Mercury

No joy on that first level so I return to an alternative set up that looks at the Fib 62% level, also the breakout from the daily chart trend line, as the next likely level for a turn. Note that in this set up the weekly trend line/channel line has not yet been broken so the risk of yet another lower low is there. So I was wrong on this one, got stopped out for a small loss and wrong on stocks with a similar result but my glass is more than half full as I am very well placed Short on Gold/Silver. In the end I only needed 1 to break for me, that's trading the turns.

Just saw your post @dmedin. I would tend to agree although conventional chartist wisdom simply has it that you trade the breakout whichever way it goes. The hard part is recognising and avoiding or fading a fakeout. The principle you are referring to is partly in play here as the consolidation pattern I drew was part of the counter trend move so in fact the breakout was in line with the current trend (i.e. a counter trend move). There are some people who see this as a trend change rather than a counter trend move that will see gold/silver below their 2015/16 lows, so who knows on that score. For the principle of buy the dips/buy the consolidation breakouts on a bull rally in Gold/Silver to hold true I think we would need to see a turn around the levels I have indicated and fast rally past the recent highs. Then and only then will we truly be in a long term bull market for precious metals. However, from a fundamentals perspective, I really believe we need to see a breakdown in the stocks bull plus inflation fears and chaotic interest rates environment, the latter of which could come about with the Fed dropping to zero or below and the bond market cracking (i.e. increasing bond yield curves). I might also expect USD to go into a massive rally in a flight to safety. Plenty of signals to watch for...

Looks like a consolidation pattern breakout to the down side to me. If all goes according to plan the next stop is 1360ish on gold, maybe 1500 on Silver. Will likely get some form of half way mini consolidation along the way. Looks like this move is getting some sentiment backing from stocks goosing and USD strength, perfect!

First target of 11060 achieved with a bounce and rally. Will this stick or will we see a the lower target (11,000) hit? Technicals support a rally here so it is a clear possibility but another leg down is also still possible. Break of the recent pair of tops around 11,180 would seem to be critical. I am Long off the turn with close stops just below the turn, let's see...

Possible small scale 1H chart megaphone formation that could signal a reversal. Also top out signs on all US large caps plus Nasdaq just broke below the recent low on opening. Not conclusive until there is a close below but worth watching. NMD at the top (all markets actually) and turn just below that Fib 88% I was tracking. Add to that the Russell 2000 has punched lower on decent volume and the Vix looks like it is setting up for a rally...

That's weird. I thought I had posted an updated on this thread... Losing my mind maybe... Anyway yesterday's bearish move on both Gold and Silver helped me spot something I should have spotted earlier, which is a possible consolidation Triangle formation. The key to such a pattern is to trade the breakout (watch out for fakeouts though). The set up that is most favourable at present is for a breakout to the down side to continue the retrace to test the H&S neckline (circa 1360). The Triangle itself has 5 hits and conventional EWT has it that the fifth sparks a move in the direction of the turn (in this case down). Currently we have seen a hit of the bottom line and a small rally but this could be a smaller consolidation within a bearish fast move down. Ideally want to see further USD strength to support this directional move. Alternatively we could see another round trip within the consolidation pattern.

Only for the Vix.

Might not even have to wait for US opening today...

A little stutter after the initial breakout yesterday but now Oil looks to be backing the first break up with a second break to new highs in the move. The rally up from the Fib 50% is in a nice 1-5 (motive rather than retrace) and then a small 1-2 retrace was put in to only the Fib 23% before being propelled to that new higher high (very bullish). Let's see if this one sticks.

At the risk of precipitating another condescending lecture about how we shouldn't look for turns and how there is only ONE way to trade @Kodiak let me say I agree with you that a turn on the Dax is on the cards. The Fib 88% is lurking just above current price so a jump to that level is possible to complete a large time frame wave 2 retrace. There is always the possibility of a double top on the Dax and we cannot yet discount a break through to another ATH but this would be the first non US large cap market to do so... You have to ask what is driving the Dax though. Unlike the US, where there is much debate about when we will see a recession or how strong the economy actual is (not very of you look at the data trends with a balanced view rather than a perma bull bias) or if it will only be another manufacturing recession a la 2015/6, Germany is in recession. The only answer can be that the ECB keep churning out the **** and the Dax addicst keeps lapping it up and perhaps more pertinently the other World indices are being propped up by the US large caps. So for a turn to happen we probably need to see one on US large caps too. That said there is no reason why the European indices can't make a move before the US markets open. We could see a fast move up on the Dax to test that Fib 88% before a drop or a drop from where we are. Whichever happens, for me we have two scenarios that would play out as a result (excluding a breakout)as follows: This top is the wave 2 turn and the next move would be a 1 down, 2 up to produce a lower high This turn is not yet the top of this move and we see a final rally (maybe the famous Santa rally) to close out the move and begin the Great Bear. Issue for me is that until I see the US large caps top out I would not be confident of any other market topping. And therein lies the main problem with the bearish set up, there isn't one triggered yet, they are all still in progress. So my approach is to watch and wait for the triggers across all the main indices. Can't comment on your Williams indicator as I don't use it but we do have negative momentum divergence building on most time frames, low volume and the Vix is shaping to breakout to the upside so while there isn't a specific trigger for me for a Short yet the case is gathering.

EURUSD has also turned at key resistance with a lower high that sets up a potential A-B-C retrace. Likely it will carry to the Fib 38% and a retest of the weekly channel line but could also carry further to the Fib 62% and a retest of the daily channel breakout zone. As with AUDUSD, the key factor will be whether we see a retrace bear move that primes a big breakout rally or another test of the lower channel support zone.

Daily chart resistance trend line remains unbreached with a couple of test failures over the past few days. Remains to be seen whether price will make the journey all the way down to the lower line or turn at an intermediary support zone in a 1-2 retrace that primes a channel breaking rally. Fib 50% looks favourite at present.

There was no Santa Claus rally last year, it was the subject of much discussion, and not a little ill humour, at the time. From memory someone posted a stat that the pre Christmas period produces a rally 65%ish of the time but it has become a regular thing in the trading zeitgeist such that everyone just believes it. Not sure what the stats are on having a bearish pre Christmas period 2 years in a row are but I would imagine it is low, if not non existent. Therefore the chances are good for a pre Christmas rally this year. However the Santa Claus phase is typically read as the few weeks in the run up to Christmas. A credible scenario therefore is the one I just outlined: a bearish drop shortly after the ATH (just happened on the Dow) that leads into a Santa Clause rally recovery and then either that fabled perma bull breakthrough rally to infinity fueled by the Fed and the Fed alone OR the perma Bear fabled mega collapse. I am less concerned about which it is now so much as seeing whether the markets follow my road map as that in itself will be instructive.

Slightly adjusted retrace channel (or possible Flag) that has seen a breakout in the past few hours. I am still a bit concerned about a gap close but otherwise happy to be Long. Still need to see a close above the next resistance zone (circa 10,000) to be really all in confident.

Looks like you have it sorted. Go Long then.

Have a look at a price chart.

What makes you think that is a drastic swing? Do you really think stocks just slowly grind up forever? Look what happened after the last few ATH's, I think I posted a chart on that right? Anyway the arrow is directional only. Here is a chart with a possible route map that would be consistent with an ending channel and a Santa Claus rally that is also consistent with recent ATHs history. Note also that there is NMD.

Possible turning point just now. No particular signals but both S&P500 and Nasdaq have hit resistance trendlines on low volume. You would have thought that all the "good news" from last week would be a much bigger spur for that mega rally the perma bulls have been banging on about... Maybe markets are worried about tomorrow's ISM data release, or just the fact than GDP and earnings continue on a downward trajectory? What is interesting me above all of that is that the Vix may be getting twitchy and right in the turn zone I highlighted in my last post.

That's right. Everyone is living beyond their means at present. That is why government debt is so large. In order to keep the gravy train rolling the politicos (of all stripes) promise the moon to buy the plebs off and stay in power. They have to pay for it via money printing (debt creation) because their economies are not balanced and the tax take is down. This is why Blair promoted immigration (more consumers, more tax take to keep his New Labour bandwagon going and stay in power). Industry is getting sold off in the UK (e.g. Cadbury) therefore the tax take is down and also because they can't get tax from the predominantly US based internet companies (hence France attempts to change the rules unilaterally, hence the trade wars that Trump is pushing). Personal taxation rates (typically via indirects) have climbed steadily to offset the tax take loss from corporates while all parties compete in a race to the bottom by seeking to take large groups of lower paid people out of the tax net altogether (like that is actually a good idea!) which results in the middle class squeeze the MSM keeps harping on about. BTW, because of the decimation of hard industry the middle class is now huge but a high proportion of them are not well paid. Germany (and to a lesser extent France and Austria) is, at present, actually in a better position than most because of their extensive and powerful manufacturing base and associated positive balance of payments. Of course they achieved this via an effective Deutchmark devaluation via the Euro and in the process screwed the poorer countries like Greece and Portugal; the quid pro quo being infrastructure projects. However Germany is in a manufacturing recession (which for Germany means a recession) and the alternative parties are on the rise (Merkel has, what, about 35% of the vote?). The German people don't want to pay out their hard won surplus to bail out the Greeks et al... They have a bloated social policy regime to maintain after all... But don't worry. In the UK at least Corbyn will fix everything... Err not for the much squeezed middle class he wont. The battle ground in the election is the middle class swing voters. Watch BoJo focus all his policy on them, plus the anti democratic referendum reversal agenda. He has already assumed he wont get any joy in Scotland, hence the "no Indyref2 policy". Battle lines are drawn, it is not just about Brexit, it is about the Union, and whether the British really want a marxist revolutionary in the driving seat or not. Corbyn has already come out talking about "going after" various groups (mostly fictitious but it plays well to his base), which is pure Marxist revolutionary rethorice and designed to polarise the country not bring it together (the irony is that Corbyn himself is anti EU but his party is split on this issue). Turns out the UK didn't need Brexit to have decisive politics, they just needed the socialist momentum movement. If Corbyn wins one of the saving graces for the UK economy, in or out of the EU but especially out of it, is that the UK is still seen as a safe haven for assets in an increasingly troubling world. A Corbyn led Marxist government blows that out of the water. Never mind the question as to whether the so-called elites will allow this, will the people of Britain? I guess we will know in a few weeks. What are the odds on a hung Parliament and all hell breaking lose with everything unresolved.

That is the point in the curve I am looking at but also the one before that in May. I don't recognise the price levels of your chart, which has the recent low as lower than the May low, IG charts are the reverse of that. Also I think the data underlying the COT trend is Futures only, whereas I use Futures & Options data. However either way the message is the same for me.

Higher high achieved, not yet closed above. Has he breakout arrived? If so next stop would be the drone strike gap high.

So far so unremarkable on stocks. Yes we have had a rally but given the decent beat on NFP and the Fed rate cut I would describe this as weak. We have fresh ATHs on S&P500 and Nasdaq (not, it must be noted, the Dow, yet!). The perma bulls have been talking up the next coming as these markets have broken to fresh ATHs and the Fed has produced the juice to goose the market so why so shy all of a sudden? I wont repeat my macro case for the Bearish side but one thing I did note in my weekly review of commitment of trader (COT) data is that the net long levels on all the major US large caps are positively anemic. Check this out: SP500 Dow Nasdaq Net COT long max since 2007: 393k 92k 164k Net COT long last Tuesday: 42k 40k 41k Of course there is another way of looking at this, that there is loads of head room for a massive rally but at present I would say this doesn't look encouraging. At the start of the 2009 bull market (March) the SP500 posted its most bullish COT ever, that 393k net long position, now it is merely 43k net long. Hmm, doesn't exactly instill confidence does it..? Looking at volume the trend is quite eye opening on the SP500 and Dow, the Nasdaq is also down but more choppy, perhaps to be expected as this is supposed to be a tech/momentum led bull. I wont comment on the volume, just look at the charts... So maybe not tomorrow, maybe not until after a Santa rally but surely some day soon...

After the fast breakout we are seeing some consolidation on Bitcoin, unsurprisingly. The consolidation is currently in the form of a channel (or maybe a Flag?). The lines are very strong, especially the supporting one with many touches. Right now I favour a test of the bottom line again that will close the gap before rallying away hard, however it may fall short of the line this time and fail a test of the 8800 level I highlighted as a key resistance zone, now support. Either way a breakout of the new overhead resistance zone (10,000) is the next big moment in the rally and a chance to go Long if you miss the turn. Personally I am set to go Long a breakout of the 1H channel consolidation formation, albeit watchful for the kind of mini fakeout we are seeing today. As has been mentioned elsewhere, the weekends often see a big move. early Sunday is setting up as a time for a lower support test... I'll be busy with life so have preset my stop in position.

God and Silver remain in flux. I can't trade it here. Only a breakout of over head resistance is tradable long for me as another large leg down is still very much on the cards. Plenty of other better opportunities for me right now, I am happy to sit this out until the fog clears.