The markets refusal to fall this morning
The conventional markets opened up down fairly significantly but that did not last for long. Gary kicks off today discussing why he thinks this happened and how long the market can remain buoyant.
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CFS – Good idea on SJB.
As for shorting the general markets, it has been VERY tricky the last few years as the pullbacks have been 2-4% and so I’ve only used the 3x leveraged ETFs like SPXS and TZA so there was enough movement to get in and get out with a profit, but they come with a great deal more risk. I’m considering TZA over SPXS just because I don’t think the Russell 2000 index is as held up by the Fed as the S&P is.
Good luck to you in your investing.
I have closed out my position on SDS at break-even and bought SDD .
Instead of shorting the Whole S&P, SDD shorts (gearing -2x) the small cap 600 index.
That should reduce the manipulation problem.
(Since the PPT appears to use S&P futures to manipulate.)
First you say your keeping SDS early this am, then 3 hours later you sell?
Looks like a pump and dump to me…
I reappraised and gave my reasons, keeping the gearing the same, the amount invested almost the same. It’s the same insurance, but less susceptible to manipulation.
By the way, when I first made my comments about keeping SDS, it was up, in the morning. It was only after the (in my opinion) the manipulated reversal that it dropped in price and flagged my reconsideration.
It’s tough call, SDS versus SDD.
The bigger stocks have been pumped, by e.g. CNBC, more than small cap stocks, so when the downturn comes they may fall further, and so SDS may rise faster than SDD.
But on the other hand, I do believe the market is manipulated, and SDD, with its small cap stocks is not so subject to manipulation as SDS, I believe.
The reason it was today and not another day I made the change was very simply SDS had dropped back to the price at which I had bought it, and triggered a flag for me to re-evaluate my purchase.
I almost bought either HDGE or DOG instead of using gearing.
Interesting strategy, yes, that was why I was considering shorting the Russell 2000 if it gets a little loftier, because the small caps are not as heavily manipulated.
Shad, The idea of shorting the general market is to counter-balance (hedge) my long-term dividend stock holdings.
I expect (hope) my dividend growth stocks will still provide dividends, but to protect against capital loss (as an insurance) I’m shorting parts of the (I believe) topping market.
That makes sense to hedge the general stocks you hold CFS, and the dividends (providing they keep coming in) will bring in some recurring revenue to offset any losses in share price while you are holding. Good luck to you sir.
WOW…Gary i hate to disagree with you but gold is weak and will not go beyond 1134, 1150 at most. No chance of 1250 until we test 1050-1000 first. This is wave iv of 3 and they are weak. Next decline will be v and pretty sharp which would test then 1050-1000 level. IMHO that will conclude bear market.
Gary that rally you’re talking about has topped most likely already and about to roll over.
What do you mean about a decline being a ‘v’?
v is roman number for 5
Ah, right – billy elliot wave stuff.
As for wave 4 – first resistance will be the old Nov low at $1131, and then $1150-$1155 zone. If the wave 4 rally gets extended I could see it possibly getting above this level and making a run at $1179-$1180. I agree though that $1200, $1224, and $1250 are not as likely and would be a stretch (possible but not probable).
Wave iii of 3 was pretty good decline. Wave iv is weak bounce from wave iii.
Wave v which follows is going to be sizable decline. Question remains if one believes wave iv completed already or it did not. Based on weakness i see in gold today IMHO wave iv completed or will complete this week by friday latest. So that means v decline is going to be next. Most of the gains in miners IMHO are already baked in.
stewie wave ii of 3 retraced 61.8% and wave iv of 3 retraced 38.2%.Perfect elliott wave principle were wave 2 and 4 should alternate in price and duration.Besides that wave C of iv was a perfect 1.618 of wave A.imho wave iv is completed at 1126.78 but like you said I am not excluding a run up to the 1135-40 area.It is testing our patience stewie.
Is it possible to translate the above into English?
Don agreed. We may have b down and c up in iv wave so it may run up to 1135 area as you said. I’m gonna skip iv wave. it’s not worth my time but i’m learning this. I’m thinking of going long JDST for wave v as that would be way better gain then iv up. Don thanks for pointing that out. Feel free to correct me or post additional info as i’m still in green learning phase but I hope i will catch on quickly.
Bob basically we should go down next week into what Gary outlined in his 1033 scenario. I agree with him on that. He somehow sidetracked into scenario b with which i don’t agree but his post on his blog about 1033 scenario is right on IMHO. Timing however is off imo. I guess we will see. I’m glad we can exchange opinions so hope he wont be mad at me heheh
Thanks for explaining that Stewie.
1119 down to 1033 is quite a drop down now though isn’t it? Not the sort of thing that you would see in one drop – more akin to what we have been seeing over this summer of a slow grind down? Assuming if down is where we are going to go eventually?
Bob sure is. Wave v is pretty big. From goldseek Aug 4. We still may be in wave iv which should top sometime this weak or we may already be heading down.
https://www.elliottwavetrader.net/scharts/Charts-on-GLD-GDX-YI-20150802784.html
EW is worthless in a heavily manipulated market. For it to have any chance of working the market needs to move on natural supply and demand. Gold does not move due to naturally market forces. It moves where the bullion banks push it. So IMO trying to label wave counts to gold is a waste of time.
Shad we’re on wave vi not 4 of 3 decline. Wave iv upside then then wave v of 3 THEN wave 4 and within those i, ii, iii or a, b, c waves. Then final wave 5 BUT wave 5 bottoms around wave v of 3 and one should expect wave 4 to be big. So wave v decline to 1033-1000 then big wave 4 up to test 1250 possibly then possibly retest of 1000-930 but i doubt we’re going to get wave 5. Either way lows for wave v and wave 5 are close enough.
It is quite possible that wave 5 final decline be where Rick Ackerman 815 target comes in. It makes sense based on wave 5 count. However i don’t think that will transpire so for now i’m getting ready for wave 4 (not iv)
correction wave iv
I think it will stewie.My belief is that gold will move up later this year and the move up will coincide with the market sell-off.Traders will pour their money in the pms oversold sector.my 2 cents
I gotcha. Sorry, I’m only semi-fluent in Elliot Wave, and follow it as a tool, but get confused from “expert to expert” on where they are starting their different wave counts within wave counts.
If I’m understanding correctly, you are discussing wave iv and v of (Wave 3), then there would be a counter-trend (Waves 4 – with an A/B/C) up and a final (Wave 5) down to the major bottom. Is that correct?
Yes I was discussing where the Larger wave 4 would head up to, (and not the smaller wave iv or wave v of Wave 3). It appears I was getting ahead of myself, because we still will have the wave v down of 3, and yes I could see wave v heading down to the $1033-$1044 area, then the larger Wave 4 up to 1224 or 1250, and then the Wave 5 down to the $1000 (I’ve had a target of $993.20 for a while) as a potential Major bottom target.
Good thoughts Stewie.
PS – I was under the impression that the larger Wave 3 ended at $1076 on July 24th, and that we were already in the larger Wave 4. Where did you start you count for the larger Wave 3 down, and where did you mark your wave iii bottom within that Wave 3?
No sorry needed mate. I am learning still myself and green still.
We are in wave iv or 3. This iv up was small and it’s over probably. wave v down will be somewhat significant. Wave 4 will be large wave up. That’s the wave Gary is looking for now but i think he won’t get it. It’s ahead of us but not NOW. Look at the chart here.
https://www.elliottwavetrader.net/scharts/Charts-on-GLD-GDX-YI-20150802784.html
Yes, thanks Stewie for the visual aid of the chart. I’ve got it now and follow you, and actually was with ya once you wrote me back earlier, but my response was poorly worded and not very clear.
I understand Elliot wave basics, but was thrown off by an audio commentary from Avi back in July, and honestly was not following along with his charts he has been posting. When he was talking last month after Gold went down to $1076 on July 24th, he mentioned that may be the bottom for wave 3. (What he really meant was wave iii inside the larger Wave 3). I heard and interpreted that as the larger “Wave 3” had bottomed, and so I thought the same thing Gary does now – that we’re currently in the larger Wave 4 up for a good bit. This seemed to coincide with August bounce I expected after the summer doldrums June/July/and early August, so I just thought he meant the larger Wave 3 had bottomed and that Wave 4 had started and would go up for 3-5 weeks. This seemed to line up with Doc’s thoughts as well.
What has become clear in talking with you today and looking at the chart you posted from Avi is that he meant “wave iii” had bottomed, and “wave iv” had started up inside of the larger Wave 3 down. Then we’ll have the wave v down to $1033″ish”, and then with that “wave v” bottom, it will end the larger Wave 3. This is $1033-$1000 zone is where you believe the larger Wave 4 will begin from.
I understood this earlier today, and that is what I was trying to communicate up above at 1:45pm, but it was worded poorly……but I got it. 🙂
Don Corleone, this is also why I kept getting confused with your comments at the end of last week. I thought after the July lows, that Gold has started the larger Wave 4, and not “wave iv” of the larger Wave 3. This clears it all up now.
Good luck guys!
Gary:
If distribution is taking place, I would think you could see cash balances climbing. Do you find this to be the case?
What do you folks think about the price of oil and the long/short positions in the Mexican Peso and the Canadian Dollar (OK, I know that it has been keeping you all from sleeping at nights worrying about it 🙂 ) ?
https://www.mcoscillator.com/learning_center/weekly_chart/pesos_message_for_crude_oil/
When Exxon and Chevron are trading in the 50s and 60s range you will know oil’s low is close….could be another 6 months-year.
I’ve barely slept in weeks worrying about that Mexican Peso….. Haha!
Must say to all you EWT analysts…I really enjoy your comments…provide a lot of food for thought!
A bit of an odd day I felt – got the feeling that there was a lack of conviction in everything included the stocks that rose in price.
What do you folks think?
Yep – tepid markets that didn’t want to take a stand but they moved mildly higher. (reluctantly….)
On virtually no volume… so I am not convinced by today’s rise and wonder what tomorrow will bring.
Yep, I felt like I was in the carnival riding on the rides with nobody in line and nobody cheering. People are spooked and waiting for the other shoe to drop.
Yep, that is the way I feel – spooked and waiting for it to go down.
Watching some of the stocks rise, on virtually no volume today, was just a joke and a waste of time.
Hey Gary if you think the US market has been trading sideways for a long time, take a look at the London FTSE 100!
http://stockcharts.com/freecharts/gallery.html?s=%24ftse
Try two and a half years near 6800-7000; perhaps not coincidentally this was the 2000 market high and the 2007 market high too.
I explained the problem of shorting the market was manipulation. I’m still keeping my SDS as insurance though.
I just bought some SJB (Short Junk Bonds) because I expect problems with company profits declining, especially in the energy area.