EUR/USD
Since my last update on EUR/USD we have seen support at 1.2973 protect the downside to perfection and the following rally have made new highs in accordance with my expectation of a move to minimum 1.3498 and likely even higher towards 1.3838, where wave e will have corrected 61.8% of wave d. That said we should not forget, that this rally could continue all the way towards the triangle resistance line near 1.4600.
Dow Jones Industrial Index
It has been quite a while since I have posted anything on the DJI, but it has not been the most interesting Market in my view. However, lets take a look at it. First of all I would like to draw the attention to the indicators below. Both the RSI and the ROC both displays a possible divergence building. This is not what should be expected if we are looking at a new major upswing. That said, we should be aware that a sudden acceleration towards the upside could cause both indicators to rise dynamically and confirm the ongoing rally.
Looking at the price action itself it doesn't look impulsive to me and rather looks like an Ending Diagonal is developing. If this is the case we can not allow a break above 14,093 as that will leave us with wave c as the smallest wave, which is not allowed under the EWP. That doesn't leave us with much more upside, but we need to see a break below 13,293 and more importantly a break below 12,884 to confirm the top and a decline towards the 10,651 area.
However a break above 14,093 will call for a continuation higher towards 16,138 in a very large broadening formation.
Gold
Has most likely ended its wave ii, which means a new test of important resistance at 1,802 is developing. However, we need a break above this strong resistance to confirm the next rally higher towards the first possible target for wave 5 near 1,998.00
When dealing with commodities they often end in some kind of moon-shot rally, which easily could be the case here too. If this will be the case we should look for a rally much higher than the 1,998.00 target, more like a rally towards 2,558.00 and maybe even towards 3,195.45 if wave 5 becomes extended, but only time can tell.
Crude Oil
Has clearly broken higher and we should now look for a rally higher towards 103.80 as the first target, where we will find strong resistance. If however this resistance gets broken too the we can expect a move much higher towards the 2008 top at 147.27. The other possibility is, that we only are looking at wave D of the triangle and from 103.80 we can expect a decline in wave E towards support near the 85 - 87 area before the next rally takes place. But for now we should focus our attention towards resistance at 103.80.
I would also like to point out, As we are in the later part of a big Triangle the price-action can become pretty erratic and very difficult to read and trade.
EWS - anymore clues to the structure of Facebook wave 4? Kind of looks like a zig zag, but isn't that uncommon for a wave 4?
ReplyDeleteHi Hedgiefundman,
ReplyDeleteI agree with you it looks like a possible zig-zag is developing. That said, taken into account that wave 2 was a deep zig-zag correction and we therefore should expect some kind of a flat correction. We most liekly should expect the coming wave B of 4 to go beyond, what would be the normal retracentment target for wave B.
I would not say the zig-zags in wave 4 is uncommon, but they tend to be second waves, which would make wave 4 a more complex wave. But I have often seen flats in wave 2, which would call for a simple zig-zag in wave 4.
Kind regards
EWS