$DJT leads $DJIAClassic theory. Had to stretch $DJT (red line). Let's see if $DJIA (blue line) follows it. Suggests ranging for months.
Dowtheory
Megaphone pattern formed in the DJ TransportsLooks pretty clear to me that with falling Oil prices, and a bounce off the former upward trending support, we have a megaphone formation appearing in the price. This means that we are likely headed for a target of roughly 7000. Possibly beyond that with a negative catalyst. As a leading indicator for the DJ30, DOWI with Dow theory, this signal is extremely negative.
A GENERATIONAL TOP IN THE MAKING In my last chart around 2 years ago entitled "SP500 BEARISH OUTLOOK - CLOSE TO FORMING GENERATIONAL TOP" (see link below), I suggested that a possible top could occur around 2000 - 2030 area which I believe is still within acceptable range for such long term analysis.
It appears to me that the likely topping pattern we are witnessing could be part of a very significant top formation, to qualify as "generational top". Based on the my interpretation of Elliottwave Principle, the cycle that began back in 1929, probably formed a major top of wave 3 in 2000, and all the intervening price action since 2000 till August 2011 low could be contracting triangle wave 4.
If this is correct, then we might have just seen wave 5 top on 19th May 2015 high. The choppy price action could just be an early development of major bearish cycle that could last several years with possible downside target retesting the 2009 low. Should this scenario play out then it could be very devastating and at the sometime offer us opportunities to benefit, if provided we are fully prepared to take advantage.
Summary:
1. Potential Rising wedge (ending diagonal) close to breaking down.
2. Have several Fib confluence,
3. Momentum divergence at several degrees.
4. May 2015 top lines up with time symmetry (see chart below).
5. Several sectors started topping from mid 2014 with the main Index grinding higher due to strength in ever reducing number of strong stock making up the S&P500
Conclusion:
If you wish to learn why I have come this conclusion then and what can assist you in getting fully prepared please register for a free webinar I am hosting on Saturday at the link - www.danv-charting.com
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
For those who appreciates my analysis, select to follow me and the chart for notification of future updates. Indicate you like my analysis by thumbs up, comments and sharing it with others. If you have an alternative idea then please be constructive and share for all to learn from.
Thank you for taking the time to read my analysis.
DanV
danv-charting.com
BITCOIN PRICE SHORT/INTERMEDIATE/LONG TERM PRICE PROJECTIONS.I will first go over the technical analysis and charting first, then discuss my projections for the upcoming short term and intermediate term projections. Let’s take a look at the chart below. Note, the support/resistance lines were drawn a while back and some still holds true today.
Bitcoin price has recently broken down from the steepest trendline with multiple support points. There were early warnings that a break down was likely. The Mike Hearn's article and TX backlogs caused some serious panic selling. The next trendline up is from even a longer time frame. We briefly breached it but rallied above it so far. This line is also pretty steep so a break down wouldn't affect the longer term trend as much, but shows more short term bitcoin weakness.
The major support line is at 2340 which coincides with the previous spike high and the most recent crash. Above this support is bullish since it is the upper end of the trading range. In terms of moving average, the 200 day and 365 day moving average is way below the bitcoin price. I use this to gauge the general longer term trend. We are a bit extended at these prices since the moving average is so far away from the price, but price can remain at these levels for an extended period of time.
The last and most important thing I want to talk about is Dow Theory. If you are not familiar, I hope you can read up on it in one of my previous Dow Theory articles. In summary, Dow Theory suggests that a trend going up needs to form a higher high and a higher low and vice versa. Look at the red arrows on the chart; we have formed lower highs on multiple occasions on the daily chart. While it is not immediately bearish, it does show buying weakness. On the other hand, the market is also forming higher lows which confirm that we are in an uptrend. We have two conflicting signals, which bring me to my next point.
In the short to intermediate term, I expect further market weakness in the short and intermediate term. We have conflicting signals in the Dow Theory which suggests bitcoin price might be in a choppy market. Since price is at the upper range of the trading range. I expect it to pullback further. I am still bullish long term since we are trending up. So unless trendlines and supports start to breakdown in addition to a lower high and a lower low, I would not change my long term price projection
I’ve covered a lot of TA stuff here, let me know what you think or have any questions
My BTC trade performance with time stamp: www.ibankbitcoins.com
I do live trades and bitcoin market analysis daily. Follow me on my bitcoin trading blog and twitter: www.ibankbitcoins.com @ibankbitcoins
"Oil Bottom" sooner than you thinkOil currently is its last stages of the decline that started in the summer of 2013 and it will place a bottom within the next few weeks. It is declining now in Minute wave v "which will be a 3-wave decline" where Minute waves i, ii, iii, iv and v represent the ending diagonal wave 5 of wave (5).
We are expecting wave v to over-shoot to the downside of the ending diagonal and below the arrow represented on the chart which will lead to triggering stop losses "below wave 3" and to increase the bearish sentiment to a new extreme.
At that point of time Oil should rebound and advance to the upside in at least 3 waves A-B-C towards the 70s~80s area or start an impulsive 5 waves (1-2-3-4-5) to the upside that could take us to new highs in the next years/decade. We cannot tell now but once the prices start to advance we will have more information to call it right.
How can we make money from this analysis? Simple; we have three options:
1-By trading spot or futures (only if you are an active trader).
2-Invest some money in Oil companies now for few years.
3-Buy long term Oil future contracts (with 2017 or 2018 expiry dates).
Happy trading :)
Where is gold heading in the next weeks, months and years?In the medium term, gold is in the 5th wave of an ending diagonal that could end around 1030. But before heading to new lows we could see a correction towards 1120 levels in the (B) wave.
In the long term, gold should start a multi-year upward move towards 1450-1500 during these years the sentiment will shift from bearish to bullish and analysts will call for new all times highs ($2500, $5000 and $10,000).
After reaching my target, gold will go in another multi-year bear market towards new lows $700s area which represents the area in which a smaller degree 4th wave ended (2008 lows) and the end of the first wave of the grand supercycle.
At that point in time, investors will dump gold and most people will be bearish gold, all goldbugs would turn bearish; which will represent the beginning of the fifth grand supercycle wave to new all time highs.
In commodities, the fifth wave usually is the strongest.
P.S: I am not a fortune teller, I just use the given variables and present the most probable outcome using Cycles, Elliott Waves Analysis, the Dow-theory, Social trends and fractals.
Gold Surprises as Dollar Gets Monkey-Hammered LowerIn " Gold Leaps Higher as Worries Mount ," I briefly pointed out how those very same institutions that championed quantitative easing policies implemented by the Federal Reserve are now coming out to proclaim quantitative easing added no substantial benefit to the real economy .
Gold was pushed lower on the assumption that central banking policy would all pan out and that the U.S. would finally achieve escape velocity; but the exact opposite is occurring. Despite the near 12 to 16 months of absolutely horrendous, even recessionary data, market participants believed that if the Fed began to tighten monetary policy then the economy must be alright.
Central bankers,misguided by classroom academics and abhorrent to real world economic dynamics, believe that if you tinker with interest rates that somehow inflation will magically begin to rise. Not so because it is real, meaningful growth that produces inflation; and it is more evident now that the these policies do not produce meaningful growth.
I mapped out the dollar's downward trajectory, which was largely based on the floundering economy and the inability for the Fed to take action that will pop asset inflation. I still believe this is based on the above factors and that the dollar will likely gather strength as the US slips into deflation.
Traders and CNBC pundits think that if deflation takes hold then gold will surely decline into the abyss. And just like their "lower gas prices equal booming consumer spending" myth, gold falling off a cliff during deflation is just as preposterous.
Gold is unique in that if can act like an insurance policy against both sides of tail risk (inflation and deflation). It is well-known that gold had a massive bull run when stagflation took hold of the US during the 1970s. Inflation ran amok.
However, nobody mentions that gold tripled, in inflation-adjusted dollar terms, during the early 1930s (the Great Depression) prior to President Roosevelt outlawing the private ownership of gold.
As I wrote last April:
" There is an assumption that the dollar and gold’s performance is strictly inverse of one another, but that is not so. The WGC (World Gold Council) indicates that between early 2014 and March 20, 2015, the dollar has gained over 20 percent while gold only fell 1.2 percent.
Historically, gold prices more than double on a weak dollar than it falls on a stronger dollar. Thus, a stronger dollar is not indicative of massive gold depreciation.
When the dollar declines, gold has appreciated 14.9 percent. Yet, when the dollar strengthens, gold has only fallen by 6.5 percent, according to the WGC. "
If you look at this chart, you will notice one thing: gold sure looks to trend with the SPX. There is an argument that this due to simple asset inflation.
Notice the massive divergence began when gold began to top in 2011. The divergence is what I call the "perception" gap.
I expect that divergence to close. It's no secret that I was right about the volatility of 2015, along with other key macro trends. I believe by the end of 2016 and 2017 is when the real fireworks begin.
Gold's recent move has been huge, and, of course, there will be profit taking. But those who follow me know that the underlying fundamentals for gold has been strengthening for some time.
(Note: the gold chart is the same I used in the above mentioned gold idea, but the minor uptrend (along with new resistance) were added).
Please follow me @lemieux_26 and check out my other ideas, which have links to previous writings.
DOW Transports To Retest Recent Lows(Note: DOWT is no longer in a bear market after rallying the last two weeks)
2015 was suppose to be just another year of the epic bull market created by reckless central banking policies. Some Wall Street estimates for the S&P 500 were as high as 2,300. Me? I projected a contraction to 1,810 in mid-January.
Whether or not the SPX will reach my target within the next 10 weeks, or so, is uncertain; but what has been quite clear is the scaffolding holding with risk assets around the global has been crumbling for sometime.
In " Is A Storm Brewing? How History is Repeating Itself ," I was clear and concise in what 2015 had in store (posted Jan. 13, 2015):
I support the idea that we are on the precipitous of something disastrous.
Those who constantly look at underlying factors and notice the shifts in the FX, commodity and economic data are witnessing that the latest boom cycle is on its last leg.
In essence, the post was a summery of the marco trends few wrote about because everybody indulged in the feel-good of rising stock prices.
The post ended quite ominously: "2015 is going to be mercurial…"
On March 26, I indicated that the DOW transports looked technically weak. Price action had been consolidating early in the year, much like the SPX. The index made several lower highs, higher lows and finally broke support at 8600.
Nobody was even looking at the transports as a potential catalyst to drag the broader markets lower, even though that is historically the case.
For instance, Cowen Group's Head of Sales, David Seaburg, said, as late as June 25 (after the the transports already began weakening underneath consolidation), "Everyone is up in arms about the transports, but the underperformance has very little to do with a weak economy and has more to do with the structural issues within the sector."
Seaburg also said that "I DEFINITELY don't see any downside (broader markets) necessarily." Almost a month-to-the-day, not only did the DOW and SPX hit their first 10 percent correction in four years, the DOW transports fell into bear market territory. Awkward.
Those that live by subjectivity, die by subjectivity.
The broader markets did receive a massive bounce following the largest NYSE short-interest since the Lehman Brothers collapse, but the transports has been rejected twice from 8,250, or the 23.6% Fib. retracement from the 2012-lows.
It's important to note that central bank credibility is fading fast, and traders will become more wary as the year winds down. Structurally, the index looks weak as earnings have been lackluster to not good at all.
EMAs are showing bullishness on the daily, as they are sloping upward. However, a close above 8,250 will be needed to garner any significant technical buying in my opinion.
Price action is within a large symmetrical triangle with price support of 7,970 cutting through the middle. This key, near-term support level could determine whether the index will test triangle support, which is supported by price support of 7,790.
A confirmed close below the triangle support will cause transports to retest the 2012 ascending trend line. I expect fundamentals to continue to deteriorate into 4Q, and the transports to challege 2011's trend (between 7,200 and 7,300).
Conversely, a close above triangle resistance could cause a rally to 8,500.
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