My Bias: short in wave 3 blue. Wave Structure: downward impulse wave 1, 2 blue Long term wave count: lower in wave 3 blue Important risk events: EUR: German Ifo Business Climate, M3 Money Supply y/y. USD: FOMC Member Evans Speaks, FOMC Member Kaplan Speaks.
Good evening everyone!
After a week of alternate wave count triggers, the days action seems to sit well with the current operating wave counts. The Dollar cross rates are undergoing an extension in their respective corrective processes, as was evidenced this week with the triggering of the alternate wave counts.
But the wave count in the DOW jones and GOLD have performed exceptionally well over the last few weeks. Both of these wave counts are pointing to a worrying larger shift in the economy at large.
The decline in blue chip stocks and a rise in the 'FEAR-ometer' which best describes the GOLD price. Indicates a decline in the risk seeking appetite of the investment community. They just haven't realized it yet! the picture that is being painted here, is one of an ending bullish half cycle, and a beginning of the bear market in investment assets. Watch out below! Today's action in EURUSD has cleared up the short term picture somewhat. The wave count has been updated to show a completed wave 'iii' pink, and developing extension in wave 'v'. I have labelled the rally off todays low as wave '1' green, wave '2' is under way and should complete above 1.0759. I have marked a possible path to the upper trendline, with an initial target at 1.0950 to complete.
Remember this is still a counter trend rally in wave '2' blue. The next leg down in wave '3' will bring the price below parity and eventually, spell the demise for the currency union. The beginning of the end starts here!
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 Important risk events: GBP: N/A. USD: FOMC Member Evans Speaks, FOMC Member Kaplan Speaks.
Cable dropped in an impulsive fashion today as called for by the wave count. I have labelled the decline as a completed waves 'i' and 'ii' in pink, of a five wave decline in wave (c). todays high at 1.2530 should not be broken for this short term count to remain valid.
Wave (c) brown should trace out five waves down, with the initial support at 1.2422, and lower support at 1.2330. That is a loose target area for wave [b] green to complete. The next leg up in wave [c] green should take the price into about 1.2650. At that point the large contracting triangle in wave (4) blue will be complete and then it will be time to batten down the hatches in wave (5) blue.
The long term wave count on the daily chart is calling for a decline below parity to complete a very large [A],[B],[C] correction to the downside in black. This is the long game, For next week, wave [b] green is the wave to watch.
My Bias: LONG Wave Structure: rally in wave [C] Long term wave count: wave [C] is underway, upside to above 136.00 Important risk events: JPY: N/A. USD: FOMC Member Evans Speaks, FOMC Member Kaplan Speaks.
Despite a very slight new low in USDJPY, the momentum indicators on the short term chart are all pointing to the upside. So wave (b) green is about to begin. The rise off todays low could well be the beginning of that wave. Today's low was at 110.62, This low should hold for now. Wave (b) green should trace out three waves and top out in the region of 112.90. this is the high of the previous fourth wave. Momentum on the 4hr chart is pointing up also, so next weeks action should be dominated by a corrective rally.
Dow Jones Industrials
My Bias: market top is in. Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high. Long term wave count: Topped in wave (5) Important risk events: USD: FOMC Member Evans Speaks, FOMC Member Kaplan Speaks.
Last nights nights wave count called for the market to decline in wave '5' red, with an initial target of 20579. The low of the day 20529, but wave '5' red does not look complete just yet.
The lower target is at 20385, where our Fibonacci ratio comes in between waves 'i' and 'iii' pink.
Last Friday night the market stood at 20916, And the wave count called for a drop in wave '3' red this week. daily-elliott-wave-analysis-03-17-17-dollar-strength-is-coming/
From that point, we have see a series of sharp impulsive declines. And the market has dropped 387 points into todays low. This is a picture of whats to come as this bear market picks up steam. For next week I wave to see prices come down to meet that lower trend line of the trend channel to complete wave 'iii' pink. If the price meets that lower target of 20385, it will add serious weight to the bearish wave count.
My Bias: Long towards 1550 Wave Structure: ZigZag correction to the upside. Long term wave count: Topping in wave (B) at 1500 Important risk events: USD: FOMC Member Evans Speaks, FOMC Member Kaplan Speaks.
GOLD reached a low of 1240.85 today in a complex wave 'iv' correction. The rally off todays low looks impulsive so far, I have labelled it as a completed waves 1,2 off the low.
The current wave count calls for the price to reach above resistance at 1264 to complete a five wave rally in wave (i) blue. When wave (i) is done, we can again expect a correction in wave (ii) blue, This correction will likely retrace into that band of support between 1226 and 1240. At that point the price structure will show a series of 1,2 waves to the upside. This will be very bullish indeed, and will set the market up for a rapid rally to complete wave [iii] green. Next week should allow enough time for wave (ii) to complete.
That wraps up another week in the market. Have a great weekend everyone. See you all again after the close on Monday.