Jeff Greenblatt, Director Lucas Wave International, LLC provides a preview of his Gann analysis that he will be presenting at TradersEXPO New York March 10-12.

We had a great low recently in precious metals, highlighted by this 75.50¢ move down in silver which was a 75% retracement against the previous leg up (see chart). Where did it stall? You guessed it, at 75 points up.

chart 1

Why might this stick? First of all, we had an interesting high in the dollar last Friday and a low in the EUR/USD. But that’s already past history. For the dollar, we have a first leg down of .745 while the whole move is 1.11. The first leg is 67% of the range and the reversal comes at 66 hours (see chart). So, if this relationship sticks, it adds to the potential high for the precious metals for the time being. One chart with a relationship could be a fluke. Two charts that can go inverse to each other is not a coincidence.

chart 2

Crude oil is violating to the upside and this is significant because it just violated the 38% retracement of the recent leg down and this is important because today is the 40th day off the bottom. It was flat and hovering around 38% and 38 days. It could’ve turned but it did not.

The stock market is still ticking. Its amazing to see this recovery and it is what it is. Some pundits are saying the rally continues because the Federal Reserve changed course on interest rates. There is a certain logic to it, but lately the news has been better. Anything that could’ve gone wrong didn’t. The government did not shut down and they keep talking about a possible trade deal with China. Pardon me, but when I see it, I’ll believe it. The latest violation for stocks was a possible vibration in the Philadelphia Semiconductor ETF (SOX). But instead of stalling, there was no reaction and to put it bluntly, there is very little in the way of bearish readings these days. All I can tell you is the candles are getting smaller and its likely the rally is starting to get tired. The Dow and SPX are already in a position where they are testing the secondary highs off the original tops, which is usually an area they get initially get repelled.

In previous updates I discussed the global debt problem. Its still out there so while the play has been long you have to be vigilant and monitor your trades and investments on a regular basis. That’s basically what I’m going to teach you in my sessions when I get to New York. I’m going to show you the kind of intel you won’t see elsewhere. Study the charts I’ve put here today carefully. Do you see how Silver retraced 75% of the previous move? The standard retracements appear as defaults on most trading software is 38, 50, 61 and 78%. I’m going to show how to break out of that box and open yourself up to unlimited turns in the market which you can come to recognize as opportunity. How does that work? Simply put, you may have heard when price and time square, the pattern changes direction.

What people in the Gann community don’t even know is a retracement will square out with price and/or time. The reason the stock market continues to go up is these magnificent types of setups have been absent on the way up. What does that mean? When the vibrational square outs are not there, that usually means the pattern keeps going. In other words, it’s a continuation signal. I don’t get excited until I see something line up and react. The SOX lined up yesterday but it did not react.

One last thought. Since there is a global debt situation which smart financial experts say is not sustainable, the only way its ever going to explode is when the bond market prices decline. The bond market has been sideways all month. I would think the rotation into stocks would cause bond prices to sink. For the bond market to get into serious trouble we likely need to see higher stock prices. As the markets sink into complacency, nobody would be paying attention to the bond market retesting the lows set last October. That could be the flash point. Its not likely to happen anytime soon. If and when bonds take a serious dip, you’ll be the first to know.