Good evening to one and all.

The LORD’s blessings to you all tonight.

I will mark this day in my diary,

today is the day that that Inflation has turned into deflation,

where debt issuance is now turning into debt destruction,

where the price structure will begin to come under extreme downward pressure,

where the economy will begin to shed jobs in a major way,

where the housing market will actually start to show major price declines.

This is the day where we jump out of the frying pan, and jump into the fire.

The US 10yr detrended Bond/Equity Yield Ratio is at levels seen in 2000, 1981, 1968, 1955 and 1929. Peak to trough losses seen over the subsequent 5 years were -25%/-75%. This is no time to be bullish!

Auto Loan Delinquencies Hit 10-Year Highs

Redfin Fires 13% Of Staff, Exits House Flipping As Downturn Accelerates

https://twitter.com/bullwavesreal

EURUSD.

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EURUSD 4hr.

EURUSD daily.

EURUSD fell in three waves to a low at 0.9935 today which was juet about bang on target for wave ‘ii’.
The rally that came in today is a a complete knee jerk reaction to that cpi undershoot.
So I do expet a reaction lower tomorrow.
I have labelled wave ‘iii’ of (iii) underway after that spike rally came in.
Wave ‘1’ and ‘2’ of ‘iii’ should create a higher low above 0.9935 now.
And next week should bring a substantial rally if this pattern holds.

Tomorrow;
WAtch for wave ‘2’ of ‘iii’ to fall back towards 1.00 even in a corrective manner.
A break of the wave ‘ii’ low at 0.9935 again will rule out this pattern.

GBPUSD

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GBPUSD daily.

Cable broke above 1.1645 again today and that does suggest wave (iii) is now underway.
Wave (iii) of [c] should push back into the 1.20 area when complete next week.
Todays rally is labelled wave ‘i’ of (iii).
I am expecting a decline into wave ‘ii’ to create a higher low by tomorrow evening.
The low at wave (ii) should hold at 1.1333.

Tomorrow;
If wave (iii) is underway here,
then next week is looking up in a big way as wave [c] continues to trace out five waves up.
Watch for wave ‘ii’ of (iii) to correct lower before that rally starts in wave ‘iii’.
1.1333 is the invalidation level for this pattern.

USDJPY.

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USDJPY daily.

Some days the action just follows the pattern to a T,
other days I am just left scratching my head to figure out whats going on!

The price fell today with a wicked acceleration lower in wave (iii) of [c] of ‘A’.
Todays move has actually achieved more than I expected in all of wave [c],
but even so,
I suspect there is one more step lower to compelte waves (iv) and (v) of [c] over the next few days.
Wave [c] will reach equality with wave [a] at 140.75,
so I am going to hold that as the main target now for this pattern in wave ‘A’.

Tomorrow;
Watch for wave (iii) to find a low very soon,
and then wave (iv) should move higher in three waves.
This correction higher should begin tomorrow.
Wave (iv) must hold below 145.00 at the wave (i) low.

DOW JONES.

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DOW daily.

The Dow is one of those markets that is really making me scratch my head these days!
Another nice looking decline has been fully retraced by a rally out of the blue.
My overall bearish view has not budged one bit even with this new high in wave ‘c’.
I just happen to think that the larger picture that is painted both in the charts and the economy is so bearish,
that it will overwhelm this hope rally.
And I suspect the eventual third wave down that is coming here is going to surprise even me!
Much like waht happened in USDJPY today!

Tomorrow;
My patience is being tested here as this wave (ii) rally is pushing the limits of its abilities here.
The reversal down into wave ‘i’ of (iii) will be required to retrace a much larger wave than expected.
And I am now looking at the 30000 level for wave ‘i’ of (iii).
That is a tall order,
but it is not impossible given the leverage that is involved in taking the market back to these levels.
Lets see what happens tomorrow.

GOLD

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GOLD daily.

I am looking at a possible five wave pattern completed at todays highs for wave (i) boue.
The price took another step higher today in wave ‘v’ of (i).
And the price broke the previous 1729 high again.
At this point the bullish pattern is moving higher in probability now,
but we do need to see a bullish higher low build in wave (ii) over the coming days.
Wave (ii) can easily fall into the 1680 area again to complete the correction.
And then we will be in a good position to evaluate the next leg up.

Even with todays rally the alternate count cannot be ruled out.
So just keep that in the back of your mind.

Tomorrow;
Watch for wave (i) to top out and then reverse into wave (ii).
Wave ‘a’ of (ii) is expected to fall into the 1700 level at the previous wave ‘iv’ low.

CRUDE OIL.

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Wave (i) seems to have bottomed out today after dropping in a nice five wave pattern off the highs.
The rise off the lows at wave (i) should now create a three wave correction higher to form a lower high in wave (ii) as shown.
And todays small rally is enough to condsider wave ‘a’ of (ii) as complete.
Wave ‘b’ should hold above the low at wave (i).
and then wave ‘c’ may even be complete by tomorrow evening if all goes to pattern here.

Tomorrow;
Watch for the wave (i) low to hold at 84.10.
Wave (ii) should rise into the 50% retracement level at 88.50 over the coming days.

S&P 500.

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S&P 500 daily.

The S&P made the great leap higher today also on the back of a reversal in the cpi.
The market actually rallied on the news that inflation is turning into deflation!
deflation is the ultimate economy killer,
and the market thinks that is good!
go figure!

I am forced to rethink the rally in wave (ii) again today.
The pattern still counts well as a correction higher so the main premise of a bearish lower high underway here is not in danger after today.
The pattern within wave (ii) is way more complex now,
and that is a headache!

Todays rally is strong enough to suggest a third wave within wave ‘c’.
So that is the idea I am going with tonight.
The rally today actually met the minimum target for wave ‘c’ already in this new scenario.
We will see tomorrow if wave ‘c’ managed to make it to the 62% retracement level at 4006.

Tomorrow;
Watch for a five wave rally to complete in wave ‘c’ of (ii) near the 62% Fib level.

SILVER.

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SILVER daily.

Another market that made a new high on a the news of deflation today!
The price managed to hit the upper trend line again in wave (c) of [c],
I am reasonably confident that this triple combination correction is complete in wave ‘4’.
And the reversal into wave [i] of ‘5’ will be a big shock to this market when it happens.
My patience is running thin these days,
but again,
I will have to wait for a signal that wave (i) of [i] has begun with a break back below the 20.00 level again.

Tomorrow;
Lets see if tomorrow will bring the required decline to kick off wave [i] down.