Tuesday, June 30, 2015

[ABX] update

Backlink.  The hope for longs is that this will turn out to be a failed 5th.  However, the recent additional selling has broken below the lower rail as if if was going to be a falling wedge.  Perhaps that means this is only 3 of 5 down but there are other options as well.  The important thing here is for the chart breaks back up into the channel and then back out the top very soon now.  As in the next day or two.  Otherwise I'm going to have to rethink everything here.

Got lucky again on [UVXY]

As luck would have it, the overhead resistance that I warned about proved to be the top of wave 1 or A.  So now we should expect, at the least, a pullback to 2 or B at the 38.2% fib before reversing strongly into 3 (EWI) or C (Avi).

I have been absolutely killing the turns lately on several stocks.  I bailed on UVXY at yesterday's close for 29% gain, sidestepped this AM's 10% opening pullback and then bought back in near the low to ride it right back up to the high of the day before bailing and sidestepping the pullback that is in progress.   Yes, part of it is luck.  If there is no game present, even the best African game guide with all his years of experience will mean nothing.  But you just have to admit that there is more than a little something to Elliott waves and technical analysis in general when you see someone able to document this kind of trading in real time.

Well, tomorrow we find out if my good luck (which itself ebbs and flows in waves folks) is holding.  I hope to be able to get back in around $40 and then hit at least the $55 mark while still in 3 or C.  Time will tell.  Keep in mind that the down sloping blue overhead resistance line and the $50 level are both likely to be important to the herd so they will probably both get taken out during 3 or 3 if my model is correct.

Zerohedge via GATA: government has taken control of commodities market using derivatives.

GATA is a total gold bug even though they try to be facts based.  By that I mean they don't understand wave theory and so they can't understand why gold isn't 30,000/ozt already.  In the long run they will be right.  Fiat currency will fail and gold will still be money, probably the only real money.  But ridiculous situations can go on for a long, long time before they collapse.  Zero Hedge also tries to report facts but again have no concept of wave theory of markets.  They think they know the fundamentals about everything and are thus often wrong about everything in the short term.  Over the long term they too will likely be correct.

Still, I thought that this article was interesting as it attempts to explain how the con men are playing this game.   In short, leverage.  Just take out several trillion in leveraged derivatives in the direction you want markets to go and hope that the herd is, well, herded in the hoped direction by these signals.  Again, if the herd doesn't want to play along then the game will be exposed, it will collapse and it will be game over.  And at some point that is exactly what will likely happen.  But the con men continue to be able to placate the masses with subsidized healthcare (recent supreme ct ruling which changes a law outside of congress, something that is totally illegal and even farcical ["words no longer have meaning"] according to Judge Scalia who is now openly mocking SCOTUS as a political support organization), mandatory $15 minimum wage in some major cities and states, etc.  In other words, the low end of the spectrum is hurting so throw them a bone so that they don't revolt and they keep on supporting socialism.

Whether or not people understand what is happening, the USA is dividing against itself internally and conservative - liberal battle lines are being drawn.  The fallout is going to be major with a high chance of some kind of de-unification of these 50 states.  I know this sounds ridiculous right now, pretty much like all of my opinions tend to sound at first listen.  But I do not write these things lightly and I firmly believe that there are credible if still unconfirmed EW models which support them.  When it happens will have a lot to do with stock market performance.   The stock market is nothing if not a huge societal mood indicator.  If the stock markets begin to tank per Prechter's models then bad, bad things will accompany it.  Prechter's model is still my primary model for stocks while Avi's model is my primary model for metals.  What happens over the next month could change that.  Avi's calling this pullback 4 of 3.  If it bottoms per his model and then goes to a higher high then I will have to strongly reconsider my opinion on the stock markets.

Watch out for overhead resistance in [UVXY]

We are right up against it now.  Generally it will take a 3rd of 3rd to break through something like this so we often kiss it during wave 1 up, pull back and then gap up and through.  It potentially implies that the AM pullback was 4 not 2 and that the rally since could be 5.  It also could be that the AM pullback was 2 that the rally up until this resistance is 1 of 3, then we should pull back into 2 of 3 for a running start at this resistance to be smashed during 3 of 3.

I'm back on the sidelines until this either slushes through that line as if it were not there (that would be unusual, low probability) or pulls back again for a running start.

In any case, be careful here, this is significant technical resistance.

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