Mercury

I want to see a break back into the 1H channel and ideally any relief rally should stay in the channel. If we see this and then get further bearish moves then there is a chance this is the end of the melt up. Long way to go yet...

That's the media for you. I'm sure they had lots of justifications. Typically media outlets cotton on to trends towards he end not at the beginning. If they were any good at doing anything except reporting what has already happened they wouldn't be in the media...

Hello!

Strong relief rally on USD of late, doubtless due to the perma bull thinking that the US economy is AOK so no need for further Fed rate cuts. ISM manufacturing belied this but the Perma bulls cling to the services and NFP numbers like they are the holy grail... US NFP? Opps! DX might be at a credible turning point here with a plausible A-BC retrace form to the rally. The turn is at key Support/Resistance and on NMD. A break lower here is vital or course and we may yet see another relief rally before any bear move really gets going but with CAD and AUD looking strong vs USD at present and EUR turning this could get interesting for USD Bears in the coming days.

Potential Coffee breakout of a down sloping channel on the 1H coincident with the Fib 50% and where Wave C = Wave A, a typical EWT relationship. There is PMD on the 1H and Daily charts and EWT rules for a retrace are met. Clearly the chance of a further drop is still very much there and we may yet see a small bearish retrace and retest of the breakout zone, if confirmed but this is still a decent shout for a Long IMO.

Serious though, if you consider this from a purely stock market perspective rather than a wider economic perspective can anyone say that the stock market is performing as it was originally designed to? That is to provide capital for business expansion and a sensible returns, mostly in dividends to investors? It seems to me that it is more about Wall St. firms getting rich (not that that hasn't always been the case) and VC firms cashing in (typically on a worthless loss making proposition...). I believe it will all end very badly and hopefully we will see significant reform rather than revolution. It is already being discussed by luminaries such as Druckenmiller and Tudor Jones, who are smart enough to read the tea leaves and get on the right side of things... In the meantime, the crash, when (not if) it comes will be an opportunity for us meager retail traders. Don't even need to trade Stocks short, just invest in Gold and Silver!

So often the case. You can say the same of Keynes and Friedman... Certainly the Central Bankers are amping up the theories of these guys. An Austrian! An Austrian! My trading account for an Austrian!

There is nothing anyone can do to stop it, when it comes. Gordon Brown learned that the hard way. Take a leaf out of King Canute's book... Marxism has been roundly defeated in the UK at least. Can't speak for other countries but the UK is not intrinsically Marxist so no worries for us... Personally I think a change of the political order is desirable, the political elites and their billionaire backers have had their noses in the trough for too long. However I doubt it will lead to the rise in the kind of extremism the liberal elite owned MSM would have us believe is the case. The bogeyman is a time honoured mechanism for keeping people from demanding change. Didn't work in the UK nor in the US, doubt it wil work in the EU for much longer but the Bogeyman doesn't have to be Chairman Mao!

So US NFP comes in off consensus but no one is posting saying "bad miss" because it doesn't fit the never ending bull story... Data release was in the red across the board. Shouldn't markets be tanking? It is hard for perma bulls to change their bias, few it seems are swing traders. Of course the US is actually open yet so let's see... A few of things to note: The Dow is at the top of its very long term channel and with significant NMD on most, maybe all, chart timeframes. The Russell 2000 has failed to break back into the daily channel 3 times now and is turning back down.

https://www.bbc.co.uk/news/business-51060580 "unprecedented levels of promotional activity". Don't know about anyone else but the sales were off the charts this year and many started months before Christmas. Not exactly the consumer strength we are having shoved down out throats by big bank paid economists...

Possible breakout retest fail occurring at or around both the neckline and channel levels. Price is peeping out over an important support/resistance level. We could still get another leg down on this but Bitcoin does have a habit of breaking out fast... The move down can be labeled as an A-B-C (1-2) retrace, which is what I would expect in trend change scenario after a head & shoulders neckline break out. There is PMD on the 1H chart at the recent turn. Overall I remain bullish on the breakout and trend change back into a longer term rally phase.

Wasn't going to post this until the weekend but turns across the board may be occurring so it could be relevant now. Still have the Fib 50% just below at 6350ish so could get a reversal off the current turn but as a general setup that fits with my ongoing analysis, this looks like an A-B-C in keeping with a complex retrace scenario that still has the $82-85 top out target in place. However before that I think we could see a significant bearish move.

No one (or institution) has the power to stop the crash once it takes hold. Corruption, or just plain old vanilla manipulation out of good intentions, will eventually implode. The case the Bears put forward is that the more effort that goes into juicing the markets the harder the crash will be. It isn't the first time this has happened and those that believe this time is different will be just as wrong as the people who said that before. Of course timing is everything but you don't have to trade the top, just recognise when it has come in and change your directional bias. What I am saying is that if Boeing breaks lower then the trend has changed. I don't know how far down it will go, the arrow is (or course) directional not quantitative...

Check out my EWT on Apple @cheviot. I think Apple is a great bell weather for stocks as this is a dominant tech led bull. The Bears are talking about a so-called "melt-up" occurring on stocks and certainly the big FANG/BAGLE tech stocks have been on a parabolic tear. But the nature of the price action visible on the charts is not sustainable so a melt up is a decent assessment. If proved true then the reversal will be fast and furious and if seen across the FANGs then it will influence the entire stocks market. All time frames currently show rally, rally, rally but the wave 5s are coming in fast now and finally we seem to be getting negative momentum divergence on the 1H chart. There are huge channel over shoots on all the long term charts, which is what one would expect of a melt up scenario. If the single most important tenet of investing is buy low, sell high then surely selling the **** out of Apple is the thing to do? After a melt up comes the melt down...

https://www.bbc.co.uk/news/business-51058929 Looks like a major wave 5 turn completed on strong NMD. Now a 1-2 bearish direction retrace is in, just looking for a lower low to nail it on.

I have been tracking a few soft commodities to see if there is anything to this idea of a reflation (wider economy inflation) across all commodities. The idea is that the Fed policy will eventually produce the much sought (by the Central Banks at least) inflation but that the Fed will not be able to control it so we will get runaway inflation that will be led by commodity prices. This has proven correct on Coffee so far... Sugar is a contrarian play as the received wisdom is "sugar bad!". However, as has been suggested by @TrendFollower I think, there seems to be an under supply at present as producers exit the market. Again similar to coffee but for different reasons: for sugar is seems to be a consumer health driven issue but for Coffee it is good old fashioned supply/demand. On the Technicals front the situation is similar between Coffee and Sugar on the charts with a wide price range and the markets completing a touchdown at or near the bottom in an A-B-C wave form, suggesting the next move will be up and will go higher than the recent highs, it certainly has been on Coffee! Note this is also similar on Gold... The recent move down looks like and A-B-C with strong PMD at the recent turn (monthly chart). Wave C concluded on the Fib 76%, not marked on chart On the weekly we can see a possible 1-2 (pink) rally and retrace within a channel that was then broken and failed a retest before rallying further in a series of 1-2 waves Zooming in on the daily we can see a V-Bottom at wave 2 (pink) and then the 1-2 (blue) produced a double bottom with PMD at wave 2 (blue). There is an ice line across the top of the V-Bottom that coincides with the next 1-2 (green) and is a strong area of resistance (now support after the breakout). We now appear to have a 1-5 up to wave 1 (brown) and a short wave 2, which has just broken higher as I am writing this... There is still a possibility that we see a retest of the ice line (crica 1290) but if the break of 1380 is confirmed then this is, for me, a bullish sign. A next resistance level break would seal it for me. If this is a turn bullish then this trend could run for some time and many points.

Yes in Sept/Oct 2019 on the reversal, not now, without a large draw down risk.

First question for you is are you day trading Oil or looking for a longer term move? If the latter (and probably in either case) then after such a sharp rally and reversal it is best to stay out for a while and see how things develop. Same thing on stocks, unless you were awake middle of the night and seeking to buy the dips, alas that move is done now and the risk of another reversal is higher as stocks move into a potential phase of ping pong price action ( more on that later perhaps, if I can be bothered...). Anyway the point being if you are not clear on the bigger picture then the short term is fraught with risk. With respect to your chart, I don't see the logic of placing the bottom of your Fib where you did. That does not appear to me to be the beginning of a wave move, rather potentially a wave 4. If you place your Fib bottom at the early December 2019 low (a likely wave 2 on the whole expected rally) and at the beginning of the rally (my wave B green) then what would you see? If my analysis and conclusion is correct and this is a wave C to a near double top with the Oct 2018 previous high (it could still blast through this to new highs...) then I would expect a period of consolidation is some form of Flag pattern around about the half way point. If the top of the wave C comes in around $82-85 (my target range for a counter trend rally) then we are at about the half way point now. I am, therefore, now looking for a period of consolidation around the monthly chart Fib 38% (could get quite a range around this) and to see a breakout to the upside to begin part 2 of the rally phase. The daily fib 23% off the wave B (green) low and yesterdays high could provide support for a consolidation range. If something else happens I will reassess... Note: By "window" I assume you are referring to the price Gap? If so note that gaps are usually filled unless they are breakaways but a retrace and fill does not necessarily trigger a resumption of a rally. All we can really say is that usually it will be filled and that the rally may resume some time after that (or it could spell a trend reversal) so for me not a trading trigger, especially not after such a sharp rally and reversal and at a point where my long term projection is anticipating a period of consolidation.

Looks like a potential Head & Shoulders trend change with PMD at the Head turn and with a 1-2 bullish retrace at the left shoulder followed by a neckline break and now a potential upper channel (consolidation) breakout. If correct this would be a significantly bullish development.

That is perfectly reasonable but you will need stops a bit below the breakout point. We could easily see a retest of this zone, maybe even a so-called hard retest (i.e. where price breaks back below the support level, stops out traders with stops too close, and then rallies hard). What you need to try and achieve is a decent base (early trades in the money and price action forming a technical base for the move) upon which you can build and leverage in a pyramid campaign. The first trade is always the hardest... Just make sure you do not fall prey to FOMO, there is always another trade another day.

Never-ending Bulls, no return to "Tory" boom and bust! Meanwhile back in the real world Gold has just broken out through the resistance offered by the previous high confirming for me that the retrace was a consolidation (possible a pennant form) in a longer term bull phase. Silver is much further behind but will most likely catch up and overtake in due course. A breakout with a Gap is the strongest form, still we have to watch out for a short term bearish retrace to close the gap and retest the breakout zone before the next part of this long term rally phase gets going. Buy the dips on Gold and Silver. Doesn't augur well for either USD or Stocks IMO and with Oil rallying as projected the pressure on profits will only increase. Possible commodities reflation trade is on. Long Gold/Silver; Short USD; Long Oil (I am not but that is the trade); Short stocks if the break lower is confirmed.

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End of the week added a small 1-2 relief rally that turned at the Fib 50% and headed back down. Yet to break lower again but if we see that next week then I expect many USD pairs to run hard. On the Daily chart we can add a Death Cross to the Techncial set up. The case for further Fed rate cuts must be growing with the ISM manufacturing data. If we see similar slippage in key data releases next week I can see the odds of a rate cut shortening, which should fuel a USD bear move.

More fear then than profit taking. Fear is a greater motivator than greed, which is why stock markets fall faster than they rise, and offer great opportunity for those whose bias for the never ending Fed put does not lock them out of spotting those opportunities until too late. Personally I don't care too much what the short term motivators are, just whether the move will be sustained. At these valuation levels it really does take much to disrupt confidence in the Bull. However poor economic data (the ISM Manufacturing release yesterday for instance) is still not producing the impact one might expect. This speaks to extreme complacency that the Fed will always be there and the bull will run forever. Such complacency is the stuff of contrarian dreams... Last week was a bearish week if we get another next week that will make breakouts across the board, Nikkei is already broken to the downside.