Wednesday, February 25, 2009

Stocks, Gold, Bonds & Oil


This is my 60 minute DJIA chart. Two channels are drawn, the long channel is the entire five wave decline in progress and the shorter channel is the small wave 4 that seems to be temporarily in control. We all know what should come next. The end of the wave 4 consolidation and a no-mistake-about-it wave 5 decline.


If anyone saw Bob Prechter today on Bloomberg, you know he has turned negative on Gold. This view is confirmed by my Cycles and EW charts below.


There are two liquid ETF's that are useful for trading Bonds, TLT for being long bonds (short interest rates) and TBT for being short bonds (long interest rates). Below are my cycle and EW charts for TBT, suggesting bonds are heading lower in price and yields are headed higher.


I now like to trade Oil with USO, an ETF tied to the price of Oil and not to the price of a basket of oil stocks (as are DIG and DUG).

120 minute


Two different time frames, multiple time frames offer additional dimensions of information that contribute perspective to the analysis at hand. In this case, the Daily chart shows five waves down in a completed wave 3 and now targets a wave 4 between 40-45. Also, please note the fresh BUY signal on the Blue Wave trend chart.

The 120 minute chart on top of the Daily chart is showing the move up in Wave 4 already in progress, initially targeting the low 30's.



Anonymous said...

Hi Allan,

Have you ever thought of simply removing the "comments feature" altogether? After all, so few of us ever add anything intellignt or inspiring to your work? Warmest regards, Joe/NYC

Allan said...

Joe, The name "AllAllan" comes from my years of participation on numerous stock forums, all the way back to the Hypotheticals board at Prodigy in the late 1980's and/or early 1990's. Then I backed off of public participation because I wasn't interested in arguing or defending my ideas with others. Thus, this blog is all Allan's ideas, for better or for worse. Only now I encourage others to share their own views, because we more or less don't argue with each other.....except for the occasional moronic rant which we all recognize for what it is and ignore. So, I've kind of have come full circle, but it would be too confusing to rename the blog.

Anonymous said...

I agree with that. Why argue your point of view endlessly. You state it and that is it. The market will prove your view wrong or right and that is all that matters in the end.

I agree with this count. The rally off the low looks like an a-b-c correction of some sort.
Likely we are in 4 of intermediate 5. A 5 = 1 will put us just below the low of this, and that could be it. Or the DJIA could continue to grind lower the next couple of weeks. I still like my 6800 to 7187 target as being the end of Primary 1. If the bond market starts to crack, I'll relook at that.

Precther made a lot of sense today, indicating a concern the market is oversold. It is trading that way. We have had a lot of bad news and it really has not gone down a lot the past 2 or 3 months.

I wish Precther would have talked in more detail about his long-term count. All he said was the market was going to fall the next 2 years.


Anonymous said...

Actually, relooking at that (I haven't been following the market much this week), it looks like we are in 4 of 3 of intermediate 5 of primary 1.

That makes it more likely we'll grind lower the next 2 to 3 weeks. That makes sense because I have an 18 week cycle low that is due after the middle of March.


Martin said...


Thanks for your blog, I really enjoy reading. I don't comment much as I am usually happy to read and learn.

I am a bit confused with your wave count, and the imminent wave 5. I am thinking we are about to go into wave 5 of 3 of 5, with more downside to come in the intermediate term when we get to wave 5 of 5.

But I was wondering if this is what you are saying. I am just not clear on your bigger picture though I have been reading back through recent posts. Hope you can clear me up on where you think we are.

Mike said...


"Have you ever thought of simply removing the "comments feature" altogether?"

You're kidding...right?

I'd still be in the Dark Ages if it weren't for an interchange of ideas here....and Comments section is a focal point for that.

Let's not stifle growth here...:)

btw....USO and UCO...both in the 6 point yesterday. Would have expected at least 8.5 from UCO seeing that it's a 2:1 vehicle.


Anonymous said...

USO is still in downtrend mode on Market Club. You still trading it to the upside?

Anonymous said...

Didn't USO make a new three period high yesterday (Thursday) and thus become a buy on the daily for Market Club?


Anonymous said...

Daily not weekly! The trend is weekly (or monthly)