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Messing about with some Gartley patterns...

BHP Gartley chart..png
 
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Yes but the CD leg can extend to 1.618 which has happened above.
The BC leg im not sure about. Says .886 which its not but it is a strong fib number of .78.
Also it fits within a larger abcd pattern..
Its worth noting i think, we sould know eithin a week if it holds.
 
To give an alternative view (which is actually I believe the mainstream view) is that the butterfly pattern doesn't work and can only fit after the fact. If it doesn't work people just say it wasn't a butterfly pattern because it didn't meet the complex and specific criteria and if it does people say "there ya go, it works!".

I think most people looking at that chart wouldn't say that's very bullish. You may get a secondary reaction if the market is oversold, but to call a bottom there at this point in time is a fool's dream.

Also, if we think about it logically, doesn't the business depend on commodity prices being up? If that's the case then don't you really need the bullish confirmation in the related markets?
 
Valued said:
To give an alternative view (which is actually I believe the mainstream view) is that the butterfly pattern doesn't work and can only fit after the fact. If it doesn't work people just say it wasn't a butterfly pattern because it didn't meet the complex and specific criteria and if it does people say "there ya go, it works!".

I think most people looking at that chart wouldn't say that's very bullish. You may get a secondary reaction if the market is oversold, but to call a bottom there at this point in time is a fool's dream.

Also, if we think about it logically, doesn't the business depend on commodity prices being up? If that's the case then don't you really need the bullish confirmation in the related markets?
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I tend to agree Valued...
Im only looking for a tradeable bounce... not a happy ever after... cheers
 
Valued said:
To give an alternative view (which is actually I believe the mainstream view) is that the butterfly pattern doesn't work and can only fit after the fact. If it doesn't work people just say it wasn't a butterfly pattern because it didn't meet the complex and specific criteria and if it does people say "there ya go, it works!".
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If every pattern worked all the time we would not be here posting ideas. In my view what sets these harmonic patterns ( and other patterns too) from other methods such as EW, is that there is no ambiguity. It will either work or it won't.....
Because when we enter the market we are dealing with probabilities, all we can do is identify the potential pattern, predict the possible direction it resolves, making a decision and then act if it fit's into our risk profile.

As for BHP it does exhibit a large Gartley on the monthly chart which has not been invalidated yet. I thought it may have completed some weeks ago but it didn't happen because the selling pressure is so great.
Personally I think we are on a cusp of a rebound in commodities starting as early as next month. The unanimous conviction in the press that commodities are doomed, is so extreme that some sort of low must be nearly at hand. This is also supported by the cycles graphs which I have attached, which suggest price has reached an extreme to the downside and the probability of a reversion to nominal levels first is a good bet.

The COT chart attached shows the deep pocketed commercial traders (banks) are building a massive short position in the dollar, probably in preparation for an inflationary rate hike from Janet Yellen, on December 16th.
Also from an EW perspective we appear to be in a wave 5 thrust out from a contracting triangle W4. A contracting triangle w4 is a penultimate pattern to the last wave up. At the very least when the thrust finishes prices should move back to the base of the triangle in the US Dollar Index.

Also raw materials represented by the famous CRB Index, are now trading at levels last seen in 2001 of 184 points. Furthermore, the price range between 175 to 185 is a major support zone dating all the way back to 1973. Based on history, commodities have a high probability to bounce from this important memory zone, which buyers have defended for generations.
 

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Its different this time, Super Cycle, all the adjectives I have heard in commodities.
Pessimism is at its max must mean something....
 
Paavfc said:
Its different this time
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Funny, that's what posters where saying on this site in 2007 about commodities. "This time it's different, China story is very compelling, blah, blah, blah........." Now it's the other way around.

Even back in late August this year posters here and the mainstream press where finding every reason as to why the market is headed lower. But the market found a low and will not surprise to head north into next year. That is not to say it's a new bull but there are opportunities available.

As for being in a super cycle, well nobody knows.... Just trade the opportunities when they come, get out early if you are wrong and wait for the next setup and keep a level head.
 
gartley said:
As for being in a super cycle, well nobody knows.... Just trade the opportunities when they come, get out early if you are wrong and wait for the next setup and keep a level head.
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One should be alert to the moment.

One thing the commentators where saying a lot during the GFC was that the world was depending on China to pull up the commodity thing. China was still under the old school utter corrupt and stimulate by building to oblivion model.

Few are under the illusion that China will pull up the commodity thing this time and Xi is not showing any signs of playing that old game.
There is no broad based stimulus heavily weighted to property coming. It's done to death.

Coal never got off it's knees and the others have fallen back on to theirs ever since Xi took the reigns and started pulling in the corruption.

That kind of massive over build was driving much of it, that's not just a slowing, it's more like reversing.

Their trying to say the demand could come from India. Been saying that for 10 years. Hasn't happened and nothing happens fast in India.

Meanwhile there is the 7.5Billion disaster to attend to.
 
So_Cynical said:
I thinks it's appropriate to call it a super cycle
~
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You only know it's a super cycle when it completes relative to earlier super cycles. Only problem is these are always expanding and contracting both in time and amplitude. Just when you think your onto something they even miss a beat and invert just to make you crazy.....

Personally I don't use them. I find delta a much better alternative, although it too exhibits inversions it's a more robust approach. For instance the 2 charts attached for super long term is 19.05 years for 1 cycle. Each coloured vertical line occurs 19.05 years relative to the preceding one of the some colour. Within this we have points in time that are highs and lows that occurred during each cycle. The SP500 chart attached I have been working with for 15 years!!! It's alerted to the GFC before it even happened and used together with other tools was bang on. The pink arrows on that chart and comments where made in 2007. You can see cycle point 16 just to the left of the red vertical line occurred in in 1987 and then again 2007. Thus the 19.05 year cycle. These are not always spot on, in this instance it stretched to 20 years but it's a very good guide!!
More importantly cycle point number 6 is coming up in the new year. I need to drill down to lower timeframes to get more accuracy but it's looking like March/April. Thereafter does not necessarily mean a crash but expect at the least some major gyrations.

Also look at the chart of the AUDUSD. It's been very consistent. You can see we are coming into a low at cycle point 9. Relative to the vertical yellow line and the last time cycle point 9 occurred in late 1995 it suggests we have either reached that low OR will should do in the next 6 months. Granted a lot can happen in 6 months, but a major low will be in place taking this chart at face value.

If the AUDUSD puts in a major low being a commodity currency, then this might be a good opportunity for commodities.
 

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I have had a look on google but find what I am after. What percentage of BHP assets are oil and gas? Or would it better to ask what percentage of profits come from the oil and gas sector?
 
fiftyeight said:
I have had a look on google but find what I am after. What percentage of BHP assets are oil and gas? Or would it better to ask what percentage of profits come from the oil and gas sector?
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You can find out the historical figures from the Full-Year Reports.

For 2015 (and 2014 comparatives) try the Report released on 25 August 2015. There's a pretty good summary on about page 14 and some sector discussions onwards from there.

Just be careful - the prices of commodities have probably moved significantly enough since then to complete change a lot of the inputs.
 
Ves said:
You can find out the historical figures from the Full-Year Reports.

For 2015 (and 2014 comparatives) try the Report released on 25 August 2015. There's a pretty good summary on about page 14 and some sector discussions onwards from there.

Just be careful - the prices of commodities have probably moved significantly enough since then to complete change a lot of the inputs.
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Awesome, cheers Ves
 
gartley said:
You only know it's a super cycle when it completes relative to earlier super cycles. Only problem is these are always expanding and contracting both in time and amplitude. Just when you think your onto something they even miss a beat and invert just to make you crazy.....

Personally I don't use them. I find delta a much better alternative, although it too exhibits inversions it's a more robust approach. For instance the 2 charts attached for super long term is 19.05 years for 1 cycle. Each coloured vertical line occurs 19.05 years relative to the preceding one of the some colour. Within this we have points in time that are highs and lows that occurred during each cycle.
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I reckon that 19years backs up iron ore supply side dynamics too.

Price spiked in 04, (at the time $40 was suddenly well above marginal producers costs of production.)

Capital was already flowing in in anticipation (wish I'd kept the North limited letter from 2000 cause it crystal balled the future nicely) but from 04 it was a torrent of new projects and upgrades when price exceeded costs by a large margin.

A new iron ore mine takes around 5-8 years to complete with all the permits / land rights / build.

With prices now below costs for many producers now production should by rights start retreating. It will take a decade though before this infrastructure after being mothballed (which not much has yet...) is really going to need major refurb making supply too elastic in the meantime to allow prices to rise much. In the interim every time price creeps up a bit existing production capacity will come on line and limit price potential.

So 2023-2026 may we'll be the next opportunity in iron ore. Going 19yeaes from 04.
 
PennD said:
View attachment 65511

Getting close to a tradeable bottom soon...
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I'm no chartist but how is it possible to tell? I don't hold BHP [other than through ARG and AFI].... It certainly looks cheap but I thought it did at $20 as well.

Even if bought here how long will it be before reasonable growth occurs? And what will happen to dividends in the meantime?

I don't mean to be a naysayer....... Could the SP go to $10?
 
Just a W.A.G... How can you ever really "know"

I'm talking short term, not buy and hold... Copper and oil also coming to trendline resistance.


Copper 12:01:16.pngoil 12:01:16.png
 
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