Elliott Wave analysis of EUR/USD; DJI; Gold; Silver and Crude Oil

 EUR/USD - With a low at 1.2223 blue wave b could be in place, but as long as minor resistance at 1.2290 protects the upside we still could see a deeper decline into the ideal-target area between 1.2174 - 1.2215, before blue wave c takes off to the 1.2522 area.

 Dow Jones Industrial Index - Not much new to add here. We could have seen the end of wave 2 with the test just below 13,090 or we might need a slightly higher rally towards 13,187 before the top is in place for a break below 12,830 to confirm that wave 3 down is under way.

 Gold - Are a rally higher towards 1,680 in work here or has we seen a top at 1,629? As long as support at 1,597 protects the downside we should accept the possibility for a move higher towards 1,680, but a break below 1,597 will ease the upside pressure and call for a test of 1,580 on the way to 1,547 and all important support at 1,521.

 Silver - See my post from July 3 here first: http://theelliottwavesufer.blogspot.dk/2012/07/i-am-back-from-vacation.html
With the break above minor resistance at 27.31 we should expect wave B towards resistance in the 29.80 - 30.47 area, from where wave C down should take over. The big questions is of cause if we will be able to break below support at 26.00 and more importantly 21.24, but time will show.

Crude Oil - After a perfect test of the ideal target-area for red wave ii at 90.95 we should now be looking for a break below support at 89.04 as first good indication, that red wave iii has taken over for a break below 86.84 for a continuation towards 83.65, 77.28 and long term target near 72.00.

Elliott Wave analysis of EUR/USD; USD/JPY; GBP/USD; USD/CAD; NZD/USD; EUR/JPY; EUR/NZD; EUR/TRY and DJI

 EUR/USD - We now have a nice five wave rally of the low at 1.2040 to 1.2389. This rally marked the first part of a more complex correction, that I'm expecting to take place. As the rally from 1.2040 was in five waves we should be looking for a zig-zag correction of which wave a now is in place and wave b ongoing. I expect wave b to correct some 50 - 61.8% of wave a, which should take us down to 1.2174 - 1.2215 area, from where we should see the next rally higher towards 1.2522, where wave c will be equal to wave a. As I expect the entire correction from 1.2040 to be complex I would expect a X-wave after we have reached 1.2522, but for now lets see where wave b ends and how wave c will unfold.

 USD/JPY - Does not in any way unfold in any impulsive manner, which does make me cautious. That said I will keep flexible an look for signs, that will point me towards more correction from the 80.59 high or that a possible new rally is under wave. A break above minor resistance at 79.10 will ease the downside pressure.

 GBP/USD - Here too we now have a five wave rally from 1.5456, which could mark the top of wave c of the Y-wave and we should expect downside pressure to mount. A break below 1.5662 will confirm that wave Y is done at 1.5722. That said having lack the power to get to 1.5902 does make me alert for a possible new X-wave calling for one last correction since the 1.5265 low, but time will show how the decline unfolds.

 USD/CAD - Is working its way lower in wave Z of a triple correction, that began at 1.0446. The ideal target for this third zig-zag is likely in the 0.9920 - 0.9935 area, but just a note of caution, as the c-waves have been smaller than the a-waves, there is a risk that we will only get down close to par, before the correction is over.

 NZD/USD - The break above 0.8054 told us, that the decline from 0.8074 only was a correction (three waves) and we should expect a new rally above 0.8074 towards the 0.8120 - 0.8140 area. We have seen a move to 0.8118 just below the possible target-area, this could be it, but a break below support at 0.8037 is need to confirm, that the correction since the 0.7453 low is over. As long as support at 0.8037 isn't broken we should expect one last rally higher into the 0.8120 - 0.8140 area, before downside pressure takes over.

 EUR/JPY - Has spiked perfectly into the target-area and since the 94.09 low we have now seen a perfect five wave rally adding confidence, that the low at 94.09 was an important low. That said we are still in the very early stages of a possible new major rally. For now look for a correction towards the 50 - 61.8% correction-area of wave one, which will be in the 95.34 - 95.75 area, from where a new rally towards at least 100.70 should be expected.

 EUR/NZD - The new decline to 1.5131 has raised all the alert flags. Normally I would expect a new low, but under the Elliott Wave Principle a 100% retrace of wave one is allowed. That side we should be expecting a new lower low near 1.5096 as long as minor resistance at 1.5222 and more importantly 1.5333 protects the upside. Only a break above 1.5333 will call the bottom and a new rally higher towards 1.5443 and higher.

 EUR/TRY - Has been in a very nice decline since the break below 2.4000, but the rally above minor resistance at 2.2310 does call for a bigger and more complex correction in wave 4. As wave 2 was a simple and Sharp correction, we should expect wave 4 to be shallow but complex. I will be looking for a wave 4 towards 2.3062 and expect it to take more than 8 weeks.

Dow Jones Industrial Index - I have changed my short term count slightly (please see the chart), so that the current rally from 12,522 is wave c of Y. There seems to be two possibilities to the count from the 12,522 low. Wave c is close to a top here at 13,118 and we should see a new decline to below 12,822 and more importantly below 12,726. However the second possibility call for a correction towards 12,873 - 12,931 for one last rally towards 13,187 - 14,000 area before wave c is finally done.
I have slight favor for the second scenario, but will look carefully for a five wave decline to be a the first sign that the top might be in place...

10Y Spanish Yield - I was wrong...

10Y Spanish yields against 10Y German yields - Please see my post from July 23 here first:
http://theelliottwavesufer.blogspot.dk/2012/07/elliott-wave-analysis-of-10y-spanish.html.

I was wrong! As I'm always are when trying to outguess, which fundamental event would cause the financial markets to react positively or negatively. I guessed the trigger would be some kind of announcement after an emergency-meeting in EU (but they are of cause all occupied with the Olympics, so they don't have the time), instead it was ECBs Draghi how was out saying, that the ECB is unbeatable and they have unlimited powers...

I don't know if the market believes Draghi or just was a bit intimidated by him, but one thing is for sure. ECB doesn't not have unlimited powers. They might re-start the bond-buying scheme, but they can't hold every single Spanish or Italian bond. Just take a look at Greece, has ECB saved it? Not to my knowledge and they will not be able to save Spain nor Italy.

Expect the next rally in the 10Y Spanish yields within the next one - two weeks. The target is still 8.12%.

You Can see and hear what Mario Draghi said here: http://www.bloomberg.com/video/draghi-ecb-to-do-whatever-needed-to-preserve-euro-OF8PNB8EROSj1nDX9sZquw.html

Elliott Wave analysis of EUR/USD; USD/JPY; GBP/USD; USD/CAD;USD/NZD; EUR/JPY; EUR/NZD; DJI; Gold and Crude Oil

 EUR/USD - We have seen a powerful rally to 1.2329, which marks green wave iii and have since the 1.2329 high seen a very small retarcement. This small retracement could be green wave iv (23.6% of green wave iii), This could be all for green wave iii, but as long as resistance at the 1.2329 high protects the upside we should be looking for a slightly deeper correction towards 1.2246 for green wave iv, before we will see green wave v towards either 1.2382 (38.2% of green wave i through green wave iii) or towards 1.2447 (61.8% of green wave i Through green wave iii). This should mark the first leg of the larger correction in red wave iv.

 USD/JPY - Has been rather resilient, but I still think we are going to see a rally in wave iii towards either 78.86 or 79.06 as wave iii. I think a rally to 79.06 will be a better fit, but we will have to be pacient and see what unfolds.
At no point can a break below 77.95 be accepted, as that will invalidate the count shown.

 GBP/USD - Here I'm still looking for the rally towards resistance at 1.5905, from where renewed downside pressure should be expected.
In the bigger picture we are in the early parts of the downside thrust out of the big B-wave triangle that have been building since January 2009 and calls for a decline below the bottom of wave A at 1.3498.

 USD/CAD - Unexpectedly broke below 1.0062, which invalidated the bullish count and calls for a third zig-zag towards 0.9995 and possibly even down to the 0.9920 - 0.9935 area, before wave 2 is finally done for a new powerful rally in wave 3.

 NZD/USD - Here too the correction from 0.7797 has become much bigger than expected, but only a break above the 0.8054 high will invalidate the bearish count. It should also be noticed, that black wave ii retraced most of black wave i. That shows us the the Bulls and the Bears is almost equally strong and the tug of fight is not over yet. However a break below 0.7985 will ease the upside pressure, but it will take a break below 0.7916 to confirm that red wave ii is over and a new decline below 0.7797 is in the making.
At the current levels sell NZD ag. USD presents an excellent risk/rewards. Stops can be placed just above 0.8054 and the potential is  a move to below 0.7797. You don't get it much better than that.
Trading is all about taking calculated risks, where the risk is as small as possible and the reward is as big as possible and that is clearly the case here where the risk/reward ratio is 1 to 6 and that's just for a decline to 0.7797, if we break below 0.7797 as I expect the reward will be much bigger.

 EUR/JPY - The rally from the important 94.09 low has been almost text-book and we should now be looking for green wave iv correcting green wave iii. The ideal target will be the 38.2% of wave iii, which comes in at 95.72 before green wave v takes over towards 96.85 (38.2% of green wave i through green wave iii) and possibly even 97.40 (61.8% of wave i through wave iii).

 EUR/NZD - The jury is still out there. Is we close to finish green wave ii and see a sharp rally in green wave iii or will we break below 1.5261 for a deeper wave c of an expanded flat correction in red wave ii? It's all about which point break first. Is it 1.5261 then the expanded flat correction is the correct answer, while a break above 1.5389 while support at 1.5261 has not been broken will call for green wave iii higher towards 1.5570.

 Dow Jones Industrial Index - The count shown above is the alternate count to the one I showed in my post here: http://theelliottwavesufer.blogspot.dk/2012/07/elliott-wave-analysis-of-eurusd-usdcad.html
The rally from 12,522 has been quite powerful, but it will take a break above 12,977 to make this count the preferred count, however if we see a break above 12.977 we should see one last rally higher towards 13,023 before the downside pressure returns.
If we don't break above 12.977, but instead break below 12,821 and more importantly 12,725 the preferred count is the right count and should call for a continuation towards at least 12,190.

 Gold - Is hoovering just below the wave-c high at 1,624.70. This high should not be broken as that would cast doubt over the B-wave triangle and could cause a rally higher towards resistance at 1.670 (not the preferred picture). Instead look for a break below 1,601 and more importantly 1,580 that would call for a new test of the all important support near 1,521.

Crude Oil - Has entered the target-zone for red wave ii and we should see downside pressure increase as red wave iii takes over for a decline towards at least 81.51. It will take a break above the 92.89 to invalidate the count above.

Elliott Wave analysis of EUR/USD; USD/JPY; USD/CAD; EUR/JPY; EUR/NZD and Gold

 EUR/USD - I'm still looking for a continuation higher towards 1.2322 as the first target for red wave 4. Remember we are only in the infant start of red wave 4, which should at least take 12 days to finish (it can of cause take longer). Also remember we should be looking after a complex correction, likely a combination of some kind.

 USD/JPY - Here I'm looking for a break above minor resistance at 78.46 soon for a continuation towards the 79.17 - 79.22 area, a break above this area will add confidence in my count and a break above 79.41 will kill any bearish counts and call for a break above 80.09 soon.
The risk is of cause a break below 77.65, that will invalidate any bullish count and call for a new decline to 76.00 and finally below the 75.55 low set in October 2011.

 USD/CAD - Has reached the ideal target-window. We could still see this minor wave ii lower towards the 61.8% retracement target of wave i at 1.0129 as long as minor resistance at 1.0166 protects the upside, but a break above minor resistance at 1.0166 will indicate that wave iii is under way for a rally towards at least 1.0405.

 EUR/JPY - Here I'm still waiting for the break above minor resistance at 95.22 to add the first indication, that an important low for the decline since the 111.43 high is in place at 94.09 and a new rally higher towards at least the 101.36 - 101.62 is under way.

 EUR/NZD - Here the big question is whether we are close to finish green wave ii for a rally towards 1.5654 or red wave ii is still ongoing as a expanded flat correction?
As long as minor support at 1.5289 stays intact I will keep the one/two - one/two count a look for a break above 1.5372 and more importantly 1.5441 for a continuation higher towards 1.5654. However a break below 1.5289 and of cause a break below 1.5261 will call for a decline to 1.5220 in an expanded flat correction, before we can expect the next rally higher towards 1.5654.

Gold - I said yesterday, that the short term count had become a mess, which should have been a alert to me, but some times you just can see the forest for trees...
The best count for now seems to be, that we are in a B-wave triangle, which should be very close to resistance around 1,610, however a small break above 1,610 can be allowed, but the top of wave C at 1,624.70 should hold firm for a break below 1,597 and more importantly 1,580, which will confirm that a thrust out of the triangle to the downside is under way.

TLT (Barclay's 20Y+ Bond fund) - Major top just ahead...

Barclay's 20Y+ Bond fund - Should be very close to an important top. The question is whether we will find the top around the 131.83 - 131.93 area or we will see a slightly higher high towards the 132.36 - 132.42 area. No matter which is right we are almost there and should expect a major decline towards at least 123.18 and likely even down to 109.84 very soon.
Short term a break below 130.28 will be the first real warning that a long term top is in place.
If you are holding bonds you should seriously consider getting out around here or at least lift your stop to just below support at 130.28 - say 130.20.
As you can see on the three charts above the wave relationship on all three time frames is pretty nice and should add confidence in the count.
Stay tuned for a major top very soon!!!

Elliott Wave analysis of EUR/USD; USD/CAD; NZD/USD; EUR/JPY; EUR/NZD; DJI and Crude Oil

 EUR/USD - With the low at 1.2040 it looks like blue wave 5 and red wave 3 is in place (see the upper daily chart). We should now be looking for red wave 4. As red wave 2 was a sharp Zig-zag correction, that retraced a great part of red wave 1 we should expect a shallow, but complex red wave 4. From a time perspective we should expect it to take more than 12 days and price-wise we should expect the correction to retrace between 38.2% - 50% of red wave 3, which means we should see red wave 4 correct into the 1.2556 - 1.2715 area. A correction close to 1.2715 will also take us close to the top of blue wave 4, which is the wave 4 of one lessor degree and is a very common target.
What shape should red wave 4 ideally take? I will expect some kind of flat correction. 

 USD/CAD - Lately I have looked at both Aussie and the Kiwi dollar, so it should be time to look at the CAD or "Loonie" as it's also called.
I do think we saw an important long term low way back in mid-November 2007 at 0.9056 the following rally to 1.3063 is best labeled as wave 1 or A From 1.3063 we saw a very deep wave 2 or B down to 0.9403, which means that wave 2 or B corrected more than 91% of wave 1 or A.
Since the 0.9403 low we most likely have see wave 1 and 2 of wave 3 or C and we are now in the very early part of wave iii of 3 and once this wave really gets going it should be a very powerful and dynamic rally towards 1.1834 (1.618 times the length of wave 1) and likely even 1.2316.
From the classic technical school we can see a very nice Shoulder/Head/Shoulder bottom over the last 3 years and a break above the neckline near 1.05 will yield a target near 1.1839 almost exactly the same target as the 1.618 times the length of wave 1.
Short term we most likely have ended minor wave i of iii at 1.0231 and should now see a minor correction back to the 1.0125 - 1.0150 area, before a new rally above 1.2031 and more importantly 1.0249 is seen for a rally towards at least the 1.04 area.

 NZD/USD - Has now broken below important support at 0.7857 and we should now see a deeper decline towards 0.7646 and likely even support at 0.7505.
Short term we should look for a reaction back towards former support at 0.7857, which has now become resistance, from where the next decline can begin.
At no point should we break above the top of red wave ii at 0.7922 as that will invalidate my count.

 EUR/JPY - As expected we saw one last decline below 94.22 to 94.09, thereby all demands since the 101.62 and even the 111.43 high has been fulfilled and upside pressure should be taking over for a rally above 95.22 towards important resistance near 97.37.
Longer term I'm looking for a rally above resistance at 101.62 towards the 111.43 high.

 EUR/NZD - We saw a perfect dip into the target-area between 1.5233 - 1.5265 with a 1.5261 low, which was followed by a quick rally above 1.5398 confirming that the next rally higher towards at least 1.5527 and more likely the 1.5805 - 1.5885 area is under way.

 Dow Jones Industrial Index - Finished a five wave decline from the 12.977 high, which is a good sign that wave 2 is finished and wave 3 down to 10,865 is taking over. Short term we need to allow for a minor correction back towards the 12,752 - 12,810 area before the next real downside pressure takes over.

Crude Oil - The correction from 77.28 seems to be over and we have seen the first minor wave to the downside reaching 87.43. We should now allow for a minor corrective wave towards the 90.27 - 90.88 area before the next real downside pressure takes over for a decline down to at least 81.23 and likely even closer to 75.66 on the way to the ideal target near 72.00.

Elliott Wave analysis of EUR/USD; USD/JPY; NZD/USD; EUR/JPY; EUR/NZD; DAX; GOld and Natural Gas

 EUR/USD - I'm still looking for one last decline closer to the 1.1985 target from where we should expect a correction to at least 1.2306. A decline to 1.1985 will also fulfil the Elliott Channeling technique, where we connect the top of wave 2 to the top of wave 4 and draw a parallel line from the bottom of wave 3 (blue channel).

 USD/JPY - We saw a nice long bullish wicked bar yesterday indicating that the correction from 80.59 could be over with the low of 77.95 however we now need the bullish bar to be confirmed by a break above 78.46 which will call for a continuation towards resistance at 79.40 and a break above here will confidence in a bottom being in place at 77.95.

 NZD/USD - Tested support at 0.7857. The first test was rejected, but after we have seen a correction towards the 0.7958 - 0.7981 area, from where we should see renewed downside-pressure and this time I very much doubt that support at 0.7857 will be able to protect the downside.

 EUR/JPY - Just needs one last decline to the 94.00 - 94.14 area to end the decline from not alone the 101.62, but also the bigger decline from 111.43. The the bottom is in place we should expect a powerful rally towards resistance in the 101.28 - 101.62 area.

 EUR/NZD - Here we saw a very dynamic rally yesterday to 1.5398, which was the first indication that an important long term bottom was found at 1.5131. Short term we should see a minor correction into the 1.5233 - 1.5265 area, from where we should expect the next rally higher towards 1.5450 and 1.5801.

 German DAX-Index - Back-tested the broken support-line and is now ready to break below support at 6,096 and 5,914 for a continuation towards 5,004 and possibly even lower

 Gold - The short term count has become very messy, but I'm not in doubt that we soon will see a test of the all important support at 1,521 I also do believe, that we will break below this support for a much bigger decline, but for now lets concentrate of the coming test of strong support at 1,521.

Natural Gas - Is well under way towards its next target near 3.62. Longer term we should look for even higher levels.
We have also seen a very nice Shoulder/Head/Shoulder bottom being build over the last six month, with a perfect break above the neck-line and back-test of the neck-line. This is really a textbook example, that Robert D. Edwars and John Magee, would have been proud of showing in their book.