Good evening to all you fine people!
As I so often have done, I feel compelled to point to John Hussmans latest treatise HERE.
Heres one small line that sums it up for me:
“Market tops are created because investors stop looking for a top, and simply extrapolate good news as a permanent feature of the economic landscape. Similarly, market bottoms are created because investors stop looking for a bottom, and extrapolate ongoing bad news.”
Well,
by this measure we have a top of epic proportions in place.
Ok, down to the business at hand.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
There is quite a tight margin for error in EURUSD this evening.
The main wave count calls for a final rally in wave ‘v’ of (c)
to complete a three wave correction in wave [ii].
Wave ‘iv’ of (c) may have completed today as a triangle.
In this case wave ‘v’ must rally up to the target tomorrow at 1.1110.
And then we can look for a decline to begin wave [iii] down.
tomorrow;
The price must hold above 1.0999 tomorrow for this short term count to remain valid.
if the price breaks that level,
It will favor the alternate count shown circled in red.
And if the alternate count is correct,
we are much closer to a sharp drop in wave [iii].
Watch for 1.0999 to hold and wave ‘v’ to complete at the target.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
It is a similar situation in cable today also.
The price has corrected off that spike high created on Friday.
I have labelled this decline as wave ‘iv’ of (c) of [ii] also.
Wave ‘iv’ can extend lower tomorrow without invalidating the wave count.
But wave ‘iv’ should hold above the 1.2413 level.
Wave ‘v’ will hit the upper trend line at 1.2780.
this level also forms a resistance level within the previous decline.
Tomorrow;
We are close to the end of wave [ii] now after last weeks rally.
And the price has already broken the wave (a) high,
which is the minimum target for wave (c).
Any gains from here should prove minimal.
Watch for wave (c) to complete soon with one final high in wave ‘v’ of (c).
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
USDJPY is higher off a corrective low earlier this morning.
This decline may have completed wave (iv) of [iii].
The rally off that low does look impulsive so far,
so it fits with the idea of a rally in wave (v) over the coming days.
I have shown wave ‘i’ of (v) now in place.
Wave ‘ii’ must hold above 108.02,
and then turn higher again in wave ‘ii’ of (v) towards the middle of the week.
Tomorrow;
watch for wave ‘ii’ to complete above 108.02.
Wave ‘iii’ will be confirmed with a break of 108.62.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
The DOW rebounded off the premarket lows today and held above initial support at 26650.
It is possible that todays lows have completed wave (iv) of [iii].
If this short term count is correct,
then wave (v) of [iii] should rally again towards resistance at the all time high over the coming week.
The market is truly in a complete delirious bullish haze at the moment,
so the bottom could fall out of the rally at any moment at these levels.
With that in mind;
I have not ruled out the idea that this rally is simply a three wave correction higher,
within a bearmarket that has already begun after the recent declines.
Tomorrow;
Watch for 26650 to hold and wave (iv) complete above that level.
Wave (v) of [iii] will be confirmed with a break of 27000 again.
I would still remain quite vigilant at this point though!
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
Gold is holding above the wave (ii) level at 1474 so far today.
The rise off that low is labelled wave ‘i’ of (iii).
Although wave ‘i’ does not look complete just yet,
another push above 1500 again
would create a cleaner five wave rally off last weeks lows.
And then we can expect a small corrective decline in wave ‘ii’ pink.
Wave ‘iii’ of (iii) should bring another nice rally to new highs.
Possibly even a break of 1554 again at the wave [iii] high.
Tomorrow;
Watch for 1474 to hold.
Ideally wave ‘i’ of (iii) will complete tomorrow with a break of 1500 again.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Crude fell sharply again today off the wave [ii] high at at 54.90.
The price has now dropped in an impulsive fashion off a three wave corrective high.
And this action fits well with the bearish outlook at the moment.
I have labelled the low of the session as wave ‘i’ of (i) of [iii].
wave ‘ii’ should correct to a lower high tomorrow,
and wave ‘iii’ of (i) should then push towards support at 51.00.
If this count is correct,
then we have a long way to go to the downside over the coming months!
Tomorrow;
watch for wave ‘ii’ to complete a bearish lower high at about 54.00.
Wave ‘iii’ down may even begin by tomorrow evening.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The S&P has likely completed wave (iv) of [iii] today.
The price has dropped in a three wave pattern off the wave (iii) high of last Friday.
The price has recovered slightly off that low at wave (iv),
And wave (v) is now expected to carry us up to resistance again.
I have the very same reservations about this short term bullish count as I do with the DOW.
the market could turn on a dime!
So I a reluctantly looking higher in the short term!
Tomorrow;
Watch for wave (iv) to hold at 2953.
Wave (v) should continue higher from here.
The critical level at the moment is the low at 2855.
If we see a renewed decline below that level,
then I will revert to the long term bearish outlook.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
Still no rise in a third wave today after a further higher low created on Friday.
I am reasonably confident that wave (i) will assert itself this week,
but I need some bullish price action to back up the count.
A break above 18.00 again should be enough to confirm wave (i) is underway.
Tomorrow;
17.26 should hold at wave ‘ii’.
Watch for wave ‘iii’ of (i) to break above 18.00 again.
U.S 10YR.
US 10YR 1hr.
US 10YR 4hr.
US 10YR daily.
The price did indeed rally today off Fridays lows.
The price pattern is still pretty safely bearish for the moment though.
Wave ‘iv’ has many different possibilities in terms of which pattern it could take,
so I will have to wait and see how the trade develops tomorrow.
But once wave ‘iv’ does complete,
we should see another drop back towards support at 128.50 in wave ‘v’ of (i).
Tomorrow;
watch for wave ‘iv’ to continue sideways to create a three wave pattern at least.
Wave ‘iv’ must complete below 131.20.