That's it friends - Vacation time! Balearic Islands calling

Take care and trade safely!

AUD/USD & NZD/USD - Topping?

Both AUD and NZD could be topping against USD. The upper chart shows AUD/USD. After testing the long term resistance line at the 110 area, we are now at support near 104.50 a break below this support will be the first real indication that a firm top is in place.

Both my proprietary indicator (red dotted line) and the MACD indicator is showing negative divergence. This in itself is not enough to call the top, but it is a clear warning that the uptrend is getting tired.

NZD/USD also tested it's resistance line at 83. It was the third time this former support line acted as resistance line. We can see a major negative divergence at both my proprietary indicator and the MACD indicator, both calling for a major trend change. Short term a break below 79.68 and more importantly 77.51 will confirm that an important top was found at 83.

The breakout from the Shanghai Composite should also be a warning, that both AUD and NZD could face headwinds in the coming weeks/months.

Crude Oil - Breaking important support

My charting system is up and running again. So here is the chart I would like to show you. As can be seen we have clearly broken below the pitchforks support line, which calls for a decline to at least 60. We will find some support near 90 too, but it should just be a matter of time before that is broken for a continuations towards 60. In the bigger picture wave [C] should take us below the bottom of wave [A] at 32.40.

EUR/USD - Ready for the next move lower

The above four charts of EUR/USD goes from the weekly top-chart to the lower 10 minute chart. The is no counts on the weekly and daily only the Pitchfork. As can be seen we are at a very critical point. The break below the lower Pitchfork line does not border well for EUR in the coming weeks/months. A break below important support at 139.69 will open the downside for a move down to 125.87.

Short term a break below 142.50 should confirm a minor top for the next challenge of supports at 141.28 and 140.73 with the Shoulder/Head/Shoulder target at 138.99.

DJI and S&P 500- At a critical junctures

I'm having problem with my normal charting system, so the charts will be a bit different today. The charts above is from FreeStockCharts.com, which actually is a great and free charting system.

What I wanted to show is the difference between the Arithmetic and Log charts. As can be seen in the two charts above on the Log scale the long term rising trend line from March 2009 already has been broken to the downside, while this is not the case with the Arithmetic scale chart.

The next important support for the DJI will be found at 11,720 and 11,555 a break below the later support will be very critical for the longer term picture.

For the S&P 500 the important support is at 1,249.05 and a break here will be critical longer term

I also wanted to show you a chart of Crude Oil, as it broke below important support on Friday. Unfortunately I not able to show it to you, but the break below support at 95 calls for a decline to at least the 60 area. One should think that it would be positive for stocks, but remember in 2008 when everything was all the same? Things is beginning to shape up very much the same way at this point in time. If this is the case there will be nowhere to hide.

I will be on vacation for the next two weeks and will not be able to update during that period. Take care and trade safely.

Shanghai Composite - Triangle breakout

Please see my post below first

http://theelliottwavesufer.blogspot.com/2011/06/equity-markets-breaking-thin-line.html

The Shanghai Composite is breaking down from its B-wave triangle. The thrust out of the triangle tends to be swift and dynamic. On the chart above I have shown the triangle target and the possible termination point. The breakdown does not boader well for the equity markets for the coming months.

The only market that hasn't broken its trendline yet is the German Dax, but it should just be a matter of time before it will. See the chart below

USD/JPY - A Leading Expanding Diagonal?

If the minor rally from 79.67 is wave (i) of iii, then wave (i) will have to be an Expanding Leading Diagonal, because of the overlaping structure. Red wave (iii) is 1.618 time red wave (i) and we should soon see red wave (v) take off towards at least 81.50 and maybe even the 82.30 area, before a deeper correction sets in.
In the bigger picture only a break below 79.67 will call for a recount.

EUR/USD - The bullish count is dead

The possible bullish count finally died yesterday with the break below 142.99. The break below 142.99 also told us, that the rally from 139.68 to 146.96 was wave C of an Expanded Flat Correction, that said we should now look for a decline to 138.99 as the first minor target, but the bigger picture calls for a continuation towards at least 128.71 and more likely 125.84 longer term as wave [E] develops.

EUR/USD - Time for minor wave (iii) up?

If my bullish count is still alive, we saw minor red wave (i) as an Expanding Leading Diagonal and we are now in the later parts of minor red wave (ii), which should be followed by red wave (iii) towards 147.20. To keep the bullish count well and alive support at 143.50 should protect the downside, but under no circumstances can a break below 142.99 be alowed. If a break below 142.99 is seen it will leave us with a Shoulder/Head/Shoulder top with a target near 138.99 and more importantly that the rally to 146.93 was wave C of an Expanding Flat correction.

USD/JPY - Ready for the next leg higher

USD/JPY should be ready for the next leg higher. I still regard the test of 79.67 as the bottom of wave ii, which will be confirmed by a break above 80.69. Breaking the 80.69-resistance would target 82.21, but further out we should see the long term resistance-line near 83.50 tested.

Only a break below 79.67 will delay the next leg higher for a move down to 78.80 before higher.

GBP/USD - Triangle developing?

Diversanta has asked for my view on Cable (GBP/USD) as can be seen on the chart above, my preferred count is, that a big triangle is developing. Wave-c most likely ended at 167.45, which a break below 161.45 and more importantly 159.34 will confirm. That said as long as support at 161.45 isn't broken to the downside, the is a risk that we are in a simple zig-zag correction, which would call for a continuation towards 177.66 before wave-c find it's final peak.

Looking at the same chart with my proprietary indicator (see below) one can see, that the latest peak at 167.45 hasn't been confirmed by my indicatore, which means that we have a negative divergence, which is a warning, that the ongoing trend is weak and most likely already has peaked.

A Triangle needs five legs so if wave-c is done we still need wave-d (down to the 151 - 152 area) and wave-e (up to 159.25 and maybe 161-162 area) before the triangle is finished and the next break lower can be expected

EUR/USD - Barely hanging on to the bullish count

With support at 143.05 still intact the possible bullish count is still valid, but only barely.
Looking at my proprietary indicator it's pointing down hard with absolutely no divergence, but the lower Pitchfork line and support at 143.05 is still holding up, therefore I will give the bullish count the benefit of the doubt, but a clear break below 143.05 (say 142.85) will tilt the odds towards the bearish alternative, which had the rally from 139.68 to 146.95 as wave C in an Expanded flat correction, calling for a decline towards at least 139.12.
At this point only a break above 145.65 will secure the bullish count and call for the next rally above 147.

Crude Oil - Ready for the next leg lower?

If my micro count is correct we should soon see the next leg lower in Crude oil. As long as support at 100.78 holdes we could one last rally towards 102.70, which poses a lower risk selling oppotunity as stops can be placed just one tick above the 103.32 top, while the possible reward is at least the low 95 area, but possibly much lower, if that important support is broken too.

The price action since the 95 low in early May is clearly corrective and it's only a question of time, when the next leg lower is seen.

EUR/USD - Possible bottom close by

I still favor my bullish count and in that case we should be at og very close to a bottom (see the chart above). As can be seen on the chart we are trading at the Mid-line of the Pitchfork, which must be considered at a strong support area. We have short term divergence at the MACD-indicator at the same time we have a possible hidden divergence on the MACD-Indicator. A hidden divergence is when the MACD-Indicator has fallen to a lower low, but the price low is higher than the previous low in this case the 143.05 low against the current price at 144.81 (I expect a low in the 144.20 - 144.30 area).
The divergences is only a warning that a possible bottom could be near not a given case, therefore we need proff, which a break above 145.00 and more importantly a break above 145.50 will confirm.

As I said yesterday we must consider the possible bearish count as valid too as we didn't break above 147.70. If this is the case we should see a continued bearish price action towards 143.05, where the next strong support will be found and a break below here will begin to tilt odds towards the bearish count.

USD/JPY - My call for a wave ii bottom seems to be panning out

Please see my post regarding USD/JPY from yesterday first:
http://theelliottwavesufer.blogspot.com/2011/06/usdjpy-low-risk-buying-oppotunity-at.html

As I said yesterday the risk/reward was excellent. It's not often, that wave ii offers a golden opportunity like this, but when it does the offer should be taken and reward can be outstanding.
As things are shaping up it seems more and more likely, that a wave ii bottom is in place. A break above resistance at 80.68 would be next good indication, that the bottom is in place and call for a continuation towards 81.61.
If we see 81.61 tested the reward will already be 10 fold the potential loss if 79.56 was broken.

EUR/USD - Headed for the 147.57 - 147.70 area

The break below 145.62 is concerning and questions my micro count from 139.68. The break below 145.62 suggest, that we have a finished five wave rally, but the failure to break above 147.70 leaves to two possible scenarios. The bullish count, which is my prime count is still well and alive, but we can't neglect the possible expanded flat correction. If this count is the right one, we have just ended wave C and should see an impulsiv decline (this is not my preferred count at this point)

Original Post below:


Red wave (iv) ended at the lower part of the target area and we are now in red wave v, which ideally should reach the 147.58 - 147.70 area. We have seen the first micro wave of red wave (v) ending at 146.32 and has just begun micro wave three of red wave (v). Minor support is now found at the 146.30 - 146.32 area, which should protect the downside for the next rally higher towards 147.16.

S&P 500 - Topping

I have shown my proprietary indicator a couple of times now and as can be seen on the chart above it shows, that S&P 500 is in a topping process. It doesn't tell if the top is already in place or we need one more rally to a new high. I do believe we have the top in place with the test of 1,370.51 and we should now be headed for support at 1,248.83 and a break below that support will confirm the top. for a decline to at least 1,101.30 but more likely 1,018.19.

Short term resistance is now found at 1,294.98, which will ideally hold, but only a break above 1,345.06 will indicate, that we should see one more new high.

Danish OMXC20 - Topped

Stan Weinstein in his 1988 book "Stan Weinstein's Secrets for Profiting in Bull and Bear Markets" showed the above chart, which shows how a bear and bull market run its course.

Looking at the Danish OMXC20 stock Index we can see, that support at 442.99 has been broken. The 150 day moving average (red) has been broken and the 50 and 150 day moving average has had a bearish cross-over and finally my proprietary indicator also confirm that the trend has swung from bullish to bearish.

The minimum target should be 415, but more likely we will see a continuation down towards 376. The prior support at 442.99 should now act as resistance.

USD/JPY - Low risk buying oppotunity at hand

If my count is correct we should be at the bottom or very very close to the bottom. Under no circumstances can USD/JPY be allowed to break below 79.56, which means a USD-buy here would pose a very low risk oppotunity as a stop-loss can be placed just one tick below 79.56.
A break below 79.56 we force a recount and call for a deeper wave 2 towards 78.82 area.

This is the kind of oppotunities we are looking for, when entering a trade - Low risk and lots of potential reward.

EUR/USD - Short term support just below

Red wave (iii) ended a bit lower than I expected, as the top was seen already at 146.96 and we are currently in red wave (iv), which has support in the area from 145.50 - 145.99. Ideally red wave (iv) will find support near 145.99 for the next rally higher towards the 147.58 - 147.98 area depending on where red wave (iv) finds it's bottom.

At this point only a break below 144.47 will invalidate my bullish count and call for a recount.

S&P 500 - Breaking support

On the Log Scale S&P 500 has now broken important support at 1,294.98, which should target next important support at 1,248.83.

Looking at Linear Scale chart long term support back from March 2009 is located at exactly this support (1,248.83). Only a clear break below 1,248.83 will give a very clear bearish view.
I first assumption is, that support at 1,248,83 will hold for a rally back to at least 1,323 - 1,329 area, before the next challenge of the support. Focus for now should towards the downside.

EUR/USD - On track

Wave v is still on track. The micro count is shaping up nicely and we should see green wave v and red wave (iii) end near the 147.50 area, setteing the stages for a red wave (iv) correction towards 146.44 and maybe even to the 145.55 - 145.80 area before the next rally higher towards 148.48 area ending red wave (v) and red wave iii.

The MACD indicator has confirmed the bullish rally, so stay focused on the upside for now.

Equity Markets breaking the "thin" line

Please see my post from May 24 first here:
http://theelliottwavesufer.blogspot.com/2011/05/equity-markets-walking-thin-line.html

More indices has now broken the "thin" line they where walking, which is a sign of weakness. It's to early to tell if an important top is in place, but all warning signs is now raised and at the least protective stops should be in place.

We have a classic divergence between the DJI and the DJT. The DJT made a new top above the 2007/2008 tops while the DJI did not, which should be a serious sign of weakness.

EUR/USD - Looking Impulsive

Sorry for not having updated the last couple of days. I have been very busy.

The rally since the 139.68 is really beginning to show impulsive behavior. Breaking above 144.23 has added even more credibility to my bullish count and the break above 145.78 today has weakened the possible bearish count considerately. For the bearish count to gain momentum again will need a break below 144.51 and more importantly 143.05.
The next real resistance will first be seen near the 147.50-147.60 area. A break here will make a new top above 149.32 look like a walk in the park.