Weekend Update #2

30 YR BONDS
The long bond had nice impulsive upside price action this past week.

Price ran into a bevy of resistance including the 200 sma, the 4th of lessor, a 1:1 price projection, as well as the price extreme of intermediate (A) (red dotted line).

I am still unsure of what exactly is playing out with structure. I suspect this is tracing out a primary [B] wave, though far from certain about that. Perhaps this is an intermediate (X) wave of a double zigzag. Again, I'm not sure.

I do show some potential counts at the bottom of the chart. Notice the super bullish count. This would suggest that a major bottom has been put in. I think that is a very remote (at best) possibility.

It does appear that near-term price has not finished going up. Not sure it gets as high as that gap, but it's a big target.

The more structure we see, the better idea we get of what's happening in this market.

All prices basis combined contract.

CRUDE
The crude market rebounded strongly this week, which was not unexpected.

My interpretation has structure in minute [d] leg of a minor B wave triangle of intermediate (B). My alternate view is that this is a minute [iv] wave triangle.

The triangle form continues to take a recognizable shape. I'm showing the continuous contact. You will notice that it counts a little different than the front month November contract, but both are currently in the same place.

It appears that we have finished minuette (a) of minute [d]. It is not clear if we have completed (b) yet. It may need additional work, but looks close to being done.

If this is correct, we should see (c) up unfold this coming week. The projected upper boundary line looks to come in around 74.50ish. (c) = (a) at 74.66, with the 78.6% of (a) at 73.30.

Key levels are the 75.41 H, which is the price extreme of [b], and the 65.05 L, which is the price extreme of [c]. We don't want to see price get much above/below these levels.

Critical support is the 61.56 L. This is the price extreme of [a]. If my assessment of the internal structure of the triangle is incorrect and [c] is still tracing, then it will need to maintain above this level.

We can come up with general upside targets, as [c] appears complete. The continuous contract measures 15.45, while the November contract only measures 14.51.

This gives targets of 80.50 and 79.56 respectively. Calculations were based on the 65.05 L of [c]. Whenever [e] finishes, we will want use that price for measurement purposes. This will more than likely give higher targets.

The cycle didn't disappoint. Perhaps the next cycle low will determine the end of [e]? This is scheduled to come in 10 trading days from Friday, or October 16.

Bottom line - we are inching closer to entering the next phase of this market. Nobody will be more happy to see that than me. Correctives can drive a person mad - myself included.

Everything appears to be setup. Lets hope for follow through.

All prices basis continuous contract unless noted.

DOLLAR INDEX
The bucky finished relatively flat on the week.

I interpret structure to be in minuette (iv) of minute [iii] of intermediate (C) of primary [B]. My alternate count has primary [B] completing at the 76.045 L.

It appears that (iv) may have completed at the 77.735 H. It is unclear with all the chop and slop of the corrective waves.

Should this be incorrect, price can not trade through the 78.085 level. This would enter wave (i) territory, thus negating the current count.

This sure has channeled like crap the last couple of months. Price acts like it has yet to go through its minor degree wave 4.

I would love to be bullish this market, but I just can't get a clean impulse off the lows. There is 4-1 overlap right out of the gate. Perhaps it's a "cheater" as these do occasional happen.

Friday is setup for a decent KoolsTools cycle peak.

As pointed out last week, there is huge RSI divergence.

Bottom line - I'm still cautiously bearish this market.

All prices basis continuous contract.

GOLD
The gold market rebounded this past week, perhaps being the beneficiary of a flight from equities.

Nothing has changed with my current view of gold. Minute [v] of minor C of intermediate (B) is where I have structure.

Although not shown on the chart, my alternate would be that we finished minute [v] at the 1025.80 H. There is also the remote chance that we finished [i] at the 1025.80 H.

I believe that minute [iv] completed at the 985.50 L. It's a very nice ABC corrective. If this is correct, it appears that we may have put in minuette waves (i) and (ii) of [v].

Based on structure thus far, I'm not expecting price to make it to the triangle target at 1076.80. It's certainly possible that it does, however, its going to take a mighty [v] to get there.

We narrowly maintained channel support on a close basis. This should not be an issue, assuming the count is right.

This is a potential concern of mine. Sure looks like a double headed monster to me.

Should this fairly nice looking H/S play out, it measures down to the 940's. This is suggestive of a short-term top being in place. Not exactly what I'm looking for at this stage - hence the concern.

The cycle this past week played out as I thought it might. Whether it was an inversion or just a plain failure, it worked out. No cycles that I can see for this coming week.

Bottom line - I remain cautiously near-term bullish. Should we take out the 985.50 L, I will assume that two headed monster is in play.

All prices basis December contract.