Elliott Wave Weekly Picture
The Elliott wave weekly picture aims to give an overview of the wave counts operating in each market I follow, the opportunities I see developing, and where the waves are likely to go over the weeks ahead.
Lets get into it shall we.
My Bias: short in wave 3 blue.
Wave Structure: downward impulse wave 1, 2 blue
Long term wave count: lower in wave 3 blue
EURUSD has grinded higher over the last few weeks in a probable wave (ii) green.
This Elliott wave structure is important in the fact that it calls for a serious sell off in the very near future in wave (iii) green to the downside.
The coming decline will be wave three of three of C, and in Elliott wave theory, this setup is primed for acceleration in the direction of the main trend.
Throughout the week I have been tracking the development of the correction shown in the short term chart. This is currently labelled as an ending diagonal in wave 'c'. If the current wave count is correct, then we should see a high probability entry opportunity over the coming week.
My Bias: short below parity.
Wave Structure: continuing impulsive structure to the downside in wave (5)
Long term wave count: decline in wave (5) blue, below parity
Cable is setting up for disappointment given the larger wave count show in the 4hr chart.
As with EURUSD the current wave count calls for a rush to the downside in a possible wave 3 red. the current short term action is currently showing a possible sell signal, it will have to develop a bit further in order to be sure, suffice to say the bulls could be disappointed after that big rally this week.
During the week the price broke down through a very important bearish confirmation level at 1.2036 this level marks the low of the previous wave B shown on the 4hr chart, breaking that low has sealed the long term trend as down, this decline is set to go all the way to parity and beyond. I will be tracking the action every day for subscribers.
My Bias: Neutral
Wave Structure: rally in wave [C]
Long term wave count: wave [C] is underway, upside to above 136.00
This weeks action in USDJPY has cemented the overall view for the US dollar in the medium term, that is we are about to see another run up the value of the greenback.
On Tuesday I wrote "The price has reached support at the previous 4th wave so I expect a turn is imminent."
I had tracked an a,b,c correction off the high in a parallel trend channel, the price was 112.66 at that time, the low came in at 112.56 and from there the price rallied over 300 points in a few days into the high of the week at 115.62.
From that high I can see a three wave correction has taken place and the price is setting up for another rally with another low risk entry point coming our way next week.
The longer term outlook is bright for the dollar going by the current wave setup.
My Bias: Long towards 20,500
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Long term wave count: Topping in wave (5)
The action in the DOW this week completed wave [iv] green, the correction off the all time high labelled wave [iii] green. The current wave count suggests another rally is in store which at a minimum I believe will take the price of the DOW up to about 20,500 in wave [v] green.
This target is where wave [v] green reaches equality with wave [I] green in terms of points travelled. This is a common wave relationship within a five wave structure.
So the near term prognosis is for a resumption of the rally, but the longer term wave structure points to a very nasty surprise for stock market bulls, The larger wave count calls for declines in the region of 50% over the coming years.
And this larger bear market is very likely to get underway in a few weeks.
My Bias: Long towards 1550
Wave Structure: ZigZag correction to the upside.
Long term wave count: Topping in wave (B) at 1500
After a sizeable 9% rally since we called the low back in December, this week saw the inevitable correction that follows every impulsive price move.
The correction so far off the wave (i) high seems to be tracing out either an expanded flat or a running flat, the coming weeks action should clear up that confusion.
In the big picture GOLD is in the process of setting up for a further rally in wave (iii), we should see an Elliott wave signal to that vein next week.
The current correction is close to completion and the next run up in price should be impressive given the current wave count.
We will be there to document every move as it happens and show you where the opportunity lies in the waves.