S&P 500 - Bearish Divergence Calls For A Decline To 3,775

S&P 500 - Bearish Divergence Calls For A Decline To 3,775 

A bearish divergence has been building for the RSI indicator since January 2018 where the indicator peaked near 88 on a monthly basis. In Elliott wave counting a peak in the RSI is most likely the end of wave 3 of 3 and therefore we should expect more upside to come as wave 3 finally came to and end in January 2022 and gave way for a correction in wave 4 and finally the ultimate run in wave 5 a new all time high at 6,147. 

When testing the 6,147 high the S&P 500 also tested the pitch fork resistance-line, which hasn't been tested since the 2000 peak at 1,552. 

In conjunction with my April 1 post, we now have two different analysis calling for a lager correction in the S&P 500. This fits nicely into all the uncertainty Trump currently is unloading into the markets, with tariffs etc. 

I will be looking for a decline to at least 3,775 which marks the 38,2% correction of the rally from the 1932 low at 4.4 to the 6,147 peak in 2025. 

We could well look into another lost decade as we did from 2000 to 2009.  

US 10Y - US 2Y Yield Says A Major Correction In The S&P 500 Should Be Expected

US 10Y - US 2Y vs S&P 500

On January 30 - 2024 I made a post calling for a major correction in the S&P 500 index once the US 10Y - US 2Y yield pushed above the zero line (You can see that post by clicking here). After the US 10Y - US 2Y yield had been inverted since July 2022 this inversion finally came to an end in September 2024 indicating that a major correction in the S&P 500 should be expected in the near future. 

This indicator is of cause not a timing tool, but a clear indication that the S&P 500 is ready to start building a top. In the current case it looks as the a top has been build from November 2024 to February 2025 and a major correction should unfold during the coming years. 

The first major downside target to be looking for is seen near 4,855, while a continuation lower to 4,056 would be very likely. 

Once we get down there I will review the possibilities of maybe even lower targets.  

Elliott Wave Analysis of Gold - Closing in on resistance at 3,100

Elliott Wave Analysis of Gold - Closing in on resistance at 3,100

Almost a year ago, when gold was trading near 2,175 I said that a monthly close above resistance at 2,172 would call for a continuation towards the next upside target at 3,100 (You can see that post by clicking here).

Well almost a year after Gold is closing in on the 3,100 target fast. I would expect the 3,100 target to act as a strong resistance, that's not going to be broken and set-up gold for a larger corrective decline towards strong support at 2,172 and ultimately a continuation lower to the bottom of wave (4) near 1,050. 

However, for now we should look for a firm test of the long-term target at 3,100 and then see what gold has in store for us. 

In my March 2024 post I call for silver to break firmly above resistance at 30.00, which we have seen, but silver still needs to accelerate higher towards the long-term resistance at 50.00. I still expect this to happen, but obviously at its own pace...  

 

Elliott Wave Analysis of EUR/USD - Wave 3 is ready to unfold towards at least 1.8147

 

Wave 3 is ready to unfold towards at least 1.8147

EUR/USD began a major upswing in October 2000 from a low of 0.8231. Wave 1 or A moved up to a high of 1.6038 from where wave 2 or B initiated. Wave 2 or B completed with the test of 0.9536 in late September 2022 and wave 3 or C has been in its infancy since then. We have seen circle wave 1 move up to 1.1276 and circle wave 2 followed with an almost perfect 61.8% correction of circle wave 1 to complete at 1.0176 and circle wave 3 should now be expected towards at least 1.3000 and more likely extend much higher towards 1.6500. 

Short-term a break above minor resistance at 1.0467 will be a strong indication that circle wave 2 is done and circle wave 3 is working its way higher. 

Elliott Wave Analysis of EUR/JPY - Wave 5 in motion for a rally towards 182.95

 

Elliott Wave Analysis of EUR/JPY - Wave 5 in motion for a rally towards 182.95

It' has been a while since I last reviewed EUR/JPY. On April 18 this year EUR/JPY was testing resistance at 164.17, which at that time I thought was the top of wave 3. However, it quickly turned out that it wasn't the top of wave 3, but rather the top of wave iii of 3 and more upside should be expected towards the next resistance near 175.66 which marked the 261.8% extension target of wave 1. 

Wave 3 peaked at 171.79 but the the B-wave of the following wave 4 tested the expected 175.66 target before a deep wave C dipped to test the low of wave iv of 4 and the 38.2% corrective target of wave 3 at 153.56. 

Wave 5 is now in motion and should see a rally towards resistance at 182.95 before completing the rally out of 2020 low at 114.20. 

Elliott Wave Analysis of Coffee - Next stop USD 300

 

Elliott Wave Analysis of Coffee - Next stop USD 300

Coffee completed a large triangle consolidation as wave Y of 4 in January 2023 and has since moved higher to test and break the triangle resistance-line near 250 and is now headed towards the next resistance at 300. 

If this resistance is broken and I expect it will be broken then the next long-term stop is see at 576. We will see the former tops at 318 and 340 give some temporary protection, but they shouldn't anything other that temporary stops before the match higher towards 576 is seen. 

That said, it's important what's gone happen near resistance at 300. If coffee fails to clear this resistance and starts to move lower again, we could see the the consolidation from 1977 continue for another 22 years as the final corrective wave "Z" unfolds. This is not my preferred count, but an option we can't exclude at this point in time. 

The job is to find the possible future path for coffee, which for now is up towards 300 and then let's evaluate the most likely future price-action for coffee. 

 

Elliott wave count for Crude Oil - Bottom could be in place

CRUDE OIL 

Elliott wave count for Crude Oil - Bottom could be in place

After a 2½ year decline from the March 2022 peak at 130.50 crude could finally could have found a bottom a new strong rally could in front of us. 

If a bottom is in place, we should see support at 63.64 protect the downside for a above minor resistance at 73.82 and more importantly a break above resistance at 77.60 that will confirm that wave 2 have completed and a strong wave 3 is in front of us for a really above 130.50

If, however support at 63.64 is broken, then the corrective decline from 130.50 remains in place for a decline towards 45.09 before the corrective decline from 130.50 completes and a new impulsive rally should be expected.