A new week is upon us and again I am looking for signs that this market is going to turn south.
But first some house keeping;
We are entering the season of goodwill as they say, so timetables tend to change!
I will be away at a family wedding on Friday, so there will not be any update that night. I will get the video uploaded on Thursdays night instead.
And next week is Christmas week, I will update on Monday evening the 23rd, and then I will be taking a few nights off, with the intention of updating again on Friday the 27th.
And now that is out of the way, lets get into this.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
The high created last Thursday broke above the previous wave (a) level at 1.1179
reaching a high at 1.1199.
This was the minimum target level for wave (c).
The price immediately sold off after that break,
and this evening we are left with a lower high in place
after a three wave decline.
It is possible that the top is in for wave (c) at 1.1199,
but a rise into the upper trend line in five waves would fit the pattern much better.
Tomorrow;
Watch for a possible triangle wave ‘iv’ to complete above 1.1115.
And one last rise into the target area to complete wave ‘c’ and wave (c).
A further break of 1.1115 will favor the idea that the top is in for wave (c).
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Its been a long run higher in cable this year
but the end of this rally in wave ‘2’ is at hand now.
The blow off top last week reached 1.3515
which is fitting for the end of such a large degree rally.
And we are now holding below that high this evening in a possible ‘i’ ‘ii’ pattern to the downside.
The price is creating a three ave correction in wave ‘ii’ today.
A rise into 1.3440 again will complete a zigzag correction.
Then I will look for a drop into wave ‘iii’ down.
Tomorrow;
watch for wave ‘ii’ to complete a corrective lower high at 1.3440.
I expect wave (i) to push back below 1.3050 again this week.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
The key level for USDJPY at the moment lies at 109.72.
If that level breaks it will invalidate that short term high for wave (D),
and we will have to wait for another top to form before wave (E) down begins.
The price has held below that level so far,
but we are so close to breaking that resistance level now that I half expect it to happen!
Tomorrow;
Watch for 109.72 to hold and wave [c] or wave ‘C’ down to begin with a push back below 109.00 again.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
Another day and another new high without any major change to the outlook.
The DOW is up 0.42% today,
I guess thats what an open-ended +- 500B cheque from the FED
and a ‘phase 2’ trade deal will get you these days!
Not a great return when you think about it!
The short term count is unchanged,
the recent low at 27320 is wave [iv] of ‘5’.
and the rally off that low is creating a five wave pattern in wave [v].
The rally has extended today which created a new high.
This only further exacerbates the the divergences in momentum that have been underway for a while now.
And it makes the eventual unwinding of this excess all the worse.
Tomorrow;
Price is holding at or near that [i] = [v] level for the last few sessions,
and the smaller rally in wave [v] is near to filling the trend channel now.
It is only a matter of time until wave [v] makes the turn into wave [i] down.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
A new high in stocks today and gold stays pretty much unchanged after last Fridays rise off the lows.
This is a change from their normal relationship over the last few weeks.
So I remain of the opinion that gold will stage a return to form soon in a possible third wave up as shown.
The alternate count for wave [iv] on the 4hr chart is still a viable option also.
This involves a very long and drawn out triangle,
and that pattern is close to completing at this stage also.
In the case of a triangle the key level lies at 1450 also.
Price must hold above that level in order for that count to remain valid.
Tomorrow;
This is like a mirror image to the stock market really!
I am on the look out for an impulsive rally off these levels
to break out of the corrective pattern that has held for three months now.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Crude is another market that is holding onto hope,
except in this market we are at the late stages of a corrective rally in wave [ii].
Wave [iii] down is expected to begin any day now.
An impulsive decine back below 58.00 again,
will signal wave (i) is underway.
I think the best opportunity on the downside will present itself
after a clear corrective lower high is in place at wave (ii).
That will take a few weeks to trace out.
Tomorrow;
Watch for the current highs to hold at 60.48.
Wave ‘iii’ of (i) should break 58.00 again in short order.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The rising trend line connecting the last few highs has been met again this evening.
As with the DOW,
it looks like wave [v] has created an extension in wave (iii) of [v],
leading onto a running flat wave (iv) and now we have a rally again today in wave (v) of [v].
The bigger picture is very much the same,
even though the market is taunting us with new highs,
as part of this overwhelmingly bullish euphoric top.
With five waves up complete at wave [v] green,
it suggests the end is nigh for wave ‘5’ at one higher degree.
We have not seen a clear five wave impulse wave lower just yet,
but that is next on the menu.
Tomorrow;
Watch for signs of a reversal over the coming week again.
Wave (i) down should bring us back into the 3100 level again.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
I am not sure that wave ‘ii’ pink is done yet as shown on the short term chart.
The price has risen in a fairly choppy manner into todays highs.
And we have not broken that wave ‘i’ high at 17.11 yet either.
The trend channel suggests a decline back into 16.72 again to complete a three wave pattern.
And then wave ‘iii’ will be set to push back above 17.60 again.
Tomorrow;
watch for wave ‘ii’ to complete over the coming days.
A break of 17.11 will signal wave ‘iii’ has begun.
Support must hold at 16.52.
U.S 10YR.
US 10YR 1hr.
US 10YR 4hr.
US 10YR daily.
Todays decline has not developed impulsively yet.
So we have yet to choose between the main and alternate short term count.
The price is heading lower in aggregate over the last week,
but this decline can also be viewed as a three wave correction in wave ‘b’ of (ii).
129.40 is the trigger level for the alternate count.
If that level breaks,
then we will likely see a rally up to 130.46 to complete wave (ii).
Tomorrow;
Watch for wave ‘iii’ to continue lower again.
Fridays high at 129.05 must hold from here.