Wednesday, August 24, 2016

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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Sunday, August 21, 2016

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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Friday, August 19, 2016

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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Thursday, August 18, 2016

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. 


Friday, August 12, 2016

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.

If you like the above post and want more like it, then you should consider joining my service elliottwavesurfer.com. Click at the link and see, what I have to offer. 

Thursday, August 11, 2016

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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Tuesday, August 9, 2016

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.