Weekend Update #2

30 YR BONDS
The bond complex continues to confound me. I thought I had a handle on what structure was doing, but I'm losing confidence in my assessment - fast.

I currently have bonds tracing an expanded flat minor 2 wave. The line in the sand with this count is the 121'11.5 H. This breach of price will invalidate a wave 2, as well as, invalidating a triangle.

We came darn close on Thursday, registering an intraday high of 121'07. When drilling down on a smaller time-frame, price action does not appear to be impulsive off that high.

Intermediate wave (1) L is 121'23.5. Should price continue moving higher, this level will be important. If this level is broken on the upside, this should lock-in the 111'21.5 L as an intermediate tradable bottom.

I'm still hopeful that 121'11.5 holds. I'm bullish above that level and bearish below a 114'25.5 break. Sorry folks, that's the best I can do at this point.

All prices basis continuous contract.

GOLD
This is another market that's frustrating both bull and bear.

They are most definitely coiling this up for a break. Which way? You can make a prudent argument for both up and down.

Long-term I believe structure strongly suggests we should see significantly higher price. From an intermediate standpoint, it suggests that price should see lower lows before the launch. Near-term, the picture is unclear.

It does look like a triangle has traced. In fact, minute [e] should be complete, thus suggesting that a "thrust" out of the triangle should be happening. Friday was a good start, but notice that the entire day was spent retracing 10 minutes worth of upside action around 7:30 am cst.

I just don't see a thrust, nor do I see impulsive price action off the 931.30 L. I will maintain my current count that we are in the beginning stages of intermediate (C) down.

I will get bullish with a price close above the 974.30 H and base channel (preferably with a gap Monday). I will get uber bearish with a price close below 927.60. No use making any wagers prior to one of those levels being violated.

Just be patient...structure will reveal its true identity soon.

All prices basis continuous contract.

DOLLAR INDEX
Has the dollar escaped with just a near death experience? Not sure, but this pig needs to make a move now.

I think you can pretty well use the 77.81 L as the line in the sand. If that level gives, you can bet that the 77.52 L is doomed (and my bullish view).

Odds favor a break lower imo. I'm not sure how you come up with anything impulsive with price action off the 77.81 L. Perhaps, it's beyond my skill level. Perhaps, it's just not there :)

I will maintain my bullish count until they break the minute [ii] 77.81 L. This will mean that intermediate (C) has not finished its business.

We need to see price take the 78.895 H for beginners. If they can accomplish that mission, 79.695 will be the next target.

All prices basis continuous contract.

CRUDE
The crude market pretty well followed my expectations for the week, although I thought that price would reach a little higher.

It appears that minuette (b) has finished at the 69.83 L, though not a certainty. We have a nice clean 5 wave structure up from that level, which I have labeled as sub-minuette i.

Once we have completed 5 sub-minuette degree waves up, we should finish (c), thus completing minute [b]. Minute [c] down should follow.

Notice how price was rejected at the corrective base channel.

Also notice the RSI divergence at the top of the micro [5]th. Exactly what should be expected with a 5th wave.

It appears that we have finished ii down and have started iii up in earnest. If [2] has completed, which is unclear at this point, we should enter the meat of (c)'s advance.

Near term, I expect price to follow through to the upside. We should see the completion of [b] later in the week.

(w) = (y) at 80.38. the minimum objective is the 61.8% of (w) at 75.25.

I'm anxious to see if they break price out to a new recovery (and yearly) high. This is at 76.56.

A double zigzag is comprised of 7 waves, which fits right in with my friend, buddy, pal Kools "7 Wave Trend Killer." The daily clearly shows the first 6.

All prices basis continuous contract.