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Monday, January 31, 2011

AUD/USD - Time for the next part of the decline?

All odds still favor the 102.53 high as the top of wave 5, however we should soon see some acceleration to the downside if this is the case. A break below 98.00 should propel us down to 95.30 and most likely a lot lower.

The risk is that the top at 102.53 only was a minor top and we need one more high before the entire rally since 60.73 finally find it's peak. A break above 102.53 could lift us up to the 105-106 area.

Gold - should soon test the uptrendline

Gold should soon test the long term uptrendline near 1,294 and a break below here will confirm that an important top is in place with the test of 1,430.95.
Take a look at the top-formation in gold and the look below at the possible top in copper.
A break below 1,294 should open up for a decline to at least the 1,143 - 1,153 area.
If however the uptrendline protects the downside for a new rally higher towards the top at 1,430.95 if that is the case, then we can with almost 100% certainty expect gold to rally much higher.

Oil - Headed for the 96 area

Oil is headed for the next resistance point near 96.45, but this rally is running out of time. The last two rallies in oil lasted for 52 and 54 days and on February 7. this rally will have lasted for 54 days and could easily be the time-limit for this rally.

Copper - Close to a safe place to sell


Copper is testing the 445-446 area for the third time, at it should be safe to sell this third test for a decline to 441.21 and a break below here confirm that an important top is in place.
If however support at 441.25 protects the downside for a new rally towards the 445-446 area. It would be time to revers from selling copper to a buying strategy as copper then should rally much higher, but for now a selling strategy is warranted.

S&P 500 - Minor wave 2 is done


All odds favor, that wave 2 has already ended with the test of 1,287.09, which is just above the 38.2% retracement target. A break below 1,280.36 will confirm that wave c of 2 is done.
Of cause the is the risk of a more complex correction, but there is no way of telling if that will develop.
The next impulsive decline should take us down to at least 1,261 and more likely 1,241.

Saturday, January 29, 2011

S&P 500 - Wave 2 top or just wave 1 of C?



Every thing point to a important top being in place with the test of 1,302.42.

On January the 20 in my post (http://theelliottwavesufer.blogspot.com/2011/01/s-500-top-in-place.html) I said a break below 1,261.78 would confirm a top, but we only reached 1,271.30, which kept the uptrend alive. A break below 1,271.30 this time will confirm that an important top has been seen. My favorite count is, that we have seen wave 2 end at 1,302.42 and should ultimately see a break below 1,011.52. If at any time a break below 1,011.52 is seen we can expect a much deeper decline.
Looking at the 5 minute chart below we can count a impulsive 5 wave decline of the top at 1,302.42, that could just be a wave c-decline, but if this is the case we should soon see a break back above 1,297.03.
If however resistance at 1,288.90 - 1,289.92 holds for a decline back below 1,275, that would increase the odds of an important top dramatically and call for a continuation towards at least 1,264.60 and more likely 1,249.02.


Friday, January 28, 2011

EUR/USD - Uptrend collapsing?

Is the uptrend since 128,63 finally collapsing? It does look that way, but we still need a break below 136.35 to confirm that a top is in place for a decline towards at least 134.16, where we find the 38.2% retracement of the 128.63 - 137.59 uptrend.


Thursday, January 27, 2011

EUR/USD - Topping?

EUR/USD is still holding it's uptrend from 128.68, we should soon see it break, but until it breaks, the risk is one more new high. We still need a break below 135.52 to confirm that the top is in place for a decline towards at least 134.10 and more likely 132.15 - 132.50 area.

The big question is, if this was the leg "C" of a correction or just the start of a rally towards 140.68 area. The form of the coming decline should hopefully determin that for us.
For now look for a break below 136.77 soon.

Wednesday, January 26, 2011

USD Index - Bearish picture

The above picture shows the bearish USD picture. The dominating formation is the Shoulder/Head/Shoulder top, which was triggered in late September 2010. The target for this formation is around 71.41. The back-testing of the S/H/S neckline produced a double-top with a target around 76.20.

For EUR/USD the targets will be around 141.48 for the double-bottom and 148.60 for the Inverted S/H/S bottom.







EUR/USD - Top in place?

If the bearish case should continue to be the preferred count a top should be in place with the test of 137,03 in early North Amarican trading. A break below 135,70 is needed to confirm the top and the next decline.

A break above 137,85 would change the picture to a much more positive one. I will post this scenario later today.

Tuesday, January 25, 2011

EUR/USD - Pricetarget fulfilled

The triangle target at 136.50 has been fulfilled and what might be lacking is the time. Very often triangles finishes at the apex of the triangle. If that is what we are "waiting" for a top should be seen in late European/early North American trading.

A break below 135.36 will confirm the top for the next decline below 128.68.

At no point should we break above 137.85, as that would call for a continuation towards 140.63 and likely also 142.81 again.

Sunday, January 23, 2011

Gold, silver and copper - Topping!




As can be see above gold, silver and copper are all topping. If we are looking at a major top remains to be seen, but all should at least see a period of correction. Copper and silver has been the leaders since the low in late 2008 and they should lead the way down too, while gold most likely will be the lacker.


VIX - Double bottom?

Could a double bottom be forming in the VIX index? A break above 19 would confirm the double bottom for a rally towards 23.79 and a break above here will confirm that an important bottom was seen at 15.37.

The normal target, when a wedge-formation is finished is a return to it's origin, which in this case is a rally bach to the 37.85 area.

EUR/USD - Topping!

Failure to break below 134.12 told us, that one more rally higher towards 136 was needed. My best micro-count is that the mess near 135.41 was an small triangle, which tells us, that the ongoing rally will be the last. The target for this rally is in the 135.36-136,50 area depending on where you measure the triangle.

Stay tuned for a turn downwards soon.

Thursday, January 20, 2011

S&P 500 - Top in place?

Surpassed my ideal target area between 1,289 - 1,291 by a small amount. As the top has been 1,295.98. A break below minor support at 1,278 would be first indication that a top is in place, while a break below 1,261.87 confirms the top for a decline towards at least 1,174. I still belive that this decline could be pretty violent and deep.

EUR/USD - Topped or close to topping out

Wave C from 128,63 might already have topped with the test of 135,38 yesterday. As all requierments was fulfilled at that point. Wave C broke slighly above the top of wave A (134.98), so the expanded flat might be over. A break below 134.12 and more importantly 133.54 will confirm the top for the next decline towards at least 127.13.

As long as 134.12 isn't broken to the downside, we could see one more new high towards 135.98.

I'm still pretty undecided if we have just seen an "X" wave or it was wave ii of 3 and wave iii of 3 down is about to begin. If the count I showed Tuesday is the correct count, then the "X" wave count would fit the picture better, but lets see what happens from here.

Tuesday, January 18, 2011

EUR/USD - A possible longer term count

It might be worth stepping back a bit from the micro-count, trying to put the latest price-action into the bigger picture.

The above count could explaine the messy decline from 160.38. If this count is the rigth one, we still need one more decline below last years low at 118.75.


Zooming in on the last part of this decline. we can see that the decline from 142.81 came in three waves. The price-action since 129.64 looks like an expanding flat correction, where a rally towards 135,94 still is needed to end wave C of the expanded flat and then we should see and impulsive wave C down below 128.71 and 118.75 longer term.

Take a look at this video

A very interesting video about trading behaviour and why we tend to do the same thing wrong over and over again.

Friday, January 14, 2011

EUR/USD - More upside needed, but...

The possible wave 2 of 5 has become much bigger, than first anticipated. As can be seen the Stoch. indicator has rolled over to the downside, but should soon do so.

The minor reaction from the 133.84 high lookes like a minor wave iv correction, which means that more upside is needed, but we are close to the start of wave 1 at 134.33, which can't be broken, as that would changes the bigger picture. A break above 134.33 would indicate, that a fuld five wave decline ended at 128.63 or that the correction from 129.64 (bottom of wave 3) is ongoing and call for further upside.

I will try to short EUR here in front of resistance at 134.33, with a stop at 134.40. It's not a low risk trade, but the loss will be very low if I will be stopped out.
The safe trade would be to wait for a break below 133,21 with at stop placed at 134,40 too.

Thursday, January 13, 2011

AUD/USD - Important top in place?




The above count is my preferred at this point. As it can be seen it points to a full five wave rally since the low in late 2008. That means the upside at the very least is limited at this point, if not an important top is in place, as per my prefereed count. The evidence pointing towards an important top being in place is negative divergence at the weekly stoch. indicator and ofcause the complet five wave rally.
To confirm the top we need a break below support at 95.42 (the bottom of wave iv of 5), but a clear break below the minor support-line will be further indication, that an important top is in place.
Finally looking at the hourly chart. we can see a five wave decline from 102.53, which at the very least indicats , that we shall see a Zig-zag correction lower. I do expect that this was only the first leg lower in a much deeper decline to the bottom of wave 4 at 80.90, which is also the 50% retracemnet target for the rally from 60.73 to 102.53.
The next leg lower should be seen, when the hourly stoch. indicator rolls over to the downside.

EUR/USD - Wave 2 of 5 entering the final stages

Wave 2 of 5 exceeded resistance at 131, which has opened a window for a move towards the 61.8% retracemnet at 132.14. Currently we see the 50% retracement tested, but I think we will see a move closer to 132.14 now.
Be aware, that the stoch. indicator has reached OB territorium, so when it rolls over to the downside it should be an excellent shortning oppotunity for wave 3 of 5 lower.

Wednesday, January 12, 2011

EUR/USD Clearly in wave 2 of 5

The bottom of wave 1 of 5 took a little longer than ecpected, but it's clearly in place now, and wave 2 of 5 ongoing. I'm looking for resistance in the 130.80 - 131.00 area, for the next leg lower. We saw no extension in wave 1 or 3, why I expect wave 5 to extent. Next downside target 121.20?




Sunday, January 9, 2011

EUR/GBP - More downside to come

I thought, that the wave [4] correction was over at 81.18, but the latest development has change that view. The overlapping structure call for more downside and the next obvious correction-target is 76.92 - 77.82 area.
The entire decline from 97.99 is filled view overlapping waves, which is only seen in corrective waves, fitting the wave 4 count. The ideal time for this wave [4] bottom is near April 13.

EUR/USD - Wave i of 5 should be done soon

The decline Friday was more powerful than I anticipated, but wave i of 5 should soon be in place.
I will keep my preferred impulsive decline count, but looking at wave 1-2-3 and 4 it's not the prettiest picture I have ever seen.

Zooming in, looking at the hourly count, we can count a five wave decline since 134.33, which should limit the downside or keep it very bumpy til we reach the bottom, but it should be soon. A break above Fridays high at 130.19 will confirm the bottom for a correction higher towards the 131.67 - 132.31 area.



Friday, January 7, 2011

USD/CHF - Minor correction before next rally higher

Sorry for not having any Elliott wave count on this chart.

The rally from 92.80 to 97.07 was wave i of 1 and we are now looking at wave ii down. There are two strong supports, which is worth looking at. The first is near 95.35 and the next is near 95. I do think that support near 95 is the most likely target for this correction.
From a time aspect the bottom is most likely in the early trading hours of the North American trading monday, but we might already see a bottom in late trading hours of the North American trading secession today.

When the correction is done the next rally should take us up to at least 99.24.

Gold & Silver - Breaking down!

The triple top neckline has just been broken, which makes gold vulnerable for a major sell-off. The first target is near the 1,264, but this sell-off could easily accelerate to the downside, if this support is broken too.

The breakdown in gold is followed by a sell-off in silver too. The target for this sell-off is in the 24.83 - 25.00 area.




EUR/USD - Wave 1 of 5 is most likely done

My prefered count is, that we are in wave 5 down from 142.81. The decline from 134.33 is wave i of five and odds favors, that it ended at 129.58 in early European trading. We should now see a correction back towards the 131.40 - 131.96 area, but can't exclude a correction higher towards 132.52, before wave iii of 5 down sets in. A break above 130.20 confirms that wave i is over and wave ii underway.

Thursday, January 6, 2011

USD/ZAR - Bottom in place?

A five wave decline since the 11.855 could be in place (see the weekly chart above). The momentum indicators confirm a possible bottom in place, as they both displays a positive divergence.

If we zoom in on wave 5 down (see the chart below). Again we have a clear five wave decline from 8.0840 down to 6.5165. The momentum indicators again confirm the bottom due to the positive divergence and at the same time the MACD has broken above "0" and the Stoch. has rolled over pointing clearly upwards.

This might be an indirect indication, that gold, silver and copper is topping.



EUR/USD - The correction is clearly over

The break below the support line at 130.53 confirms that the correction is over at the next target is the 129.64 low, where I expects wave i of 5 to end. Bulldozer in a comment to my EUR/USD comment yesterday, see the link, that it looked like a possible Shoulder/Head/Shoulder. As can be seen it could very well be a S/H/S calling for a continuation down to 116.75.
(http://theelliottwavesufer.blogspot.com/2011/01/eurusd-correction-over.html#comments)

The hourly chart below shows the micro count. We should be close to a minor bottom in wave v of 5 down. The momentum indicator has entered oversold territory confirming, that the down is be coming limited or more bumpy from here.



Wednesday, January 5, 2011

Gold and Silver - Topping?

Trying to call a top in in these two shining metals, has come with embarrassment, but just looking at the weekly gold-chart, clearly displays that a five wave rally from 680 is in place. At the same time a possible triple top could be in making, but before the "neckline" at 1,360 breaks. I'll just call for the possibility.

The chart below is the 4-hourly chart showing the triple top close-up.

I have no Elliott wave counts on the silver charts.

The two charts below is the weekly silver chart (the upper chart) and the daily silver chart below.
It's possible that a important top is in place. The channel resistance-line was slightly broken followed by a break below the minor rising support-line since 18.32 in late May (the lower chart is the collapsing trend in close-up).






S&P 500 - One step closer to the top

The new high today keeps the uptrend intact, and gets us one step closer to the ideal target area between 1,289 - 1,291. That said it's also time to protect yourself from a sudden turn around.
We now have a very clear five wave rally from 1,011.52, which does limit the upside for at least a correction towards the 1,173 area. Wave patterns have a tendency to become more clear towards the end of a major top or bottom.
I will lift my stop to just below the 1,262.72 bottom, to protect myself for a sudden turn around.
I will even try a minor short at that point with a stop just above the high set for this uptrend.

The big question is whether this is wave "C" in total or just wave "1" of "C"?

Time will tell!


EUR/USD - Correction over?

Did the correction end at 134.33 yesterday? If support at 132,48 breaks, then the answer is yes.
Odds do favor a break below this support soon, which will open for a decline to the longer supportline near 131,00.

If however 132.48 against all odds holds and we break back above 133.60, we should see a new attack on the 134.90 resistance.

The alternate count is, that a triangle is building, where we have just ended wave "c" at 134.33 and are now building wave "d".

Tuesday, January 4, 2011

EUR/CHF - A bottom is in place

On december 22 - 2010 I wrote, that a bottom could be very close at hand. I had the next support at 124.80, which was broken for for an overshoot to 124.00. With the rally we have seen today the odds do favor a bottom is in place for a rally towards the top of wave 4 at 137,75 - 138,35. (The chart below is a close-up of the above chart).

The big question is if the test of 124.00 marked a major bottom or if it "just" marks a temporary bottom and further declinces will be seen later. The current price action will reveal that later.


Monday, January 3, 2011

EUR/USD - The never ending story?

The sideways action since the beginning of December is becoming an never ending story.

The correction has become way to big to be a wave 4, so it's likely to be some kind of "X" wave. The is no impulse seen, but instead a lot of overlap rising the odds that this is some kind of correction.

I still think that we are looking at a double correction, which still could move higher towards the 134.90 area, before rolling over to the downside again. The last part of the rally should ideally follow the red dotted line, but lets see what develops from here.