Weekend Update - #2

30 YR BONDS
The 30 Yr failed its retest of the 50 sma, which resulted in nice downside price action for the week.

The 50% retracement level of the move off the 111-23 L, which I have labeled (X)?, supported price again. I believe this level gives way rather soon.

Equality comes in at 114-16. The minimum downside objective is 116-26.

My guess is that price wants to test the 114-26 pivot. The 78.6% retracement level is in the same area.

The bigger picture still remains unclear to me. If the 30 YR did put in an intermediate (X) wave at the 123-25 H, this would mean there is another (A)(B)(C) that should play out to the downside.

Bottom line - I still expect to see another 5 waves down of minor degree, at minimum. We will reassess at that point.

CRUDE OIL
The crude market continues with its corrective off the October 21 H. We have spent 12 trading days in this choppy sideways pattern.

Until structure suggests otherwise, I will continue to assume that we finished a minute degree wave [i] at the 81.99 H.

Friday's price action gave us a decisive close under the 20 sma. If we go back and retest the 20 sma with a failure, look for price to try and find its way back to the 50 sma, which is currently at 73.78 and rising.

I will reiterate from last weekend's update, this move off the 81.99 H in no way appears impulsive. This is suggestive of higher price.

The retracement levels of minute [i] (or whatever it turns out to be) are on the chart.

We are due a minor KoolsTools cycle low Wednesday.

Prices basis continuous contract.

DOLLAR INDEX
The greenback had a huge spike higher Tuesday, before spending the rest of the week retracing the move off the 75.085 L.

It appears that early morning spike was a "thrust" out of a (iv)th wave triangle. If correct, the 77.50 H completed a 5 wave structure that would be labeled minute [i].

The ensuing retracement would be the wave [ii] retracement. It is unclear if [ii] has finished or not. It has retraced 78.6% thus far, a perfect wave retracement in my opinion.

Notice that RSI has failed to breakout of the 50% level once again. This has become the rock of Gibraltar.

Also notice that price could not successfully close the 50 sma.

Both of these appear to be setup to give way when we get our next 5 waves up.

The 75.085 L is a critical level for this assessment. Should we trade through that price, we obviously have something wrong.

Prices basis combined contract.

GOLD
The gold market had hard upside price action this past week.

I stated last week that I was suspicious that minute [v] had in fact completed at the 1072 H. Those suspicions were confirmed with price action.

My best guess is that minute [iii] actually finished at the 1072 H, though I have it labeled as a minuette degree on the chart. It really doesn't matter, as this leg should finish off structure out of the triangle.

It appears that we should have one more small subdivision higher, though it certainly may be complete.

Once we can count a 5 wave move down, that will be our confirming evidence that intermediate (B) is finished.

Bottom line - it appears we are very near an intermediate degree top. Once in place, structure suggests that we should see price trace out an intermediate degree (C) leg down.

This should take price down to the price extreme of (A) around 700, assuming my interpretation is correct.

Price basis December contract.