C and the dollar is toast OR are we correcting 4 of 5 right now …?
So, if you read below we looked for May 2017 to be a cycle and so far it has worked … that being said, I apologize again but I need to go do a little “Elliott stuff” to get a picture for the roadmap.
Some background: I am a CMT and w/ that designation comes a modicum of understanding of Elliott Wave. (it’s a requirement) That being said I also trained under the Master Constance Brown (http://aeroinvest.com/) not once but twice! (she also told me at one point to never count a wave again ) … to add to that I actually taught the CMT (i) Level III Elliott Wave online to hundreds of students. What’s that mean … I love Elliott Wave – when it works! (Work w/ me folks, that was supposed to be funny.)
Elliott Wave rules of the road:
- Trust and do not break the RULES. There are only 3 ….
- Wave 3 can’t be the shortest
- Wave 2 cannot go below/above Wave 1
- Wave 4 cannot overlap ANY of Wave 1.
- Master the corrections …
- Triangles, Flats, Expanded Flats, Zig-Zag, W-X-Y, double and triple threes
- Learn to recognize B waves .. (hint – they are always 3 waves)
- Learn to recognize a 3rd of a 3rd (read: thrust)
- Learn to use and trust LONG TERM (monthly and weekly) Elliott Wave counts … intraday is hard as hell.
- DO NOT USE Elliott in isolation …ever. use a MA, oscillator, price targets, RSI, etc. etc.
So, there you have it … it’s a very helpful tool (that’s all it is) and it’s NOT the panacea. it’s a tool folks …
but, it’s important right now w/ regard to the dollar index.
here’s the BEARISH VIEW – we finished an A-B-C correction (note on the cycle month) and down she goes …
here’s the BULLISH VIEW – we just finished 3 and are correcting in 4 and a new high on the USD is to be made w/ a 5 up ….
so, here’s where I really think we are:
- I want us to notice the 3rd of a 3rd action below. That certainly makes me think we just finished the 3 ….
- Note the ‘range’ transition that occurred w/ the RSI – if we are patient enough on a LONG TERM charts the RSI will ‘tell you’ when it moves from the bearish to bullish ranges or vice versa. in this case … believe we moved up into the bullish zone and the dollar will, in due time, continue to advance higher after this correction (is it ending?)
- Dollar Bulls are at 8%
so, in conclusion, I see patterns and sentiment that call for a dollar low/rally. as this rally progresses it will take on 5 waves or 3 waves and then a PATTERN to SELL DOLLARS will appear. IF it fails THEN the dollar rallies and IF it works then the dollar fails and we could be at the A-B-C TOP and the dollar is really really going to take it on the chin.
It’s all probability folks … that’s all it is. I HAVE NO IDEA which way it will go and really don’t care. Give it a shot and use a stop.
05/17/2017 – well here we go … as you will see we are sitting on the BOTTOM of the BUY RANGE PATTERN that we have been waiting for….some STRONG THRUST DOWN so that begs caution. BUT, note the TIME component of the 3 drives the symmetry is pretty awesome.
so – pause/wait and IF the dashed red trend line is taken out to the upside on a WEEKLY CLOSE (98.50) then perhaps the next big run has begun.
05/07/2017 – Happy “insert name here” day … have you noticed that Social Media is making a “insert name here” day for everything? So, for me, I say “Happy Dollar Index Update” day … as an FYI, that’s May 7, 2017.
Anyhoo – man this is getting interesting. I’ve updated both the 4 hour and the monthly since Plaza chart below.
Let’s pay attention to 3 things:
- the level shown back on April Fools Day is now even more important. As you can see below, we now have 2 projections into the same area, we have a 3 drives to a bottom forming and have added another ratio to this area. WOW ..kind of important.
- on the monthly, notice the blue rectangle w/ time above/below it. That represents, in months, the EXACT time it took to rally after falling from 164 and it hit – exactly – from the rally low in 2008 to now. The key here is that it hit right at a very powerful PRICE relationship. it was an exact 1.618 price projection relationship. Very well could have finished A-B-C Elliott Wave correction – we simply don’t know yet … is this a 3 or a C. (that’s the big deal)
- also, on the monthly, note the cycle we started from 1985. It’s smacking right into May (now) and so …it DID NOT rally up into the ‘target zone’ ID’d and it’s finishing an important BUY pattern in the 98-99 area. IF THIS HOLDS and rallies us UP into the target zone we still have to consider this to be a BIG resistance area ALONG w/ time so …
W/ all of this going on AND w/ the French doing the elections right now believe this will resolve – SOON.
WATCH 98-99 level for the first chess move to occur … hope this helps.
04/01/2017 – Happy April Fools Day!
per below, the US Dollar Index smacked right into our target …but, the PATTERN certainly looks like one more wave ahead. Then, well, things are going to get really interesting! Next stop is more than likely 106-108 on the index.
it’s quite clear to see 5 waves completing up into that area …
also, was ‘hoping’ for a deeper correction as shown on the dollar index but the ‘fundamental frequency’ stopped it and, for now, probability says a low is in place for the USD and it should vault higher in the coming weeks.
one last, on the chart below, note the cycle tops from 1985, 2001 line up in May 2015.
Going to get really interesting.
1/14/2017 – if your into harmonics and patterns, then read below. If you just want the bottom line up font (BLUF) then read this: WAIT to do anything on the US Dollar.
Obviously, I’m “called” or “attracted” to a movie like this because of the amazing synchronicity to ‘string theory’ and ‘time’ … so if I really want to go ‘deep’, so to speak, I will play a soundtrack like this w/ only this music in the background and a chart …
what’s most important .. ? where are we now ..,
- there is BEARISH RSI divergence on the monthly
- the TIME component (a big deal) is EXACTLY equal to the last major rally in the index since the Plaza Accord
- the most recent high is a 1.1618 projection and EXACTLY .786 the rally from 1995-2201 – EXACTLY
- we have RECORD NEGATIVE/BEARISH sentiment for the EURO (a major component of the index)
- see blog and note the cycles on the POUND and the AUSSIE and LOONIE
- note: the RSI ‘transition’ to higher support zones … that’s bullish
So, UNFORTUNATELY, my friend we need to WAIT and IF (the big IF ) every thing is to come together then we should see support come in around 92-95 to get long on the dollar.
PS – you read it here … I’m REALLY ‘believing’ (not supposed to do that) that the $$$ will find support in/around the areas sighted below. BUT .. if you try and SEE the picture that’s painted .. this COULD BE A MONSTROUS $$$ TOP. How will we know …. no flipping idea. You guys/gals tell me ….
12/30/2016 – updating the US Dollar Index post
- bearish divergence – check
- 1.618 price projection hit – is this an a-b-c correction and the dollar has peaked? Potentially … or is wave 3 of 5 concluding w/ a pull back imminent?
- SENTIMENT is extreme bearish for the EURO and GOLD
- note – we are hitting the same TIME correction in a couple days as the move up from 1992-2001
- Economist .. the best contrarian indicator out there.
CLIFF NOTES: if you read below you’ll see there are other targets higher. We are approaching the same TIME as the last move up in the dollar against the smash from the Plaza accord so the ‘no brainer’ long dollar trade is one that begs of caution. Is this THE top in the USD and now we go back below 70? Don’t know, but a preponderance of evidence suggests STIFF resistance from now into January for the USD.
11/19/2016 – if you want to follow the Dollar posts, just search dollar on the top right area of the blog. the overall thesis, which has proven to be correct so far, was the dollar was going to strengthen all the way from the low 70’s. it’s been a nice run …
is there higher to go … yes.
but then …
here’s the picture – note, I’ve used the high from the Plaza Accord in 1985 to put the .382 retracement on the chart. That also overlaps w/ some nice other extension and retracement ratios. Believe the highlighted area in/around 107-108 is going to be key.
also, note the TIME component between the last major rally from 1992-2001. Next month, or, depending on how you draw the time component, perhaps January the Dollar Index should run into some pretty stiff resistance in TIME.
last thing is the Elliott Wave count … I always tell people – I LOVE Elliott wave – when it works. here, the count has been pretty much a “Ray Charles count” on a long term basis. I’ll try to walk you thru the importance:
- market corrects in 3 waves labeled a-b-c
- the market moves impulsively in 5 waves
- wave 2 can’t overlap the beginning of wave 1
- wave 3 can’t be the shortest
- wave 4 can’t overlap the beginning of wave 1
- if you take the low in 2008 and start working your way up we see that we are ‘clearly’ creating 3 waves into yesterdays price action.
- here’s where it gets tricky .. simply, I don’t know if this an a-b-c big corrective move OR we are impulsively going higher in a 1-2-3-4-5 sequence.
- the key here – wave c (of a-b-c) always has to be 5 waves (unless in a triangle)
- so if you look you can see the ‘small’ 1,2,3,4,5 being carved out (Turkey reference) so the blue highlighted area 107-108 COULD be the end of a C wave and the entire A-B-C move OR the end of wave 3 and we correct 4 and then off we go again in 5.
I honestly have no idea ….
Here’s what the charts are SHOWING US:
- square root target
- the ‘time’ of the last corrective move
- the ‘count’ showing we are in the 5th wave of C and 3
- EXTREME sentiment for a strong dollar
- the .382 from the all time high
- divergence set up on Monthly RSI
- ‘other’ extension and retracement targets
Expect some major resistance .. again, we are 6 handles away from the target area and that represents HUGE moves in currency .. BUT remember, right now, we are at extreme (not historic) but extreme sentiment and this has never proven to be wrong from a contrarian indicator. This puppy could snap back on you really really quick.
only TIME will tell … let me know if you have any questions.
1/2/2018- after the failure of the measured move target, we came up with some additional targets. it certainly appears we have TWO 3-drives to a top patterns coming together w/ very nice time symmetry. not to sound the alarm here BUT this has the makings of a very important and large top for the Utility sector.
08/24/2017 – hard to believe it’s been a YEAR since I last posted on the Utilities … at the time, as you can see below, the DJ Utilities Average was about to equal it’s measured move (the blue arrows) along w/ hitting a 3 drive monthly pattern at the 2nd drives 1.618 expansion target. The market DID REACT but not in the manner expected. While this number did stop the market in it’s tracks, we have ultimately blown thru this pattern and it has now failed. Folks, that is a big deal … monthly patterns like this are USUALLY (the operative word) walls of china for support or resistance.
So, as long as the Utilities are continuing higher … rates ain’t budging in my mind.
You can also see below some ‘future’ targets to consider.
Wow, that was an epic failure of a monthly pattern …
August 7, 2016 – are the Utilities cracking? Historically, they have NEVER gone farther than the measured moves shown from the post 6/6/2016. Stay tuned. the point we are trying to make here is that when these blue measured moves are present AND a perfect 1.618 extension is present THEN the Utes have correct either 46 or 60 percent. here’s the question – are you ready for THAT? watch the close on Friday for more weakness coming confirmation.
6/06/2016 – were rolling right up into the target zone w/ monthly bearish divergence. yes, I still think this is a big deal and begs of caution … in 26,854 days Utilities have never gone farther w/out a major correction. Questions?
going to show this chart again of the Utilities … watch closely, the upper target is pretty darn close. Since the low in the 1940’s the Utilities have never gone farther than this (or close to this – still some upper targets) w/out a major pullback.
1/1/2018 – update to heating oil. first off, learn to use percentage moves on log charts. this was certainly a beauty. second, looks like some stiff resistance coming up for Heating Oil. Yes, I know we have frigid temperatures BUT trade what you see not what you believe …
watching the ETF NIB. concerned w/ liquidity but it’s a long term pattern …
12/21/2017 – have been vacationing w/ the family in Cabo. Great time … below is the updated chart of Bitcoin Index. would like to see another move lower to complete an A-B – C correction.
12/7/2017 – see below. it’s pretty darn busted up …
wait for a little lower?
note all three legs up (blue arrows) were exactly the same and so this move down was to be expected. using the last ‘big’ move down as a projection and it comes into that 23-24 area.
I DO NOT LIKE THAT IS HAS REACTED WEAK ON THE LONG TERM LOG TREND LINE FROM 2009.
12/7/2017 – binging on Narco’s right now. Awesome series .. binged on Stranger Things w/ family. All that being said, no change since October … just thinking it’s too risky to establish a LONG here …
10/1/2017 – going to start this post w/ the image that I used before to describe my love affair w/ NFLX. The patterns have been strong and it’s blow thru many levels sighted below. I BELIEVE in PATTERN RECOGNITION as an AMAZING TOOL to manage risk and put probability in your favor. NFLX has been an amazing run …and it has the bar eating me, right now. Enough said! 🙂
since my last post in April, NFLX is up roughly 20 percent. Pretty darn good … but, again, I’m just trying to remove any bias and simply take a look at what I SEE and NOT BELIEVE. You’ll see in the chart below that 1) the patterns have failed on this puppy and it’s strong strong strong! 2) we have some factors coming into it which SHOULD (the operative word) cause resistance or a stall or a fall from in/around current levels.
roughly 5 people from all over the world (pretty cool hugh?) have asked me to take a look at NFLX. I waited till the end of the month to see wha the monthly candle would bring …it’s a doji. In the PAST this has led to strong explosive moves UP. I still SEE 5 waves but until we get a monthly signal reversal candle (look for a close beneath 160 on a weekly level as a first sign) then the beat goes on …
now that the quarter has ended I sense/believe and, yes, want the market to reveal itself this first week of October …
thanks for reading ..
04/22/2017 – trade what you see, not what you believe. NFLX has been “topping” since January 2017. shown below are the key gap areas and the looming trend line …but folks, it hasn’t moved lower. unless we get a weekly close below 133 – step aside. the ‘math’ stopped it but it sure seems strong to me, for now …
- basically hit the target zone we were identifying. now it gets interesting as you can see, on the daily, we have many gaps staring from this past summer. if we can break thru the 133-137 level then the gap 100-112 seems like a reasonable target for now.
our assumption is we have completed 5 big waves per the below so … could get interesting? Or, the stock will never go down, right? the market only moves up.
1/12/2017 – well if at first you don’t succeed, try again. doesn’t matter this its NFLX, in the world I live in, it’s just a ‘chart’ so here we are at it again …
well, the GAP from the former congestion area into new highs was powerful BUT note that we have been selling off since the gap and IF (the big if folks) we close back below the dashed orange trend line AND close the open gap (a gap down back below is ‘technically’ the island reversal THEN guess what things could get going to the downside. so use those levels noted below as your guide.
some key stuff:
- note the monthly
- that’s some pretty large bearish divergence
- also note, from the first move up way back when it ‘perfectly’ hit the 3.142 (PI) projection
- also note the top trend line … a daily close above that is VERY bullish but right now, banged right into it as resistance
- note the monthly ‘log’ chart
- the top trend line held price at bay (that caused the consolidation IMHO) but if we keep going that top trend line would be the next logical target
- note the daily
- see the orange dotted trendline … that’s the one to really watch for now
- I REALLY like that wave 1 up and wave 5 up are equal in PRICE and TIME
- note how wave 3 gapped rigth up to the AB=CD where wave 1=3 and then ran ….
- REALLY pay attention to the gap that was left a couple days ago – that’s the one which, if gapped down below will cause the island reversal
perhaps NFLX will kick my butt again … we’ll see.
if you look thru or have been reading my blog you’ll realize that the patterns do fail .. invariably when this occurs I’ll go back to the drawing board and come up w/ another PATTERN. check out WYNN … you never know what’s going to happen and the PATTERNS do fail. manage the risk …
$NFLX has beaten me – alot. Uncle ….
that being said, I hit erase all on $NFLX chart and took a fresh look at it … I still see 5 waves up w/ no RULES broken so the count is valid and there’s monthly bearish divergence and we are about to tag the upper long term trend line that is roughly 10 years old. I still say be careful up here but .. again … UNCLE.
but what’s the next pattern or set of target areas? No flipping idea …nope, not going to do it.
“f’it dude, let’s go bowling”
12/06/2017 – looks like we are smacking into some large resistance from a time and price perspective. here or a little higher should do it for Crude for now.
2/2/2017 – can’t believe it’s been over a year since I posted on crude – but I guess it has. as you can see below, the ‘math’ tagged the low in crude.
where do we go from here? well, the ‘easy count’ and that’s what I’m into says – perhaps – a little higher and then down to take out 26 ?
no way, right? You Never Know.
note the percentage corrections … certainly looks like 30 and 25 are possibility. Especially since the OSX/NYA ratio hasn’t bottomed along w/ the Loonie but i do believe we are getting ready for a big bounce.