Weekend Update - #2

30 YR BOND
The bond market had nice upside price action this past week.

It is still unclear to me if structure off the 114'14/32 L is somehow attached to the wave structure from the 138'1/32 H. I'm just unsure.

It has a nice channel and acts like it wants higher.

If you trade this market, I can't be much help. I need to see additional structure to form an opinion.

All prices basis continuous contract.

CRUDE
The crude market had hard downside price action, giving away almost 9% on the week.

Structure has been very confusing for the last couple of months, as price has chopped back in forth in 3's. This is not unusual for a corrective.

My assessment of the structure has us in a minuette (c) of minute [c] of minor B. I believe that structure will turn a big triangle here, or combination.

It's not my view that we are ready to see significant downside price action. Structure suggests to me that it needs more work on the upside on an intermediate degree before all hell can break loose, which I do believe will happen eventually.

I have placed triangle boundary lines on the chart, not because I think that is where they belong, but to give you an idea of the form I'm looking at.

Minute [c] has turned complex, which is typical in a triangle (p. 52, Elliott Wave Principle). It should finish higher than wave [a]. Should price exceed [a] at 61.37, we are not dealing with a triangle (unless an expanding type).

Drilling down intraday, it's unclear if sub-minuette iii has completed. You could argue that it finished at the 65.60 L, as the leg down to the 65.05 L counts better as a 3, suggesting an expanded flat for iv. We did have a nice 161.8% projection at 65.06.

(c) = 127.2% of (a) at 63.54. The 78.6% retracement of [b] sits at 64.49.

There is another L-L cycle due on Monday. The last two have come in like a charm. On the posted daily chart, [a] and (b) gave w L, (b) and w gave (a) L. w and (a) comes in Monday.

Bottom line - I'm looking for the downside to finish up this coming week, perhaps as early as Monday. [d] should unfold in a ABC up, followed by [e] down.

All prices basis November contract.

DOLLAR INDEX
The dollar made new lows on Wednesday before stabilizing and catching a bid.

My interpretation has structure finishing a minuette degree wave (iii) of minute [iii] of minor 5 at either the 76.23 L or 76.045 L. It's unclear where the orthodox bottom should be.

The 76.23 L had a direct hit with the 161.8% projection of (i), as well as, setting up a nice expanded flat.

Regardless of where the bottom of (iii) is, price should not trade in the territory of (i) at 78.085. Should this happen, I would need to reassess structure.

I have included a bullish alternate at the bottom of the chart.

I think you have to be cautious here. We have huge positive RSI divergence, which I have overlayed on the chart. We also have a unsustainable DSI reading of 3% dollar bulls. This can't, and won't, last.

Bottom line - I remain cautiously near-term bearish on the greenback. Once minute [iii] completes, we should see a [iv] wave that takes some time to fully trace, as [ii] was relatively short lived.

All prices basis continuous contract.

GOLD
The gold market corrected this past week, with Thursday being the big down day.

My current assessment of the yellow metal remains the same. We are in a minor C leg of intermediate (B). At completion, (C) should follow, taking price significantly lower than current levels.

No question we finished a wave at the 1025.80 H. I have it as a minute [iii], which means we are tracing [iv]. It's unclear whether [iv] is finished, but it looks close.

We supported at the broken trend line drawn from the 1060 H and 1028 H. Also notice that this corrective has traced back to the (iv)th of lessor degree, which is expected.

Price closed right at the 38.2% retracement. This supports my view that this is a fourth wave, of at least some degree. Additional retracement ratios on are the chart - should they be needed.

I have placed a new channel on the chart forming a 2-4 line. Should [iv] need additional work, I will make changes to the channel as needed.

The minimum upside objective is 1043.80, where [v] = 61.8% of [i] - [iii]. Interesting enough, equality comes in at 1080.10, very close to the triangle target.

One thing that does give me caution here is the huge volume registered on the downside this past week. I also noticed that weekly volume has been decreasing since the triangle breakout.

It is entirely possible that I am behind in the count, but more than likely, I'm actually ahead of the count. Time will tell.

We are suppose to have a KoolsTools cycle peak on Monday (black dotted line). This was arrived at from the 4/17 and 7/8 dates. I suspect there will be an inversion and it will signal a low.

Bottom line - I remain near-term bullish gold. Structure continues to suggest that we should see higher price, meaning this retracement was counter-trend. Keep an eye on the dollar.

All prices basis December contract.