S&P 500 - Time to a rally higher towards 1,078

The above chart shows my preferred short term count. If I'm rigth we saw the bottom of wave 1 of black circle wave 3 yesterday, and should now see a rally higher towards the triangle apex near 1,078. We might even see a rally higher towards 1,083 and even 1,094, before the next big decline sets in.
Yes, support at 1,041 was broken yesterday with a low at 1,035.18, but we closed directly at the support and the five wave decline from 1,131.08 tells us that the first part of the decline is over.

The next best count, which is much more bearish (shown below and not my preferred count) has that wave 1 of black circle wave 3 ended at 1,067.98 and wave 2 at 1,082.57 and that we are now in the powerfull wave 3 down. If this count is the correct one, a clear break below 1,041 should be seen today for a decline towards 1,019 and 980.

EUR/USD - Failuer to break below 121.03 keeps the altenate count alive

Short term important support at 121,03 held firm, which keeps the Altenate A-B-C correction count alive. If my bearish count is to stay valid we should not see a break above 123,25. If we do, the alternate count calling for wave C towards 126-127 becomes the favorit count.

Economic deja vu ? rerun

I just wanted to rerun my April post under the name "Economic deja vu" (see the link below)

As good as the call for a big rally in the 1990's was the last call for a rally in April seem to be just the opposite.

http://theelliottwavesufer.blogspot.com/2010/04/economic-deja-vu.html

S&P 500 - Wave 1 of black circle wave 3 down is over

With the test of 1,041.04 wave 1 of black circle wave 3 down is over. in the chart above we can spot a nice little inverted shoulder-head-shoulder formation, which will be triggered upon a break above 1,048.56 for a rally back to at least the apex of the triangle at 1,078, but I would expect a rally high towards 1,086 and very likely 1,096, before turning hard down in wave 3 of black circle wave 3.

Remember we should not see a clear break below 1,041 for this count to hold. A clear break below 1,041 would call for a much deeper decline just below 860.

S&P 500 - A minor bottom should be close

The thrust down from the triangle has worked well and my long standing target in the 1,050 - 1,051 area is hit and broken slightly. Ideally we should see a minor correction to the 1,054-1,055 area followed by one last minor decline to just below 1,043. Strong support at 1,041 should hold for a rally back to 1,100 area, from where the next strong decline should begin.

A clear break below support at 1,041 will cause a review of the count and call for a much more bearish count.

Shanghai Composite - Breaks important support

The break below important support at 2,502 today add confidence in my impulsiv decline count. calling for a continuation lower towards the 2,000 area.

Longer term wave [C] should break below the bottom of wave [A] at 1,664.92 for a move towards 1,175 and possibly even closer to 1,000 area.

S&P 500 - A triangle has developed

Sub-wave (iv) has turned into a triangle, which is close to ending. We should see a final thrust lower soon. The triangle has a minimum target of 1,058, but we could see my ideal target near 1,050 - 1,051 hit.

Remember that triangles always for say the last move in the direction of the trend (in this case down), before a correction sets in. Ideally we should see the bottom of wave (v) beginning of trading Wednesday, when the triangle apex.

S&P 500 - Time for the next leg lower towards 1,050 area

Not that I have much new to add, but I think we will see the next leg lower towards the 1,050 - 1,051 area today.
I would expect 1,081.68 protect the upside for a decline towards 1,065 and maybe even 1,055, before the next consolidationphase sets in.

At no point should we see a break above 1,086. If 1,086 is broken to the upside, we should see a move higher towards the 1,100 area, before the next leg lower will be seen.

EUR/USD - The correction from 122.08 became a bit more complex

The break above 123.50 Friday, made the correction from 122.08 a bit more complex. As long as 123.06 isn't broken to the downside one more rally higher towards 124.30 can't be excluded. From 124.30 or a break below 123.06 we should see support at 122.80 challanged soon for a continuation down to at least 121.19, but a more likely target would be the 118.75 - 119.47 area.

At no time should we see a break above 124.76, as that would call for a move higher towards 126-127 area.

EUR/USD - The wave (ii) correction extended to 123.87

The wave (ii) correction extended higher to 123.87 just below the 123.94 ideal target, but we should now see a break below 122.50 soon, that would accelerate the decline though 122,10 for the next decline to 121.08 and 118.75 on the way to the ideal target near the 114.71 area.

Ideally 123.18 will stay intact now, but resistance at 123.50 should not be broken at any time now, if it does a more complex wave (ii) will develop, but that is not preferred at this point.

S&P 500 - The bearish count works well

The bearish count that I have been working with since the 1,130.97 high works very well.

Yesterday we saw sub wave (5) slightly below the ideal target area between 1,077-1,078.
We are now seeing a series of ending wave 3's and 4's, which should ideally end with a test near 1,050-1,051 ending the first minor wave of black circle wave 3 down.

When minor wave 1 down is done we should see a correction higher towards 1,091-1,100 area in minor wave 2, before the next powerful minor wave 3 takes over.

For now let's concentrate on minor wave 1 down towards the 1,050 - 1,051 area.

S&P 500 - Sub wave (5) of (iii) down is under way

Sub wave (3) became deeper than my ideal target, but that's was wave threes does. Sub wave 4 therefore didn't quite make it to the ideal correction 1,101-1,102 area, but it came close with the test of 1,099.64.

We should now see 1,095.50 hold for a break below 1,088.66 for the next leg lower towards 1,081 and maybe even the 1,077-1,078 area before endning sub wave (5).

EUR/USD - The next leg lower towards 114.71 has begun

Sub wave (i) and (ii) is done and we should now see sub wave (iii) down to at least 121.06, but more likely we will see an extension lower towards 119.59.

Short term a break below 122.95 will confirm that sub wave (iii) is in motion. If we fail to break below 122.95 and break above 123.47 we will need one more move to the upside for a test of 123.91 before sub wave (ii) is finally done. My preferred scenario is that sub wave (ii) is done with the test of 123.51.

Australia Ordinaries - wave 2 is done

Wave 2 of wave [C] down is done and we should see wave 3, which should reach at least 3,784, but more likely continue all the way down to 3,252. Ultimately wave [C] should take us below the 2009 low at 3,090.80.

S&P 500 - The big bear market is in force again

Resistance in the 1,117-1,118 area held perfectly for a decline though 1,106 adding confidence in my call that a important top is in place with the test of 1,130.97.

Short term I'm looking for a test of support near 1,092.61 ending small sub-wave (3) calling for a minor correction higher towards the 1,100-1,102 area from where the next decline lower ideally will begin for a decline towards 1,081.

At no point should resistance at 1,109.24 be broken to the upside as that would cancel this count

S&P 500 - Has now resumed the bear market

Despite the ideal turndate was on Wednesday we must accept that we now can count 5 waves up in wave C and that the break below 1,115 yesterday was the first good indication that the top is in place. A break below 1,106.03 will confirm the top and that the powerfull circle wave 3 down is in motion.

The high at 1,130.97 should remain unbroken at any time to keep this count alive.

Short term expect resistance in the 1,116-1,118 area for a break below 1,106 soon.

EUR/USD and the USD-Index

The USD-Index mad a perfect touchdown at the 38.2% retracement point of the rise from 79.50 to 88.72. The lowest point of wave (iv) of one lessor degree was just below the 38.2% retracement target at 85.13. A break above 86.53 would indicate, that wave v of 3 up has begun.
The ideal target of wave v of 3 would be near 90.78.

If you look at the EUR/USD chart below you can see, that it didn't make it all the way back to the 38.2% retracement target at 126.18. A break below 122.55 would be an indication that wave v of 3 down has begun. Wave v of 3 should break below 118.75 for an ideal target near 114.47.

S&P 500 - The ideal target-area is now hit

The market gaped up at the opening and the ideal target- area between 1,130-1,150 is now hit, so is the middle of the wave 2-4 channel.

I still believe the ideal time for the beginning of black circle wave 3 lower will be on Wednesday. It should be ideal to short the S&P 500 tomorrow or early Wednesday for a break below 1,115, which will be the first good indication that the top is in place.

AUD/USD Wave II has extended

My preferred count is, that wave II has become an expanded flat. As we broke above 87.50 overnight wave C of II has become extended and should reach the low 88.90 area, before turning down in wave III.

As can be seen in the hourly chart below the break outside the possible ending diagonal has become more extrem than I expected, but a top should soon be seen. The Ideal target in the low 88.90's has almost been reached with the 88.59 high, but we might need one more rally closer to the ideal target near 88.90 before a break below 87.51 tells us that the top is in place for wave III down.

S&P 500 - Still headed for the 1.130-1.150 area

The isn't much new to add. We are still headed for the ideal target area from 1.130 - 1.150, from where the next big decline should be seen.

The current consolidation could evolve into a small triangle. If that's the case we should see a small set-back from near the current level near 1,116.35 before the last thrust higher into the ideal target area.

Remember that triangle foresay the last move in direction of the trend before a trendreversal is seen.

We are in the late stages of the expanding flat correction that began on May 25 and all demands in relation to form is fulfilled at this point, so a top can be found anytime now. Ideally the top will be found on Wensday, when the entire corrections has taken 21 days. At that point black circle wave 1 and 2 will be equal in time, but it's not a must!

AUD/USD - The ongoing correction is almost over

A big expanding flat correction has developed since May 25. We are now in the final stages of this correction, which ideally will reach the 87.50 area before the next big drop will set in.

Short term we should see a small decline to near 86.38 before one more move higher towards 87.50 setting the stage for the expected decline. The next decline, which will be wave 3 down from 93.89, should be strong and powerfuld and should decline to at least 74.25.

EUR/USD - Headed for 126,00

The call for a correction higher towards the 126-127 area is working out just fine.
The break above the red resistanceline has added confidence in the call for wave iv higher towards the 126-127 area.

When this correction is over a new big decline below 118,75 for support at 114.40 should be expected.

S&P 500 - We are in wave 5 of C

Wave 4 of C ended at 1,089.03 and we are now in wave 5 of C. Ideally wave 5 will end in the 1,130 - 1,150 area, but be aware that all demands in regards to structure now is fulfilled and a top can be seen at any time now. A break below 1,099.34 would be first indication, that the top is in place, while a break below 1,089.03 (bottom of wave 4 would confirm the top.

When wave 5 is done a new impulsive to the down side should be seen as black circle wave 3 developes.

S&P 500 - The alternate count died yesterday

The break above 1,105.48 yesterday "killed" the possibility, that the decline from 1,105.48 to 1,042.17 was the first down legg in a new impulsive decline. That also added support to my favourite count, that we should still see the correction reach the 1,130 - 1,150 area, before setting the stage for the next impulsive decline.


Taking a closer look at the rally since 1,042.17 wave C should be a impulsive five wave rally. The best count for that move is seen below. If this short-term count is correct, then we should be in wave 4, which should terminate in the area from 1,080-1,082 before wave 5 of C take us higher towards the ideal target-area near 1,130-1,150.

S&P 500 - Still in black circle wave 2

My favorite count is, that black circle wave 2 has become a flat correction and that we still should see a move higher towards the 1,130 - 1,150 area before black circle wave 2 ends setting the stage for black circle wave 3 down.

It is a possibility that black circle wave 2 already ended at 1,105.48 and we have seen the first sub wave i down and that we currently is in wave ii which has just ended or will end early next week. A break below 1,080.28 will add credence to that count.

EUR/USD - Wave iii down is done and wave iv underway

I back from a very nice holiday on the Island Lancerote. As I was away the wave (iv) triangle (see the hourly chart below for details) finished at gave us the final thrust down in wave (v) to end wave iii. On the day chart above the support line was broken for the second time since the downtrend began in November 2009 and we have seen positive divergence building as wave (iv) progressed. We should now see wave iv correct towards the 126.18 - 126.72 area, which is both the 38.2% of wave iii down and the top of the previous wave (iv) of one lessor degree. This is a common target for wave iv setting the stage for wave v down and finally pin-pointing the end of wave 3 down.

The mood towards the Euro is very bearish at this point, and News Week just had a cover declaring "Death of the Euro". I do think News Week has been out declaring the end of the Euro at a very early stage. Only in November it was the USD that was headed for destruction. It is always worth noticing cover stories as they very often fore say a coming turn in the trend, but this time I only think it will be a minor trend change ending wave iii setting the stage for wave iv.

The USD-Index (not shown) should head for 85.20 as its wave iv progresses.

Vacation time

I will be travelling to the small island Lanzarote just outside Vestafricas coastline for the next week.

Take care so long! See you on Friday June 11 again.

EUR/USD - Wave (iv) has become pretty complex

Looking at the longer term picture we are still in wave (iv) of iii down. Wave (iv) has become more complex (not uncommon for wave four's) than first anticipated. It's pretty diffuclute to see whats going on in wave (iv) on the daily chart, therefore the chart below shows the hourly chart.

As can be seen below the best count at this point is, that some kind of tilted triangle is bulding. It seems that we still need a little more action to the upside to finish wave e of (iv). Wave e should ideally finish near 124.20. Only demand is that it doesn't break above the top of wave c at 124.52.

When wave (iv) is done we should see a thrust out of the triangle in wave (v) ending wave iii down.


The picture of a wave iv triangle is the same for the USD-Index (the EUR accunts for 59% of the index). The triangle seen in the USD-Index is nicer than the one in EUR/USD. Again we should see a little more downside pressure to finish wave e of iv, but we can't break below the bottom of wave c at 85.85.

When the triangle is done we should see a strong thrust to the upside in wave v.

S&P 500 - Made it...

First lets take a look at the longer term picture. I think that major wave [B] finished at 1,219.80 on April 26, and we have seen the first part of major wave [C]. I do expect major wave [C] should ultimately break below major wave [A] at 666.79.

Now lets take a closer look at the first leg lower from the 1,219.80 high. As can be seen below we can count a five wave decline down to 1,040.78 labled black circle wave 1. Yesterday by holding above key support at 1,065.89 my favorit count (shown below) stayed intact calling for a correction higher towards the 1,130 - 1,150 area in black circle wave 2. I have to mention that a very common target for wave 2 is to the ending point of wave 4 of one lessor degree, which in this case would mean a rally to 1,173.30, before black circle wave 3 sets in.

A break above 1,103.49 should give us a rally towards the low 1,130 area, from where a flat or triangle wave iv should be seen, before the last rally higher towards the 1,150 area.

At no point should key support at 1,065.89 be broken, if it does, the correction from 1,040.78 would be over and it should only be a matter of time before 1,040.78 is broken to the downside.

S&P 500 - Make it or break it!

It is "Make it or break it" time for the S&P 500 A move below "key" support at 1,065.87 will leave me with no other choice than to adopted the alternate count shown below. But if support at 1,065.87 holds, then I'll keep my count above a expect a rally higher over the next few days towards the 1,130 and possible 1,150 area.

As said if key support at 1,065.87 breaks then the Top Alternate Count below becomes the favored count calling for wave III of III down. If that happens we should see a decline to at least 971, but more likely the 889 area.

NYSE Summation Index - Major sell signal

Take a look at this indicator. It turned bullish in April 2009 and have stay bullish during all of the rally since April 2009. But as can be seen in close-up below it crossed and went bearish on May 26 for the first since early April 2009.

I do think that this is a major sell signal and the bulls should be very careful in the future.

EUR/GBP - Possible Fractals

As I took a fresch look at my EUR/GBP chart I spottet this possible fractals. The current correction is the "Child" to the much larger "mother" streching 4 years from 2003 to 2007.

If they are Fractals then we should be very close to a bottom calling for a new powerfull rally soon. If that picture is correct, then the financial markets will soon spot that UK has almost as big a debth as Greece

Shanghai Composite - At cross roads

The Shanghai Composite is currently at a very important cross road. If the decline from the August 2209 high at 3,478.01 was a A-B-C correction, then wave A and C has reached equalty at 2,525.50. If it was a A-B-C correction then support in the 2,481.97 - 2,525.50 should not be broken to the downside. If however support at 2,481.97 is broken, then the A-B-C correction count should be dismissed and a much more bearish count will be favored.

My favorit count is the much more bearish count, but be flexible.

AUD/USD - Wave III down is under way

Wave II ended at 85.51 and wave III is now under way. The long term picture still call for an ultimate break below the 2008 low at 60.04.

We are currely seeing accelleration in wave iii of 3 of 1 of III down (sorry for the complex count)

I'm looking for a decline to at least 82.09 and possibly even 80.83 before we see a more decent correction, but for now stay with the USD.

S&P 500 - Back after the holiday

We should still see more upside or at least the correction should use up more time. The key point right now is 1,065.87 if we break below the key point we will most likly see some kind of flat correction, but as long as key support at 1,065.87 is not broken I favor that wave c up will rally higher closer to my target area.

EUR/USD - The correction is clearly over

I have had to change my count slightly. You know I had some problem labeling the decline from 123.88 to 121.50, the decline below 121.50 makes a expanding flat the best count and the current decline part of wave 5 down. We are currently in the middle of wave (iii) of iii of 5. Wave (iii) should fall to 120.55.

I'm still looking for a move closer to 116 and possibly even closer to 114.43 before a new correction higher. Just remember that the long term pictur is very bearish calling for a move below par.