Weekend Update #2

30 YR BONDS
The bond complex had hard downside price action on Friday, erasing all of the gains from early in the week.

Price broke and closed over critical resistance on Wednesday. This eliminates the possibility of any triangle, at least based on the continuous contract.

Notice that price was repelled at the 78.6% projection of minor A, as well as the 38.2% retracement of the entire move off the 138'1/32 H.

One of the problems I have with this witch, is I do not know what the long-term count is. Based on the data I have (only 10 years), I suspect that the intermediate degree correction (EWI has this degree labeling) we completed at the 110'14/32 L was a primary [A] wave. This of course is a guess.

Anybody out there that has a LT count - please chime in.

Here is the combined contract. Notice that the triangle is still in play.

Also, price has not taken out the (A) L at 123'10. This leaves the possibility that the alternate count may be in play.

Bottom line - I'm not sure what's going on in this market. Near-term it appears that price put in a reversal late last week and should see some downside pressure.

CRUDE
The crude market sold hard the first part of the week before stabilizing.

Price took out the minuette (x) wave low on the near month (October) calling into question my preferred double zigzag count for minute [b].

The problem is that both the combined and continuous contract failed to follow - so far.

As mentioned previously, I DO NOT believe structure finished in an ending diagonal. An ending expanding diagonal? Nope.

I have to admit though, price certainly "looks" like it wants lower on the daily. The 1 bar projection (KoolsTools) says it wants 64.88 (basis continuous contract).

From a cycle standpoint, the low at minute [a] and minuette (b) gave the low at minuette (x). The (b) and (x) wave lows ended Friday. Will this be another low?

If your bullish this market, you better hope so. We have completed two sets of 5's down. We get another one and that equals an impulse. Telling us that, at minimum, we see another 5 waves of minuette degree.

Drilling down on our chart, I can make a case for price reversing here. We do have some channel support and RSI is certainly diverging. If that is the case, it needs to start higher right now.

First objective would be to break the channel mid-line and take out the 68.78 H in impulsive fashion. The 69.40 H would be next (basis October contract).

DOLLAR INDEX
The dollar chopped around for the week, ending basically where it started.

It continues to support on the lower boundary line. I still have a bullish interpretation on the chart of completing intermediate (C) at the 77.52 L.

For how long is the question? Probably not much longer, as I suspect price breaks lower.

Bottom line - I will be pleasantly surprised if the dollar gathers itself here and pushes higher. My guess is that (C) has not finished. Lets see what next week brings.

All prices basis continuous contract.

GOLD
As posted Thursday, it appears that the gold market has a completed triangle and in the process of thrusting higher.

It broke free of several channels and closed above some pivots. It appears to be in the early stages of this advance, which I believe to be a minor C wave of intermediate (B).

If this is correct, then we should see new all-time highs.

The triangle target is 1076.80. C = A at 1248.40, while C = 61.8% of A at 1127.60. The first objective will be to take out the 1015 level.

I would have liked an opportunity to get long at a channel backtest, but it does not appear that will happen. I will look for an entry this coming week.

With so many of the markets showing uncertainty to structure and direction, its nice to have one that appears to have a defined tradable structure.

All prices basis December contract.

Weekend Update - Grains

CORN
The corn market continued its downtrend this week.

Price took out the 312 L on Thursday and had a decisive close below it on Friday. This signals that primary [4] is indeed complete at the 373 H.

It appears that minor 1 and 2 are finished and 3 is underway. We should see price continue to accelerate as 3 of (3) hits its stride.

Notice that price moved back inside the channel after hanging around the upper boundary last week.

I am still looking for price to find its way down to the 270's. The minimum primary objective is 278.125, which is where [5] = the 61.8% of [1] - [3].

Other targets include 279, which is where (3) = (1). 3 = 1 at 273. So, there is nice confluence in that area.

Notice that volume has been declining since [3] completed. This is generally what happens in 5ths. RSI also looks like it will give us a positive divergence on this leg. Another 5th wave signature.

This coming week should continue to see price weakness. I would like to see price action make its way to the mid-channel line, where conveniently, structure may finish its multi-year correction.

All prices basis continuous contract.

SOYBEANS
The bean market reversed course and sold off the entire week.

It appears that we finished primary [A] at the 1040 H. If this is correct, we should be tracing [B], which would be followed by the final [C] of a double zigzag.

Price should maintain above the [X] wave low of 746.25. The 61.8% retracement sits at 858.50, which is conveniently near the (4)th of lessor degree.

Once [B] completes, targets will be 1263.75, where [Y] = [W] and 1066.125, where [Y] = 61.8% of [W]. We will also be able to get a projection off of [A].

The structure off the 1040 H appears to be taking the form of a zigzag, which would make sense, however, it's to early to make that determination.

All prices basis continuous contract.

WHEAT
The wheat market, like the rest of the grains, had hard downside price action this past week.

Price broke and closed under the 486 L. This suggests that intermediate (2) has completed.

It also appears that minor 1 and 2 are complete and 3 has started in earnest. If this assessment is correct, price action to the downside should accelerate as 3 of (3) kicks in.

We should attain our minimum primary objective of 465.75 in short order. This is 61.8% of [1] - [3]. [5] = [1] - [3] at 391.50. V = 38.2% of I - III at 385.125. There are several sets of fib numbers in this area.

Our nearest intermediate degree target is (3) = (1) at 417.50.

Like corn, volume has started to diminish on this leg. Again, this is suggestive of a 5th wave.

All prices continuous contract.

Gold

I wanted to give you an update on gold.

It appears that indeed gold did trace a triangle and has decisively broken free over the last two days.

The "thrust" took a couple of days to get in gear, but looks to be in full swing now. Price took out and closed the 993.60 pivot. Next up is the 1015 H, or minor A.

The triangle measures to 1076.80. C = A at 1248.40, while C = 61.8% of A at 1127.60.

It is early in this leg. There should be new all-time highs attained if price reaches its target. I will look for a backtest of the upper boundary line for a potential long setup.

All prices basis December.

Crude

Crude put in another small bodied candle today. Range was $1.74 on below average volume.

If your bullish this market, today was almost a victory. We maintained above yesterdays price low of 67.05, yet structure does not appear to be suggesting that the decline is finished.

It looks like we finished off a [C] leg of a corrective this morning. We have not witnessed impulsive price action thus far. My guess is that 67.05 breaks.

Perhaps price wants the daily projection at 64.88 (basis continuous contract). Perhaps it wants a lot lower. It's unclear to me at the moment.

If this was an ending diagonal, then that would suggest that we should see the 61.11 L in short order. The ED scenario is my backup to my 4th alternate count. In other words, I ain't buying it folks.

Let's see how price action treats us tomorrow. If this witch can hold the channel, maybe we could see some upside potential. As stated earlier, I have serious doubts as to whether 67.05 can hold.

ES

Another pretty slow action day in the equity markets. Range was 13 handles on extremely light volume.

It appears that minuette wave (iv) is still in process. We clearly had a 5-3-5 structure off the 991 L. I have labeled this as a sub-minuette w wave.

Price action off the 1004.25 H (nailed by Koolio) was choppy and just didn't feel or look like a 5. I believe it is an x wave. This means that (iv) will be a combination ( two separate correctives).

It's unclear if the second sub-minuette degree abc is complete. My guess is that it has more to go, but it's close. Notice that we do not have that classic RSI divergence as of yet.

y = w at 1004.50. y = 161.8% of w at 1012.75. I have the retracement levels (black) on the chart.

There is the chance that the leg down to the 991.25 L was indeed a 5. If so, this could complete (v), thus finishing minute [i]. I don't think this is the case, but be aware of that possibility.

Once we finish this y leg, it will gives us two sets of small 5's. If we go on and trace a third 5, that will increase the odds that [i] completed. This might fit in with the KoolsTools timing cycles, which called for a low based on the 8/25 and 8/28 daily's.

Regardless of the retrace, I believe structure suggests that lower prices are ahead of us. It doesn't necessarily mean that the bear rally is exhausted, though it certainly could be.

As previously stated, I need to see the channel from the March lows taken out before I can join that camp.

I will patiently await a setup that allows me to put on a short line via puts. I'm hoping this pig has enough in it to get up to the 1012-1014ish area at minimum. I would like to see the base channel hold the retrace if possible.

Line in the sand for a beashish case would be the 1027.75 H imo.