FTSE 100 and DAX - topped or is topping

The FTSE 100 does look as it has topped for now and we should soon see a challenge of the support line from early March 2009.

The DAX also looks like it has topped or is very close to topping. Looking at the VDAX below it seems as the top is is place and pressure to the downside should build going into 2011.

A top around now would also fit the Brenner Cycle, which calls for a top in 2010.

The Game is Up, The EURO is Finished! Nigel Farage Speaks Out

Is he angry? I think so, If he's right time will show.

EUR/USD - Is wave 3 down extending ?

The count since the top of wave 2 has worked nicely, but I might have to change the micro count to the above, showing that an extension is in progress. The is no way of telling if this is the right count, but it seems very possible.

If the above count is correct I would expect one more decline below 129.80 before a minor correction higher towards 130.61 and possibly 131.36 - 131.49 below the next leg lower.

I still would like to stress you to be careful trading any of the corrections, as wave 3 normally is the most powerful of the impulsive waves and the corrections is often sub-standard.

EUR/USD - Wave 3 of 3 down has already begun

The failure to take out 133.45 points to the fact, that wave 2 already ended at 133.45 and that wave 3 of 3 is now ongoing. this wave should fall towards 130.37, but as we are in the most dynamic part of wave 3, where the point of recognition really hit the market, and extension within the extension can't be ruled out, therefore a clear break below 130.37 could extend the decline towards 128.37.

EUR/USD - Wave 2 of 3 is ongoing

Wave 2 of 3 is ongoing. The best micro-count (see the hourly chart below) tells us, that wave 2 is an expanded flat (wave B ended below the beginning of wave A). Wave C should now be underway. Ideally wave C of 2 ends near the 134.10 - 134.21 area, but as I have stressed a couple of times. We are now in wave 3, which normally is the strongest and most powerful of the impulsive waves, therefore the corrections tend to be sub-normal.

When wave 2 is done we should see wave 3 down to at least 128.32, but I wouldn't be surprised if wave 3 extends down to 124.67.

EUR/USD - Wave 1 of 3 is done

Wave 1 of 3 became slightly deeper than my target area between 132,10 - 132,20, with the test of 131.96. Wave 1 is now done and we should see wave 2 of 3 up to 134.21. At 134.21 38.2% of wave 1 would be retraced and 134.21 also marked the high of wave (iv).

Once again I will stress, that we are in wave 3 down, which normally is the most powerful impulsive wave and corrections tend to be sub-normal.

EUR/USD - Wave v of 1 down is progressing

The best micro count is, that we are in the final part of wave 1 of 3 down. Wave v of 1 is now in progress and should take us down close to the 132.10-132.20 area. When wave v of 1 is done one more correction back towards 134.10 - 134.20 should be seen. Even Though this is my preferred count I would stress, that we are in wave 3 down and correction tends to be sub-standard and extensions within extensions can easily be seen.

EUR/USD - The last wave iv is developing

Wave iii ended at 132.85 just 4 pips above the previous wave (iii). The following rise makes the best count for wave iii a fifth failure (At 32.82 wave iii became exactly 1.618 time longer than wave i) and the current rise wave iv. This wave iv should terminate near 134.21 and setting the stages for wave v's decline down to 132.10 ending wave v of 1 of 3.

EUR/USD - Wave (iv) could still be in progress

As we haven't broken below 132.82 yet, wave (iv) could evolv into a triangle. If a triangle is developing we can expect a run back up to 133.97 as wave c and then wave d down to 133.26, before wave e, which can take whatever shape possible.

EUR/USD - The next wave (iv) is in place

Wave (iv) is now in place and wave (v) down is ongoing. Wave (v) should break below 132.82 ending wave iii and setting the stages for wave iv, which should again correct back up to the 134.12 -134.31 area.

Banking Index - Big S/H/S top building

The Banking Index has been building a major Shoulder/Head/Shoulder top since August. A break below the neckline at 43.00 will be very bearish with an objective in the 26.85-27.00 area. The banking industry is normally an leading indicator for the stock market in general. If the topformation is triggered it will have a major impact on the rest of the market.

Note how the correction from 17.75 ended almost perfect at the 38.2% retracement of the fall from 121.16 to 17.75.

DAX looking toppish and the VDAX breakout

The German DAX Index is looking toppish, as the expanding ending diagonal might have topped with the test of 6,901. A break below support at 6,617 would add confidence in my call for a top.

The VDAX has broken out resistance of a falling wedge, which should result in a rise towards 28 and possibly even 32 over the coming weeks and months. The expected rally in the VDAX also adds credence to my call for a possible top in the DAX Index.

EUR/USD - Wave 3 down progressing nicely

The above chart shows the expected series of wave 3 and 4's. Look for wave (iv) to end close to 134.12, before the next decline lower in wave (v) ending wave iii.

Original post below:

After the fast decline yesterday and the break below 134.58, which froced me to re-adopt the Expanded Flat correction count as wave 2. The first part of wave 3 down has progressed nicely. We should now be looking for a serie of waves 3-4's before ending the first part of wave 3 down.
Wave i of 3 should ideally end near the 132.72, but thrid waves is normally strong and powerful and extensions within extensions is not unlikly.

The chart below is the USD Index, showing a clear break of the downtrend since 88.70, confirming the new uptrend.

EUR/USD - Next leg lower has begun

The break below 134.58 has forced me to adopt the Expanding Flat correction as wave 2 again. But getting the rigth focus lets look at the daily chart. The break below favors that wave 2 ended at 137.86 making the C wave of the expanding flat correction shorter than it would normally be.

If the above count is correct we should now be in wave 3 down, which sould at least take us down to 130.77, but an extention would be more likely.

Focus should again be to the downside and correction used to sell EUR.

FTSE 100 - Looks very toppish

It looks like the FTSE 100 has put in an important top at 5,902. A smal S/H/S top has formed, which has an objectiv in the 5,390 - 5,400 area, but it could easily be a much deeper decline.

Short term resistance is now located at 5,670, which will ideally cap the upside, but if broken a move towards 5,705 should be seen.

EUR/USD - Wave C of 2 should begin now

Wave B went a bit under my ideal target at 135.62 and from the timing point of view we have seen an almost perfekt hit. Wave C of 2 should now be under way, with an ideal target in the range from 137.77 to 138.14. An extended wave C can't be ruled out, but time will show.

At this point only a break below 134.58 will alter my count back to my former count - The Expanded flat - where the C-wave had become too short.

EUR/USD - A change in count is needed

We saw the expected top in early European trading this morning, but the following price action, which broke below the ending of wave (i), has forced a change in my count. I now have to adopt the count which had wave 1 ending at 134.58. This count then suggest that we have seen a five wave A and now is in wave B. Wave B has become an expanding flat correction, which should ideally end near 135.62 and from a time point of view in very early European trading hours, before taking of in wave C, which should take us up to 138.34 as the ideal target.

EUR/USD - Wave C of the Expanding flat is progressing nicely

I still favor the Expanding flat scenario. Wave A went from 135.72 to 137.77 and wave B declined from 137.77 to 134.58 ( i think that we saw a minor fifth wave failure at the bottom of wave B) and we are now in wave C up from 134.58 to ideally the 138.20-138.45 area, but could easily extend to the 139.00 area.

The micro wave count of wave C shows that wave v of C will extend and looking at the chart above we should be close in end wave (5) of (iii) of v calling for wave (iv) down to 137.40 or slightly below, before wave (v) sets in.

Armstrong and Brenner cycles

It has been a while since I have looked at the Armstrong and Brenner cycles. Starting with the Armstrong economic cycle (the chart above). It can be seen that the economy should peak in February 2007 (The February 24.th to be precise). Projecting that over to the equity market, we know that they peaked in late October 2007. The economic down cycle should continue to April 19.th according to Amstrong.

Looking at the Brenner Cycle (see the chart below - Sorry for the quality, but it's an old handdrawn chart, but it should last my lift time or at least as long as I'm trading...)
The Brenner Cycle shows that we should see a top in 2010 followed by a decline into 2011.
According to the Brenner Cycle chart, the 2011 should not be a panic low, but as we saw in 2008-2009 the decline still could be very severe.

An other important issue is the risk of an inversion of the cycle. There is no telling if a inversion will be seen, but we saw an cycle inversion in March/April 2009 (probably because of FED's QE1). The risk of a new inversion (this time negativ for the economy) is obviouse, but not a giving case. No matter if an inversion will be seen or not, the end of 2010 and the beginning of 2011 could be a major disappointment for many investores.

EUR/USD - Wave C of the Expanded flat is well under way

Wave C of the Expanded flat correction is well under way. The micro count represents my favorite count at this point. I would expect wave v of C to extend if we are to reach the ideal target area. If wave v becomes 1,618 times wave iii it will exactly reach the bottom of the ideal target area.

VIX Index - Breaks out

The falling Ending Diagonal finished wave B and the break above the resistance line warns that a period of increasing volatility is under way again. If my count is correct we should now be in the very early part of wave [C], which should at least reach 50.93 longer term.

The break above the upper Bollinger Band, tells us that we need a couple of days of consolidation back towards the middle band at least, but also warns that we could be in the very early parts of the new uptrend. Also note that the middle band is curving slightly upwards warning of a possible new uptrend beginning.

EUR/USD - Wave c of the expanded flat underway

Wave C of the expanded flat correction, that is my favorite count, should now be under way. I'm still looking for a rally higher towards the 138.20 - 138.43 area at least.

I have shown an alternate count on the chart above, which has wave 1 ending at 134.46, but the final outcome should still be a wave 2 correction higher. The reason for this alternate count is, that the decline from 137.77 to 134.46 does have an impulsive look to it. Wave B of an Expanding Flat can't be impulsive, it has to be a three wave affaire. The decline could also be counted as a three wave decline, which is why I keep my Expanded flat scenario as my favorite for now.

EUR/USD - Wave 2 has become an expanded flat correction

As I wrote yesterday, some kind of flat correction was building and that this flat correction still could evolve into an Expanding flat correction. The price-action since has proven this statement right. Wave 2 has evolved into an expanding flat, where wave B within 1 pip became 1.618 times longer than wave A. We still need a break above 135,72 to confirm that wave B down is done an that wave C up to at least 138.10 - 138.43 is under way.

Please see Infinitus alternate count to the above. As alway his doing a great job tracking the micro-count. This count calls for one more minor low, before wave 2 up kicks in.

http://http//singulorum001.blogspot.com/2010/11/11172010-night-wave-1-main-count-1h.html

EUR/GBP - Time for wave iii to kick in

It's time for wave iii to kick in now - stay tuned

EUR/USD - The alternate count is now the preferred

Yesterday i wrote, that wave ii of C was done. The priceaction since proved me wrong on that point, but it cleared the picture at the same time. I had and alternated count ending wave 1 at 135.72, this count is no longer the alternate count, but the preferred count. There is simply no chance that wave 1 could have ended at 136.70 and have the rest of the micro count to add up.

Therefore wave 1 ended at 135.72, wave A of 2 went from 135.72 to 137.77. Wave B of 2 went from 137.77 to 135.59. As the bottom of wave B is lower than than the beginning of wave A, the only possible count is, that wave 2 is a flat correction of some kind. It can still turn into an Expanded Flat correction, but if wave B is done at 135.59, then wave C (have to be a five wave impuls) will end above the top of wave A. Ideally wave C will end in the 138.20 - 138.40 area.

As I wrote a couple of days ago. Corrections is hard to trade, as the options is more.

EUR/USD - Minor wave ii is just done

Odds favor that minor wave ii has just ended at 135.97 and wave iii up is under way. Wave iii should rally towards 138.59 but could extend to 139.31 before minor wave iv sets in.

Topped or topping

FTSE 100 Topped or is topping

DAX topped or is topping

BOVESPA topped or is topping

SENSEX topped or is topping

All the above has either topped or is topping out. The BOVESPA (Brazil) and the SENSEX (India) is making a big flat correction (they can still turn into expanding flats, but it's less likely), while FTSE 100 and DAX looks more like Zig-Zags.

If FED's USD 600 billion isn't headed for the equity markets, where are they going? Commodities... Hmmm it doesn't look like it (The CRB Index, Gold, Silver, Oil and most soft commodities looks tried), But if they on the way to this market, we should see some kind of moon shot soon, with oil spiking towards USD 100 pr. barrel. Gold and Silver spiking higher as the "public" rushes into the only real currency thereby ending the 10 year rally. Finally softs will push higher in one last spike, hurting especially the Emerging Markets economies as we saw it in 2008. Pushing the global economic back into recession or worse.

The other place, where the money can go, is into the currency market as the bond market doesn't seem ideal either. If the USD 600 billion heads into the currency market, I would expect them to head for safe-haven currencies, not the high yielding currencies as most commodity currencies is.

I might be a little early on this call, but it depends where the money goes first. If it's to commodities first, then expect the collapse during the end of first quarter 2011. If however the tops is already in place then we are facing major trouble before X-mas.

S&P 500 - Fifth failure top confirmed ?

The break below 1,195.85 has raised the odds, that we did see a fifth failure at 1,226.71. As it's very dangerous to count fifth failures I would like to see a break below 1,184.06 too, but as I said the odds has risen dramatically. However a break above resistance at 1,218.71 will once more turn the picture bullish for a new go at 1,226.71 and probably also the 1,242 - 1,246 area.

EUR/GBP - Wave 2 most likely in place

EUR/GBP has most like just ended wave ii of 3 of [5], therefore buying EUR against GBP here should pose very little risk, when taking the potential into account.

The longer term target for wave [5] should be above the top of wave [3] at 97.99. As it can be seen on the Daily chart above the rally since the bottom in 2001 has been nicely contained by the red channel borders. When a possible five wave impulsive rally is contained as well within the Elliott channel as is seen here then wave [5] is most likely to hit the upper channel border before ending.

The short term count (seen below) shows that a rally past the top of wave i at 85.59 will confirm that wave iii is under way for a move towards at least 86.43 and more likely 87.56.

Quantitative Easing Explained

EUR/USD - Expanded Flat wave 2 or wave 1 just ended?

Are we still looking at wave 2, which has turned into an Expanded Flat correction or did wave 1 end at 135.72 and wave 2 up has just begun?

I still prefer that wave 2 began at 136.70 and wave 2 turned into a expanded flat correction, which should ideal see a move up to 139.20, but it could move alle the way up to 140.10.

However I can't exclude that wave 1 first ended at 135.72 and wave 2 is only in its early stages. It doesn't change the target for wave 2, which still is in the 139.20 - 140.10 area.

No updates before tomorrow

I will not be able to update before later tomorrow, so take care out there.

Just a short note the the B wave (see the chart below). The B wave has become an Expanding Flat correction, but we should soon see wave C higher kick in an take us up to the 139.70 - 140 area.

EUR/USD - Wave 2 well under way

After wave 1 ended at 136.70 yesterday, wave 2 is now well under way. Wave 2 will most likely be a simple zig-zag or a combination of corrections (time will show), but for now, what we are looking at is a simpel zig-zag, where wave A and B is done and wave C is under way. Wave C will most likely be 1.618 times longer than wave A and reach the 139.70 - 140 area, before exhausting.

If wave 2 becomes more complicated we might see wave 2 go beyound the 140 marker, but that's not was in the cards just yet.

You can see a small Inverted Should/Head/Shoulder bottom, which points to 139.96 as an ideal target.

EUR/USD - Wave 1 down is over

The price action of today has eliminated the possibility for the wave 1-2 ; i-ii count.

We have seen an Expanded Triangle as wave iv and wave v down to 136.70. the following rally back into the triangle has sealed the count, which is that wave 1 down is over. We should now see wave 2 correcting wave 1 and rally towards the 139.73 - 140.48 area. This area will be the ideal termination point for wave 2, but second waves can take back almost all of wave 1 without destroying the count.

Short term focus has now shifted from the downside to the upside. But this is a correction and the are harder to trade.

S&P 500 - Possible fifth wave failuer ?

We might just have seen a fifth wave failuer in the S&P 500. It's still very eraly and we need a break below the top of wave i at 1,195.85 to confirm the fifth wave failuer.

A fifth wave failuer is a sign of weakness and could be a warning of a very quick sell-off, if the signal is confirmed.

EUR/USD - Two possible counts

Right now I see two possible counts for the impulsive decline from 142.82.
My preferred count is the above, which sees the decline as a wave 1-2 and wave 3 down has just begun with wave i and ii almost done. If this count is the rigth one then wave 3 will easily break below support at 136,95 for a decline to at least 135.36.

The alternative count, seen below, still has us in wave 1 down, where only the last minor wave v is missing. If this count is correct then we should see support at 136.95 hold for a correction back towards 140 - 140.66 area as wave 2.

Stay flexible and let the waves tell you which scenario is right.

EUR/USD - Wave 3 down has already begun

The quick decline below 138.22 has forced a small new recount. It hasn't changed the bigger picture, which calls for a continuation down to 135.31.



As the rally from 138.22 was clearly impulsive (5 wave), the only possibility is that it was wave C of some kind of flat correction. In this case an Expanding Flat.



We are now in wave 3 down and the point of recognition will soon be seen and the decline from 142.82 accelerate to the downside.