The setup for the big trade

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Tue, Jan 24, 2017 - 8:02am
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If that little consolidation

If that little consolidation on top of the Dow rally is really a wave four of final wave five up - it should be getting ready to prove it soon. Proof only acceptable by successfully breaking out to the upside.

And if it isn't, a failure to prove it's a technical flag will remove a certain percentage of the bulls buying those stocks from the arena.

Time for big money to declare it's intentions methinks. Just briefly .....

I'm still raising those stops under my stock holdings. Really itching to close them in now.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Wed, Jan 25, 2017 - 3:42am
Pete
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Gold Monthly Babson Ladder/ EWP question

Dug this up to take a look. December 2016's low on R4 reinforces the idea that we made a Monthly P2 there.

I have a 1983 edition of Elliott Wave Principle. I'm sure it's been updated with new observations. But, on pages 25-30 is an interesting discussion regarding extensions of impulse waves--specifically 5th wave extensions. Elliott's observation seemed to be that 5th wave extensions are always doubly retraced. Do we have a 5th wave extension in gold, into the 2011 top? The wave from 2008 low had 5 waves within it, seems to me (and I've seen it counted that way by others, although the alternation of the corrective 2 and 4 appears sketchy). But the extension of the 5th wave seems very clear, when price went parabolic. The drop from 2011 to 2015 would be the first retracement of (this interpretation of) the extension--look at the incredible correlation of the lows! The "doubly retraced" part implies that the 2011 top will be reached again in either a B wave (actually higher in an irregular correction, per the book), if 2011 is a "cycle high" (whatever that means!?), or will be exceeded by an impulse wave higher. Either way, it appears by the discussion on pp. 25-30 of this edition that the all-time high will be reached again before the 2008 low is reached. However, alternatively...

perhaps the "start of the extension" means the 2008 low, if the entire last wave is considered the extended wave. That would mean gold's going near that low (Prechter and Collins say not necessarily to the extreme low value). It would be nice if someone here would chime in on this...I find the terminology confusing.

Wed, Jan 25, 2017 - 4:10am
Pete
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$gold update

The last major MLs and their Hs in the Feb 17 contract tell the same story as in the continuation chart below. Notice that they are both downsloping. Typically, a bottom will be at or near a rising line, or an intersection of (rising or declining) lines. It can be somewhat obscure, but typically it would be an MLH, or 2P line, such as from the monthly swing pivots (used here on the daily). Might it be R2 of the monthly rally? It could be. My sense is that the top is probably in today as the ORD touching 2 major lines is convincing, and you can see the resistance gaining strength on the 60m chart as price "exhausted" at the new high. I now expect a higher low in a few weeks (Valentine's Day?) for a p2, setting us up for a 3rd or C wave upside. The p2 will probably be a major pivot. The circles are at 3x points, and if price got there, the support could be very strong.

It's interesting that B-C is about 162% of 0-A. A decline to the 3x with R2 would be at about 62% of 0-A in price and 62% of the time of w.1 up.

Wed, Jan 25, 2017 - 11:25am
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Regime change you might not

Regime change you might not have noticed:

Can anybody find the White House Climate Change page?

It may be that an obscene amount of past 8 years PR, NGO, politico-lobbying, re-education, pseudo research, and interest group subsidy money is on it's way to money heaven, or the other place, with not so much results to show for it as a few unknown people planned.

It couldn't have happened to a nicer bunch of folks ...

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Wed, Jan 25, 2017 - 12:17pm
Pete
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Something I learned today

There is an excellent resource at Elliott Wave International for understanding the basic tenets, here.

I was particularly interested in the Fibonacci relationships regarding extensions. What I learned is that a 5th wave extension is often 161.8% of waves 1-3. Applying this knowledge to the waves after the 2008 low in Comex Gold futures would have projected a potential top to the presumed-extended 5th wave at 1928.70. Actual top was 1923.70. Fantastic!

Wed, Jan 25, 2017 - 12:47pm
Pete
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Another "nicer bunch of folks"

Payback time...Clinton Foundation kaput. And this.

Makes me smile

Wed, Jan 25, 2017 - 2:36pm
Pete
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ES top projection

This is really simple and relates the geometry of a correction (w.4) to the next wave. The reaction line value is less than 0.5% below that projected by the w.5 = w.1 concept, which projects to 2353.50. This week the rl is at 2348.73 and it is declining at -0.99 a week. So over the next few weeks these values remain very close indeed.

The center line and the action line are both multi-pivot. What's not to like? While this seems too obvious to be true to me, maybe us at this point, the truth is most traders have no idea of Babson's concepts.

Earlier I had posted the similar concept using a different center line. I prefer this one. Either way, "its getting very near the end." (the Beatles)

Another thought: Remember what W.D. Gann said about the stock market in the 7th year of any decade?

Wed, Jan 25, 2017 - 5:30pm argentus maximus
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Looking at the White House

Looking at the White House website, I agree that it is likely that there will be a change of regime when it comes to climate change. At the very least it's not one of Trump's priorities. The deletion of the climate change, lgbt rights pages and the like is a bit of a contrived controversy though. RedsilverJ has a pretty good video on that.

The climate change page is here, the lgbt/social-rights page is here.

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Wed, Jan 25, 2017 - 6:21pm Pete
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EWP of Extension

Pete Iv'e personally never found any Elliot 'rule' to work with precision and consistency. There always seems to be a different wrinkle to any mechanical rule. Someone told me years ago that there was a price 'gap' during the final extension around 1054. And that has been filled. Also I had wondered about whether the double retracement rule was valid for the Wave C extension on your chart in post 9734? It was an extension but it was corrective not impulsive. So, even by other measures we should see some pullback, or in the case retracement back downward.

Thu, Jan 26, 2017 - 2:19am
Pete
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@eclectic

I believe the rule I am referencing was only for extensions of the 5th wave of a 5-wave impulse wave. Any C wave is a third wave in a correction, so the rule doesn't apply, seems to me. The idea was that after a 5th wave extension (not an extended first or third wave) there would be an A down to the start of the extension and then a B up to the prior top or beyond (an irregular correction); or, the entire impulse wave would continue higher in a larger degree. But since the Dec 2015 low was right at the prior P4--the start of an extended 5th wave (?)--and the 5th wave is 162% of the P0-P3 wave--I think it makes a strong case for the wave structure presented. That is, I think we've lived through W.A. in the form of a 3 wave correction. (Remember how Trader Joe pointed out that the "diagonal triangle" [starting the week of Friday July 11 2014], postulated to come after a 4th wave triangle in the weekly chart, violated the rules, thus invalidating Daneric's 5 wave count?)

I bring this whole thing up because it would point to prices regaining the all-time high at the B wave top (at least), without having to revisit the 681 level first (the big deflationary scenario favored by Daneric and Trader Joe). I have been seriously doubting whether 1923.70 would be seen again after Trader Joes's expectations for the B wave.

I will email studyofcycles.com about this and see if I get any response, preferably from Trader Joe.

Thu, Jan 26, 2017 - 8:18am
Solsson
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Sorry for not contributing

Sorry for not contributing ... I am stressed out and working long hours at the moment Tx for the latest RNP's Am, great stuff.

For now I am looking for a price when wave 2/b will end, 1165 to close the breakout gap? Sold 10% of my K92 after the breakout in order to make another JNUG bet in Feb, so things are looking really good trading wise, work wise not so much.

Tx Pete for the charts!

Thu, Jan 26, 2017 - 10:59am
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Pd

What in the world is going on with Palladium? Up for most of the past year and then down almost 10% in 24 hours.

Thu, Jan 26, 2017 - 11:14am
Pete
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Correction to post #9738

I goofed on my calculations for the reaction line for the ES weekly. The R1 value this week is 2340.80, not what was posted at #9738. The correct number is not so confluent with 2353. Interestingly, Trader Joe mentioned 2330-2340, instead of 2353, as a top number (where 5 = 1), and I don't know why. Remember, it's the closes that really matter with reaction lines. They point out areas of probable support/resistance, not necessarily exact values, though sometimes they will do that too, especially with other, supporting lines coming into the same time/price (including Fibonacci values, in my opinion).

Thu, Jan 26, 2017 - 1:29pm
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Solsson

As usual, great call on the turn. I also went that route way back on Jan 16th when I saw the gold Daily RSI creep above 70, and saw that 16 of 18 trading days in a row had been in the green (suggesting buyers should be getting scarce) and knew we had op-ex and the Chinese holiday looming. I was a bit early, but have hung in there and added to my short (DUST) at 1215.

Problem is, we (your JDST, my DUST) have not been rewarded as much as we should have, price wise... VIKING06 posted this interesting chart on Main and it is worth reposting here- the shares are still well above where they should be relative to price of gold, silver, and USDX moves.

I think this suggests that either we get something of a correction to realign the price of metals with the price of the shares (during the Chinese trading holiday starting tomorrow?), or they are just being accumulated for longer-term, and aren't as price sensitive as usual (which might be a good sign for longs, going forward). We will see. Either way, will let this run into (late?) next week, then look to exit.

Thu, Jan 26, 2017 - 3:50pm
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Gold vs Fiat

Green is SDR, blue USD, purple GBP, red EUR, and orange AUD.

Different pivots are visible to a non US centric analyst.

So does breadth mean much in FX, and by how long might such a leading indicator lead?

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Thu, Jan 26, 2017 - 6:09pm Pete
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@ Pete

Yes, I now do agree. Was trying to read too much into the readings and the rule would not apply. Tks for your feedback.

Thu, Jan 26, 2017 - 8:44pm
Pete
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Misquoted Trader Joe

...and I don't know if he was talking futures or cash, but he mentioned 2340-2350 for the sp500 (not 2330-40 I had said above).

Fri, Jan 27, 2017 - 10:55am
Pete
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Gold 60m

Friday AM and gold is showing some strength. The CL looks good. If there is an up daily close, this could have legs to an equal or higher high (above b). Holding at 38.2%R for a p2 is indicative of a potentially explosive market.

Fri, Jan 27, 2017 - 11:11am
Pete
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Gold 60m #2

The "lid" on the upward movement may come from the m3 60m 0-4 line, just reached. An hourly close above it would be bullish, and a close above its corresponding r1 line (not drawn) would likely take us back to the top, given the larger context in the post above.

Fri, Jan 27, 2017 - 1:39pm
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Pete- momentum?

Your post made me think of something and wonder if there was a pattern, so I checked it out and thought I would comment- just food for thought. In the arena of the "trend is your friend", I was interested in how downside momentum like we have seen in gold has played out over the recent past. We went above 70 RSI on the daily, and on this drop we've now we've come back down to neutral, just below 50.

In the past four years, daily RSI has gone from above 70 to break the 50 line 9 times (like we've just seen). Of those 9, 7 times price kept falling to an RSI of 35 or lower, 1 time it tracked sideways, and only once did it reverse and start a move higher. Not definitive, obviously, but a move up from here would look to be much lower odds (11% of the time we've seen this setup) vs. a continued move lower (77% of the time we've seen this setup), at least in the four years 2013-2016.

I'll probably get burned, but I am hanging with my shorts a little while longer, see what next week brings.