Will a “Cold / Frost” Full Moon cool off Fiery Hot Gold Futures ???
In light of an especially noteworthy Full Moon, both gold bugs and those who are particularly 'in tune' with the waves of collective social mood (akin to social tuning forks) ought to remain extra cranky for an additional few days. 02:28:xx, Wednesday morning (12.2.09), marked a Full Moon; we at Fibozachi always reference time in EST, which is universal 'market time' while everything else is just ‘noise,’ though apparently there is something
other than just dead 401(k) money scattered across mutual fund
sub-accounts domiciled in Manhattan/ Boston (equities), Chicago
(commodities) and Newport Beach (bonds).
And while we jingoistic Anglophiles know this December Full Moon iteration as the "Oak Moon", Native Americans refer to it as the "Cold Moon" or the "Frost Moon." By the way: thx for the land; turkey dinner; and really sorry for the T + 6 year Bataan Death March-esque "Trail of Tears" that, while certainly not a SNAFU by any stretch of revisionist history, was totally FUBAR, by explicit design. Our collective bad; enjoy your duty free goods and casino's though.
In Elliott Wave parlance: corrective waves of extremely large degree, such as Supercycle wave (IV)'s and the latter portions of Cycle wave c's, are notoriously characterized by a persistently negative trend within collective social mood, which continually leads to recurring bouts of physical xenophobia. After we examine the technical posture of front month and continuous
contract Gold futures as well as the DXY/ US Dollar Index, we will
highlight some choice quotes from an author/ strategist who is one of our
favorites. This highlight will provide several enlightening insights into the secondarily confirming nature of and truly profound substance within the new, revolutionary study of Socionomics.
Which, as a rabid Socionomist, is just a lovely segue into price action across financial markets!
… the spot PoG (price of gold) nudged above $1216 overnight (as of 02:30) while front month gold futures (current basis, February, GCG10) continued to register considerable volume
right out of the gate; especially when segmented by rolling 233 or 610
minute (Fibonacci) interval periods across the continuous contract (@ GC). Futures are a "natural time" instrument, which trade continuously, whereas equities are a "cash session"
instrument, which primarily trade within an almost arbitrarily fixed
time schedule of 09:30 - 16:00 (which is what equity indices are solely
based upon) with small pre/ after-market sessions.
Volume within the GCG10 has been potent since effectively becoming the front month contract on 11/27/09; well after "news" of default from Dubai, the crown jewel of 21st century capitalism (a fantastic by Marla Singer of Zerohedge.com), wilted the ephemeral 'green shoots' of emerging markets and sent 'em sliding back down their impossibly steep "slope of hope."
Our "At And while initial volume within the GCG10 has been contextually Should
personal belief in the 'value' of "news" itself is best summarized
through a timeless quote of R.N. Elliott's:
best, news is the tardy recognition of forces that have already been at work
for some time and is startling only to those unaware of the trend."1
impressive, it is still a rather pathetic sum in
terms of aggregate notional dollar value … while the DX/ $USD
sits just above its daily S2 pivot point, yet to
plot either a fresh swing low or a FNL
(failed new low).
any key commodity, currency or equity market plot a high probability trading
signal (buy or sell), we will immediately update you within these
pages. In the interim; please click anywhere
within this sentence to read our previous piece, "A Detailed Technical
Update of the S&P cash, S&P futures, DJIA cash, Gold futures, the VIX
and the US Dollar Index ... as well as a look into the "Crown Jewel"
And while initial volume within the GCG10 has been contextually
Having presented that brief technical update, we would like to turn our attention toward one of the greatest, yet most consistently misunderstood, legends of technical analysis, Robert R. Prechter, and his conceptual brainchild of Socionomics; which seeks to cogently unify the otherwise loosely structured social sciences. Below are but a few select quotes from Mr. Prechter's, 9/11/01, "Special Report” of the "Elliott Wave Theorist" publication - without any alterations/ edits.
First, as a basic preface: some folks (like your author) find Mr. Prechter's work both intellectually fascinating and technically rigorous while many others simply have no interest in it. As technicians/ traders who practice a rather comprehensive and quantifiably systematic approach to technical analysis, we at Fibozachi find the unique insights below rather prescient and hold them to be essential off-peak reading for professional technicians and serious students of techinal analysis who are interested in learning more about the fractal nature of financial markets. Again, such is simply our personal opinion; we have no formal affiliation or business relationship with either EWI or RrP and are simply studious admirers of their priceless work. For wholly un-random reasons, EW, Socionomics and even Mr. Prechter himself are typically either immediately loved and intellectually cherished or simply loathed and forcefully derided.
to each their own; obviously, our intent is to share pertinent
information that has helped us grow as both technicians and traders. And we highlight this material simply because we believe that many others will find it similarly interesting and highly thought provoking.
radical thesis of The Wave Principle of Human Social Behavior and the New
Science of Socionomics (New Classics Library, 1999) was unmistakably manifest in
the raucous social comedy of the 1990s, and now it is playing out in the first
act of a developing worldwide social tragedy that will last years. The primary
thesis of this book is that changes in social mood cause and therefore precede
changes in the character of social events. In contrast to this idea, most people
erroneously try to divine the implications of events in attempts to forecast
financial markets and people's collective feelings. Their approach cannot work
because markets are driven by natural trends in mass psychology, and events
resulting from those psychological trends come afterward. It is the changes in
such trends, as indicated by turns in the stock market, that signal a coming
change in the tenor of social events.
equally radical thesis underlying socionomics is that social mood is patterned,
and it is patterned according to the Wave Principle. Since these patterned mood
trends precipitate social events, you can forecast the character of social
events by tracking the trends and patterns in the primary meter of social mood,
the stock market.
explained why global atrocities followed the 1929-1932 crash and continued
during most of the rest of the bear market pattern, which ended in 1949. It also
explained why the worldwide peace initiatives and unprecedented acts of
reconciliation of the 1990s followed nearly half a century of social mood
uptrend. The dramatic, historic pictures shown in Socionomics to convey the
power of these moods were not placed there simply for academic purposes. This is
real life we're talking about. You have to live near those events to
sense that fact.
the Wave Principle is the single best method for anticipating the behavior of
markets, its value at times goes way beyond even that great benefit. As
explained in Chapter 12, the effects that a change in market trend will have on
society are not in evidence at the start of the trend. They become intensely
manifest by the time of its termination ....
long term trend toward a positive social mood always leads to times of peace
and political cooperation, such as we enjoy today. An extreme trend change in
social mood toward the negative always leads to calamities. The average level of
conflict during the bear market will be far greater than it was during the bull
market and will lead to periods of turmoil, not just in financial markets, but
in society. Indeed, the trends now implied by long term market patterns have
always produced dramatic social upheaval. The last time a bear market of the
currently projected magnitude took place was 1720 to 1784, a period that began
with a market crash, ended with the Revolutionary War, and led to a deep and
global five-year depression.
coming trend of negative social psychology will be characterized primarily by
polarization between and among various perceived groups, whether political,
ideological, religious, geographical,racial or economic. The result will be a
net trend toward anger, fear, intolerance, disagreement and exclusion, as
opposed to the bull market years, whose net trend has been toward benevolence,
confidence, tolerance, agreement and inclusion. Such a sentiment change
typically brings conflict in many forms, and evidence of it will be visible in
all types of social organizations. Political manifestations will include
protectionism in trade matters, a polarized and vocal electorate, separatist
movements, xenophobia, citizen-government clashes, the dissolution of old
alliances and parties, and the emergence of radical new ones. Tariffs will
become popular, regardless of the fact that virtually everyone knows they are
dangerous and wrong, because they are a consequence of an increasingly negative
psychology involving fear, envy and a misguided attempt at self-defense.
Xenophobia will be practiced regardless of people's generally good intentions,
because fear and hatred become pervasive in major bear markets regardless of
whether or not they are justified. There will also be a danger that governments
will impose police-state type controls as a consequence of the bear market. Such
periods often end with emotional political oustings, whether by vote,
resignation, impeachment, coup or revolution.
Elliott wave analyst can even put a fine point on when the best and worst
social times will occur. The Socionomics book explains that wars always erupt
during or immediately after "C" waves in bear markets of Cycle degree or larger.
More important, the bigger the corrective process, the bigger the war. We are
in only wave (a) of the Grand Supercycle bear market, which will have to do
mostly with financial destruction. So shocking though they may be, events to
date are in fact correspondingly and comparatively mild, like Hitler's takeover
of Czechoslovakia was to ensuing events within Supercycle wave (IV). Within
wave (a),wave c, which should unfold from 2002 to 2004, will bring greater acts
of conflict and instances of physical danger. Yet as At the Crest explained, the
worst global horrors - and this is good news for now - will not occur until
wave (c) of the entire Grand Supercycle ....
is another esoteric point but one of great value. A section on "Nuances" in
Chapter 15 of Socionomics explains that negative social themes due to appear in
any approaching bear market first express themselves in milder form in the
preceding fourth wave of one lesser degree. Stop for a minute until you get
this idea. Here is a more detailed explanation: Social mood repeatedly traces
out five waves up followed by three waves down. The negative themes in "wave
four" within the "fives waves up" presage those that will dominate, more
dramatically and on a much bigger scale, in the ensuing "three waves down."
is true of the styles of cultural trends. For example, Psycho came out in 1962,
at the end of a fourth wave correction of Primary degree. In the larger bear
market of 1966-1982, slasher films (the Halloween and Friday the 13th series)
were a dominant theme.
is also true of the character of social events. In an earlier fourth wave from
1916 to 1921, collectivists took over Russia. In the larger fourth wave that
followed, from 1929 to 1949, collectivists took over nearly half of the earth's
population, in Germany, Italy, Eastern Europe and China.
Are Elliott waves and socionomics
purely academic toys? They are not. Like good philosophy, they are not just
theoretically correct; they are practical and useful in everyday life. At major
junctures, understanding the change at hand can mean the difference between
success and failure, life and death. The people who started successful
businesses in 1949 and 1982 or went bankrupt in 1933 and 1975 understand the
first point. The people who got out of Europe in 1938, or who stayed there,
would understand the second.
In coming months and years, others will repeatedly
be shocked over "surprising" single events, which they do not understand as
being part of a larger pattern. At least you will know that we are in a pattern
and even, most of the time, where we are in it. From that, you can make
important decisions that will guide your life."
for those of you with an interest in learning much, much more
about the lunar synodic cycle from another truly brilliant technician; please see
Chris Carolan's seminal tome, "The Spiral
Calendar", his excellent recent article "1929 + 1987 = ????",
and also his landmark technical treatise
"Autumn Panics: A Calendar Phenomenon", which won the 1998 Charles H. Dow Award for
Excellence in Technical Analysis; "given to the research paper which is
judged to contribute creativity, innovative though and professional
presentation to the study of technical analysis."
always, we hope that this quick overview is helpful, thank you for taking the
time to read our thoughts and promise to try to find, if not make,
the time to answer thoughtful questions.
Disclosure: we anticipate becoming (1) considerably long the $DXY / US
Dollar Index via DX futures; (2) about as short various commodity futures as
Danny Devito and (3) about as short the ES (S&P futures) as Verne Troyer,
once a multiple confluence of proper trading signals confirm themselves; during
any given session we may trade any of these instruments bi-directionally.
For similar technical takes, market calls and insights; please visit our brand
new website, www.fibozachi.com. There, you can view
both our complete body of analytic work as well as detailed explanations of the
unique design development and technical methodologies within the proprietary
technical indicator packages that we use daily to perform a comprehensive technical
analysis of stocks, options, ETFs, bonds, futures and FOREX across interval periods of
time, tick and volume.
Value of News," R.N. Elliott's Masterworks: The Definitive Collection,
ed. Robert R. Prechter, Jr., p. 277