All Star Market Timing

The Weekly JDV Market Timer - November 30, 2008

Depression Beater Portfolio: - See below for updates

(This portfolio is just a sample of my own portfolio - no recommendation to others is implied or intended)

11/30/08 (Commentary for Sunday evening) - The market rallied into the  Turning Point Cluster of 11/29 & 12/1 and appeared to complete a EW a-b-c corrective pattern off the 11/21 low -looking for a turn down on Monday that should at minimum retest the recent lows. The 5-day MA of CBOE put/call ratio is at the lowest level since the 11/4 high and the Bollinger OEX PVI ratio came in at a very COMPLACENT .34 on Friday. The Option Premium Ratio recorded another large DIVERGENT DECLINE implying weakness on Monday and the TRIN5 moved down to 3.67 arguing a stock market reversal is at hand. The PM complex is also close to a short-term high - should see a pullback here that should be bought. There is a potential for an explosive up move in gold during the settlement of the December contact - it will pay to have some exposure to physical gold in the near term.  We're looking for a broad market decline on Monday and we will be watching the pullback in our selected gold stocks very closely.       

 

Stock Markets:    The projected target low of SPX=650 is still possible into mid-December - but we got to SPX=740 on 11/20  and there were signs of bullish divergence - however, we are expecting at least one more price low by mid-December.  Taking out the 11/4 high on the SPX negates some bearish EW wave counts for the short-term but only for the short-term. SPX=650 will be seen at some point next year if not by mid-December.

 

PM Complex:  Gold made its low on 10/27 and retested it on 11/23 - Gold appears to be coiling for a huge move up shortly. Settlement concerns on the Comex December contract could be a catalyst at some point. Use weakness this week to add to core gold and PM stock positions. The large 15% premium on CEF suggests a short-term pullback sometime this week. 

 

THIS WEEK INCLUDES IMPORTANT TURNING POINT WINDOWS IN STOCKS – read new comments below in blue.

TURNING POINT WINDOWS:

·         Gold/Silver–  Gold and silver are coiling for a large move up - use weakness this week to add to gold and PM stock positions.  Strong physical gold demand argues for a potential settlement problem in the December Comex  Gold Futures contract at some point  - the disconnect between the paper and physical markets may be heading for a collision. 

·         Stocks – The Turning Point Cluster of 11/29 & 12/1 should turn the SPX down for at least a retest of the 11/21 lows and maybe more  - there is still the chance of making one more price low by mid-December.  More concerned at this point in selecting stocks for the Large Wave B rally that will kick in soon than in catching the Crash Wave Low

·         Crude Oil – Crude oil trying to put in a bottom here - last week's price action was an inside week  - $40 by mid-December is possible but we are losing downside momentum - a resumption of the Crash Wave to lower targets would be required t0 see $40 soon. The situation in Pakistan - the current theater of jihad operations could turn explosive soon. Natural gas is base building - looks potentially explosive. 

·         Grains – Looking very weak here.

·         Bonds – Bonds are close to finishing a minimal 5-wave up pattern on the daily chart - could get a bounce if the market reverses tomorrow. Let this move run its course before taking a bearish posture again. 

·         Currencies -  The US Dollar may have finished a wave 4 correction and is turning up - the Crash Wave may have one last bark left.     

TURNING POINT DAYS:

The next Turning Point Cluster is 11/29 & 12/1  - looking for the SPX to reverse down here and maybe gold as well  - a reversal on Monday could set the stage for the resumption of the Crash Wave to lower lows or at least a retest of the 11/21 lows.

Depression Beater Portfolio: New Updates

(This portfolio is just a sample of my own portfolio - no recommendation to others is implied or intended)

 

Holdings:

 

1) 100 shares of SDS at an average price of 103.2249 on 11/18 - roughly 15% of portfolio - still 85% in cash.

 

2) 1000 shrs of SLW at $2.73 on 11/24

 

Strategy: Looking for the market to pullback to retest the 11/21 lows. Favor adding to PM stocks, buying natural gas stocks SNG & CHK and adding integrated oils like COP.

 

Working orders: New updates

 

1) Change GTC order of 5000 shrs AUY @$4.00 to 1000 shrs at $4.50

2) Change 5000 shrs of HL @$1.50 to 2000 shrs at $1.50

3) Change 5000 shrs of SLW @ $1.70 to 1000 shrs @$2.90

4) Change 5000 shrs of SNG @$0.90 to 2000 shrs at @1.20

5) Add new order - Buy 200 shrs CHK at $16.00

The Daily JDV Market Timer - November 27, 2008

Depression Beater Portfolio: -

 

PORTFOLIO MOVES TODAY: BOUGHT 1000 shrs SLW at 2.73

 

Holding:

 

1) 100 shares of SDS at an average price of 103.2249 on 11/18 - roughly 15% of portfolio - still 85% in cash.

 

2) 1000 shrs of SLW at 2.73

 

Changed prices of GTC orders for gold stocks on 11/25:

Working orders: Add Good-Till-Canceled (GTC) under the market orders for 5000 shrs of AUY @ 2.43(change to 4.00),5000 shrs of HL @ .70(change to 1.50),  & 5000 shrs of SNG at .70(change to 0.90)  - these stocks will double or triple when the Crash Wave runs its course into mid-December(the bottom in the PM complex looks to have been made on 10/27).

 

 

11/27/08 (Commentary for Thursday)  The SPX did not pull back as anticipated on Wednesday. Instead, the market put in shallow Wave B retracement Tuesday on the 5 day 5 min chart and launched a "wedgy" looking Wave C on Wednesday that could be completing an EW a-b-c correction from 11/21. We've had three rally days in a row and a lot of traders are convinced that the low is in - maybe, but the Bearish Elliot Wave pattern that we are focused on will not be negated until we take out the highs on 11/4 - that action will speak volumes to us. We are in a POSITIVE SEASONALITY timeframe and Friday is usually one of the most bullish days of the year - however, SENTIMENT INDICATORS remain complacent and we have a MAJOR TURNING POINT DAY on Saturday - which should turn the market down no later than Monday. The HUI/XAU has made a huge run up from 11/13 as expected appears to be pulling back CORRECTIVELY - trying to buy selected gold stocks on dips - ONLY SENIOR GOLD STOCKS WITH POSITIVE CASH FLOW. We believe that gold made a major low on 10/27 and believe that Real M2 money upply figures are starting to show an increase from the huge reflationary effort from the government. Gold stocks like AEM, KGC and MFN have been excellent intra-day trading vehicles and should be watched closely.

 

• Gold -  Gold is correcting the large impulse wave made into last Monday from 11/13 - buy selected gold stocks on dips.  
• Stocks -  Friday has positive seasonality - but a MAJOR TURNING POINT DAY (11/29)and COMPLACENT SENTIMENT INDICATORS argues for a turn down no later than Monday.  Holding 100 shrs of the SDS ETF (2 X short SPX) in my Depression Beater Portfolio.  
• Silver- Pullback has been corrective. 
• Crude Oil - Nat Gas made an impulsive rally on Tuesday  - buy UNG on dips.
• Bonds -  Bonds look set to move higher in a 5th and final rally from the June low - Bond Bears be patient - your time will come soon. 
• Dollar -The dollar also needs another leg up to finish its 5-wave rally pattern - as long as the US Bond and Dollar Index have incomplete EW rally patterns - the Crash Wave still has potential of making lower lows.   

Sentiment Highlights:

• The bullish sentiment on gold declined from 34% on 10/10 to 9.4% on 11/17 - a 6 month low - it's been hard to swim against the negative tide of the commodity board but an important low could be close at hand - GOLD MADE AN IMPORTANT LOW ON 10/27 and RETESTED IT ON THE !!/13 FULL MOON.

Depression Beater Portfolio -  started to track a new portfolio- it will contain cash, GLD, gold ETFs, UNG, and bull or bear ETF funds:

• Fund allocation - Holding a 15% allocation to SDS (2 X S&P500 Bear ETF) at an average price of 103.2249 from 11/18 with a stop and 1000 shrs of SLW at $2.73 from 11/26 - working GTC below the market orders for AUY, HL, and SNG as mentioned at the top.

The Daily JDV Market TImer - November 25, 2008

Depression Beater Portfolio: -

 

NO PORTFOLIO MOVES TODAY:

 

Holding: 100 shares of SDS at an average price of 103.2249 on 11/18 - roughly 15% of portfolio - still 85% in cash.

 

Changed prices of GTC orders for gold stocks on 11/25:

Working orders: Add Good-Till-Canceled (GTC) under the market orders for 5000 shrs of AUY @ 2.43(change to 4.00),5000 shrs of HL @ .70(change to 1.50), 5000 shrs of SLW @1.70(change to 2.30) & 5000 shrs of SNG at .70(change to 0.90)  - these stocks will double or triple when the Crash Wave runs its course into mid-December(the bottom in the PM complex looks to have been made on 10/27).

 

 

 

11/25/08 (Commentary for Tuesday)  The SPX started a pullback today and by the look of the COMPLACENT SENTIMENT INDICATORS: Bollinger OEX PVI at .33, the Option Premium Ratio at 2.55 - same value as on 10/13 before a 900 hundred point decline and the CBOE ALL INDEX put/call ratio < 1 (very rare) - this market needs at least a B-wave test of the 11/21 low. The HUI/XAU appears to be pulling back CORRECTIVELY - trying to buy selected gold stocks on dips - ONLY SENIOR GOLD STOCKS WITH POSITIVE CASH FLOW.  Gold stocks like AEM, KGC and MFN have been excellent intra-day trading vehicles and should be watched closely.

 

• Gold -  Gold and the HUI/XAU are pulling back correctively - should she see a small C-wave down tomorrow   
• Stocks -  Looking for a pullback tomorrow in the SPX - OPTION INDICATORS ARE COMPLACENT HERE - one more new low is likely for the Crash Wave.   Holding 100 shrs of the SDS ETF (2 X short SPX) in my Depression Beater Portfolio.  
• Silver- Pullback has been corrective. 
• Crude Oil - 5-wave decline from yesterday and sideways consolodation say we're going lower - $40 oil be December still targeted.  Nat Gas tested lows again.
• Bonds -  Bonds look set to move higher in a 5th and final rally from the June low - Bond Bears be patient. 
• Dollar -The dollar also needs another leg up to finish its 5-wave rally pattern.   

Sentiment Highlights:

• The bullish sentiment on gold declined from 34% on 10/10 to 9.4% on 11/17 - a 6 month low - it's been hard to swim against the negative tide of the commodity board but an important low could be close at hand - GOLD MADE AN IMPORTANT LOW ON 10/27 and RETESTED IT ON THE !!/13 FULL MOON.

Depression Beater Portfolio -  started to track a new portfolio- it will contain cash, GLD, gold ETFs, UNG, and bull or bear ETF funds:

• Fund allocation - Holding a 15% allocation to SDS (2 X S&P500 Bear ETF) at an average price of 103.2249 from 11/18 with a stop - working GTC below the market orders for AUY, HL, SLW and SNG as mentioned at the top.

The Daily JDV Market Timer - November 24, 2008

Depression Beater Portfolio: -

 

Holding: 100 shares of SDS at an average price of 103.2249 on 11/18 - roughly 15% of portfolio - still 85% in cash.

 

Changing prices of GTC orders for gold stocks:

Working orders: Add Good-Till-Canceled (GTC) under the market orders for 5000 shrs of AUY @ 2.43(change to 4.00),5000 shrs of HL @ .70(change to 1.50), 5000 shrs of SLW @1.70(change to 2.30) & 5000 shrs of SNG at .70(change to 0.90)  - these stocks will double or triple when the Crash Wave runs its course into mid-December(the bottom in the PM complex looks to have been made on 10/27).

 

 

 

11/24/08 (Commentary for Monday)  The bailout of Citigroup said a lot to me - it is a reminder that the real estate market is still in a free fall - the lower the real estate market goes - the more bad debts on the balance sheet of Citigroup and the more bailout money is required - a vicious spiral. The manner that the SPX 5 min chart sub-divided up near the close on Friday augured for more rally today which is technically still part of the stock expiration window. Still most indices that we follow (NDX,SPX,RUT, DJIA ...) have traced out an EW 5-wave pattern from Friday's low (A Turning Point Day) - this implies at least a pullback tomorrow. A complacent recent on the Bollinger OEX PVI today (.54) also argues for a pullback as does a back-to-back Divergent Decline on the Option Premium Ratio. However, the Crash Wave has done a minimal 5 waves down on the Weekly SPX chart since October and a low is close. Still, both the US long bond and the Dollar Index look like they need one more leg higher to complete patterns on their daily charts - this argues for ONE MORE PRICE LOW in the SPX in the next few weeks.  The PM complex bottomed on 10/27 and retested the low on the 11/13 Full Moon - Gold and PM stocks held above their recent lows when the SPX took out its October lows on Thursday - bullish behavior - looking to buy Gold and Silver and even select PM stocks on dips - the strength in energy and gold today argue that the commodities are gearing for a big rebound rally and that the Crash Wave is near its end.  Gold stocks like AEM, KGC and MFN have been excellent intra-day trading vehicles and should be watched closely.

 

• Gold -  Tomorrow is a 1-Day Reversal Window from Starkey - if gold takes out Monday's high look for a reversal down - we'll be raising the prices on the under-the-market  GTC orders for AUY, HL, and SLW in Depression Beater Portfolio - very good risk/reward setup. We need to focus on the beaten down senior PM miners with POSITIVE CASH FLOW - need to avoid the NG situations at this time. NG is a great gold resource but is having trouble raising capital.  
• Stocks -  Looking for a pullback tomorrow in the SPX - one more new low is likely for the Crash Wave.   Holding 100 shrs of the SDS ETF (2 X short SPX) in my Depression Beater Portfolio.  
• Silver- Looking for pullback tomorrow. 
• Crude Oil - Rally today overdue - could have some legs - favor Natural Gas. 
• Bonds -  Bonds needs a 5th wave up to finish their 5-wave rally pattern - wait for next leg up before looking to short. 
• Dollar -The dollar also needs another leg up to finish its 5-wave rally pattern.   

Sentiment Highlights:

• The bullish sentiment on gold declined from 34% on 10/10 to 9.4% on 11/17 - a 6 month low - it's been hard to swim against the negative tide of the commodity board but an important low could be close at hand - GOLD MADE AN IMPORTANT LOW ON 10/27 and RETESTED IT ON THE !!/13 FULL MOON.

Depression Beater Portfolio -  started to track a new portfolio- it will contain cash, GLD, gold ETFs, UNG, and bull or bear ETF funds:

• Fund allocation - Holding a 15% allocation to SDS (2 X S&P500 Bear ETF) at an average price of 103.2249 from 11/18 with a stop - working GTC below the market orders for AUY, HL, SLW and SNG as mentioned at the top.

The Weekly JDV Market Timer - November 23, 2008

Depression Beater Portfolio: -

 

Holding: 100 shares of SDS at an average price of 103.2249 on 11/18 - roughly 15% of portfolio - still 85% in cash.

 

Strategy: Expecting a Crash Wave low in the next three weeks - need to be agile - got close to our SPX=650 target on Thursday and the weekly charts are showing a clear 5-wave down pattern. Looking for at least one more leg down.

 

Working orders: Add Good-Till-Canceled (GTC) under the market orders for 5000 shrs of AUY @ 2.43, 5000 shrs of HL @ .70, 5000 shrs of SLW @1.70 & 5000 shrs of SNG at .70  - these stocks will double or triple when the Crash Wave runs its course into mid-December - thanks to Trader Hunt for the Hidden Pivot Target price on AUY.

 

Strategy:  The 26% rally in the HUI/XAU on Friday was impressive - gold held above its 10/27 lows while the SPX took them out - this divergence is telegraphing the start of a large rally in the broad market in the next couple of weeks. Looking for a 3-wave pullback in AUY, HL, SLW and SNG that we will nibble at - probably at higher prices than we have placed GTC orders at - patience.

 

11/23/08 (Commentary for Sunday evening) - The broad market rallied on expiration Friday but the new 52 wk low list was heavy and the breath was not that good - perhaps more an artifact of expiration. More impressive, however, was the rally in gold which could be indicating that the Crash Wave should finish in the next couple of weeks. The most telling economic statistic last week was the announcement from Japan of a trade deficit in October (despite a 2/3 drop in the price of crude!) - the first one since 1980 - this confirms that the entire developed world (USA, Europe and Japan) is in the first  coincident recession since 1975. The fact that the SPX took out the 2002 lows on Thursday has big significance in Elliott Wave Grand Super Cycle theory - the entire 2002-2007 bull market in the SPX has been retraced and we are now confirmed to be in Wave {IV} down that should correct the entire bull market in the USA from the 1700s - or so the theory says .... we live in interesting times.

 

    The rally in the PMs and commodity stocks may be indicating that the non-stop de-leveraging selling in commodity stocks may be slowing down - an intermediate bottom in crude oil and natural gas may also be close at hand. The Bollinger OEX PVI declined but still remains in NEUTRAL territory at 1.43 - a much improved sentiment indicator than we've seen for some time. The Option Premium Ratio gave us a Small Divergent Decline on Friday which argues for weakness on Monday.  Natural Gas appears to be basing for a big move up when the Crash Wave makes its final lows. We're looking for a broad market decline on Monday and we will be watching the pullback in our selected gold stocks very closely.       

 

Stock Markets:    The projected target low of SPX=650 is still possible into mid-December - but we got to SPX=740 on Thursday  and there are signs of bullish divergence - however, we are expecting at least one more price low by mid-December.  We should then see a multi-month rally develop after the panic low is confirmed (12/15 according to the Bradley indicator) - years of bear market action lie ahead of us.   From a Fibonacci point of view – we are 34 years from the 1974 waterfall decline and 21 years from the crash of 1987 – dangerous relatives.

 

PM Complex:  The XAU crash patterns of 1998 and 1987 may not be applicable here in this historic Crash Wave - but the HUI/XAU did hold above their 10/27 lows as the SPX spiked below theirs - a sign of strength and ROCKETED higher on Friday.  Gold stocks should not be bought aggressively until we see an intermediate bottom confirmed in the the broad stock market but if we see a 3-wave corrective pullback in AUY, SLW or HL early next week - we may start to nibble.

 

THIS WEEK INCLUDES IMPORTANT TURNING POINT WINDOWS IN STOCKS – read new comments below in blue.

TURNING POINT WINDOWS:

·         Gold/Silver–  The bullish COTs, successful retest of the 10/27 lows and the basing action argued for the upside breakout seen on Friday  - if we get a three-wave pullback into Tuesday - we will start to nibble. Strong physical gold demand argues for a potential settlement problem in the nearest Comex  Gold Futures contract at some point  - the disconnect between the paper and physical markets may be heading for a collision. 

·         Stocks – Projected lows of SPX=650 and DJIA=5000 are possible going into mid-December but bullish divergence is showing up in gold and some other indicators  - still expecting at least one more price low in the next few weeks. More concerned at this point in selecting stocks for the Large Wave B rally that will kick in soon than in catching the Crash Wave Low

·         Crude Oil – Close to finishing a 5-wave down pattern from 11/3 on the daily - rally on Friday still looked corrective though - $40 by mid-December is possible. The situation in Pakistan - the current theater of jihad operations could turn explosive soon. Natural gas is base building - looks potentially explosive. 

·         Grains - Soybeans are finishing a 5-wave decline on the daily - the grains could see a bounce soon. 

·         Bonds– Long-dated US maturities are spiking here to all-time highs. Let this move run its course before taking a bearish posture again. 

·         Currencies -  The US Dollar appears to be ready to pull back after a wave 5 of 3 completed this week - this could give gold and oil a window to rally this week.     

TURNING POINT DAYS:

The next Turning Point is Tuesday, 11/25 - but there's a cluster a Fibonacci turning point days between now and early December  - a failed rally on Monday could set the stage for the resumption of the Crash Wave to lower lows.

The Daily JDV Market Timer - November 20, 2008

Depression Beater Portfolio: -

 

Holding: 100 shares of SDS at an average price of 103.2249 on 11/18 - roughly 15% of portfolio - still 85% in cash.

 

Working orders: Add Good-Till-Canceled (GTC) under the market orders for 5000 shrs of AUY @ 2.43, 5000 shrs of HL @ .70, 5000 shrs of SLW @1.70 & 5000 shrs of SNG at .70  - these stocks will double or triple when the Crash Wave runs its course into mid-December - thanks to Trader Hunt for the Hidden Pivot Target price on AUY.

 

 

 

11/20/08 (Commentary for Thursday)  We've lost 1000 DJIA points this week - clearly we are in Wave 3 of 5 of the Crash Wave and the market is moving down with an intensity that is surprising many. A Turning Point Day tomorrow on 11/21 allows for the possibility of some kind of bounce - SELL RALLIES.  At this point I would welcome another One Day Wonder that would allow us to add to short positions in the Depression Beater Portfolio. The all exchange put/call ratio posted another  high value of 1.21 but the Bollinger OEX PVI ratio came in at 1.64 less than a Buy Signal (> 2.00) which still shows COMPLACENCY. Gold appears to be building a base here as the COTs look very bullish - the PM stocks should follow the market down but when the Crash Wave bottoms, PM stocks should be the biggest winners on the following rally.  The Bradley indicator calls for a decline into mid-December and the potential ending point of the Crash Wave still looks like SPX=650 based on the monthly chart. Crude oil looks set to test $40 by mid-December - may not bottom until Crash Wave has totally run its course.  Gold stocks like AEM, KGC and MFN have been excellent intra-day trading vehicles and should be watched closely.

 

• Gold -  Gold is basing and holding above its 10/27 lows - placing under the market GTC orders for AUY, HL, and SLW in Depression Beater Portfolio - very good risk/reward setup. PM stocks should follow the Crash Wave lower.
• Stocks -  We lost 1000 DJIA points this week - we are clearly in Wave 3 of 5 of the Crash Wave  - if we get a bounce on the Turning Point Day tomorrow - use it to add to short positions.   Holding 100 shrs of the SDS ETF (2 X short SPX) in my Depression Beater Portfolio.  
• Silver- Silver got ht today but is still holding above the 10/27 lows. 
• Crude Oil - Crude oil keeps making new lows and looks destined to test $40 before year end - the plunge below $50 today really caused the integrated oil stocks to buckle as well. 
• Bonds -  Bonds getting a good flight to quality from the stock sell off - Long Bonds appear to be in a Wave 5 off the June low on the daily chart - hold off on bond shorts until the Crash Wave bottoms.  The bonds are the last great bubble to pop and should be close to the start of a mega-decline.  Investors need to take advantage of the Long Bond rally here and shift to shorter maturities.
• Dollar -The dollar is breaking to a new high - a Wave 5 of 3 - should go higher into mid-December as the Crash Wave runs its course.   

Sentiment Highlights:

• The bullish sentiment on gold declined from 34% on 10/10 to 9.4% on 11/17 - a 6 month low - it's been hard to swim against the negative tide of the commodity board but an important low could be close at hand.

Depression Beater Portfolio -  started to track a new portfolio- it will contain cash, GLD, gold ETFs, UNG, and bull or bear ETF funds:

• Fund allocation - Holding a 15% allocation to SDS (2 X S&P500 Bear ETF) at an average price of 103.2249 from 11/18 with a stop - working GTC below the market orders for AUY, HL, SLW and SNG as mentioned at the top.

The Daily JDV Market Timer - November 19, 2008

Depression Beater Portfolio: - Added 100 shares of SDS at an average price of 103.2249 on 11/18 - roughly 15% of portfolio - still 85% in cash.

 

Tomorrow: Add Good-Till-Cancelled (GTC) under the market orders for 5000 shrs of AUY @ 2.43, 5000 shrs of HL @ .70, 5000 shrs of SLW @1.70 & 5000 shrs of SNG at .70  - these stocks will double or triple when the Crash Wave runs its course into mid-December - thanks to Trader Hunt for the Hidden Pivot Target price on AUY.

 

 

 

11/19/08 (Commentary for Wednesday)  Several indices closed below the 10/27 lows indicating that Wave 3 of 5 down could be in force here. A Turning Point Day on 11/21 (Mc Hugh PHI day) allows for the possibility that today may have put in a short-term low that could lead to another sharp rally  before heading down in earnest.  At this point I would welcome another One Day Wonder that would allow us to add to short positions in the Depression Beater Portfolio. The all exchange put/call ratio reached a high value of 1.31 but the Bollinger OEX PVI ratio remained in a neutral range of 1.00 which still shows COMPACENCY. Gold appears to have finished an EW a-b-c zig-zag rally 11/13 and is turning down for another test of the 10/27 lows - the PM stocks should follow the market down.  The Bradley indicator calls for a decline into mid-December and the potential ending point of the Crash Wave still looks like SPX=650 based on the monthly chart. Crude oil looks set to testing $40 by mid-December - may not bottom until Crash Wave has totally run its course.  Gold stocks like AEM, KGC and MFN have been excellent intra-day trading vehicles and should be watched closely.

 

• Gold -  Gold finished an EW a-b-c zig-zag rally up from 11/13 and appears to be heading down to test the 10/27 lows - placing under the market GTC orders for AUY, HL, & SLW in Depression Beater Portfolio - very good risk/reward setup.
• Stocks -  Wave 3 of 5 of the Crash Wave may have be in force here - if we get a One Day Rally - use it to add to short positions.   Holding 100 shrs of the SDS ETF (2 X short SPX) in my Depression Beater Portfolio.  
• Silver- Silver appears to have finsished a corrective bounce from 11/13 and is heading down to test its 10/27 lows.  
• Crude Oil - Crude oil keeps making new lows and looks destined to test $40 before year end - however, a EW 5-wave decline pattern on the daily chart is emerging and we could see a bounce soon.
• Bonds -  Bonds getting a good flight to quality from the stock selloff - Long Bonds look to make a 5th wave high here - hold off on bond shorts until the Crash Wave bottoms.  The bonds are the last great bubble to pop and should closeto the start of a mega-decline.  Investors need to shorten maturities.
• Dollar -The dollar appears to be in a wave 4 of 3 correction - should go higher into mid-December as the Crash Wave runs its course   

Sentiment Highlights:

• The bullish sentiment on gold declined from 34% on 10/10 to 9.4% on 11/17 - a 6 month low - it's been hard to swim against the negative tide of the commodity board but an important low could be close at hand.

Depression Beater Portfolio -  started to track a new portfolio- it will contain cash, GLD, gold ETFs, UNG, and bull or bear ETF funds:

• Fund allocation - Holding a 15% allocation to SDS (2 X S&P500 Bear ETF) at an average price of 103.2249 from 11/18 with a stop - putting in GTC below the market orders for AUY, HL, SLW and SNG as mentioned at the top.

The Daily JDV Market Timer - November 18, 2008

11/18/08 (Commentary for Tuesday) The market is keeping us guessing here - there is a bullish possibility that we may have put in a B-wave low today and launched a C-wave up from a larger EW a-b-c pattern that started on 11/13 - the low volume declines on Friday and Monday and the big volume after the reversal late in the day today argue for that. However, market internals were terrible today and leadership was very thin to the upside. I'm still of the opinion that we will see lower lows into mid-December but it's not something that I will bet the farm on until I see a solid technical break of the 10/10 support levels.   The Bollinger OEX PVI indicator moved up from .95 to 1.03  - still neutral territory - but CBOE index option players traded almost as many calls as puts - a negative. McHugh has a PHI date on 11/21, so any move into that time period should be reversed.  Gold looks like its coiling for a move up and silver took out Friday's high.  The Bradley indicator calls for a decline into mid-December and the potential ending point of the Crash Wave still looks like SPX=650 based on the monthly chart. Crude oil looks set to testing $40 by mid-December - may not bottom until Crash Wave has totally run its course.  Gold stocks like AEM, KGC and MFN have been excellent intra-day trading vehicles and should be watched closely.  

• Gold -  Gold appears to be coiling here and held up despite the low inflation numbers  - the COTs are very bullish in gold and suggest that gold's downside is very limited here - gold has been in a trading range from 10/10 ... could see explosive upside action at some point. 
• Stocks - Late today may have been the start of a C-wave rally to finish off a EW a-b-c rally from 11/13 - we could attempt to test the high from 11/14 before turning down. Added a small position in the SDS ETF (2 X short SPX) in my Depression Beater Portfolio.  
• Silver- Silver took out Friday's highs - looking stronger than gold.  
• Crude Oil - Crude oil keeps making new lows and looks destined to test $40 before year end - however, a EW 5-wave decline pattern on the daily chart is emerging and we could see a bounce soon.
• Bonds -  Bonds showed some strength today but the pattern on the daily chart looks week.  The bonds are the last great bubble to pop and should be at the start of a mega-decline.  Investors need to shorten maturities.
• Dollar -The dollar appears to be in a wave 4 of 3 correction - should go higher into mid-December as the Crash Wave runs its course   

Sentiment Highlights:

• The bullish sentiment on gold declined from 34% on 10/10 to 9.4% on 11/17 - a 6 month low - it's been hard to swim against the negative tide of the commodity board but an important low could be close at hand.

Depression Beater Portfolio -  started to track a new portfolio- it will contain cash, GLD, gold ETFs, UNG, and bull or bear ETF funds:

• Fund allocation - Added a 15% allocation to SDS (2 X S&P500 Bear ETF) at an average price of 103.2249 with a stop - keeping 85% in cash.

Junior Mining Portfolio -  stocks that should be followed on a PM complex breakout - may not see a run until early 2009:

• SRLM ($0.12) - this company is in trouble - it suspended production today (9/15) at the Sunshine mine and is unable to obtain financing. This company failed its due diligence from Minco Silver and the merger has been scuttled. SRLM is having trouble raising capital and servicing its debts.  
• GCR.V ($0.09C) - believe this company is confirming a major Kambalda-style Ni/Cu + PGM discovery at its Langmuir project in Ontario - could be the discovery of the decade and a potential $B market cap.
• VIT.V ($0.17C) - new management - great properties in Nevada - good drilling results in Jan 07 - great drilling results released 12/11 & 4/10 to confirm Cove McCoy find.
• ICI.TO ($0.225C) - huge discovery in China - open pit mine an option - NEW DRILLING RESULTS AT DEPTH AND ALONG STRIKE announced on 10808! NEW SHAREHOLDER RIGHTS PLAN VALIDATES value.
• SNG (1.46) - this profitable Canadian natural gas company just announced what appears to be a SECOND major gas discovery off the coast of Trinidad - this company is a good long term hold in a rising natural gas market.

The Daily JDV Market Timer - November 17, 2008

11/17/08 (Commentary for Monday) The market is threatening to break down here in a Wave 3 of 5. We need a rally tomorrow to reverse the tide and negate some bearish Elliott Wave patterns. The Major Turning Point on Sunday may have peaked the rally from Thursday on Friday afternoon - we may have seen a truncated C-wave of an EW a-b-c zig-zag pattern end. The low volume decline on Friday and Monday does leave open the possibility of another rally attempt to test the highs from Thursday but so far it looks like the big rally on Thursday was just another One Day Wonder.  The Bollinger OEX PVI indicator backed off from 1.77 to .95 - a neutral level.  Gold and the PM stocks also weakened but gold held up reasonably well considering the weakness in other commodities.  The Bradley indicator calls for a decline into mid-December and the potential ending point of the Crash Wave still looks like SPX=650 based on the monthly chart - the market action  today keeps alive that possibility. Crude oil looks set to testing $40 by mid-December - may not bottom until Crash Wave has totally run its course.  Gold stocks like AEM, KGC and MFN have been excellent intra-day trading vehicles and should be watched closely.  

• Gold -  Gold held up reasonable well today but PM stocks are still locked at the hip with Mr. Market  - the COTs are very bullish in gold and suggest that gold's downside is very limited here. 
• Stocks - Thursday's big rally is looking more and more like another One Day Wonder - sell rallies here. Buy puts or bear fund ETFs on rally attempts tomorrow.  
• Silver- Silver held up reasonably well today - won't go long until Crash Wave exhausts itself. 
• Crude Oil - Crude oil keeps making new lows and looks destined to test $40 before year end. 
• Bonds -  Bonds showed some strength today but the pattern looks weak.  The bonds are the last great bubble to pop and should be at the start of a mega-decline.  Investors need to shorten maturities.
• Dollar -The dollar appears to be in a wave 4 of 3 correction - should go higher into mid-December as the Crash Wave runs its course   

Sentiment Highlights:

• The bullish sentiment on gold declined from 34% on 10/10 to 9.4% on 11/17 - a 6 month low - it's been hard to swim against the negative tide of the commodity board but an important low could be close at hand.

Depression Beater Portfolio -  started to track a new portfolio- it will contain cash, GLD, gold ETFs, UNG, and bull or bear ETF funds:

• Fund allocation - 100% cash  (may add to bear ETF funds in next day or so)

Junior Mining Portfolio -  stocks that should be followed on a PM complex breakout - may not see a run until early 2009:

• SRLM ($0.12) - this company is in trouble - it suspended production today (9/15) at the Sunshine mine and is unable to obtain financing. This company failed its due diligence from Minco Silver and the merger has been scuttled. SRLM is having trouble raising capital and servicing its debts.  
• GCR.V ($0.09C) - believe this company is confirming a major Kambalda-style Ni/Cu + PGM discovery at its Langmuir project in Ontario - could be the discovery of the decade and a potential $B market cap.
• VIT.V ($0.17C) - new management - great properties in Nevada - good drilling results in Jan 07 - great drilling results released 12/11 & 4/10 to confirm Cove McCoy find.
• ICI.TO ($0.225C) - huge discovery in China - open pit mine an option - NEW DRILLING RESULTS AT DEPTH AND ALONG STRIKE announced on 10808! NEW SHAREHOLDER RIGHTS PLAN VALIDATES value.
• SNG (1.46) - this profitable Canadian natural gas company just announced what appears to be a SECOND major gas discovery off the coast of Trinidad - this company is a good long term hold in a rising natural gas market.

The Weekly JDV Market Timer - November 16, 2008

11/16/08 (Commentary for Sunday evening) - The next two days are crucial for the market - we are looking for either a "continuation signal" of the historic Crash Wave into mid-December and much lower target levels or we will temporarily negate the bearish EW count by taking out the 11/3 high in the SPX. Sunday is a Major Turing Point day - we're looking for a rally on Monday that fails to take out the 11/3 high and reverses down. Taking out the 11/3 high on the SPX will put us back into a continuation pattern from 10/10 that could extend longer in time and higher in price.    We got a BOLLINGER OEX PVI buy signal (2.04 > 2.00) on Friday which argues for strength on Monday. Gold has been in a sideways trading range since 10/10 - could see a runup here as the USD corrects in the short term. When the SPX spiked below the 10/10 lows on Thursday, the HUI/XAU held about their October lows - a sign of strength for the PM complex.

      

 

Stock Markets:    The projected target low of SPX=650 is still possible into mid-December - the next two days will validate or negate this possibility .  We should then see a multi-month rally develop after the panic low is confirmed (12/15 according to the Bradley indicator) - years of bear market action lie ahead of us.   From a Fibonacci point of view – we are 34 years from the 1974 waterfall decline and 21 years from the crash of 1987 – dangerous relatives.

 

PM Complex:  The XAU crash patterns of 1998 and 1987 may not be applicable here in this historic Crash Wave - but the HUI/XAU did hold above their 10/27 lows as the SPX spiked below theirs - a sign of strength.  Gold stocks should not be bought aggressively until we see an intermediate bottom confirmed in the the broad stock market. Taking out the highs of the SPX on 11/3 may be a sign of an intermediate bottom.

 

THIS WEEK INCLUDES IMPORTANT TURNING POINT WINDOWS IN STOCKS – read new comments below in blue.

TURNING POINT WINDOWS:

·         Gold/Silver–  The COTs have turned bullish on gold - the Commercial positioning suggests a rally soon. Strong physical gold demand argues for a potential settlement problem in the December Gold Futures contract - the disconnect between the paper and physical markets may be heading for a collision. 

·         Stocks – Projected lows of SPX=650 and DJIA=5000 are possible going into mid-December in the projected rally on Monday fails to take out the 11/3 highs and reverses down - further world financial panic is likely - the pattern from 11/10 to 11/4 in both the SPX and NIkkei look like CONTINUATION PATTERNS - the Crash Wave may have more work to do. Monday is a 1-Day Reversal Day according to the Starkey Methodology - anticipating that a rally will take out Friday's high in the SPX before reversing down

·         Crude Oil – Close to finishing a 5-wave down pattern from 11/3 on the daily - could get a bounce here - however, still looking for $40 oil by mid-December if the Crash Wave continues. 

·         Grains - Corn and soybeans still in steep down trends. 

·         Bonds– Long-dated US maturities are breaking down - look to sell short.  Buy the TBT fund on pullbacks. 

·         Currencies -  The US Dollar appears to be ready to pull back in a wave c of 4 of 3 - this could give gold and oil a window to bounce this week. .    

TURNING POINT DAYS:

The next Turning Point is Sunday, 11/16 - this is a key day for the stock market - a failed rally on Monday could set the stage for the resumption of the Crash Wave.