Elliott wave analysis of Silver - Has bottomed or will bottom near 18.17

Silver - Has bottomed or will bottom near 18.17 

The correction from 20.57 in wave iv either completed with the test of 18.39 or will complete soon near 18.17 for the final impulsive rally higher to 21.58 and maybe even closer to 23.00 from where a new long term decline to below 13.65 is expected. 

Short term a break above minor resistance at 19.04 will confirm that the correction in wave iv is complete and wave v higher is developing. While a break below minor support at 18.53 will indicate that a final decline closer to 18.17 will be needed to complete wave iv and set the stage for the final rally in wave v. I do slightly prefer the more bullish option, but will let the breaking above 19.04 be the deciding factor.  

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Elliott wave analysis of AUD/USD - Wave [5] lower to 0.6102 developing

AUD/USD - Wave [5] lower to 0.6102 developing 

AUD/USD has been declining since late July 2011 high at 1.1080. The first part of the decline from 1.1080 to 0.9387 is clearly in three waves and the following sideways consolidation best counts as a triangle. Triangles can only be seen as wave four's, B-waves or X-waves within the Elliott Wave Principle. This triangle can't be a wave four triangle so it has to be either a B-wave triangle or an X-wave triangle. Both will call for more downside, but the X-wave triangle would call for a new zig-zag correction and the decline from 1.0583 is clearly impulsive, which is why I have labeled it wave B. 

As just said, the decline from 1.0583 is clearly impulsive. Wave [1] decline from 1.0583 to 0.8845 and was followed by a simple zig-zag correction in wave [2] to 0.9758. Wave [3] wasan almost perfect 1.618 times extension of wave [1] and completed at 0.6901 and was followed by an expanded flat wave [4] 0.7835. 

This means wave [5] lower now is unfolding to below the low of wave [3] at 0.6901. The Elliott Wave Principle says, that when wave [3] becomes extended, one should expect wave [5] to be equal in length to wave [1] and that will be the case at 0.6102, so that will be the ideal downside target for wave [5]. 

Let's see how wave [5] is developing. wave 1 of [5] decline from 0.7835 to 0.7141 and has been followed by a complex double zig-zag in wave 2 that completed with a failure at 0.7749 and wave 3 of [5] is currently developing. Remember that the third wave is the wonder to behold and the wave we normally will expect to extend and the minimum extension in wave 3 will call for a decline to 0.6643. 

On the way lower to 0.6643 minor downside targets are seen at 0.7328, at 0.7190 and at 0.7104. So once the small consolidation below the broken support-line from 0.7141 is complete, expect downside acceleration towards 0.7328 and lower. 

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Elliott wave analysis of AUD/NZD - Wave ii bottom likely in place with the test of 1.0383

AUD/NZD - Wave ii bottom likely in place with the test of 1.0383 

In my August 19 post (you can see that post by clicking here) I called for a decline into the 1.0387 - 1.0460 area to complete wave ii. Wave ii completed with the test of 1.0383 and wave iii to above 1.0772 is now developing. 

The first good indication that wave iii indeed is under way is a break above minor resistance at 1.0469, while a break above 1.0528 will confirm the next impulsive rally for a return to 1.0772 on the way higher to 1.1333 and likely even above.

We are about to enter wave iii of [3], which normally is the strongest part of an impulsive rally. This is the wonder to behold and when prices goes almost vertical, with only very small correction, so I'm not sure you will want to miss this opportunity.

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Elliott wave analysis of USD/SGD - Look for the next impulsive rally towards at least 1.4507

USD/SGD - Look for the next impulsive rally towards at least 1.4507 

It has been a while since I touched base here, but those of you who has been a member for a long term, know I track this from time to time. The latest development is very encouraging and indicates the correction in wave 4 finally is completing calling for wave 5 higher to at least 1.4507 and likely even closer to 1.5282. 

Going back to the top of wave 3 at 1.4365 in October 2015, I called for the top of wave 3 and the onset of wave 4 on October 6 - 2015 (you can see that post by clicking here). 

Wave 4 became slightly deeper than I first expected in my April 4 - 2016 post (you can see that post by clicking here) as the low came in at 1.3311. 

I'm currently looking for a break above the minor resistance-line from 1.3836 near 1.3539 and more importantly a break above resistance at 1.3638 to confirm that wave iii of 5 is unfolding for the rally to 1.4507 and likely closer to 1.5282. 

Support is now seen at 1.3467. 

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Warning of change is in the air

Warning of change is in the air

Charles Dow, founder of the Wall Street Journal and the Dow Jones & Company, said that if the industrial and transportation indices didn't bot rally a new bull market couldn't be unfolding. 

The Dow Transportation index topped in December 2014 and is currently way below this top, while the Dow Industrial index is at new all-time highs. The divergent of the two indices is a warning that change is in the air. 

The logic behind Charles Dow's assumption was that if manufactures profits are raising, then they are producing more and if follows they need to ship more products to the consumers. So the two indices should both move in the same direction and make new highs together. 

As can be seen from the chart above, the DJT topped already in December 2014 and has been in a downtrend ever since. It will take a break above 8,358 to break this series of lower lows and lower highs. 

While this Dow signal isn't a timing tool it's a warning that change is in the air. 

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Elliott wave analysis of USD Index - Ready for a strong rally towards at least 100.00

USD Index - Ready for a strong rally towards at least 100.00 

The USD Index has been in an impulsive (five waves) uptrend since the May 2011 low at 72.20

Wave (iv) of this five wave uptrend completed in May at 91.92 and wave (v) higher towards 105.44 is now developing.

The first couple of waves higher in wave (v) is clearly impulsive in nature, but still lack upside acceleration, but that is about to end. An expanded flat correction as red wave (ii) indicates that upside acceleration towards at least 100.00 soon should be seen.

The first strong indication that red wave (iii) is developing will be a break above minor resistance at 95.10 and strong confirmation that red wave (iii) is unfolding is seen upon a break above resistance at 96.52.

Stay tuned for upside acceleration soon.

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Elliott wave analysis of Copper - Finally seems to be ready for the next rally towards 2.6410

Copper - Finally seems to be ready for the next rally towards 2.6410

About a month ago I call for Copper to blast higher anytime (you can see that post by clicking here).

Well the correction in wave ii became a lot deeper than I first expected and it dragged on a lot longer than expected. That said, it finally seems that wave ii is complete and wave iii of (iii) higher to 2.6410 is ready to take over. 

The first strong indication that wave ii is complete and wave iii higher is developing, will be a break above the minor channel resistance-line near 2.1945. A firm close above this resistance-line will call for a rally to 2.2775 on the way higher to 2.38 and then 2.57 with the wave (iii) target seen at 2.64. 

Elliott wave analysis of DJI - New all-time high at 18,638 could have long term consequences

DJI - New all-time high at 18,638 could have long term consequences 

Yesterday a new all-time high was seen for the DJI at 18,638. From an Elliott Wave perspective this is important as we now have a five wave rally from the March 2009 low. We also can count a five wave rally from the January 2016 low and finally we can count a five wave rally from the June 2016 low, so we are now in a territory where a long term top could be found anytime now. 

I don't say that the top is in place, but just that all requirements has been fulfilled from an Elliott Wave point of view. 

The ideal mathematical target for the five wave rally from June 2016 calls for a rally to 18,843, while the same calculation from the January 2016 low calls for a rally to 18,742, while the ideal mathematical target from the March 2009 low is seen at 19.989 close to the ideal target from the 1932 low at 20,098 (see the long term count from 1932 by clicking here). So yes, more upside could be seen as long as minor support at 18.468 protects the downside, but a break below here will be the first warning that a long term top could be in place, while a break below important support at 18,247 will be a very strong warning that the top is in place.

So stay cautiously bullish, but keep your stops tight and in place. Or look for other kinds of protections like the (SDOW - Proshares Ultrapro Short Dow30 or SPXU for the Ultrapro Short S&P 500). The Ultrapro means the shares are leveraged 3 times, so you "only" need 1/3 of your portfolio to get you covered, if you don't want to sell out.

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Elliott wave analysis of GBP/JPY - Important long term low could be in place at 130.98

GBP/JPY - Important long term low could be in place at 130.98

The rally of the 116.82 low in mid-September 2011 to the high of 195.88 in late June 2015 is counted as a five wave (impulsive) rally in wave [A] or [1]. The Elliott Wave Principle stats that after an impulsive move and three wave correction could bee seen. This means that a three wave decline should be expected from 195.88. 

As can be seen from the two upper charts (weekly and daily) the decline from 195.88 to 128.75 is best counted as a double zig-zag correction in wave [B] or [2]. Once the correction in wave [B] or [2] was complete a new impulsive rally in wave [C] or [3] was expected. 

The rally of the 128.75 low to 143.24 does look impulsive and is counted as wave i and the decline from 143.24 to 130.98 as a complete wave ii, which means a strong rally is expected in wave iii higher towards at least 154.43, where wave iii will be 161.8% the length of wave i. 

However, to indicate that wave ii indeed is complete, a break above minor resistance at 132.03 and more importantly a break above resistance at 134.02 is needed. As long as minor resistance at 132.03 protects the upside, more downside pressure can not be excluded, but the downside potential is viewed as limited from here. 

Under this count the low at 128.75 needs to hold firm. An unexpected break below this invalidation point, will keep the decline from 195.88 alive for a move to 118.81. 

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Elliott wave analysis of AUD/USD - Ending diagonal still in play here

AUD/USD - Ending diagonal still in play here 

In yesterday's post, I said that a break above 0.7664 would question the bearish outlook. We have seen a small break above 0.7664 with a high seen at 0,7672. therefore, I have been taking a closer look at the price-action since the 0.7418 low. Instead of count it all as part of the ending diagonal, a better fit might be that the rally from 0.7418 to 0.7615 was a small wave a followed by wave b lower to 0.7484 and then the ending diagonal as wave c higher to 0.7675 as wave c. 

Wave c will be equal in length to wave a at 0.7675 and will at the same time stay just below the starting point of wave i at 0.7676 keeping the guidelines of the Elliott Wave Principle intact. 

So from 0.7675 a strong decline is expected, with the first minor target being the origin of the ending diagonal at 0.7484, but looking at the larger picture, much more downside pressure should be expected towards 0.7294 and likely even lower to 0.7060. 

Should a break above 0.7676 be seen, that would invalidate the immediately bearish count and suggest that wave 2 isn't complete yet, but the potential upside should be very limited and likely not move higher than 0.7707 before topping out and start the next impulsive decline. 

Only an unexpected break above 0.7835 will invalidate the bearish outlook altogether. 

Elliott wave analysis of AUD/USD - Strong impulsive decline to 0.6100 still expected

AUD/USD - Strong impulsive decline to 0.6100 still expected 

My preferred count still calls for more downside in wave [5] of (C) to complete the long term decline from 1.1080.

Wave 1 of [5] began at 0.7835 and completed at 0.7141 and was followed by a complex corrective rally to 0.7676 in wave 2. Wave 3 is now in its very infancy, but is expected to accelerate lower in the coming weeks.

Zooming in on wave 3, we can see the first minor impulsive decline (i) began at 0.7676 and completed at 0.7418 and was followed by a strong correction in wave ii that completed on Friday with a high seen at 0.7664. Wave c of ii turned into an ending diagonal and the break below the ending diagonal support-line near 0.7640 triggered the completion of wave ii and the onset of wave iii.

Wave iii of 3 is normally the strongest of all the impulsive waves and is regarded as the wonder to behold. During this wave prices move very strongly and the decline is expected to become almost vertical.

The ideal target for wave [5] of (C) is seen at 0.6100 where wave [5] will be equal in length to wave [1].

A break above 0.7664 will seriously question this count, but only a break above 0.7835 will invalidate this count altogether.

Elliott wave analysis of Corn - Has bottomed or will bottom soon near 310

Corn - Has bottomed or will bottom soon near 310

Corn is tracing out a very complex B-wave correction. This correction began way back in late September 2014 from the low of 318 rallying to 443 as wave W and has since been followed by another zig-zag decline to 319 and is now in a position, where wave X is complete or will complete after one more decline closer to support at 310. 

The first strong indication of wave X being complete will be a break above the resistance-line near 329, while a break above resistance at 335 will confirm the low is in place and call for a new long term rally towards 443 and possibly even higher towards 519 before the long term complex correction in wave B is complete. 

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Elliott wave analysis of WTI Crude Oil - Low expected near 38.78

WTI Crude Oil - Low expected near 38.78 

The rally from the mid-February low at 26.06 was in five waves (impulsive) indicating that at least an zig-zag (A-B-C) rally should be expected. 

Wave A rallied in five waves from 26.06 to 51.67 and has been followed by a corrective decline (double zig-zag correction). This double zig-zag correction is now close to completion and is expected to complete near the 50% corrective target at 38.78 from where a new impulsive rally towards at least 62.58 is expected. 

The first strong indication of a bottom being in place, will be a break above minor resistance at 41.83, while a break above 43.74 will confirm the bottom is in place and a new impulsive rally is developing. 

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Elliott wave analysis of Microsoft - Rally to 64.75 and then a 38% correction to 39.72

Microsoft - Rally to 64.75 and then a 38% correction to 39.72 

Microsoft has seen a nice rally of the March 2009 low at 14.87. The rally is clearly in five waves and after a five wave rally a larger correction of the entire five wave rally should be expected. 

Wave 5 is not yet complete and should cover more upside towards the 64.05 - 64.75 area before topping out and turn lower as the five wave rally is being corrected. 

Why am I looking for a top in the 64.05 - 64.75 area you might ask? Well at 64.05 wave 5 will be 38.2% the length of the entire rally from the low of wave 1 at 14.87 to the top of wave 3 at 56.85 added to the bottom of wave 4 at 48.04. 

However, at 64.75 wave 5 will be equal in length to wave 1, which is a very common target for wave 5. So with a target-cluster in this area, that is what I will look for before wave 5 is complete and a 38% correction is expected. 

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