Loading ...Perhaps the SMT Cycle Guy is correct, but me thinks there is a bit more work to do before that is really a foregone conclusion.
I don’t know much about what the FED or the “powers that be” will or won’t do but, from a chart perspective, mine show that I will wait another day or so for a confirmed breakout.
http://blog.smartmoneytrackerpremium.com/2016/04/runaway-move.html
None other than Forbes and Reuters are now confirming that China, on April 19th, will start setting the price of Gold on the Shanghai exchange in Yuan. The sources I cited on an earlier post were questionable but this is Reuters and Forbes now so it seems to me that China intends use the physical only exchange in Shanghai to set the price which will marginalize the LBMA and the COMEX..
http://www.reuters.com/article/china-gold-fix-idUSL3N17G2W4
Yet according to ZH, China has devalued their currency TODAY???
AND that the FED had another emergency meeting on Financial Markets today (2nd Emergency meeting this week).
AND the G20 is meeting in Washington DC this week.
WTF?
For grins, here is my Chart of UVXY, which looks pathetic unless you notice the double bottom at my lower fork channel. Remember the last time China devalued the Yuan? (hint: Aug 2105 and Jan 2016)
I got a bit sloppy with my trendiness in my earlier WTIC post. This update shows that we do NOT yet have a breakout. Somewhere between $44-45 is needed to accomplish that.
Oops.
The charts say it all despite what looks like a glut of supply.
My second chart shows a breakout on a 2 year Weekly. Is the Bear is Oil over or is this a false breakout?
I have the SPX is on day 4 of a new Trading Cycle after a very mild TC Low and my Blue Forks shows the bullish uptrend channels along with potential resistance if Bear Market forces are still in tact.
My second close up chart shows the move out of the double bottom has been very bullish here but is so steep that I do not see how it is sustainable longer term. It looks very much like a steep Bear Market rally and we should still expect the next Intermediate Cycle Low in the June/July timeframe.
Will it be a higher low or a lower low than Jan/Feb? Time will Tell 🙂
The USD has started a new short term Trading Cycle here but I am not sure if we are in a new Intermediate Cycle (IC) just yet as the longer term weekly count is not clear to me (see chart). Normally we see IC lows in the USD every 5-6 months so I thought that the low in Feb was the IC Low.
If Feb was an IC Low then it is too early for the USD to make another one here. So if Feb was the IC Low then we should expect the USD to roll over on or before day 9-12 (i.e. make a lower High and move into a lower low).
If this is the IC Low then we should make a Higher High than the late March High. Even if it is a new Intermediate Cycle here, my expectations are that my Red down trend line will contain any upside move into this Summer.
I have Gold on Day 12 of a new Trading Cycle and possibly a new Intermediate Cyle as well.
This is about where we often see a half cycle low. If so, we may test but should not break my lower fork line.
Added: A second Gold chart with a very simple Trading Cycle trend line rather than a Fork.
So if we drop to 1219/1220, we break my Fork but not the Trading Cycle trend line. If either of these plays out, it should happen in the next few days I would think as half cycle lows are usually fairly quick.
If we drop below the 1219 area, this would likely indicate that the IC Low is not behind us and that 1206 will be retested and perhaps broken.
Can’t post a chart but it looks like stocks just put in a mild Trading Cycle Low on day 38 last Thursday.
While more upside confirmation is needed, today appears to be day 3 of a new TC here.
WTIC Crude is bouncing out of what I believe is a Trading Cycle #1 Low (TC1 Low) which sure looks like a new Intermediate Cycle. The first chart is a Daily that shows the nearer term price action where it has backtested the breakout from the current one year downtrend.
My second chart is a Weekly showing it still has more work to do to confirm that it has found a Bear Market bottom. Note that the upper Red Line on my second chart has not been tested yet and this is the 4 Year Cycle downtrend line for Crude. I would not expect this line to be broken on the first test. Perhaps Oil will find a TC2 top here?
I have posted a couple of times that I believe that the Gold and Miner Intermediate Cycles have diverged here. This is very subtle as their shorter term trading cycles are somewhat in sync but their longer term Intermediate Cycles are several weeks out of sync (by perhaps 6-8 weeks). I bring this up because something very similar happened at the start of Gold’s Secular Bull in the 2000 to 2001 period (see my last two charts).
In any case, I have Gold in week 18 of its IC and the Miners (GDX as a proxy) only in week 11. Many Cycle newsletters only track Gold’s Cycle, assuming that the Miners are always in sync. This approach may work 95% of the time, but I see evidence of Cycle divergences between Gold and the Miners at the start of Bull Market moves.
Here are my circa 1999 – 2001 Fractal’s for Gold and the Miners. Note that the Miners led Gold out of its Secular Bear Market low by one full Intermediate Cycle. The current divergence, if it holds, is far more subtle.
The SPX is now on day 39 and is in the middle of the average timing band to find its next short term Trading Cycle Low, perhaps next week. The larger issue here is where price will bounce from here before the next 5-6 month Intermediate Cycle Low (IC Low) which I am expecting in the June/July timeframe.
If the Bear in global stocks continues, then I would expect the dome and red channel on my SPX chart to guide price into the next IC Low this summer.
My last Weekly chart shows a Fractal of price action out of the SPX’s last three IC Lows from last weekend. Note that each Fractal had a 10 week bounce before moving into their initial TC Low.
Gold and the miners broke my cycle downtrend line today, very likely signaling a new Trading Cycle here.
I was also expecting a 5-6 month Intermediate Cycle Low as well during the first half of April based on the 5 month IC pattern that Gold has been adhering to over the past 1 year plus. I am struggling to find where Gold’s last Trading or Daily Cycle Low made a lower low. In Cycles, a Lower TC Low is required to ensure that an IC Low has also occurred. My Gold chart shows one possibility of how a “Consolidation” IC Low may have occurred but it is muddled at best.
From a Time perspective, early to mid April is 5 months from early December. As I have said a number of times however, ICs tend to get longer when an asset is bullish and shorter during bearish phases (witness the SPX 5 month low to low when ICs had been running 7-9 months during the bull).
I have the USD on day 14 and wedging into a decision point which could lead to an IC Low (which I thought had happened back in February.
WTIC Crude is in the timing band to have found a TC Low here on day 36 yesterday but Crude’s ability to swing within a 36-47 day timing band can drive one crazy.
My chart show an interesting pattern of a backtest within a Bull Flag all inside my blue uptrend fork.
Not much has changed from my Cycle perspective on Gold here. From a time perspective, I am still looking for the next Intermediate Cycle Low in the early to mid-April timeframe. Here is an update on the 3 channels I am watching. Note the backtesting over the last sever days within these channels. Much depends on the USD here so I am also watching it closely.
I am still holding many of Spock’s Rocks but hedging with ZSL here. My second chart shows my ZSL hedge which is still profitable at this point.
I mentioned in my CRB post last Friday that it looked like Crude Trading Cycle had topped here.
I shorted Crude with SCO on Monday and added today on the back test of my two lines (lower Blue Channel and Red downtrend from January). I plan to be careful here as Crude has a wide timing band for TC Lows but I think we will likely get at least a 38% pullback into perhaps mid-April
WTIC Crude Cycle Chart:
SCO Chart:
Technically the USD has made a lower low today than March 18th which would normally indicate that the Trading Cycle has failed here. It is close enough, however, to be considered a double bottom so I am watching it closely. PM complex is struggling a bit with the USD down which is somewhat strange.
Unless this is a False Breakout, the DOW moved past a major cycle downtrend line this morning out of the May 2015 High. A higher weekly close on Friday than last week would be quite bullish.
PM’s are going to the moon here if what I think is a new Intermediate Cycle for the USD has topped already. The USD, however is also in the timing band were we often see a Half Cycle Low (Half Trading Cycle Low).
It also found support at a very curious spot today at my lower fork. Gold and Silver backtested their recent breakdown below their respective TC uptrend lines and the Miners did not break above my red downtrend line either.
Let us see what tomorrow brings.
USD Chart:
Gold Backtesting:
Silver Backtesting:
GDX Testing top red line:
Loaded up on ZSL this morning right at the back test of the breakout above its downtrend from Jan 20th.
Here is a Daily over the past 3 months and a 5min closeup of today’s action. I’m in until my channel breaks.
I bailed on my shorts earlier this morning with a small profit as it looks like the indicies want to go higher here.
I do not believe, however, that the TC Low I was expecting is behind us. Lets see how the week closes.
By my count, Gold’s 4th Trading Cycle (TC4) just failed on day 6 (i.e. made a lower low than TC3).
As I had mentioned in a previous post, TC4’s failure was a certainty from my perspective but I thought perhaps we would bounce at the trend line a day or two longer. A TC failure signals the start the decline into the next Intermediate Cycle low, which I expect in the early to mid-April timeframe.
FWIW, I am expecting Gold and the Miners to make a higher IC Low than in January but I still loaded the boat with positions in JDST and GLL (may add ZSL tomorrow). Action could be choppy but once a Trading Cycle fails, the price action has a downside bias even in a sideways chop into a Bull Flag perhaps.
My 5min chart shows JDST just broke the downtrend line out of the Jan 20th top.
Note that on the move up today, Price was rejected at speculative downtrend channel. Looks good so far on my 5min monitoring chart.
In addition to my green trend line break yesterday, SPY just formed a “Swing High” by making a lower low than yesterday’s daily low. While more confirmation is needed with some additional follow through, it sure looks like the Trading Cycle topped in a very similar fashion to the Fractal from last Fall. Back then we had a 38.2% retrace of the move into the TC Low and I would expect something similar as this move out of the bottom has been very bullish.
My chart below shows a close up on the 5min of the green trend line break, the Yellow double Top, the lower low from yesterday and a speculative downtrend channel (Blue and Orange down trend lines)
A 38% retrace would take us to the 1962 level. Interesting that ZH also spotted the same fractal that I pointed out on my weekend SPX post.
http://www.zerohedge.com/news/2016-03-21/its-day-26-rally-decision-time
While the action on the SPX may appear unremarkable this morning, the SPX is actually wedging to a decision point. Here are my real time monitoring charts on SPY (60 Min and 5 Min). The lower Green line on both charts is the Trading Cycle uptrend line. If price breaks to the downside, it will likely signal that this Trading Cycle has topped.
he 60min shows the wedge out of the Feb IC Low and the 5min provides a very close in view of same. Last Cycle update was here:
http://goldtadise.com/?p=365393
Standing by with SPXU if it breaks down below my green line.
Friday was Day 25 of the current SPX Trading Cycle (36-43 days Low to Low on average). This SPX rally has been bullish and very steep (see my Green Trading Cycle uptrend line inside my Blue Fork). The rally out of last Sept was similar after retesting the Aug Low and topped on day 24 before moving into its TC Low. Are we looking at a potential Fractal?
Watch this Green trend line closely next week or so because if Price moves below it, this will likely signal that the current Trading Cycle has topped.
Weekly chart of same. Note the similarity of the weekly patterns (so far) from the Aug & Sept lows to the current period. Both retested the Lows followed by a strong rally of 5-6 weeks. Will history repeat with stocks topping next week? Time will Tell. 🙂
Added: SPX circa 2000-2002 as a potential “Echo Year.” The Blue arrows show how the SPX stair steps up into a market top with each 5-6 month Intermediate Cycle making a higher high and a Higher Low (very important). The first Red arrow shows where the Bear starts AFTER the SPX breaks this pattern by making a Lower IC Low. Note that once it breaks my green line and the lower IC Low and then signals the start of the Bear starts the stair step down of lower IC Lows into the bottom.
Note also the one IC Higher Low (circled) leads to a false breakout above my channel and the 30ema. The Bear bottoms at the second breakout and the 30 ema turns up with price above.
Added: If 2000-2002 is an Echo Year, these next two chart show a speculative downtrend channel in the months and year ahead. Unless the SPX rolls over soon, however, this “speculative channel” will be just that. If it does and the Bear lasts into 2017, the last chart provide is a potential longer term view of an expanded channel with some Fibs and a major support line.
With a beautiful looking Bull Flag Breakout.
Here is an update to my long term Gold Channel with a revised Bull Flag. The original Flag breakout was the one in Green that I posted on earlier. I have updated the chart with the Red Flag to show where the next real test should come in around 1450 or so.
Short term cycles will come and go but if the long term Price channel holds, this chart provides us with a view to the bigger picture.
My first long term chart shows Crude breaking out from a long term downtrend. I have Crude on day 24 of TC1 in a new Intermediate Cycle.
TC’s in Crude can range from 36-46 days low to low on average.
Here is the thing about Bressert Cycles. In order for an Asset to move into an Intermediate Cycle Low, one or more Trading Cycles MUST fail (i.e. make a lower TC Low than the previous one). That is a Fact. I am not saying things will play out as my chart depicts but most Gold Intermediate Cycles have 4 Trading Cycles and TC1, TC2 and TC3 did not Fail during this IC.
During the long Bear most of Gold’s ICs almost always failed in TC3 and then TC4 would be the real Crash and Burn (Wave 5 down in EW Speak). TC3 did not fail here so that leaves only TC4 (unless we get a TC5 which I have not seen is some time).
The IC Low can be Bullish if it makes a Higher Low than Dec 2015 which I very much expect. We are now in TC4 and this is very likely the Trading Cycle that will Fail leading to the IC Low I expect in the April timeframe. If my pattern below is accurate, this would be very Bullish.
Nothing goes straight up and a pullback is healthy to shake out the weak hands and recharge Investor Sentiment. That is what Cycles are all about. Markets are all about investor sentiment and for them to work, you need both Buyers and Sellers.
