Jan 2, 2019

Long term - update

Happy New Year!!!!

I wish you successful new year and good luck trading in 2019, I think we will need it:)

The current view for the next 6 months:
- Stocks - intermediate term low expected and multi month rally.
- Bonds - multi month corrective move higher.
- USD - another leg higher to finish corrective move which begun in Feb.2018.
- Precious metals/miners - 4 year cycle low in Q2 and the begin of nice rally higher.
- Crude Oil - corrective wave B higher in the next months.

I think we have the expected 4 year cycle high and a big correction is running. Next we should see an intermediate term low in January and multi month rally. When it is over another scary decline for 4 year cycle low in late 2019 or Q1.2020.
Alternate we have shorter 4 year cycles(both high-to-high and bottom-to-bottom) and the high was in January 2018 followed by a correction roughly one year for 4 year cycle low in the next few weeks.

I thought we have big sideway pattern with another zig-zag higher to follow, but with a quick plunge for two months we have bigger A-B-C from the top and 2 year cycle low. In the next months bonds should move higher. Watch RSI it should reach the trend line.

10 year yield - the move from the low looks like finished A-B-C and in the next months they should drop lower. RSI - double divergence and broken trend line, the move up should be over.

Long term USD made 16 cycle high the end of 2016 and should move lower in the next several years.

Intermediate term we have counter trend moves and such is running at the moment. USD finished the impulse most likely short wave B and C is running.

JPY after 2 year cycle high and decline, now we should see 4 year cycle low in 2019 followed by strong rally for 8 year cycle high in 2020. It has very high correlation with Gold and this are the same cycles.

USD/JPY - I think we have shorter 4 year cycle and I have adjusted the yearly cycles. If the count is right we should see a low in a few weeks and final move higher. EW pattern similar like gold miners - wave c to finish wave B flat correction or something more complex for B like triangle. We will know when we see the decline and the low in 2020.

No surprises - we saw a decline and intermediate term low earlier in September... since then choppy move up. I doubt this is important low. I think we will see one more decline next year for important 4 year cycle low. Currently I am watching the month of May as possible bottom, but I will not be surprised if the bottom is "stretched" April-June - not synchronized bottoms for gold miners/gold/silver like 2015/2016. The pattern is taking shape and I this should be a nice trading opportunity - 4 year cycle low followed by a strong rally into Q1.2020 for 8 year cycle high.

GOLD - the expected decline was very fast and made a low in August earlier as expected this is the "surprise". I think gold should turn lower for the final decline and 4 year cycle low.

SILVER - last time I wrote that is already too late in the cycle for a rally and we saw a decline. Now I think it is too early for an important low(4 year cycle low). The first 2 year cycle was shorter 19 months so the next one should have at least the average length 22 months which is another 5 months or May 2019.

MINERS - the obvious outcome should be strong wave C(green) like the first half of 2016. The bearish case is wave b/B for much complex wave B(red) or a triangle(yellow). In both cases this is a good trading opportunity.

Both moved in the expected direction, but really crazy moves... I do not think you can forecast something like that before you see it developing.

Crude Oil - important high on time hitting the trend line(see below) and relentless decline without a pause. Next we should see a retracement for wave B and one more leg lower.

Alternate cycle view with Benner cycles 11-10-7 years explaining the irregular long cycles and relative regular 3-4 year cycle. Most EW guys are counting wave 3-4 and 5 has begun. I think we have huge A-B-C and now corrective a-b-c for X is running. Another zig-zag lower should finish the secular bear market. This is arithmetic scale on logarithmic scale the second A-B-C is equally big like the first one.

Natgas - I was expecting something like this(all previous important highs were sharp moves higher), but next year not now. We need one more up and down for impulse to confirm a major top.


  1. Thanks for all the hard work Krasi . Great charts - especially crude. Sub $20 oil again would presumably tie in with the big bear market in stocks.

  2. I guess we just had USDJPY low and gold high...

    1. USD/JPY I was thinking the bottom of wave 3, but with this flash crash... can not be sure. Looking RSI and the waves test of the low will look better. Maybe lower low below the spike is not needed, something lower will do the job.
      I see for the first time flash crash in major currency pair.... I have to adjust the chart above - either the triangle or c is running already.

      Gold - it is possible to count it as a top. Possible a-b-c and RSI looks like two legs higher.

  3. Happy new year Krasi! Good luck to you too, many thx for the updates, we need all the luck fate can bring (and rigor and analysis too)
    Regarding the sp500, are we facing triangle or larger if/C ? Thx

    1. The plan is this is wave A with B higher to follow. Given the extremes we saw the probability that this is wave A of a triangle is low(triangles burn time and do not push to extreme fear).
      The alternate scenario is the correction begun in Jan.2018 and this is wave C.

  4. Krasi, wish you a very Happy New Year! I am a novice trying to learn from your charts and weekly posts. Just would like to thank you immensely for the regular postings and your responses to all the questions and comments. I have learned a lot from it during the past one year. Благодаря!

  5. The crude oil is already going to 57 ?
    Or is one last minimum to 39?

    1. Difficult to say - at the moment there is two legs higher with the same size.
      If it holds above 47,5 continuation higher for impulse is more likely.
      If it moves below this level overlapping corrective waves.