It’s Friday of Christmas week,
while the stock market is active, volume is incredibly thin.
So whoever is buying hard now,
is doing so without counter weight against them.
And with that we have seen a ramp in price today,
along with a plunge in volume.
The average volume over the last few months is about 300 million shares traded daily in the DOW.
Last Friday saw a volume of 603 million shares.
While todays market traded about 120 million shares so far.
This is the lowest daily volume in over three years as far as I can see in the DOW and the lowest volume in over five years in the S&P .
And this is occurring at an all time high after a ten year bull market advance.
Food for thought!
Ok,
down to business to finish off this week.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
EURUSD is rallying today in line with the short term count.
Wave ‘c’ of (c) should break the high of wave ‘a’ at 1.1200, at a minimum to complete.
The upper trend channel line shown,
suggests a high at about 1.1290 to complete wave (c) and wave [ii].
Next week;
Wave (c) will complete soon enough and with that,
a double three correction in wave [ii] will be inplace.
Then I will turn my focus to the downside again to begin wave [iii].
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable has turned higher today to begin a correction in wave (ii).
The rise off the final low last week is likely only wave ‘a’ of (ii) as shown.
With a three wave correction expected over the coming week.
A 50% retracement of wave (i) gives us a target for wave (ii) at 1.3210.
Next week;
watch for wave ‘b’ and ‘c’ to continue to grind along higher over the coming days.
We should have a corrective pattern in wave (ii) complete by the middle of next week.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
The action in USDJPY remains perplexing at the moment.
I have shown a possible alternate count on the 4hr chart for wave (D).
This shows an ending diagonal in the place of wave ‘C’ of (D),
and this count allows for another pop up to about 110.40 to complete wave (D)
and then the drop into wave (E) should begin.
If the price breaks above 109.72 that will trigger this alternate count.
Next week;
If the price falls back below 108.40 again,
that will re affirm the current wave count.
Watch for 109.72 to hold,
and wave ‘C’ to begin to fall again towards the 107.00 target area.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
Wave (v) of [v] is up again today after a very one sided thin trade.
The price is now approaching the upper trend channel line of wave ‘5’ blue
which began off the October lows.
And of course this is all being achieved on declining volume and declining momentum.
Needless to say,
this is a horrible setup for those who are jumping into the market now.
With an upside potential for the market in the low single figures,
and a downside potential of above 75% over the coming second half cycle.
The wave count is unchanged despite the Christmas rally.
The fist move lower off the all time high is coming very early in the new year.
And that is where I will stay focused on.
Next week;
Watch for wave (i) of [i] to push below 28200 again as the first sign that the rally has cracked.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
Gold is finally on the verge of turning the tide out of this long corrective phase.
Todays highs reached above 1515 for the first time in almost 2 months.
The first level of significant resistance lies at 1516,
this marks the high of the previous wave (b) of [iv].
And a break of this level will be a solid signal that wave [v] has begun.
the next two resistance levels lie at 1535 and 1554,
each successive resistance level provides a higher test of confidence for the long term bullish count.
So,
If 1516 breaks,
then we concentrate on 1535 in the development of wave (i) blue.
Next week;
1486 should continue to hold as wave (i) develops.
Watch for wave ‘iii’ of (i) to push up towards 1535 before correcting in wave ‘iv’.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
The setup in Crude looks about as bad as it can get in terms of an over mature counter trend rally.
The recent rally is part of a large three wave correction in wave [ii] green.
This is still my favored interpretation of the action.
Wave (c) of [ii] has gone on longer than anticipated for sure.
But the long term wave count calls for a sustained drop into wave ‘3’ over the next few months.
And this much I am convinced of.
All that is missing at the moment is the initial impulsive turn down to form a lower high.
This will be the best indication that wave ‘3’ has begun.
Next week;
I will stay on the lookout for a turn lower to begin soon.
A break of last weeks low at 60.00 will be a good sign that the turn has begun.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The S&P is up a further 20 points since Mondays update.
The extension higher is viewed as all part of the same wave (v) of [v] advance.
The price is actually close to filling two trend channels at this point
as you can see on the short term chart.
And the same situation stands for
After a rethink of the action today,
I have relabeled last weeks triangle at one degree higher in wave (iv).
And again,
we have a complete five wave advance in wave [v] on our hands.
So now I want to see a reaction lower off the upper trend channel lines next week to begin wave (i) of [i].
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
The rally in wave ‘iii’ briefly broke above 18.00 this week,
before this small correction began.
Silver is heading lower today as part of a three wave correction in wave ‘iv’ of (i).
Wave ‘iv’ should complete at about 17.60 again,
and then wave ‘v’ is expected to rally again next week to complete the larger wave (i) blue.
If we see a break of 18.30 again in wave (i),
that will provide a very strong signal that we are heading higher again for the longer term.
Next week;
Watch for wave ‘iv’ to complete early Monday.
A break of 18.04 again will signal wave ‘v’ has begun.
U.S 10YR.
US 10YR 1hr.
US 10YR 4hr.
US 10YR daily.
Bonds have now filled the small trend channel to the upside again after todays rally.
The price has hit above 128.60 at todays highs,
the correction has done what is expected of it,
so it is time to look for a turn lower again into wave ‘iii’ of (iii).
The price should hold below 129.05 from here.
And a break of 127.90 again will signal wave (iii) is underway.
Monday;
Watch for wave (iii) down to get underway properly.
All going well,
wave (iii) should bring us down towards the 124.00 handle in an impulsive move over the next month.
Have a great weekend everyone.
Until next week,
God’s speed and blessings to you all.
enda.