EUR/USD - The wave v count is still good

Important support at 139.68 is still untouched keping the micro wave count well and alive. The possible Ending diagonal I described yesterday also fits the picture nicely at this point. The only problem I have with the Ending diagonal is, that we will need quite an overthrow to make it past 142.89, but it's not unlikely. There is an other possible micro count for this wave v rally. That wave one went from 140.05 to 141.15 follower by an Expanded flat correction, which ended at 140.49 as wave two and we are now in wave three. If this count is correct we should soon see a clear break above 141.70 for a move towards 142.29. A break above 141.70 will likely produce a more negative outlook for the USD again. While a break above 142.49 will have the perma bears call for the demise of the USD and making the contraian call for a stronger USD a nice possibility...

EUR/USD - Still in wave iv or has wave v begun?

The upper resistance line of the red Pitchfork effectivly held the rise back yesterday. That

leaves us with two possibilities. The preferred count is, that wave v begun at 140.05 and it's evolving into an Ending diagonal. The rally from 140.05 to 141.49 is clealy in three waves and the only "impulsive" wave, that's allowed to be a combination of three waves is the Ending diagonal.

A break above 141.35 and more importantly 141.49, would add credence to this count, while a break above 142.20 confirms this count.

If however we are still in wave four (not preferred) the best fit seems to be a possible triangle forming. If this is the case we would most likely see a move towards 141.70 - 141.80 followed by a decline to towards the 140.80 - 140.90 area.

Only demand I have at this point is, that we at no point break below 138.68 as that would leave an overlap between wave i and iv, which is not allowed under the EWP.

USD/JPY - Just one more minor push and wave 1 is done

If we can have one more minor push above 81.98 we have a very nice five wave rally from the 76.99 all-time low bottom. That means that we could have a major long term bottom in place in USD/JPY. If we break above 81.98 we should see a top near 82.68. When this five wave rally is done, we should see a deep zig-zag down to at least 80.51, but more likely we will see wave 2 end in the 78 - 79 area. This should provide an excellent long term buy-oppotunity.

EUR/USD - We are now in the final wave v up

Wave iv ended yesterday at 140.05, after a perfect toutch at the lower red Pitchfork line, the following break above 140.90 confirmed, that the bottom was in place. If my micro-count is correct we are now in red wave iii of wave v higher. Ideally red wave iii will rise to 142.41, the red wave iv problably as a expanded flat correction or a triangle and then red wave v higher to take out 142..81 and end the entire rally since 128.63.

EUR/USD - Is the correction from 142.49 finally over?

EUR/USD began the trading day with a gap down to 140.28 from Fridays close at 140.87, This gap might be an exhaustion gap ending the wave iv correction. If this is the case we should see a break above 140.90 soon. I'm still looking for one last rally above 142.49 and more importantly just above 142.81. All important support is still at 139.83,which marks the top of wave i. A break below 139.83 would suggest that the rally from 128.71 ended with a fifth failure calling for a new powerful decline.

EUR/USD - A thrid alternative in play

As long as important support at 139.83 isn't broken to the downside. I will keep my wave iv correction count. I must admit that it has become more complex than first anticipated, but that is absolutely common for four's waves. It is beginning to look like a flat correction, which wasn't what I was looking for due to the principle of alternation. Both wave 2 and 4 can be more or less identical i shape.

Original post below:



In my prior post today I said there was two alternatives if support at 141.49 was broken. Unfortunately I missed a third possibility namely the triangle possibility. As things look the best option at this point is, that a triangle wave iv is developing and that we have seen the first three legs and still misses the D and E leg before the final thrust up.

S&P 500 - Is the X wave finished?

The rally since the 1,248.83 is clearly corrective in its form, which it should be forming wave X. The question whether it's finished as a double zig-zag or we need one more zig-zag forming a triple zig-zag targeting the 1,331 area. A break below 1,284.09 will confirm that the double zig-zag was enough, while a minor correction to 1,297 followed by a break above 1,312 will argue that we is in need for a thrid zig-zag.

No matter which outcome I still regard the decline from the 1,344.03 high as a wave 4 (see my post)

http://theelliottwavesufer.blogspot.com/2011/03/s-500-we-are-in-wave-4.html

Is the no possibility, that an important top did form at 1,344.03? Yes there is one, that an Expanding Leading Diagonal is forming. If this is the case we should not see the 1,312 area broken and a sharp decline down towards at least 1,207 and more likely 1,176 ending wave 1 down. Time will show which count is the rigth one, but for now I favor the wave 4 scenario.

EUR/USD - wave v well under way

On a micro count basis, minor wave i (red - not shown on the chart above) ended at 141.49 yesterday and red wave iii of v might have ended at 142.20. If this is the case, we have just ended minor red wave iv of v at 141.50 and should seen a rally higher breaking above 142.49 and likely also 142.89, before wave v is fianlly done. A break below 141.49 will leave us with two alternate counts. The most likely is, that we are in a serie of wave one's and two's and the second alternative is that we are in and ending diagonal, but this is the case we have only just finished wave a at 142.20 and is in the middle of wave b.

On a short term basis, ideally support at 141.49 will hold for a break above 141.93, which will confirm that red wave v of v higher is under way.

EUR/USD - Wave iv is over or very close to be finished

Posted at 14:40 pm:

Just a small follow-up on this mornings post (see below - Original post). The second zig-zag from 142.49 was formed by a sharp decline for wave A and wave C became an Ending Diagonal, with a nice throw-over or rightly a throw-under to end the final C-wave causing an sharp rally, which took out resistance at 140.90 without problems. We should see red wave i moving towards 141.65, from where a deep decline in red wave ii towards 140.74-140.93 before red wave iii kicks in for a move towards at least 141.90, but more likely 142.


Original post:
The roadmap I laid out yesterday for the short term price-action has been pretty much on the spot. The second zig-zag from 142.16 has become a little deeper, than my ideal target-area between 140.80-141, as we have reached 140.68, but that hasn't caused any damaged to the overall bullish picture. Only a break below 139.83 would harm the bullish picture and call for a much deeper decline.

Looking at the micro count of the seconde zig-zag from 142.16, wave C has become and Ending Diagonal, which should be close to its terminal point. The final e wave can't break below 140.42, if my count is correct. A break abover 140.90 will confirm that the bottom is in and a rally above 142.49 and most likely 142.81 should follow.

EUR/USD - Correcting in wave iv

Wave iii ended at 142.49 yesterday and wave iv is in motion. We have just seen the first part of wave iv as a simple zig-zag, which was just as expected. We should now see an "x" wave towards 142.10-142.20 before the next decline towards the 140.80 - 141 area. When this correction is done we should see one last rally making a new top above 142.49.

EUR/USD - Wave iii topped or topping

The latest price-action has forced me to changes my count slightly. Wave iii topped or is topping near 142.40. At 142.40 wave iii is 1,618 times longer than wave i. A break below 142.01 will confirm that wave iv is in motion. Wave iv should be a simple zig-zag or a triangle due to the principle of alternation. Wave ii was a flat, therefore wave iv should be a zig-zag or a triangle or a combination of corrections. The most likely target for wave iv is near 140.96, where it has corrected 38,2% of wave iii.

S&P 500 - We are in wave 4

With todays break above 1,294.53 the decline from 1,344.03 is only in three waves and therefore corrective. The most likely count at this time is, that we have see wave "W" of a more complex correction and we are currently trasing out and "X" wave towards 1,307 and possibly even 1,323 before the next leg lower.

In the bigger picture, that means we currently is in wave 4 and later should see a new high above 1,344 (see my post from March 16 -link below).

http://theelliottwavesufer.blogspot.com/2011/03/dji-beautiful-picture.html

USD/JPY - At a long term bottom?

Above you can see the long term picture for USD/JPY. The break to a new low below the 1995 low at 79.70 could end the long term decline in USD/JPY.

My favorit count is, that wave 4 turned into a major triangle and depending on, from where one meassure the thrust out of the triangle we could have a major bottom in place with the test of 76.99. It would also match the Apex of the triangle. It very common that the apex also marks the final low.

Zooming in on the long term picture (see the daily chart below). The decline from 94.98 was a nice five wave decline, where wave 4 also became a nice symmetrical triangle, which has fullfil its target. Also notice that the bottom of wave 5 hit the wave 2-4 channel perfectly also pointing towards a possible bottom.

If we have a bottom in place we first of all needs a break above 81.98, which would give us a five wave rally from 76.99. If we see the break above 81.98 I wouldn't be surprised to see only a minor new high to near 82.40, before a correction towards 78 - 79 area sets in.

If however resistance at 81.98 protects the upside for a break below 79.53, that would indicate, that we need more downside at problably a new low below 76.99.

EUR/USD - Wave (iii) is likely done

The rally from 139.78 is looking nice and impulsive just as we would expect form a third wave. We might have seen the top, with the test of 141.84. A break below 141.52 will confirm that, but as long as 141.52 protects the downside we can't exclude wave (iii) moving higher towards 142.18 first. As wave (ii) was a flat we should be looking for a zig-zag or a triangle correction as wave (iv), setting the stage for wave (v) ending the rally from 134.26 and wave E of the ending diagonal, which will terminate wave D. (see the daily chart below)

S&P 500 - We now have 3 waves down

We now have three waves down from 1,344. It's still an open question whether this is the start of a new impulsive wave down or we only are in wave 4 down.

My greatest concern is, that the possible wave 3 down had a lot of overlapping waves, which makes it more possible, that we are only in wave 4 calling for one more new high.

Looking at the Pitchfork it would make better sense if wave 3 ended at 1,344 and that wave 4 is developing.

That said we can't neglect that we could be in an impulsive new decline from 1,344. The possible wave 3 is 1.618 times longer than wave 1. If the possible wave 4 is capped at or below 1,281 for one more decline in wave 5, the following correction will reveal which count is the right one.

But for now we should continue to be focused on the downside or at least more sideways correction.

EUR/USD - Still on track higher

The break above 140.06 yesterday confirmed, that we still is on track for a move higher towards first target near 141.12, but we could see a continuation higher towards 142.77, before the mess from 128.71 finally find its peak.

Support is now found near 140.23 and again at 139.78, but I would prefer to see 140.23 cap the downside.

EUR/USD - The correction became even more complex

The wave (ii) correction became even more complex than first anticipated, but it doesn't alter the fact, that it is a correction. I'm still looking for strong resistance at 140.06 to break for a move towards 141.12.

The risk is a break below the 138.52 - 138.63 area, which would add credence to the bearish case.

If USD/CHF is any guidance (I think it is), then we should see EUR/USD move higher.

DJI - A beautiful picture

I haven't looked at the Dow Jones Industrial for quite some time, but here it is and it's a beauty.

We are currently in wave [B] the question is if wave [B] is done with the test of 12,391 or we need one more rally as the thrid zig-zag in a triple zig-zag combination since the low at 6,470 in early March 2009. If we need one more zig-zag we should first see a decline towards the mid-line of the pitchfork near the 11,155 - 11,250 area, before the last rally higher towards 13,336 and maybe even 13,856.

What's talking in favor of one more rally is needed? The priceaction yesterday did. The decline from 12,087 is at best a three wave decline, which does favor, that we will need a new zig-zag rally towards the 13,336 - 13,856 area later.

The only way we can keep the bearish view is, if we are in a series of wave one's and two's. That might be the case, but we need more proof.

EUR/USD - Headed for 141.12

The expanding flat correction ended at 138.52 (right in the middle of my range). We are currently trading around the mid-line og the Andrews Pitchfork, a break above this line should accelerate us higher towards at least 141.12.

Short term I expect support in the 139.30 -139.50 area for a break above 140.13, which should provide power enough to accelerate us towards 141.12.

The bearish case got a hit yesterday with the break above 140.03. If the 140.37 high is broken too, the bearish case would be of the table.

EUR/USD - Wave (ii) down still in progress

Yesterday I said, that I expected a small correction towards the 138.40 - 138.70 area, before the next rally higher sets in. We can now see, that a detour higher to 140.03 took place first, as an expanded flat correction as wave (ii) is forming. I still look for a decline towards the 138.40 - 138.70 area, but we could stall near 138.80, kicking of the next rally.

Wave (iii) should take us to at least 141.12.

Infinitus has the bearish case covered here: ( http://singulorum001.blogspot.com/2011/03/eurusd-forex-elliott-wave-analysis-14th.html )

EUR/USD - In wave v up

Wave iv ended exactly at the support-line from 134.26 in mid-February, with the test of 137.50 and we should now be in wave v up, which should break above 140.37.

Wave v does look impulsive, which add confidence in this count.

In the short term we should expect a small correction down towards the 138.40 - 138.70 area , from where the next leg high should be seen.

Also looking at the Andrews pitchfork's the support line of the rising pitchfork and the support line of the small falling pitchfork (gray) was tested and held nicely confirming the uptrend since 134.26.

As I have stated a couple of times, this rise since 134.26 is a mess and does make it more likely than not, that we are in a correction as a C-wave up.

The risk is a break below 137.50, which will force us to make the bearish count the favorite.

CRB Index - Top in place?

We might well have seen an important top in the CRB index. We had a very clear five wave decline in 2008 from 473.97 to 200.16 followed by a zig-zag correction, which has almost perfectly hit the 61.8% retracement mark for wave A.

If the top is in place we need to see a decline through 335.10 soon, which will confirm a decline to at least the 321 area.

Risk is, that support at 335.10 protects the downside, which means we need just one more new high closer to or just above the 369 before the top is finanlly in place.

If we have seen an important top in the CRB Index, then we problably have seen or are very close to see important tops in the commodity currencies as well.

Global Dow and S&P 500 - Topped?

Lets take a look at the Global Dow first. The waves of the Global Dow is very nice and very clear.
I do think that wave B ended at 2,246.54 on February 18, just above the 61.8% retracement target of wave A. Wave b of B also became almost perfectly 61.8% wave a of B. All we need now is confirmation, which a break below 2,125.04 will provide a decline to at least the 2,031 - 2,032 area.

The S&P 500 diped shortly under 2,094.53 (did not close under), but it should be enough to confirm that a top (most likely a major top) for a decline to at least 1,217. Copper provided a nice lead for us as I expected (see my post http://theelliottwavesufer.blogspot.com/2011/03/copper-vs-s-500-topping.html).

The next important level will be 1,255. A break below this level will make the current decline the biggest since this uptrend began in late June 2010 and confirm that this entire uptrend is at least being corrected or more likely ended the entire rally since March 2009 and the next big decline has begun.

EUR/USD - Final leg higher has begun

Support pretty much held yesterday and we should now see a break above 138.60 soon to confirm that the final leg higher towards 142.25 has begun.

Risk is still a break below 137.31, which will cause an overlap between wave 1 and 4 (not allowed under the EWP). A break below 137.31 will force a the bearish count to be considered.

EUR/USD - Testing support

On the daily chart (see the above) we are currently testing strong support. Ideally this support will hold, but if it break we will see support just below near 137.45. Only demand I have is that we under no circumstances break below 137.31 as that would give us overlap between the possible wave 1 and 4, which is not allowed under the EWP.

The only thing there is to say is that the EUR/USD picture currently is a mess, which makes it more likely than not, that we are in a correction of some kind.

Copper vs. S&P 500 - Topping?

As the chart above shows, copper and the S&P 500 has been in a tight correlation since mid-March 2009. Copper turned before the S&P 500 did, as copper turned in late December 2008, while S&P 500 turned in early March 2009, therefore I will be looking for copper to top-out before the S&P 500 does.

The latest action in the copper could point towards a possible top being in place in mid-February 2011. If this is the case we should soon see copper break below all important support at 421.25 (light green line) A break below that level will confirm the top for a decline towards at least the 362 - 366 area (15% decline).

A break below 421.25 in copper will most likely mean that a top is in or very close in the S&P 500 too. A break below 1,294.53 would be the first confirmation of a top, while a break below 1,255.22 would confirm a decline towards at least 1,178.

EUR/USD - More upside to come

Back from a perfect skiing holiday in Austria.

I expect the current correction to end near the 138.40 - 138.50 area for the next leg higher towards the 142.25 area, where I expect a top to be set.

The rally since 135.24 does not show any impulsive caracters, which does not boarder well for this rally in the longer term, but we should still expect more upside to come.