My longer term view is that wave E, of the major B wave triangle, ended at 1.3894 and that a impulsive decline is developing in wave C. We have likely seen the first two waves of the impulsive decline. Wave 1 from 1.3894 down to 1.3508 and an expanded flat wave 2 likely ending at 1.3773 and I'm now looking for a break below support at 1.3662 to confirm that wave 3 lower is developing. The first target for wave 3 is at 131.41, but it could easily extend deeper.
We have seen a five wave rally from the 75.56 low to the 105.44 high and we are currently in a major correction towards the 38.2% correction at 94.03.
Short term I'm looking for a break below minor support at 101.36 and more importantly a break below support at 100.73 confirming the next leg lower towards the target at 94.03.
My long term is that a major correction from the 2009 low at 1.3514. We saw wave A from 1.3514 to 1.7042 and since the 1.7042 high we have seen a huge B-wave triangle, which ended in a very small E and we are now in wave C higher towards 1.9440 where wave C will be equal in length to wave A.
After a five wave rally from the mid-2012 low at 1.1605 to 1.5597 and since the 1.5597 high we have seen an expanded flat correction unfolding. We are currently in wave c of this expanded flat correction, which I expect will reach the 38.2% corrective target at 1.4072.
Short term I would like to see a break below support at 1.5085 to confirm the next part of the decline lower towards 1.4072.
The downside pressure has been stronger than I expected, therefore we have to consider the possibility that wave b of the decline from 145.69 already is in place and wave c lower towards 126.00 is developing. Short term a break below support at 138.68 is needed to confirm that wave b is indeed in place and wave c developing. However, as long as support at 138.68 is protecting the downside there is a possibility that one last rally closer to 142.26 will be seen.
Today's Support and Resistance Levels:
Current Spot: 1.6314
I was looking for a wave 2 correction towards 1.6445, but it has extended lower and is currently testing support at 1.6290. The downside is limited from here and under no circumstances should we see a break below the start of wave 1 at 1.6252. Short term I will be looking for a break above resistance at 1.6397 as the first good indication that wave 2 is over and wave 3 higher towards 1.7141 is developing. Only a break below the start of wave 1 at 1.6252 will invalidate my bullish count, but even if we does see a break below 1.6252 the downside potential should be limited.
Well so much for the possible larger triangle. With that possibility out of the way, we have to look at the possible alternate counts. My new preferred count shows that wave x ended at 141.27 the 50% corrective target of the decline from 145.69 to 131.23. I still need to see a break below support at 138.68 to add confidence to this count, but if we does see this break below 138.68 we shod be looking for the part of the decline towards the long term corrective target near 126.00.
Even though my preferred count indicates renewed downside pressure, another alternate count could be that an expanded flat wave b is unfolding calling for a decline to 137.71 before wave c higher towards the 142.25 target.
It is still a little early, but I do think that wave 2 ended with the test of 1.3773. I will now be looking for a powerful wave 3 decline towards at least 1.3121. Short term I will be looking for a break below support 1.3562 confirming that wave 2 did end at 1.3773 and wave 3 lower is developing.
I do think the final wave v higher towards 1.70 is developing, but we do need some additional confirmation in form of a break above minor resistance at 1.6683 and more importantly a break above resistance at 1.6702 confirm wave iii of V higher towards at least 1.6852.
As we can count the first five wave decline of the 1,345.45 high I count wave c as terminated and will be looking for wave d lower towards support near 1,185. I would like to see red wave iii accelerate lower towards at least 1,293 soon to confirm that wave c did indeed end at 1,345.45.
Since the 100.73 low in early February we have seen a simple zig-zag correction, but the c wave has taken a shape of an ending diagonal. Looking at the ending diagonal we are currently in the final wave, which as a maximum target is allowed to reach 103.25, just above the 50% corrective target of wave A from 105.44 to 100.73. I think we will see red wave v of the ending diagonal ending slightly below 103.25. From just below 103.25 or upon a break below 101.64 the next impulsive decline lower is expected
I'm a keen Elliott wave follower. I do use, what you might call, standard technical analysis too, but my main focus is on the Elliott Wave Principel.
I use it professionaly as well as in my private affairs. To give you an example I sold my house in late 2005 and are currently renting a flat, not expecting to reenter the property market before 2012-2013.
I'm very much into long term seasonal cycles and demography too.
Waiver: I will not accept any responsability for any loss of funds because of any investmenst done on the basis of my analysis. The analysis herein are done with the utmost due dilligence, but can from time to time be wrong and point you in the wrong direction.
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