Elliott Wave Market Wrap for the Week Ending 01-13-17
This weeks Price action across the markets we follow, again turned up some great calls and some more clarification on larger Elliott wave patterns in operation in those markets.
The patterns in operation spell disaster ahead for some markets, and foresee bull markets for others.
Lets get into it shall we.
The price action of late in EURUSD has been bearish in the extreme given the larger Elliott wave pattern in operation.
But on Monday I saw a possible extending correction to the upside in EURUSD, which would see wave (ii) green take the price above 1.0650 saying - "The price is encountering resistance at the 50% retracement of wave (i) green again.
The alternate wave count shown circled in red, would allow for another rise above 1.0650 to complete wave (ii) green."
By Friday that idea had come to pass, and the resistance at 1.0650 was met.
For the moment there is a stay of execution in play for EURUSD, but what is coming down the path will not be pretty for this pair.
Since calling the high in wave [iv] green last week, cable dropped 400 points, unanswered! That call was a prime example of how Elliott wave analysis can improve your chances of finding high probability trading opportunities.
Early in the week I was expecting one more leg down before turning up in a corrective rally. - "The stall in the decline this evening is is likely a minor wave (iv). One more decline will do it I think. The lower target of 1.1950 is still possible to complete wave 1 red."
By Friday's close the market had dropped one more time to complete the five wave structure. and off the low a three wave rally has taken place.
The Elliott wave count has worked a charm so far with the price hitting every waypoint that I suggest. The wave pattern in operation here is suggesting a bleak future ahead for Cable. whatever happens We will be on top of it.
The Dollar Yen analysis turned up a great trade this week in wave (c) of a correction to the downside. On Monday I released this chart which mapped out the possibilities for the week ahead.
Saying - "Wave (c) has an initial target at about 113.80, where wave (a) will equal wave (c) in points travelled. Wave (c) green should trace out five internal waves."
On Tuesday the market had completed waves 'i' and 'ii' and was lining up for a sharp decline in the rest of wave (c).
By Friday that correction had completed in a five wave declining wedge pattern and reached a low of 113.76 meeting the initial target set five days earlier.
The larger wave pattern at play in this market is suggesting a big move from this point, which will surprise much of the analyst community, But not us!
The DOW has remained mired in a corrective pattern for the last few weeks, but this correction is in its end stages and should be followed by a rally to beat the band!
With this rally will come a whole lot of self praise and back slapping, and when the 20,000 price level is met we will hear comments of a new era and a bull market to continue for years to come.
All the while the larger wave pattern that is in operation in this market is suggesting a completely different future for the stock market and the economy in general.
The future I am contemplating for the world economy is one that no-one else wants to think about right now. The Elliott wave pattern is telling us to prepare. We should listen.
Gold has continued to impress this week, and the wave pattern I have been tracking every day has worked a charm so far.
On Monday I released this chart calling for a rally to the upper trend line and the pattern to complete at about 1195. Saying - "I think the price will rally to the upper trend line in to complete wave (i) blue, I will then look for a counter trend correction in wave (ii) blue."
By Friday the market had topped 1208 and had completed the first leg up in this developing bull market.
I have spoken during the week about two developing possibilities for the coming rally. Both foresee a large price move in the wave pattern, but one is far more bullish in its prescription for the future.
All will be revealed in time!