Elliott wave analysis of DJI and Copper - Is an economic storm brewing?

Dow Jones Industrial Index Weekly

Dow Jones Industrial Index Daily

 

 

Dow Jones Industrial Index:

 

 

Please see my post from August 18. here first: http://theelliottwavesufer.blogspot.dk/2013/08/elliott-wave-analysis-of-dji-and-apple.html

 

 

We are closing in on the important support at 14,551, which I expect will protect the downside on the first attempt to break below it, but after a correction towards maybe 15,109 or even 15,239 we should see a new attempt to break below the important support at 14,551 and this time we should expect a break below it for a continuation lower towards at least 13,443 and possibly even lower.

The decline from the all time high at 15,658.43 has clearly all the characteristics of an impulsive decline and all we need now is a break below 14,551 to confirm, that the bears are in control of this market.

Copper:

It has been a while since my last post on copper (you can see it here: http://theelliottwavesufer.blogspot.dk/2013/04/elliott-wave-analysis-of-dji-facebook.html). As can be seen the Shoulder/Head/Shoulder neckline has just been retested a second time and the next attempt to break below important support at 2.99 will most likely be successful and call for a decline towards the the S/H/S target just above 2.0
It seems both DJI and Copper is confirming a slowdown in the economy. If my expanded triangle Count for the DJI is correct it will be a nasty economic slowdown.  We don't have the final confirmation yet, but take your precautions and be ready for what might be coming. As we saw it in 2007-2009 a economic slowdown in the US of this magnitude will effect the rest of the World too, so don't just lean back because you don't live in the US. Be ready for the possibility of a BIG economic storm during 2014-2016. I anticipate a stock market panic some time during 2015.

VIX Index:

It has been a long time since I have shown my VIX-barometer.

As can be seen on the chart above, we had some major shifts in the mood in 2010 and 2011, where we went from complacency to a fearful market, but from August 2011 it has been a one way ticket well into a state of complacency and only just this last month does the mood seem to be shifting towards a more concerned market. We are still no way near anything, that makes the market feel uncomfortable, but it should be noted, that we saw a bullish engulfing month i August and that is the first sign in a long time, that the mood is swinging towards a more fearful market.

Elliott wave analysis of EUR/USD; NZD/USD and EUR/AUD

 EUR/USD

Please see my post from August 25 here first:
http://theelliottwavesufer.blogspot.dk/2013/08/elliott-wave-analysis-of-eurusd-gbpusd_25.html

With the break below 1.3187 we had the confirmation needed to confirm, that wave 2 did indeed end at 1.3452 and that wave 3 lower is developing. The first downside target is at 1.2993 followed by 1.2762. The ideal target for wave 3 will be at 1.1896, but it could extend lower.
Short term I'm looking for a move a Little lower towards 1.3150 followed by a correction towards 1.3244 before the next powerful decline.

NZD/USD Monthly

  



NZD/USD 8 Hourly

 

 

NZD/USD

 

 

The expected wave ii of 3 rally turned out to be of sub-normal length as we only reached 0.7875 before the next decline pushed us lower. The shallow correction indicates as I said on August 25, that the bears are in control here and we could easily see the bottom fall out of this cross for a very powerful decline.

Longer term I'm looking for much lower levels in this cross and would at least look for a decline towards 0.6560, but a break of this support calls for a much deeper decline towards the long term support-line, which currently comes in near 0.5420.

 

 

EUR/AUD

Please see my post from July 4 here first:
http://theelliottwavesufer.blogspot.dk/2013/07/elliott-wave-analysis-of-euraud-short.html

We saw the expected shallow correction in form of an expanded flat correction, which ended at 1.3902 easily holding above the support at 1.3814 I mentioned in my post from July 4.
Sine the wave iv of 3 low at 1.3902 we have seen a rally higher towards the 50% target (50% of the length taken from the start of wave i of 3 top the top of wave iii of 3 added to the bottom of wave iv of 3). We could still see a move closer to the 61.8% target at 1.5255, but a break below minor support at 1.4755 will likely rule out that possibility and confirm that wave 3 has finished with the test of 1.5030 and wave 4 is developing.
As wave 2 was a Deep zig-zag correction, we should expect some kind of flat correction or maybe a triangle. Only time will show. The target for wave 4? we should not look for anything deeper than the 38.2% correction target of wave 3, which comes in at 1.3934, but we have to accept the possibility of an even small correction Down to the 23.6% corrective target at 1.4353. Both targets will enter the territory of wave four of one lessor degree, which is what we would expect.

Elliott wave analysis of EUR/JPY and EUR/NZD for August 30 - 2013

EUR/JPY

Today's Support and Resistance Levels:

R3: 131.37

R2: 131.04

R1: 130.56

Current spot: 130.02

S1: 129.88

S2: 129.65

S3: 129.24

Technical Summary:

The price action here has been almost none existent. We have been trading sideways in a narrow range between 129.64 - 130.56. As long as minor resistance at 130.56 protects the upside, we could see one last decline closer to important support near 129.24, but from there or upon a break above resistance at 130.56 we should see a powerful thrust out of the triangle towards the upside for a rally towards our next major target at 139.21. Longer term we are looking for much higher levels near 170.00.

Today's Support and Resistance Levels:

R3: 1.7144

R2: 1.7095

R1: 1.7066

Current Spot: 1.7033

S1: 1.7005

S2: 1.6968

S3: 1.7005

Technical Summary:

With the break below 1.6996 we knew, that wave ii had not finished yet and that it was an expanded flat correction (the top of wave b ended higher than the top of wave a and the bottom of wave c was lower than the low of wave a). The impulsive rally that follows an expanded flat correction will be an extended wave, so once wave ii is finished we should expect a very powerful wave iii higher. Short term I'm looking for a decline towards 1.6989 and maybe even lower towards 1.6912 as long as resistance at 1.7066 and more importantly resistance at 1.7095 protects the upside. However, a break above 1.7095 indicates, that wave c of the expanded flat correction is in place and wave iii has taken over for a rally towards at least 1.7166 and more likely higher towards 1.7274.

Elliott wave analysis of EUR/JPY and EUR/NZD for August 29 - 2013

 EUR/JPY

Today's Support and Resistance Levels:

R3: 131.37

R2: 131.04

R1: 130.56

Current Spot: 130.12

S1. 129.88

S2: 129.65

S3: 129.24

Technical Summary:

We saw a break above resistance at 130.50, but the lack of a follow-through rally could indicate, that we need one last decline to just below 129.65 before the e wave of the triangle is finally over. No matter, if we need one last decline or we are going to see a direct break above resistance at 130.56 (yesterdays high). We should soon see a new impulsive rally higher and a break above the triangle resistance-line near 132.20 for a continuation towards 139.21 as the first major upside target. However, longer term I'm looking for much higher levels closer to 170.00.

 EUR/NZD

Today's Support and Resistance Levels:

R3: 1.7168

R2: 1.7122

R1: 1.7056

Current Spot: 1.7024

S1: 1.6989 (Invalidation of my preferred count)

S2: 1.6950

S3: 1.6912 

Technical Summary:

I still think, that wave iii higher is developing. For now we have seen red wave i of iii and red wave ii of iii has bottomed at 1.6996 and I'm now looking for a break above 1.7056 as the first good indication, that red wave ii is indeed over. A break above strong short term resistance at 1.7122 will confirm, that red wave ii is over and that the powerful red wave iii of iii is developing towards at least 1.7455 and likely higher. That said, as long as minor resistance at 1.7056 protects the upside, the risk is a break below 1.6989, that would invalidate our preferred short term count (see the chart below) and tells us that wave ii is an expanded flat correction and a decline closer to 1.6912 should be seen before wave iii will be ready to take over.

To show my short term Count for red wave i and red wave ii of iii I have added an hourly chart (see above). As can be seen we are very close to the invalidation point of my preferred Count and this poses a low risk EUR-buying opportunity, as the stop can be set just below 1.6989.

It should also be noticed, that we could have a possible hidden divergence in place and if this is the case we can expect a very powerful rally in red wave iii of iii. STAY ALERT!

Elliott wave analysis of Crude Oil - It's on the move again higher...

Crude Oil

Please see my post from July 3 here first: http://theelliottwavesufer.blogspot.dk/2013/07/elliott-wave-analysis-of-crude-oil.html

Well Crude Oil is finally on the move again and could be headed towards 120.84 as the next major target. As wave i and ii is almost equal in length we should expect wave v to extend and that would call for a rally towards 120.84 before wave 3 comes to an end. Longer term we still should be looking for a rally higher towards 126.87 before this C wave is over.

Elliott wave analysis of EUR/JPY and EUR/NZD for August 28 - 2013

 EUR/JPY

Today's Support and Resistance Levels:

R3: 131.04

R2: 130.50

R1: 130.15

Current Spot: 129.93

S1: 129.65

S2: 129.28

S3: 129.00

Technical Summary:

With the decline to 129.65, just above my second target. We likely have seen or is very close to the bottom of the final e wave of the triangle and a new powerful impulsive rally could begin any time now. The first good indication will be if support at 129.65 protects the downside for a break above 130.15 and more importantly a break above 130.50, which will call for a test of the triangle resistance-line near 132.00 and break above here will confirm that a new impulsive rally is developing towards 139.21 as the next major upside target. However, if support at 129.65 is broken it will delay the impulsive rally for a move closer to the triangle support-line near 129.00, but only a break below 127.94 will invalidate the triangle count.

EUR/NZD

Today's Support and Resistance Levels:

R3: 1.7341

R2: 1.7274

R1: 1.7218

Current Spot: 1.7182

S1: 1.7143

S2: 1.7081

S3: 1.7042

Technical Summary:

Wave ii only corrected 23.6% of wave i, this is what would be called a sub-normal correction for wave ii and indicates lots of underlying strength in this pair. With wave ii in place already I will be looking for wave iii higher towards at least 1.7859 and more likely wave iii will extend higher towards 1.8397. As wave iii is the most likely candidate to extend, this is the wave we will like to participate in for sure. With the very small wave ii we now know, that we can expect a deep and time consuming wave iv, but we will concentrate on that, when the time comes. For now, it is time for the powerful wave iii and a break above 1.7274 confirms the next part of wave iii is under way.

Elliott wave analysis of EUR/JPY and EUR/NZD for August 27 - 2013

 EUR/JPY

Today's Support and Resistance Levels:

R3: 131.98

R2: 131.74

R1: 131.52

Current Spot: 131.43

S1: 131.24

S2: 130.80

S3: 130.39

Technical Summary:

We are currently developing the final e-wave of a symmetric triangle. I expect wave e to fall towards 130.18 and maybe even lower towards 129.61 before the next powerful rally higher. A break above 131.98 will be the first good indication, that the triangle has finished and the next impulsive wave higher is developing, while a break above 132.30 will confirm the next rally higher towards 139.21. 

Looking at the larger picture (see the chart below) this triangle represents a B-wave triangle and the coming rally higher will be the C wave of a major zig-zag correction, that began at 94.10. The ideal target for wave C of the zig-zag will be at 170.00.

EUR/JPY DAILY

 

EUR/NZD

Today's Support and Resistance Levels:

R3: 1.7182

R2: 1.7143

R1: 1.7110

Current Spot: 1.7082

S1: 1.7042

S2: 1.6989

S3: 1.6936

Technical Summary:

We have seen wave i from 1.6325 to 1.7197 of a new major impulsive rally. Currently we are in a wave ii correction, which ideally will correct 38.2% of wave i, which would call for a decline towards 1.6864. The reason why we only are looking for the minimum correction is the speed of which wave i developed. However it should be remembered, that second waves are allowed to correct 100% of the first wave, but they can never break the starting point of wave one. Once this wave ii correction is over we are looking for a new very powerful rally higher towards at least 1.7775, but it is more likely to extend higher towards 1.8314. but for now let's stay focused on the possible termination of wave ii.

Elliott wave analysis of EUR/JPY and EUR/NZD for August 26 - 2013

 EUR/JPY

Today's Support and Resistance Levels:

R3: 133.81

R2: 132.74

R1: 132.31

Current Spot: 132.07

S1: 131.68

S2: 131.22

S3: 130.85

Technical Summary:

Wave d of the triangle is now in place and I will be looking for the last decline as wave e. This expected e wave normally relates to the d-wave with some Fibonacci relationship, but e waves of triangles can be any of the corrective patterns we know, even triangles. However, once this e wave of the triangle is in place we should be looking for a new powerful rally higher towards 139.21 and longer term we are looking for a rally towards 170.00. That said for now we should concentrate on the e-wave, which ideally will decline to 130.18 and maybe deeper towards 129.65 before the next rally higher.

EUR/NZD

Today's Support and Resistance Levels:

R3: 1.7238

R2: 1.7182

R1: 1.7134

Current Spot: 1.7109

S1: 1.7066

S2: 1.7006

S3: 1.6935

Technical Summary:

We most likely saw the top of wave i on Friday with the test of 1.7197 and we should now expect a wave ii correction towards at least 1.6864, where wave ii will have corrected 38.2% of wave i. This is also where we saw wave four of one lessor degree and that is a very common target for second waves. That said it should be remembered, that second waves are allowed to correct all of the first wave, but it can never go beyond the start of wave one, which in this case would be at 1.6325. However, taking into consideration how powerful this wave i has been, we should not expect to much of wave ii. Longer term I'm looking for much higher levels in this cross with 181.33 being the next major long term target.

Elliott wave analysis of EUR/USD; GBP/USD; AUD/USD and NZD/USD

 WEEKLY

SLIGHTLY PREFERRED COUNT

ALTERNATE COUNT NO. 1

 

EUR/USD

 

In the larger Picture I still expect we ended wave e with the test of 1.3711 and we have seen wave 1 Down and either just have ended wave 2 or is close to end wave 2. To confirm the end of wave 2 we need a break below 1.3187.

 

The break above 1.3416 has forced a minor recount of my previous preferred count and the two count above represents my new preferred count and alternate count no. 1.

 

In my preferred count we have either ended wave 2 or is very close to end wave 2, but under no circumstance can we see a break above 1.3610. If a break above 1.3610 occurs this count is dead and the alternate count no. 1 becomes the preferred count.

 

The alternate count shows an expending triangle, which could be finished or we could still see a move higher in wave e towards 1.3700, but under no circumstances can a break above 1.3711 be allowed. If we do break above 1.3711, then wave e of the larger symmetric triangle can't have ended and a rally towards 1.4200 should be the outcome.

 

Common for both these counts is, that we need a break below 1.3187 to confirm that wave 3 lower is developing.



GBP/USD

 

My preferred Count is still, that we are in wave ii of 3 and soon should see a powerful decline towards at least 1.4200 and possibly lower. However, for this Count to stay valid under no circumstances can a break above 1.5752 be allowed. As a break above 1.5752 will break one of the Elliott Wave Principles Cardinal rules, that wave two can't break above the starting point of wave one. If we does see a break above 1.5752 it will not be a total change in the bigger Count, just that wave 2 still is unfolding and that wave b of 2 was an expanding flat correction.

 



AUD/USD

 

 

I'm still looking for much lower levels in AUD/USD and think, that we are in the early stages of wave iii of C lower. The above Count have worked well and I don't believe those counting the decline from 1.0583 as wave C and the decline from 1.1080 as complete. A break below 0.8845 will confirm my preferred count and call for a decline to at least 0.8468.

 

For my Count to stay valid resistance at 0.9318 will have to protect the upside. A break above 0.9318 will invalidate my Count, but it will not cause me to Count the decline from 1.1080 as finished.

 



NZD/USD

Here I'm also looking for a continuation lower towards 0.6560. That said we should be close to a bottom of wave i of 3 and should expect wave ii higher towards the 0.7962 - 0.8002 zone before the next  powerful decline takes over.
Short term a break above 0.7866 will confirm that wave ii of 3 is developing, but don't try to trade this correction as the decline has been very powerful and it's a warning, that the bears is strong.

Elliott wave analysis of EUR/CAD

EUR/CAD

I will update the text later, but a quick note.

The structure of the rally since the 1,2129 is very powerful and does look impulsive in character. That should mean, that we should be looking for much higher levels in the coming months as wave iii of 3 moves higher towards at least 1,5497, but I would not be surprised to see a extension higher towards 1,7073.

Elliott wave analysis of Nifty 50

Nifty 50

Please see my post from July 11 here first (http://theelliottwavesufer.blogspot.dk/2013/07/elliott-wave-analysis-of-nifty-50.html)

With the break below the base channel support-line I have made a change to my previous bullish Count. Longer term the Picture is still very bullish, but for the short to medium term Picture we should expect more downside action in wave c of a flat wave II correction, which began at 6,338.50 in late October 2011.

As wave A we saw a complex triple zig-zag correction and for wave B we saw a simple zig-zag correction. However, for wave C we should expect an impulsive five wave decline to just below the ending point of wave A at 4,531.15, before we should expect the next impulsive wave higher to take over.

Elliott wave analysis of EUR/JPY and EUR/NZD for August 23

EUR/JPY

Today's Support and Resistance Levels:

R3: 133.81 (top on May 22)

R2: 132.74 (top of wave c of the triangle)

R1: 132.34

Current Spot: 132.14

S1: 131.92

S2: 131.52

S1: 131.05

Technical Summary:

We have seen the expected rally towards the triangle resistance-line near 132.00 and I will now be looking for the final e-wave of the triangle. This e-wave could fall all the way towards the the triangle support-line near 129.00, but it is more likely to end early, which would likely mean a termination of wave e close to 129.60. Once wave e is in place we should be looking for a new impulsive rally higher towards 140.98 as the next major upside target, but longer term we are looking for much higher levels closer to 170.00

EUR/NZD

Today's Support and Resistance Levels:

R3: 1.7153 (the top from August 5)

R2: 1.7100 (the ideal target for wave i)

R1: 1.7080 (current high for wave i)

Current Spot: 170.37

S1: 1.6998 (break below here will be first indication of a finish wave i)

S2: 1.6936

S3: 1.6855 

Technical Summary:

We have almost reached the ideal target for this wave i and we should soon see a wave ii correction develop. As long as support at 1.6998 protects the downside we could still see one last spike higher towards the ideal target at 1.7100, but from there or upon a break below 1.6998 we should see a corrective decline towards the 38.2% corrective target, which comes in at 1.6804. This correction could of cause be deeper, but looking at the speed wave i had and the impatient of the market we should only expect the minimum corrective target reached. But for now let's concentrate one picking the top of wave i near 1.7100.

Elliott wave analysis of EUR/JPY and EUR/NZD

 EUR/JPY

Today's Support and Resistance Levels:

R3: 131.56

R2: 131.20

R1: 131.03

Current spot: 130.88

S1: 130.63

S2: 130.21

S3: 129.90

Technical Summary:

Well once again we saw a break above resistance at 131.01, more and more evidence is pointing towards the triangle as the preferred count. That means we should see a continuation higher towards strong resistance near 132.00 to end wave d and then one last decline towards 129.98 and maybe even down to 129.50 before wave e of the triangle is in place. However, once wave e of the triangle is done, we can expect a new very powerful rally higher towards 170.00, but for now we have to concentrate on getting this triangle finished.

EUR/NZD

Today's Support and Resistance Levels:

R3: 171.53

R2: 171.00

R1: 170.74

Current spot: 170.47

S1: 170.00

S2: 1.6967

S3: 1.6934

Technical Summary:

I'm still looking for a top of wave i near 171.00 and we should be ready for the first sizable set-back since this rally took of from 1.6325. The ideal target for this wave ii correction of wave i will be at the 38.2% retracement target at 1.6804. That said, we must remember that the corrections during wave i has been sub-normal and therefore we will have to monitor the coming wave ii closely, but for now let's focus on getting the top of wave i in place near 1.7100 and then where we can expect wave ii to end.

Elliott wave analysis of EUR/JPY and EUR/NZD

EUR/JPY

Today's Support and Resistance Levels:

R3: 132.07

R2: 131.55

R1: 131.01 - Invalidation point of the bearish count

Current spot: 130.75

S1: 130.52

S2: 130.33

S3: 129.90  

Technical Summary:

I'm still looking for an impulsive decline to develop any time now. Short term I'm looking for important resistance at 131.01 to protect the upside for a break below 130.33 and more importantly a break below 129.90, which confirms a continuation lower towards 128.17 and maybe even low. However, a break above important support at 131.01 will invalidate my bearish count and call for a rally higher towards 132.00 and make the triangle count my preferred count.

EUR/NZD

Today's Support and Resistance Levels:

R3: 1.7100

R2: 1.7050

R1: 1.7006

Current spot: 1.6975

S1: 1.6925

S2: 1.6856

S3: 1.6835

Technical Summary:

We should be close to the top of wave i of the new impulsive rally which began at 1.6325. I expect the top to be set close to 1.7100 from where we should expect a correction towards at least 1.6915 and more likely down to 1.6804, where wave ii will have corrected 38.2% of wave i. If wave ii ends at 1.6804 it will still be a sub-normal correction for a wave ii and indicate underlying strength in this cross.

Longer term I'm looking for much higher levels.