2017 Trading Guide: $ALT/$CAL/$APX/$PX

1. $ALT

a. Chart 1 : Monthly Time Frame

Long-term Trend: up

Resistance: 24.00 area

Trendline Support: broken

Is 8.90 the bottom of Wave 4?

If this is the case, Wave 5 is $ALT's next destination...

b. Chart 2 : Weekly Time Frame

Short-term Trend: down

Pattern: Expanding triangle (3-3-3-3-3)

Good News: It appears that Wave 4 Correction is finished.

2. $CAL

Chart : Monthly Time Frame

Currently @ Primary Wave 5

Next Destination: Primary Wave A

3. $APX

Chart : 3 Month Time Frame

Now done with corrective wave E.

A breakout is on the way moving to Primary Wave 5...

4. $PX

Chart: Weekly Time Frame

Next Destination:

Cycle Wave I

Currently @ Primary Wave [3] and heading to Primary Wave [4]

Currently @ Intermediate Wave (5) and heading to Intermediate Wave (A)

$XAUUSD/$PX

It appears that $XAUUSD has found its bottom for Wave 2 @ 1221. In Elliott Wave Principle, one of the three rules is that Wave 2 will never retrace Wave 1 100%. This would mean that the bears' expectation that gold would go below the December 2015 low @ 1047 is bound to be disappointed.

I see gold now resuming its bull rally...

As for $PX, it went far advance than gold's price movement. It even refused to correct big as the gold mining stocks' benchmarks in the US such as the $GLD, $GDX, and $HUI.

$PX has already reached Wave 3 and it appears that it has already broken out from Wave 4 corrective triangle. Despite its current price movement, I am anticipating $PX to return to its uptrend channel and to continue Wave 5.

The foregoing analysis is based on the assumption that $PX leads $XAUUSD.

However, if the situation is the exact opposite, gold leading mining stocks, then we have a more bullish interpretation.

This chart provides such a more bullish perspective...

$PX has just been flexing its muscles for the last 12 months to prepare for a massive run. Both the Wave 1 run in January and the Wave 3 run in June were just sub-waves of primary Wave 1.

$PSEi and Elliott Waves

After reading Robert Prechter's lessons on Elliott Wave Principle, I realized that many of the charts I made are wrong.

Counting waves is not easy. There are rules and guidelines to follow. You cannot easily dismiss them without putting your capital at risk.

Studying EWP is very challenging...also confusing...

Just an example of such confusion is this forecast...

$PSEi is now heading to minuette wave (i) "of minute wave [i] or minute wave [a]" - unsure - "of minor wave 1 or minor wave A" - also not sure - of intermediate wave (1) of primary wave [1] of cycle wave V of supercycle wave (I) of current grand supercycle.

That's a total of 8 degrees of waves...

I didn't include the subminuette, which refers to price movement every minute...

The 8 degrees are enough to confuse me...

The above forecast is a bullish one...

How about a bearish scenario?

Instead of heading to primary wave [1], it's possible that the December 23 low is an intermediate wave (3) and $PSEi is now heading to intermediate wave (4), which is a part of primary wave [A].

Is this analysis making sense to you?

If it does not, don't bother...

The only thing you need to know is either its time for you to buy or sell...

$ALT/$CAL 3

Today's change in $ALT's par value has confirmed that the stock has resumed its downtrend...

That is at least what I see as far as this chart is concern...

Wave 1-2 is complete and $ALT now is moving to Wave 1-3.

As for me, the best decision to take is either to cut loss or reduce my position.

That is contrary to what one "master" I know believes...

For him, the time to reduce position is when the stock is going up...

The fall is an opportunity to add...

I do the same provided the trend is up...

Motivating myself to keep monitoring the stock is the reason why I prefer not to completely sell all my shares, but just reduce its size and maintain a minimum number of shares...

Thinking of re-entering at historical supports (9.00/7.60) and trendline support (6.30)...

Or I can just simply wait for the cycle to be finished...

As for $CAL, I got confused with that 2.80 price bar...

I am getting older...

My eyes betrayed me...

I thought the high of the 2.80 price bar is higher than the previous candlestick...

But as I was checking $CAL's chart this afternoon, I observed that they have the same high price...

Anyway, I counted that 2.80 price bar as the end point of Wave A...

That's the reason I came to the conclusion that Wave C is done...

If my previous chart does still work, then the pullback today is the last before the start of a series of uptrend waves...

However, if my previous chart was wrong, then $CAL now is still completing Wave C...

Wave C-4 in particular searching for its low...

What might come next is a bounce followed by a pullback, and then a rally...

Not unless of course someone thinks that despite of $CAL's big drop, it would still resume its downtrend...

If that's the case, then another reading is needed...

And just this morning, 23 December as I was checking stocks' charts...

I started with A-stocks and then got stranded with a C-stock...

$CAL again...

As I look to its chart, I was reminded of an old chart I made...

That one took for granted the exact number of price bars...

But considered more the highs and lows and the channel...

Seeing this chart again changed my mind...

This chart seems natural, not forced, and clearer...

I am thinking of using this chart in trading $CAL...

This chart shows that $CAL is about to complete Wave 4...

I am expecting a bounce...

And then a resumption of downtrend to finish Wave 5...

2.20 can be a bottom candidate...

Worst case scenario is @ 1.80...

$ALT/$CAL 2

Still testing my knowledge of EWT. That explains the differences in my charts...

Though I am dealing with the same stocks...

My new chart on $ALT...

Still confused about the direction of this stock. I am not sure what will happen on and after the day $ALT's change in par value.

A bearish scenario would put $ALT's current price movement forming Wave 1-2...

A bullish scenario on the other hand would mean $ALT's price action is heading towards Wave 1-3...

And here's $CAL's chart...

In contrast to earlier charts, which focuses more on the exact highs and lows to form a downtrend channel, this one considers the place of each price bar in the movement of waves. As a result, I see $CAL seeking the low of Wave C-4. If 2.27 was already the bottom, then I expect a bounce to form Wave C-5.

A bullish case can be built once Wave C-5 is complete. There might be a pull back first before starting a rally. 

$ALT Update 2

Today, at 3.29 PM, PSE Edge disclosed that Mr. Navasero disposed again 5M common shares @ 2.44 per share. I see it as a subtle move. Why disclosed it one minute before closing of the PSE? Why was it not disclosed early this morning before the opening of the stock market?

$ALT has been going down for 6 consecutive trading sessions and closed today @ 2.20. The 2.44 disposal price could be perceived either way, that $ALT now is undervalued @ 2.20 or its actual price in the eyes of Mr. Navasero is worth less than 2.44. The first interpretation could be a bullish sign to encourage holders and buyers. The second perspective is bearish and would result to more selling causing the price of $ALT to go down even deeper. This will serve as a warning for both investors and traders who are too bullish about this stock as a result of reading press releases and hearing Mr. Navasero's big statements.

Let's review the historical transactions of $ALT's common shares:

12 August 2016 - Mr. Navasero bought 208, 624, 961 shares of $ALT @ 1.74.

16 November 2016 - Mr. Navasero disposed 50M common shares of $ALT @ 2.88. As a result of this transaction, Mr. Navasero profited Php 57M in just 3 months. Very profitable transaction indeed!

16 December 2016 - Mr. Navasero disposed again another 5M common shares of $ALT @ 2.44 per share. He bagged another Php 3.5M after this transaction.

As traders, how should we view the history of $ALT's common shares?

First, I don't know for what purpose, but obviously Mr. Navasero's disposal of 55M common shares of $ALT shows that he is in great need of cash.

Second, in the eyes of Mr. Navasero, $ALT's price per share is less than 2.44 but higher than 1.74. Checking $ALT's chart from a monthly time frame, it has two historical supports, 1.80 and 1.52. The trendline support is @ 1.26. Considering Mr. Navasero's low assessment of $ALT, it's but appropriate to consider these support prices in entering this stock.

Third, I am now having a second thought about all the information that I researched about this company. There is a disconnection between the fundamentals of this company and its market price. I don't want to think that those big words thrown out there are nothing but have the intention to deceive the investing public.

Finally on a positive note, at least the number of shares being disposed is getting smaller. With remaining approximately 153M shares, both direct and indirect ownership, we don't know how many more Mr. Navasero will dispose on 16 January 2017. 

Buying PM's Futures Contracts

Precious metals' analysts claim that the demand for both physical gold and silver remains strong. If this is true, how can we account for the huge drop in PM sector for the last few months?

The three most common reasons so far used to explain the drop in the price of gold and silver are related to Fed rate hike, the strength of USD, and the uncertainty brought by US election. David Scheman recognized that they certainly affect the price of precious metals, but none of them is the real reason for the huge drop. The real reason he said is that JPMorgan had massive short position for the last few months. However, just recently, JPMorgan is closing out its shorts and at the same time aggressively buying physical gold and silver and futures contracts.

I don't understand the futures contracts and the meaning of buying them. This is the good thing living in an information age for you can simply consult Mr. Google to answer your question. Investopedia provided me an answer that made sense to me:

"If market participants anticipate an increase in the price of an underlying asset in the future, they could potentially gain by purchasing the asset in a futures contract and selling it later at a higher price on the spot market..."

The above explanation tells me that after suppressing the price of precious metals, JPMorgan now anticipates that their price in the future will increase. And that's the reason why JPMorgan is buying both the physical gold and silver and futures contracts. They intend to profit from it by selling gold and silver later at a higher price.

References:

campaign.r20.constantcontact.com/render?m=1101357242253&ca=fc1c8b73-0fe7-41e3-be8d-2fb1b12e4dfb

www.investopedia.com/terms/f/futures.asp

$ALT the FOO

I have been hearing a lot about $ALT's Follow-on-Offering (FOO), but I don't really understand its nature, whether its good or bad for shareholders. The only thing I see is that since this "rumor" has been released, the price of $ALT has been falling.

And so I decided to ask Mr. Google about $ALT the FOO. Join me in my inquiry...

The first site that appeared in my search is this one:

www.cnbc.com/2015/04/17/cramer-secondary-offerings-unexpected-sign-of-strength.html

It's from CNBC...

The title names FOO as Seconday Offerings...

The key insights from the above article are the following:

• FOO is bad for shareholders according to conventional wisdom

• FOO will bring down the price of the stock (Exactly! This is what's happening to $ALT! No good news yet about FOO. That's sad...)

• Thinking of FOO as bad news is the old way of viewing the market (Oh! There"s a good news after all!)

• FOO could be a signal of management's acumen and effort to unlock the company's value in innovative ways ( Now this is good news! How I wish this is true in $ALT's case)

• Next Jim Cramer is talking about FOO in the environment of lower rates, which he considers good. How about now? The Fed has just recently raised rates. And $ALT will be having a FOO. Is this still good? I missed this one!

• FOO in times of lower rates boost the company's balance sheet and could result into share price rally.

• The reduction in debt if FOO's proceeds is used for debt payment will cause rating agencies to upgrade their ratings of the company

• FOO's proceeds if used in business expansion will improve the company's earning potential and EPS (This is precisely Mr. Navasero's goal!)

• FOO "might be an extremely shareholder friendly move."

The second link is from investopedia.com

www.investopedia.com/ask/answers/07/secondary_offering.asp

The article seeks to answer the question why prices fall as a result of FOO. This is exactly my question...

These are the insights from this article:

• Original investors don't like FOO for it reduces their level of ownership as the shareholders base expands. This is described as dilution.

• Or the other way of saying it is that as a result of FOO, the EPS value of initial shareholders shrinks and that is why they don't like it (I am now thinking of Sarangani and Papa Sec as original investors that don't like $ALT's FOO that's why they are selling it down).

• The only way to counter such negative sentiment on the stock price as a result of FOO's dilutive impact is a strong justification for the issue of new shares in the first place (I think $ALT has that strong justification. It so happens that perhaps with inside information, both Papa Sec and Sarangani don't believe it)

The third link is from this site:

www.loncarblog.com/secondary-offerings

This article is exactly what I'm looking for. It tells us about FOO from biotech sector, which precisely $ALT belongs to.

These are the key insights:

• FOO is integral in biotech sector for the sector is so risky and capital-intensive

• Shareholders must know FOO's impact on capital structure and its future implications on their holdings

• FOO is associated to the movement of a "hot stock" and is usually perceived as either a "scam" or the end of the company. "Often times the opposite is true." (How I wish the same thing is true with $ALT)

• If you understand that FOO is issued from the company's position of strength, then there is nothing to worry. In fact, the more the price goes down, the greater your returns.

• We know that FOO is issued from the company's position of strength if the proceeds is used to fuel growth (It's true again in $ALT's case). FOO in this case should not be viewed as dilution, but as a supplement to investment.

• FOO that comes out of nowhere and without major company events should be viewed with suspicion

• FOO that comes from a company that is trading at or near new lows is a red flag (This is also true with $ALT. I am now getting confused)

• Biotech company's lower FOO price is another red flag

The final article is from wikipedia:

https://en.m.wikipedia.org/wiki/Follow-on_offering

It distinguishes between secondary offering and FOO/FPO...

Key Insights:

• There are 2 types of FOO: dilutive and non-dilutive

• If new shares are issued, this is dilutive. If no new issues are created, this is non-dilutive

• FOO is preceded by prospectus similar to IPO

• In contrast to IPO, FOO is the "subsequent public contribution" and "the public issue of shares for an already listed company."

This article answers many of my questions about FOO...

Ang $CALbaryo ni $CALbo

Ito pa yong isang stock na tiyak marami ang dumadaan sa CALbaryo at malapit ng maCALbo...

Imagine sa kabila ng mga positive press releases, ang stock na ito ay patuloy sa pagbulusok...

Sa takot na maubos ang kanilang buhok, maraming mga traders iniwan na ang stock na to...

Ang sabi ng marami pag nabutas ang 2.60 "Goodbye na! Ayokong tuluyang maCALbo!"

Pero yong iba talagang mapilit. Maghihintay daw sila ng "higher low" at "higher high" bago muling pumasok...

Sa palagay niyo kaya hindi yan alam ng mga "operators"?

These operators have bigger guns...

Anong tsansa mo na manalo?

Ang ipinagtataka ko sa stock na ito ay bakit pinagkakaguluhan gayong "downtrend" pa rin naman.

Isang batas ng mga traders na madalas kong naririnig ay bawal bumili sa isang stock na patuloy ang pagbaba. Maghintay daw ng reversal bago bumili...

Ewan ko kung sino gumawa ng batas na yan...

Balik tayo sa tanong about chances of winning against the operators...

Kung pondo ang pag-uusapan, walang laban ang mga small time retailers...

Pero kung chart at tibay ng sikmura, diyan may laban tayo...

At kailangan marunong ka maupo...

Basta ang alam ko sa kabila ng "madilim" na kahapon, isa si CALbo sa mga stocks na paborito ko...

Dito ako unang nalugi...at dito rin ako natuto...

Simula noon, aba! parang ATM ko na itong si $CAL...

Yon nga lang, ibang klaseng ATM kasi kinakailangan mong maghintay ng ilang buwan bago lumabas ang pera...

Ok balik tayo sa charts...

Tatlong charts ang pinagbabasehan ko sa laban na to...

Chart #1

Long-term ang time frame ng chart na to...

Mapapansin ninyo sa bandang kaliwa may 2 waves na magkamukha...

Hindi ko alam kung ang tawag diyan sa EWT...

I simply ignore the first wave and did a recounting...

The good thing with this chart is that it gives you support and resistance at 2.50 and 4.00 respectively. So kung long-term trader ka, let's say 3 to 4 months, you can buy this stock @ 2.50 and sell @ 4.00. Siempre kung nainip ka, pwede mo namang ibenta below 4.00...

The problem with this chart is that it does not provide you the clear direction of the stock. We don't know whether the downtrend is resuming or the trend is reversing. In short, neutral ang chart na to.

Chart # 2

This chart is the most negative...

CAL has just finished with its corrective waves and has resumed downtrend. It is now finished both with Waves 1 and 2 and is now forming Wave 3. If this interpretation is correct, then potential turning point is @ 1.80.

And so if you are a current holder of this stock and using this chart as your guide, you can either endure the pain of seeing your paper loss or cut your loss as early as possible and plan your re-entry near that price.

Chart # 3

This is the chart I like the most...

It gives you the big picture and multiple scenarios...

There are 3 potential prices for bounce: 2.60, 2.50 and 2.30.

Resistance is @ 3.25...

The Night Before the Rate Hike

The night before the rate hike...

I slept with the price of gold @ 1151...

I told myself that the safest day to have a position in gold sector is this coming Monday, 19 December...

When I woke up the following day, I saw gold crashed down to 1130.13...

That's a $21 dollar drop...

I thought to myself, "Is that all the Fed rate hike can do to gold?"...

And so on Thursday, I forgot about the buying schedule I made...

And so I took my initial position both in $PX and $APX shares...

However, the low that I thought was final, started to move down again...1127.10...1125.84...1124.52...and finally settled @ 1122.64...

Meanwhile, numerous gold fans are now predicting gold going down below 1000...

And so I thought, "That's it! I think we already have the bottom. Those who formerly were so bullish about gold have now turned bearish."

I consider such change in sentiment positive. I took it as a "buy signal".

After such reflection, I check both the current chart of gold and the charts of my chosen stocks...

Here's the current gold chart...

As you can see, after three red candles, finally a green candle appeared...

Is this a head fake just like the previous candles above that chart?...

I think it is not...

The difference is that such candle appeared after the completion of corrective Waves A-B-C and a pull back, which I interpreted as the last one before the rally to Wave 1...

As for $PX and $APX, I selected only two timeframes, monthly and weekly...

Here's the monthly and weekly charts of $PX...

Both show that they are heading to Wave 5...

$PX's performance in fact from July to December was exceptional...

While most of the gains of gold this year has been erased and gold stocks' benchmarks in the US have retraced big such as the GLD, GDX, and HUI, $PX maintained its 97.95% year-to-date gain. That's really impressive!

As for $APX, it still has much to cover to cope up with $PX. Year-to-date, it managed to retain its 54.44% gain. Compared to $PX, that gain is still short approximately around 43%.

Here's $APX's charts...

Both also show that $APX is moving to Wave 5...

$ALTernative Chart

I was wrong...

It's difficult to swallow your pride...

If this is depression that I assume holders share with me and could be included in one of the indicators, $ALT now is definitely a buy...

I was wrong to treat the waves carelessly...

My bias perhaps interfered in my charting...

And I did a recounting...

This time I see $ALT differently...

Instead of looking forward into an upward trend, I now see a resumption of downtrend...

Again, I might be wrong the second time...

$IDC

$IDC...

Will it revisit 2.80 after six months?

If that is case, the stock will be forming a double bottom...

The stock may start all over again...

DXY's Final Wave and XAUUSD

DXY is now soaring...

It is now forming its final wave...

Wave 5 to be exact...

This is to validate the Fed's rate hike announcement...

Proving that the US economy is strong and will get stronger under the new administration...

And here's XAUUSD...

It is still struggling to find its low...

Experts say that both the strong USD and rate hike will cause the perfect bear storm for gold...

Soon we will see who is lying and who is telling the truth...

As for me, I see this as the final pull back before the rally.

I am expecting for the formation of Wave 1-1.

---0---0---0---

Here's a "conspi" story...

Something good and something big is coming to the gold sector if not by the end of the year, early next year...

I am referring to gold Shariah Law...

1.6B Moslems, 36% of world population will now have an opportunity to trade gold...

An anticipated $2 trillion will boost the demand for gold...

And that's why "they" are frightening you to flee this sector while they themselves are flocking into it...

$ALT Update

$ALT was moving nice the last four trading sessions. In my chart, I see the end of Wave 1 @ 2.89 and so I was expecting that the next move will be down to establish the low for Wave 2-1. However, I didn't expect that the retracement will be deep. $ALT revisited 2.39 this afternoon. Will this be the final low for Wave 2-1? Or am I mistaken in my interpretation and my counting? If $ALT will revisit 2.35 again and thereby will retrace 100%, I will repeat the whole process again; there will be a recounting. Perhaps for those who have advanced knowledge in Elliott Wave Theory could find an explanation for such anomaly.

Though technical analysts despise stories, I could not help myself but relate $ALT's movement with recent company disclosures. I am referring to the change in par value of $ALT's shares and the Php 400M loan by Mr. Navasero. The market hates uncertainty. It doesn't like these recent news. As a result, $ALT shifted from an uptrend to a downtrend.

Viewing PSEi from Three Time Frames

In trading stocks in PSE, it is very important for a trader to keep in mind the big picture. And that is the long-term direction of PSE.

Viewing the 30- year history of PSE in relation to Elliott Wave Theory, I can't understand why most "master traders" I stumble with in trading fora are all bullish. They claim to be guided by the same EWT. However, I am thinking that perhaps the difference is caused by a failure to look @ PSE from a longer time frame.

As for me, using the 30-year chart, I see that PSE has already completed the series of five impulse waves and is now in the corrective phase, Wave A-3 in particular.

From monthly time frame, you can see PSE differently. Beginning 2008 up to the present, PSE has already completed the entire market cycle, both the impulse waves (Waves 1 to 5) and the corrective waves (Waves A to C).

Many market analysts are aware of such market cycle and so they see PSE as preparing for another level of series of five uptrend impulse waves. It is popular to hear from them a forecast of PSE 10,000.

I have two major difficulties in accepting such forecast:

First, if it is really true that PSE is heading towards another level in bull cycle, how can we account of such run in view of the deteriorating global economy? We have been hearing a lot about the European banking crisis, liquidity crisis, the bond and the derivatives bubbles ($100T and $555T respectively), the destructive impact of ZIRP and NIRP, and the war on cash. Do these economic and monetary phenomena indicate a healthy world economy? Is Philippine economy really that exceptional to be immuned from such catasthropic events?

Second, how about the impact of the stronger USD on emerging markets? It has been reported by economists Claudio Borio and Hyun Song Shin that "the strong dollar could precipitate a wave of defaults on $9 trillion of dollar- denominated emerging markets corporate debt." If this is the case, how can you expect PSEi to continue soaring while businesses in emerging markets like the Philippine market are struggling to pay their debts?

With the above two considerations, I think looking at PSEi from a daily time frame shows us a more accurate direction of the PSE in the coming months.

Based on the above chart, PSE now is done with the series of corrective waves and is now reversing its trend and heading downward to complete Wave 5. We just don't know exactly the low of this wave. The important thing to bear in mind is that if this interpretation is correct, there is another huge downleg to complete this downtrend impulse series of waves.

Change in Par Value

The PSE Edge announced this morning a follow-up regarding $ALT's disclosure about the change in par value of its shares from Php 0.05 to Php 0.25. The stated reason for the change is said to be the improvement of the "liquidity of the shares of the company for the benefit of shareholders."

This is not something new to me. I already read a lot of articles about this. To check if my memory is still working, I asked the help of Mr. Google.

According to Share Investor Educational Series, the change in par value whether it is stock split (also known as share subdivision) or reverse stock split (share consolidation) "has no effect on the value of the individual shareholder's overall shareholdings relative to the total market valuation of the company".

As for the claimed improvement of the liquidity of the shares of the company, it is actually the opposite. Share split achieves such improvement in liquidity not the share consolidation, which the company just did. However, SIES doesn't completely dismiss that reverse share split has no benefits. By increasing the par value of its shares, $ALT actually may attract institutional buyers. Finally, if SIES is correct, $ALT increased the par value of its shares "to meet the minimum trading bid size to ensure its listing status on the stock exchange".

Source:  https://blog.shareinvestor.com/share-consolidations-and-share-splits/

$LR

Someone is giving up on $LR.

And he is looking for another stock where he can park his money.

This prompted me to look into the stock's chart.

And here's what I found.

Based on its Weekly Time Frame, the stock has already completed the downtrend impulse series of waves. In fact, it has also completed the uptrend corrective waves and thereby the entire market cycle of the stock is now complete. This is exactly the time every trader is waiting for to employ their precious capital. I suspect that its current movement instead of viewing it as a resumption of downtrend is actually finding a floor in preparation for the uptrend rally. It is just unfortunate that not a few traders leave a stock in the time that they should be adding more shares.

I just wonder now about the wisdom of that popular trading advice "buy low, sell high!" Many traders today do the exact opposite.

See $LR's chart from the Weekly Time Frame:

And here's $LR's chart from Daily Time Frame:

Wave 2 is now looking for its low...

I will be including this stock in my watch list.

Once I see the low has been placed and the reversal price bar appears, that's the time to deploy my capital.

Stocks I Hate

After today's move, I am beginning to hate $ALT. Not that it runs contrary to my expectation. In fact, it is still moving within my channel's range.

I just find it difficult to identify the source of my disgust. Perhaps, it has something to do with the players of this stock.

Early this morning, just less than an hour after the opening of the PSE, most orders in the sell side are so small. Any trader can easily sweep them all. Imagine a sell order of just 1,000 shares from 2.69 to 2.74. This kind of line of orders shows that the number of shares sellers want to dispose is so small. And so those who buy into this trap would just take those available shares only to see later that those shares get bigger and never run out. And so during the closing time of the market, traders realize that the absence of sellers during the early hour of trading is just a disguise. In fact, there are more sellers than buyers even at a lower price. Such realization would cause doubts about the stock and would breed more selling. As a result, $ALT ended the day with bears gaining the upperhand.

The above story is just a product of my imagination. It is simply reading too much into the price action of the stock. It is an example of emotion interfering into trading. Overcoming such emotion is a must if a trader wants to succeed in this field. The tendency if you fail to overcome such emotion is that you will hate the stock and you will never look back regardless of the performance of the stock. It happened to me in the case of both $PPC and $TUGS. I was an early holder of these stocks for several months and gave up later and never looked back. Only to see later that they started doubling in price but I no longer mind for I had had enough with those stocks.

Will such disgust happen again in $ALT?

The Gold Sector

This coming Monday, 19 December will be the safest day to decide whether to take a long or short position in the gold sector. After the announcement of rate hike this December 14, we will see the market's response whether it is true that rate hike is bad for gold or not.

Not a few contrarian analysts claim that rate hike in an environment of depressed price for gold is good for the sector. They cite the last time the Fed increased rate in December 2015, which they claim became the mother of the gold bull that ran from January to July 2016. However, I could not avoid to think that with the increased rate, the Bank of Japan (BOJ) turned to negative rate, which probably is the real source of the change in the trend of the gold market. If BOJ will repeat such action, my doubt that this coming rate hike will be followed by a renewed run in the gold market will be removed.

As for technicals, yesterday XAUUSD registered a low of $1151.24 per ounce of gold. I see this as the end of the final corrective wave. However, as far as technical analysis is concern, we don't know yet either gold will resume its downtrend or will reverse its direction. If the downtrend is resumed, I have no doubts in mind that the $1000 support will be broken. On the other hand, if the trend reverses, it is better to simply sit down and wait as your "seed" grows until the end of the series of uptrend waves. I am more inclined to believe this latter direction considering that a Shariah law that will certainly affect the gold market will be publicly announced this 29th of December. However, since the manipulation of  western central banks is very strong in the gold market, we really don't know for sure what direction gold will take.

XAUUSD/DXY

Wave C-4 is complete. XAUUSD is now forming Wave C-5. Will the low today @ 1151.24 USD per ounce the final bottom? Or will the rate hike two to three days from now push gold further down?

As for $DXY, there are two more waves to go. Currently, if the 101.78 high will no longer be broken, then we already saw the end of Wave 5-3 of the USD index. After this, $DXY has one more rally left before the rate hike. Once Wave 5 is completed, normally it is followed by a 3-wave retracement. We expect that such retracement will be good both for gold and the $PSE. However, we just don't know the extent how price manipulation can distort this kind of price action.

The Current Status of My Journey

I started as a "funnymentalist". I encountered this term from traders who are dissapointed with the conventional way of trading stocks. I bought and sold shares of company stocks based on news, company disclosures, and brokers' analyses. Result? After a year of trading, my 200k capital became 102k, a 49% loss. They say it's part of learning and that's the tuition fee you have to pay. Being a scholar in most part of my student's life, I find such payment very expensive. And if that is really a tuition fee, how about those traders who have been in the stock market for decades and yet seems to have learned nothing and still paying such expensive fee?

I refuse to accept my loss as tuition fee. It was simply a loss for believing what the "experts" say. And so I decided to stop listening to the experts' "noise" and started my own journey in studying technical analysis. After almost a year of trading using simple indicators such as moving averages and fibonacci retracement matched with the channels I made, I regained my loss. Year to date, my port is now up 61.76%.

Now that I am still testing my recent learning about Elliott Wave Theory (EWT) - A big thanks to that mythical fanatic of EWT I stumbled in investagrams.com! - I am expecting to have more profitable trades in the next six months. I am now integrating my previous knowledge about technical analysis with the EWT.

June 2017 will be the submission of my next report card...

$ALT/$CAL

It seems to me that instead of 2.50, 2.35 is the end of Wave C. $ALT now has completed Wave 1 @ 2.89. Ideally, $ALT should move higher than the 2.90 high of Wave 1-3. However, if 2.89 is what the price movement tells us, we will accept it as such. What follows is a 3-wave retracement forming Wave 2. I expect it to be flat. I will be exiting @ Wave 3 high for I anticipate that the retracement will be stiff. Those who have strong stomach can simply sit down until the end of Wave 5.

As for $CAL, it appears to me that no clear low has been established yet and the 8 coming waves will show traders what decision to take.

$CAL now is in the last stage of Wave A @ 2.75. A 3-wave pull back will follow to establish that final bottom in preparation for the rally. I see at least 3 prices as candidates for final low: 2.60, 2.30 and 1.50 is the worst case scenario.

After the bottom has been established, I am expecting a bounce towards Wave C formation. Once Wave C is complete, that is the time to observe closely the movement of the stock. If it will resume its downtrend, that's the time to say "goodbye". But if $CAL will reverse its trend, that's the time to take a long position.

Note:

I just kept this analysis to myself for the past 2 days for I am still testing my knowledge of EWT. However, it is encouraging to see the relative accuracy of EWT analysis with what happened to $DD and also with what's happening to both $ALT and $CAL. This analysis is in no way a recommendation to buy these two stocks.