Larry TV January 12, 2019


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January 12, 2019 Video Transcript

naturalgas-cyclesJanuary 12, 2019 welcome back to Larry TV. We are looking at natural gas and my cyclical forecast which suggests right here, right now we should see this market start to rally. Notice we've seen cyclical lows about an equal distant, and it is suggesting natural gas is ready to move to the upside. So let's take a closer look.

natural-gas-forecastHere is a clip from my 2019 forecast report. A lot of you have already purchased that. Thank you very much for doing that. Those who haven't, you probably should get it because it shows you clearly, in advance, what's most likely to happen this coming year.

For natural gas we can see it should start to rally right around the end of the year. And that rally, that's the red line which predicts the stronger term trend of the market, suggests this rally can last until the middle of February. And on a short-term basis we are in a strong short-term cyclical move now to the upside.

natural-gasLooking at the daily chart now. We can see that we had a breakout on Friday. I think what we will see next, (because we are close to the overbought position in Percent R) is a little further move to the upside here, then a pullback. We are probably going to get back into this gap area up here, (and that's going to represent resistance in the market), and pullback. The next time Percent R gets back into the buy area, the oversold area, I think we want to look for and take buy signals in natural gas.

gold-forecast

 

Now looking at my cycle forecast for gold. It suggests we should now start to see gold move to the downside until probably the middle of February. So let's take an up close and personal view of the gold market.


While the trend of momentum, the blue line, is to the upside we started to congest in here. Our measure of accumulation has moved sideways. In fact it is very interesting. We see the last five days’ range have all been inside of this large outside bar. goldSo what does this tell us? The market is ready for an explosive move up or down, I think to the downside. But in any event, getting above the high of this outside bar is a strong buy signal. Getting below the low is a strong sell signal. Also we have trend lines coming up here which would suggest trading there or closing below it would be negative. Trading below Thursday’s low or particularly Wednesday's low is certainly an entry point into this market on the sell side.

bondsI talked last week about bonds coming down. They've done that. Now we have an interesting scenario. We had a large outside day down close on Thursday. Those tend to be bullish. The fact that we came back immediately I think is quite constructive in this market. The blue line, the trend of momentum, is to the upside. Our intermarket forecast work technique suggests we should rally and continue rallying sometime into at least the middle of February. So I now want to look for and take buy signals in the bond market. Where would that be? Well, getting above Friday's high I think would be one buy signal, or the formation of a higher short-term low. The next time Percent R dips back into the buy area.

crude-oilAnd it looks like it's time for crude oil to decline. Our intermarket forecast work suggests just about now we should see this market move back to the downside. We have been overbought in this market. A lot of buying, Percent R has been in the sell area. And notice when we are in this downtrend every time we get into the sell area, nice selling opportunities. So where do we sell? Well on Friday we had one of those outside days down closes, that usually means we rally back. And a rally back then the formation of a lower short-term high or a trend reversal in the market, a trend line break would represent your entry on the sell side, expecting lower prices now in the energy markets.

yenThe Japanese yen hit our targets. We are on the sidelines now. I ‘d want to stay on the sidelines for a little bit longer. You see our intermarket forecast work suggests we should come down in here, have a rally later on this month. So for now I think we are going to see prices get back into the 0.92 area, maybe back into these old closes back here. We have had a break to the downside, a rally, we should make a new low, taking out these lows we saw earlier this week, then you can look for a buy point in the yen. But wait for that to happen first.

british-poundStill bullish on the British pound, but not for much longer. Our intermarket forecast technique suggests by the end of this month we should move back to the downside. So where can we rally? A lot of entries on Friday with that outside day up close. I think we can rally back to almost to 1.32 on this move, certainly 1.31. So have protective stops right underneath Friday's low. Use the lowest low of the last three days to trail this market up and look to take profits anywhere above 1.31.

dollar-indexNow looking at the dollar index. Our intermarket forecast technique suggests it is now time to rally. This has been a great forecast, a roadmap of what should happen. It has called this market quite well. So what I'm expecting now is a little higher price, then a dip in the market. And on this next dip as Percent R gets into the oversold area I want to take buy signals in this market. I don't want to be a buyer above Friday's high. I really want to see the market dip for a day or so, then get ready for the continuation of the up move forecast by the intermarket techniques that we use.

coffeeNow looking at coffee on a weekly basis. While the government is not reporting the commitment of trader report, we really don't need it because we have our own version of it, my COTSI index. After all the years, I think I can see in my sleep when the commercials are buying or selling, and we formulated that into an index. When that index is high in this area, typically coffee or any market will rally. And that's right where it's been. We had the breakout signal we talked about this week. The seasonal pattern is up. I want to use a trailing stop under the lowest low of the last three or four days.

So where can you get in this market, if you're not in it already? Clearly getting above the highest high of the last one or two days, getting above Friday's high, the formation of a higher short-term low higher than back here, would be your entry point.

cornI think is time for the grains to rally. My long-term work suggests we should start to see the entire complex start to move to the upside.

We are looking at corn now. Corn has held pretty well in here. Good accumulation. Notice our accumulation line is higher here than here. Price isn’t yet. This is suggesting to me that we will see higher prices taking out these old highs in here. The trend of momentum, the blue line, is clearly to the upside. wheatPercent R, look at that. It is in the buy zone. We want to take buy signals in corn, or the other grains.

Wheat where we see the accumulation line is also close to new highs. Bullish.

 

 

 

soybeans

 

And soybeans. Accumulation is at a new high. So this is one we want to really pay attention to, and the strongest of the grains has been…


oats

 

The oat market. Oh my gosh, look at this. However, is not time to buy it here. It has just been too strong. The first time though that Percent R gets back into the oversold area, I want to go long oats.


nikkeiAnd now let's turn our attention to the stock markets, first looking at the Nikkei in Japan. It is ready to rally. We have been talking about this. The commercials got long the market. You can see typically when they do that, we get rallies. Our intermarket forecast work suggests an up move, a little bit of a sideways, and then higher. I think we are going to see that in the Nikkei. So where could you go long? Well, getting above Friday's high I think would represent a buy point, or getting oversold in this market. In any event, look for higher prices in the Nikkei.

eminisAnd good news in the United States stock market. Look at the advance decline line. It has been so strong in here. Notice how we were in a sideways action here, the advance decline line was continually moving higher. And this week we saw pretty much the same thing as we took out the old high back here, right? But price hasn't gotten there. What does it tell us? It tells us there is a high probability that price will now get above this old high. In other words, the advance decline line leads the way, and it's telling us we should move higher. Where? Maybe back to 2752, 2750, somewhere in that area. 2700, I think is almost for sure. Have trailing stops the lowest low of the last four days. We have been long this market. The trend of momentum is moving to the upside. A little later on, at the end of this month we want to be more cautious. But for now, look for higher stock prices and do take profits anywhere above 2700.

That's it. Until next weekend, as always, Larry Williams, wishing you good luck and good trading.


 

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