To start tonight,
one chart to put the crude rally into perspective.
Here’s tonights video also.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
We have a reasonable decline in place off the high at 1.1239.
The question is this,
Are we dealing with the initial decline to begin wave (i) of [iii].
And that question cannott be answered yet.
Todays rise off the lows has not created a three wave corrective structure yet.
That shoule happen by monday evening.
And then we can look for a continuation lower in wave ‘iii’ of (i) over next week.
Monday;
We must see a lower high form at wave ‘ii’ below 1.1239
and then wave ‘iii’ of (i) should fall back below support.
Watch for that lower high in wave ‘ii’ to complete on Monday.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable is closing near the lows of the session this evening.
This suggests that wave ‘i’ down is not complete just yet.
Once we have a five wave structure lower in wave ‘i’,
Then we can expect a three wave recovery to a lower high below 1.3283 in wave ‘ii’.
This should complete by Monday evening.
And then wave ‘iii’ of (iii) will be set to decline back below 1.2760 at a minimum.
A break of 1.2900 again should rule out the alternate count.
Monday;
Watch for that lower high in wave ‘ii’ by Monday evening.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
It is hard to know if wave ‘C’ has completed yet.
The one glitch in the wave count at the moment
is the relative size of wave [iv] versus wave [ii].
So,
todays lows may only be wave [iii] of ‘C’,
with a further larger wave [iv] and [v] left to complete.
This is the first alternate count.
As for the current count,
the price seems to be searching for a low righ now,
so I expect next week we will see a rally in either wave (i) or wave [iv].
Monday;
Watch for a push back into the 109.00 handle again in wave (i) or [iv].
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
The new all time high in the DOW stands at 28872.
And off that high,
we have an impulsive move lower off the high,
with a corrective looking retracement in place after todays trade.
This action can be read as waves (i) and (ii) as shown.
If that is the case,
then next week will be a down week with an impulsive decline in wave (iii) pushing back towards the 27700 area again.
The main aim is the same as usual.
I want to see a large five wave move lower develop in wave [i],
followed by a three wave correction in wave [ii].
This will create right shoulder and setup for a larger decline in wave [iii] towards the end of January.
Monday;
Watch for wave (ii) to hold below 28872 and for a larger decline in wave (iii) to begin.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
After a very long and painful correction in the last quarter,
it is nice to see Gold back reaching for the highs of last September again.
I maintained all along that the decline was corrective in nature,
but the endless grinding nature of the correction was pushing me to doubt, that is for sure!
Anyway,
here we are again at 1550,
after a rally in wave ‘iii’ of (iii) as per the current count.
So I think we should expect another small correction to develop next week.
Either in wave ‘iv’ of (iii),
or alternate wave (ii).
Monday;
Watch for wave ‘iii’ to find a final high soon.
Wave ‘iv’ will likely fall back into that band of support again between 1535 and 1516.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
This mornings spike higher in crude has invalidated the previous short term wave count
So I have now switched to the first alternate count this evening.
This involves a larger second wave correction in wave ‘2’ blue.
This correction is at one degree higher than the previous wave count
and is best viewed on the 4hr chart.
The main take away is this,
the correction in wave ‘2’ will be retraced completely when wave ‘3’ down gets underway.
And that decline is not far away at all.
Just take a quick look at the COT chart
and see how the retail trader has bought into the new crude oil rally in a big way.
bullish at the end of the trend???
Next week;
Watch for wave (i) of [i] to begin with a five wave decline back into the 60.00 handle again.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The S&P is sporting the same lower high as the DOW today.
And I am again counting this as a 1,2 sequence off the highs at 3263.
This is speculative of course,
but the larger count is calling for a decline to occur.
So it is just a matter of time at this point.
The price has tested a rally back into the upper trend channel line over the last week,
but has failed both times.
This is another indication that momentum is failing.
And this fits with the idea of a larger turn down now building off the highs.
So lets see if we can start that decline next week.
Monday;
Watch for the highs told at 3263.
I want to see a five wave decline push back below the 3150 level at wave (i).
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
Silver is drifting sideways over the last few sessions in line with a possible triangle pattern in wave ‘iv’ pink.
The triangle should continue to hold above 17.73 on the lower end.
If we break that low it will favor the idea that wave ‘iv’ is a flat correction.
But both patterns should lead to a rally again in wave ‘v’ of (i) towards the end of next week.
Monday;
Watch for wave ‘iv’ to continue sideways in a tighter range over the next couple of sessions.
A break of 18.25 again will signal wave ‘v’ has begun.
U.S 10YR.
US 10YR 1hr.
US 10YR 4hr.
US 10YR daily.
Bonds have rallied today back up to the next higher resistance level at 1.2941.
This action confirms wave ‘c’ is underway now.
And we should see a five wave rally up to the trend channel line at 130.40 again over the coming week.
This rally should trace out five waves ideally,
but I will just have to wait and see if something more complex is developing.
Monday;
Watch for Wave ‘c’ of (ii) to continue higher in five waves.
We should see a small correction on Monday before the rally resumes again in a third wave within wave ‘c’.
Wishing you all a great weekend.
See you back on Monday evening again.
God bless and God’s speed to you all.