Unemployment avi

It doesn't look like the consumers is ready to take over the government spending, and they (the government) can't keep spending forever... Wonder where the stocks are going...

USD - Index close to its bottom?

As can be seen on the daily chart we have had a nice five wave rally down from 89.62 ending wave c of [B] in a flat correction. That means we will soon see a the powerfull wave [C] take off. Wave C do have wave 3 personalities, so this is not the wave to mess around with.

I have drawn a Andews Pictfork defining black circle wave 5, look how the center (median) and upper lines define the entire black circle wave 5 down move. If my count is correct we might need one more stabe at the center line close to 74.

Looking at the internal relations between the waves:

Black cirkle wave 5 will equal black circle wave 1 at 74.34
Black cirkle wave 5 will be 0.618 time the lenght of black circle waves 1-3 at 74,37

The low on November 26 was 74.17 so this target has been fulfilled.



As can be seen the move down since November 3 from 76.82 do look like and ending diagonal missing the final part down in wave V. Idealy it should move below 74.17, but not below 73.88 as wave iii may not be the shortest. So even at the current level at 74.53 a long USD-Index position will make a low risk position, as the stop can be placed just below 73.88 makeing it a less than 1 percent risk trade.



On the 5 min. chart I have drawn in a lower pink line which marks the absoult bottom at 73.88, which must not be broken or my count is wrong. I have also drawn a upper pink line at 75.19 (low of wave (i) as any break above here will confirm that the bottom is in place.

During the next couple of hours we could see a move up to the 74.90 - 75.05 area before the last leg lower closer to 74.00, but we are close to a bottom and don't need much more before the bottom is in place.

Black Swan event - Dubai not paying its debt

I'm in a bit of a hurry this morning, so it will just be a quick update.

Just as our eyes was fixed on the Baltics countries, Greece, Spain or maybe one of the minor Eastern European countries running into trouble, the state owned company "Dubai World's" yesterday annouced it would not pay off interest of its debt in December. This is a Black Swan event, just as the collapse of the two Bear Stearns Funds was it in 2007, exposing the trouble with the Sub-prime loans.

Dubai World's failure to pay interest on its debt burden will be the trigger causing a new round of risk aversion. This is the event exposing the fact, that not all is okay and the return to "normal" only was due to Government intervention.



This might be a early call (maybe even too early), but the bubble in Gold might have bursted. A break below 1,129.50 would confirm the collapse of the bubble calling for a return to at least 1,022.00, but if this is the start of wave C we will see much lower levels.

The last couple of weeks we have heard over and over again, that the rise in Gold isn't due to speculation... but something totally different. Gold is now being regarded as a new safe asset-class. We have heard this song many times before. At the top of the housing bubble almost everybody said, that it wasn't a bubble. What aboute at the top of the Dot.com bubble, almost everybody call it the "New economy". I could keep on going, but there is no need.

If wave B has topped with the 1,194.90, it was just above the ideal target at 1,188.95, where wave c of B would equal wave a of B.



Crude oil has broken its uptrend-line, we do need a close below the uptrend-line '
(73.77 today) to get confirmation of a change in trend, but it's seriously weakning the uptrend. a close below 73.77 would call for a decline to at least the low 58 area.




AUD/USD broke and closed below the uptrend-line since early March yesterday. As stated yesterday we had a clear five wave move down followed by a three wave correction to 93.22 ending minor wave 2 and we are currently seeing minor wave 3 in motion, which should reach at least 87.63, but the decline will be much deeper in the bigger picture.




NZD/USD has broken below important support at 70.70 confirming lower tops and lower bottoms calling for much lower levels.

AUD and NZD crosses are looking increasingly weak

AUD ag. JPY broke below its uptrend-line from early February calling for a major decline in red circle wave 5, which should ultimately fall below the bottom of red circle wave 3 at 55.05.

Red circle wave 4 found its top at 85.31 just shy of the 61.8% retracement of red circle wave 3 at 85.61. The break below the uptrend-line at 80.84 calls for a wave 3 move down to the 67 - 70.55 area. I would expected 70.55 would marke the bottom of wave 3, but time will show.



NZD ag. JPY is pretty much in the same position thus a bit further ahead, which is very commen. NZD the smaller currency is almost always lead the way down ahead of the AUD.
The break below the Shoulder/Head/Shoulder neckline at 63.64 in Asian trading has triggered the top-formation for a decline to 56.58, which also happens to be where wave 3 would be 1.618 times longer than wave 1.



EUR ag. AUD has ended a large A-B-C correction 159.42 calling for a rally to at least 181. the ongoing wave iii is expected to reach at least 168.72 but a more likely target would be 173.08, where wave iii would be 2.618 times longer than wave i.



Again NZD leads and has broken clearly above wave 1 high at 206.95 calling for a continuation towards at least 215.62 but more likely 225.79 where wave 3 would be 2.618 times longer than wave 1.

Are they from the planet Earth?

I found this quote from the FED minutes in November in an article in Financial Times today.

"US Federal Reserve officials have expressed concern that near-zero interest rates could fuel "excessive risk-taking in financial markets" but believe the possibility of such an outcome is "relatively low", minutes from its November meeting show".

Sorry! But don't they live on the same planet as we do?

Gold and T-bills are clearly displaying bubble shapes (sorry I can't load up any charts today, but you know how it looks). The biggest problem with bubbles are trying to identify the top, but everybody knows when the top is finaly in place...

Why does the statement come as a surprise to me? It shouldn't FED couldn't see the housing and debt bubbles evolving right in front of them, so how should they be able to see, that the currently way too low interest rates will create excessive risk-taking by the major banks that have recived huge amounts in different bail-out packages.

This one is just great - You will love it...

DJI - Meeting heavy resistance

In Thailand the local Thai's had a saying "Same same but different" and I do think it goes well with yesterdays new high in the Dow Jones Industrial Index (DJI) and Gold (new all time high in USD). These two majors was the only majors making a new high among all the majors. S&P 500, Nasdaq, Nasdaq 100, UK-FTSE 100, DAX, all stayed below their year high. Looking at the BRIC countries they also didn't make new highs yesterday. In fact the Shanghai Composite already toppede in late August, The Indian Sensex topped in late October and both the Brazilian Bovespa and the Russian stock index topped on November 18 2009.

Could this be it? Yes!
DJI is facing triple resistance, meeting the 50% retracement target of wave [A]at 10,340.88, wave C equals wave A at 10,501.29, the trendline resistance back from October 2007 comes in at 10,502.71 today, which is also where the minor resistance line from May 11 2009 comes in today. Are we going to see one more new high in DJI closer to the 10,500 area? We might, but I'm sure it will prove difficulte to exceed yesterdays high at 10,495.61.

What would happen if resistance at 10.500 is cleared? A clear break above 10,500 would call for a continuation higher towards 11,232.83 area, where the 61.8% retracement target of wave [A] is found.

Looking at gold everybody wants it and they wants is bad. We all know what will happen, when the last fool (it is not I) has bought it in a vending machine at the airport or at Harolds UK it has but one way to go.

Let's be a bit more serious. We are in Wave C up from the October 24 2008 low at 680.80. At 1,188.85 wave C will equal wave A in lenght. We are currently testing channel resistance, but when the hype gets going, there is no saying when it stops, but it will stop...

A break below 1,129.50 would be first warning that the top is in place, and of cause a five wave decline followed by a three wave correction would be the ideal set-up.

You know I'm bearish, but I haven't been this brearish since the beginning of the year. The failure for the USD-index to make a new low alongside DJI is a major warning sign to me. The five decline in AUD ag. USD (wave i) is a major warning (AUD leads - see my post below). The major collaps in the Shanghai Composite overnight, the lack of followthough in the equity leaders the emerging market indicies should cause concern. I think FED and Wall Street is fighting a loosing battle trying to have us all belive that all is well...

AUD/USD - Top in place?

Above is my prefered count showen on a daily and hourly chart.

Looking at the daily chart we can see a impulsiv decline from 98.49 (July 15 2008) to 60.04 (October 27 2008), which I have labled red wave [A]. From 60.04 red wave [B] has unfolded with a likely top in place at 94.05 (November 16 2009).
As can be seen on the daily chart we are currently testing the supportline established since March 2009 and a break below this support line will confirm that red wave [C] is unfolding.
The rise since March 2009 has taken on a bearish wedge shape, which also will be triggered upon a break below the support line at 90.58, calling for a sharp decline.

Zooming in on the daily chart the hourly chart is showing a five wave decline from 94.05 down to 90.58(slightly breaking below the support line in minor wave i). Wave ii ended yesterday at 92.77 with an almost perfect 61.8% retracement of wave i at 92.72. If my count is correct minor wave iii is in its early stages and a break below important support at 90.58 will soon be seen. Only an unexpected break above
92.72 would call for a new high above 94.05.

AUD found its low already in late October 2008 and thereby was amongst the leaders of the ongoing rally, will it also lead the way down?

It's a bit early to tell, but it should come as no surprice if it does.

Australia has benefited a great deal because of its geographly placement close to China delivering a lot of the commodities China needs, but remember that the Shanghai Composite topped already in early August. The Shanghai Composite also bottomed in late October 2008 as the AUD did, leading the way up for the equity markets. Overnight the Shanghai Composite took a nosedive with a 3.45% fall, which very well was the start of wave 3 of C down to below the October 28 2008 bottom at 1,664.92.

Bovespa - Is wave B coming to and end?

Okay Fred here we go

Looking at the weekly charts the best fit (prefered count) is that we are currently tracing out wave 4 of [3]. The shape of wave 4 is most likely to be a flat or a triangle, that would alternate from wave 2 (principle of alternation).
We are close to finish wave B of 4. If wave (v) equals wave (i) we should find an ideal top at 68,307.61 and if wave (v) is 61.8% of wave (i) thourgh (iii) the ideal top should be found at 68,306.99. Therefore the current high at 68,059.65 could be enough to fullfil the possible targets (we are within 0.5% from the targets).

Looking at the relationship between wave 1 and 3 of wave[3] wave 3 is 4.236 times longer than wave 1. So we can expect wave 5 of [3] to equal wave 1 of [3] in percent traveled (318%), which would make wave 5 of [3] top at 93,603.

Looking at the daily chart I have concentrated on the ongoing (or just finished) wave B. It has become a double Zig-zag, where pink wave c was equal in length to pink wave 1. Blue wave c where equal in length to blue wave a at 67,655.76 so the current top at 68,059.65 has exceeded the ideal target by 0.59%, which should be totally acceptable.

Finaly looking at the last chart (hourly) we can see a clear five wave rally with a small new high at 68,059.65 so the most important demand - form, has been fullfiled. First serious clue that the top is in place is ofcause a five wave drop, breaking below 64,224.65 (wave 1) and a three wave counter rally (wave 2).

The conclusion is, that we most likely have seen a top of wave B of 4 or the top will be in shortly for a wave C down for a move below wave A at 29,435.11 for an ideal target at 23,574.38 (flat), but a triangle will have wave C stop at 40,567.72

Meredit Whitney on Banking stocks

http://www.cnbc.com/id/15840232?video=1332936523&play=1

Glad to be back from vacation

The USD Index has made a new low and tested 74.69 as its
lowest level, which is just above the 78.6% retracement of wave [A]
The ending diagonal should be close to its end, but we still might need
one more spike down to or just below the 78.6% retracement target
74.54.

EUR/USD, which account for 57% of the USD index has not

made a new top (yet...) As long as no new top is seen I'm still

looking for a new sharp drop. The divergence between the

USD Index and EUR/USD has been seen at all major turningpoints.

I don't know if it's the USD that leads or the equities and it

really doesn't matter. Eventhough we have made a new high

for the year the entier upmove looks very tired and are facing

strong trendline resistance just ahead as well as the 50%

retracement of wave [A].

All spiced up with massive divergens on the RSI, which is a clear warning

That a trendchange can happen any time.

Looking form a cycle perspective, the failure to hold the October 19.

top does call for a elongeated timeconsumption. Important tops

are seldom fund in November or December, but instead in the

periode from January to March. With that said there might be a

chance that a top will be found in the coming days as one of the

minor cycles peak on November 18. Sometimes the minor cycles

can cause major trendreversals, because the major cycles all

turned down in early 2007.

S&P 500 is facing stong trendline resistance just above as

well as the 50% retacemente target of wave [A]. Again we see

negative divergence on the RSI, MACD ect. At the same time

we a backtesting og the broken minor trendline is being seen

is this it? I don't like that the October 19 top was exceeded as I

just mentioned above important tops are seldom found in November

or December, but these times are not normal times.

I had a very nice vacation at Kata beach in Phuket Thailand. It's really worthwhile to visit. The pepole are extremly friendly in Thailand and allmost everything is cheaper there. A days salary is about USD 9 for an ordinary worker. They told me that the amount of turist was only half the ordinary amount (which I was glad for...) and they of cause have been hurt by the economic crises too.