Friday, March 24, 2017

Elliott Wave Analysis of GBP/USD - Triangle consolidation in wave 4 finally looks complete

GBP/USD - Weekly

GBP/USD - Daily 

GBP/USD - 4 Hourly





GBP/USD - Triangle consolidation in wave 4 finally looks complete 

The triangle consolidation, which has dominated the picture since early October 2016 is finally coming to an end and renewed downside pressure in wave 5 should now be expected towards at least 1.0755 and likely even closer to the long term target seen at 0.9534 (see the long-term outlook here).

Short-term, a break below minor support seen at 1.2422 will be the first good indication that wave E of 4 has completed, while a break below support seen at 1.2333 will confirm that wave 4 has completed and wave 5 lower is unfolding.

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Thursday, February 9, 2017

AUD/NZD - Should we expect a different outcome this time?


AUD/NZD - Should we expect a different outcome this time?

Please take a close to at the chart above. It shows the bottom-formation that played out in USD/JPY from 2010 to late 2012 (the black line), before USD/JPY took off for a more than 50% gain. 

The red line, shows the current price-action in AUD/NZD. Do you see the similarity? If you do, then should we expect a different outcome this time around?

I would not bet on a different outcome.

I also don't say they have to be identical, but I think it would be a rather safe bet to place on them be close to similar.

When AUD/NZD starts to pick-up speed as I expect it will, It will be almost impossible to enter without a large risk. Just look what happened in USD/JPY, when it started to pick-up speed. From late September 2012 to May 2013, there was almost no corrections. This is why you want to be in wave 3, when it takes off.

As Robert Prechter says it. "Wave 3 is a wonder to behold!"

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Monday, January 16, 2017

Elliott Wave Analysis of AUD/USD - Directly lower or is a larger triangle unfolding?




AUD/USD - Directly lower or is a larger triangle unfolding?  

As long as important resistance at 0.7525 holds firm, we could still a direct break below minor support at 0.7425 indicating a direct decline to 0.6667 and longer term closer to the 0.6000 - 0.6100 area. 

If, however resistance at 0.7525 is taken out, then a larger triangle is expected. This count calls for more upside closer to 0.7625 before the triangle consolidation is complete and a impulsive decline lower towards 0.6667 and lower should be expected. 

No matter, which of the two scenarios that proves to be correct, the final outcome, will be a break lower. 

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Wednesday, January 11, 2017

Elliott Wave Analyses of Gold - Long-term correction unfolding from the 2011 high at 1,920.80


Gold Monthly Time-frame 

Long-term correction unfolding from the 2011 high at 1,920.80 

I was searching the Internet and came across this long-term Gold chart dating back to 1792. At that time gold was trading at 19.39 and we have since seen a long-term bull-trend that peaked at 1,920.80 in September 2011.
I have labeled the long-term chart from (1) to (5), which indicates that a top of Cycle degree completed in 2011 at 1,920.80 and the ongoing correction is of the same cycle degree. If this is correct, then we should be looking years ahead before the correction from 1,920.80 comes to its conclusion. Probably something in the neighborhood of 20 years.
Normally, the first corrective target we should be looking for i the bottom of wave four of one lessor degree, which in this case would be the low of wave (4) at 252 in August 1999. If, we however calculate the 61.8% corrective target of the rally from 19.36 to 1,920.80 that will provide us with a target near 745,00 and we have the bottom of wave 4 of (5) just below at 682.41, so I will be looking for this target-area, but will keep the long-term target at 252 in mind.
The decline from 1,920.80 to 1,046.23 only marked wave (A) of  the correction in cycle wave II and wave (B) currently is unfolding. My preferred count for wave (B) is that a triangle consolidation is unfolding. But let me be clear, that this ongoing correction in wave (B) still can take on a number of other shapes. Add to that (B)-wave corrections often take a number of unexpected twists and turns. But for now, let's keep what works and the triangle count has worked out pretty well till now.
Within this triangle, we saw wave A rally in three waves from 1,046.23 to 1,375.04 and wave B turned lower from 1,375.04 to 1,122.51 and wave C higher towards 1,323 is now unfolding.     
Please also see my long-term count from June 19 - 2016 here

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Friday, December 16, 2016

Elliott Wave Analysis of the USD Index - Will resistance here at 103.32 hold?

The Rate of Change -30 months

USD Index with the 30 month ROC

USD Index - Will resistance here at 103.32 hold?

I "bumped" into the Rate of Change (ROC) chart last night. The text in blue didn't really matter to me, but I noticed two things.
  1. The ROC is at levels, only seen a 30-40 years.
  2. When the ROC peaked at 42 in 1983 the decline in the ROC bottomed at -41.5 and the same relation was seen in 2001 to 2004.
So when the USD index finally peaks we should be looking at for the ROC to decline to the negative opposite number of the peak. That said, it's important to remember that just because, we are at extreme levels for the ROC it does't mean the top is in place, but that we should be aware that the rally from 2011 is an elite move. 
From an Elliott wave point of view wave 3 is currently testing the 161.8% extension target of wave 1 at 103.32. If a clear break above here is seen, then we should look for a continuation higher to the 200% extension target seen at 110.55. The minor count shows that we are in wave iii of [5] of 3, so after a correction in wave iv more upside towards 110.55 is likely in wave v of [5] of 3.
A continuation higher to 110.55 would fit the EUR/USD count nice as more downside is expected here towards 0.9580. 

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Thursday, December 8, 2016

Elliott Wave Analysis of EUR/GBP - Wave 4 completed at 0.8303 wave 5 towards at least 0.9452 is now unfolding

EUR/GBP - Daily 

EUR/GBP - 4 Hourly 

EUR/GBP - Wave 4 completed at 0.8303 wave 5 towards at least 0.9452 is now unfolding

The decline in wave 4 spiked the 38.2% corrective target at 0.8396 and moved lower to test the low of wave [4] of one lessor degree to complete the correction in wave 4. 

With the low of wave 4 in place, we should be looking for wave 5 higher to above 0.9270 with the first target for wave 5 seen at 0.9452, but I would not be surprised to see a continuation higher to the 0.9723 target. 

Short-term, I expect support at 0.8484 max. 0.8404 to protect the downside for the break above minor resistance at at 0.8551 for a rally towards 0.8707 on the way higher. 

Only a break below 0.8404 will invalidate this count. 

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Thursday, December 1, 2016

"DOW 50,000" a Wall Street legend predicts - Time to be a contrarian?


    Sentiment in excessive optimism territory

    NYSE Margin Debt close to all-time high levels

    The Buffet Indicator is at excessive levels

    DJI - An ending diagonal is close to completion

    DJI - One could make the case that the rally from 1932 is completing

"DOW 50,000" a Wall Street legend predicts - Time to be a contrarian?

I saw this headline yesterday and quickly found the article (you can read that article by clicking here). It immediately reminded my of the 1999 book that predicted would rally to DOW 36,000. You can buy that book at Amazon for USD 0.01 (The DOW 36,000 book for USD 0.01 then click here). James Glassman co. author to that book, actually repeated that prediction  in March 2013 (you can see the new prediction from March 2013 by clicking here). The funny thing is, just two years earlier James Glassman made commentary in the Wall Street Journal under the headline "Why I Was Wrong About DOW 36,000" (you can see that article by clicking here). In that article Glassman says, that the first major change was a slower US economy - Has that fact changed in 2016?
The second big change was risk, he says - Has the "new" type of risks decreased in 2016?
I don't think they have. Everyone of the risks he mentions is the same and then we have to add one more risk, which is the current rally from the March 2009 low at 6,470 now has lasted 7½ years one of the longest bull markets in history (the third longest I think).
The Margin Debt is close to its all-time high levels from April 2015, when the margin debt hit 400%, which by the way is 33% above the March 2000 margin debt top and 23% above the July 2007 margin debt top.
Finally, I think it would be appropriate to bring the Buffett indicator into play too. This indicator gained fame back in December 2001 when Warren Buffett in a interview with Fortune Magazine said "it is probably the best single measure of where valuations stand at any given moment."  
Back in 2000 this indicator peaked at 151.3%. The same indicator peaked at 115% in 2007 and now it's hovering near 125%. I'm not the inventor of this indicator, so Buffett might read it different than I do, but I don't think it's a good sign. Also taking into consideration that Berkshire's cash holdings currently is at USD 85 Billion (see this article from CNBC by clicking here). 
I think investors is "play with fire" as Buffett said in that article. But then, what do I know? 

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