Weekend Update #2

30 YR BONDS
The bond market reversed late in the week on increasing volume.

Price rejected off the 200 sma before finding support at the 50 sma.

It is unclear to me if the move off the 114-26 L should be counted as a 5 or 3. It sure looks like a nice zigzag to me.

If it's a 5, like I show on the chart, there is 4-1 overlap.

My best guess at this point is that price is tracing an intermediate (X) wave. It may or may not have completed at the 123-25 H.

All prices basis combined contract.

CRUDE
The crude market continued higher this past week as expected.

My interpretation of the crude structure remains the same. I have price tracing minuette (c) of minute [d] in a minor B triangle of intermediate (B). My alternate view is that this is a minute [iv] triangle.

Price ran into the upper boundary of the corrective channel and was initially repelled, but finished Friday's trade closing above it. This also closes price above the daily 50 sma.

I show minuette (a) completing at the 71.39 H, however, it is possible that it actually finished at the 71.97 H.

In Thursday's update I mentioned some reservations I had with this [d] leg structure (read that post for specifics). Triangle legs can be difficult to discern, and generally are.

I'm not real concerned with exactly how the internal structure traces out. Just be aware that this wave could end at any time.

Should price trade through the 75.89 H or the 61.38 L, this would invalidate the triangle view

We are scheduled for a nice KoolsTools cycle peak on Friday. The last 3 L-L's have actually given the next low.

Bottom line - I still expect price to make its way higher, finishing off this leg.

All prices basis November contract unless noted.

DOLLAR INDEX
The greenback made fresh lows on the week, maintaining its leading role as the worlds largest supply of toilet paper.

My interpretation has structure completing minute [iii] of minor 5 of intermediate (C) of primary [B] at the 75.68 L. My alternate view is that low finished minute [v], thus primary [B].

Should [iii] be complete, then we should be in the beginning stages of [iv]. Any trade through the 77.795 L, the price extreme of [i], will suggest that perhaps it was wave [v] that finished at the 75.68 L.

The move off that low certainly appears corrective in nature.

Bottom line - I maintain my near-term bearish stance. If my assessment is correct, we are getting closer to a turning point, however, were not quite there yet.

All prices basis continuous contract.

GOLD
The gold market shot higher this past week on heavy volume reaching all-time highs.

My interpretation has structure in minute [v] of minor C of intermediate (B). This is actually a bearish view. The bullish alternate view has structure in minor 3 of intermediate (3) up to god knows how high.

Notice how we went from one side of the channel to the other, finding resistance on the upper boundary and previous high print. There were also plenty of fibo relationships there as well, almost assuring us of at least a pause.

It appears that minuette (iii) completed at the 1062.70 record high. If correct, we should currently be tracing (iv). I have placed wave (iii) retracement levels on the chart.

(ii) was a sharp zigzag, therefore, suggesting that (iv) should be relatively flat and possibly complex.

I mentioned last week that I thought price may not be able to reach its triangle target of 1076.80, which by the way, is right in the area of where [v] = [i] - [iii] Obviously, based on price action thus far, it could easily attain that level - should that be in the cards.

If (iv) has traced its low, which is doubtful, then (v) = 61.8% of (i) - (iii) at 1092.30. The 426.6% projection of (i) sits at 1092.80.

Should this retrace get out of hand, the price extreme of (i) = 1011. The line in the sand level.

There was a H-H cycle that came in on Friday based on the 6/3 and 8/6 dates. This suggests that we should see some downside pressure, fitting right in with structure.

Bottom line - I expect to see an additional push higher once this retrace is complete.

All prices basis December contract.