Hello there, welcome to a new week.
I sometimes point to John Hussmans work to add a nice rounded valuation perspective to the mix.
He has just posted another nice long read – Navigating Turbulence.
It is definitely worth a read.
On with the show.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
EURUSD has fallen off the high registered on Friday at 1.1147.
The high came in just 16 pips below the 62% retracement of wave ‘1’.
So I think wave ‘2’ should be complete after almost hitting that common retracement level.
The decline today is reasonably impulsive,
but it has not yet traced out five waves down.
One more drop towards that 1.0950 level will signal that wave (i) of [i] is complete.
A lower high in wave (ii) should set the scene for a further decline in wave (iii) by Wednesday.
Tomorrow;
All in all,
this week looks like a down week for EURUSD as wave [i] continues.
watch for wave (ii) of [i] to complete a lower high below 1.1147 by tomorrow evening.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable must fall soon in order to stay with this current bearish pattern.
The correction in wave [iv] has extended dangerously close to the previous wave [i] low at 1.2898
so I want to see the price turn lower in an impulsive fashion this week in wave [v] of ‘3’.
Todays decline looks more corrective than otherwise so far.
But so long as the price holds below 1.2486,
I will work with the idea that wave [v] has begun.
If the price falls below the low of wave ‘iv’ at 1.2139 again,
that should be a signal that wave (i) of [v] has begun.
Tomorrow;
Watch for wave (i) of [v] to push lower again tomorrow.
1.2486 must hold.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
I have changed the short term count this evening to show a five wave decline in wave [a] off last weeks highs.
The price should now be tracing out a zigzag lower in wave ‘A’.
So the overall pattern in wave ‘A’ will be a simple 5,3,5 pattern.
If the overnight low is the final low for wave [a],
then wave [b] should be underway with the rise that began early today.
I have labelled waves (a) and (b) as almost complete now,
and wave (c) up is targeted to the previous fourth wave high at 109.09.
Tomorrow;
Watch for wave [b] to continue higher over the coming days.
Once we have a three wave rally complete off the wave [a] low.
The I will look for wave [c] to return lower again.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
So far the price has held below last Thursdays wave ‘A’ high at 22700.
This level should continue to hold as wave ‘B’ unfolds.
The price gaped lower as the futures opened overnight.
The price registered a new low in wave (c) of [a] this morning,
and off that low we have seen a three wave rally into todays highs at wave [b].
This action should now complete waves [a] and [b] of the larger wave ‘B’.
And the wave count now suggests that we will see another decline in wave [c] of ‘B’ over the coming week.
I think the minimum target for this decline will be 20654.
This level marks the previous wave [iv] of ‘A’.
Tomorrow;
Watch for wave [c] of ‘B’ to return lower again.
Wave [c] should trace out a five wave decline over the coming week.
Once we have a three wave decline complete in wave ‘B’.
then I will look higher in wave ‘C’ for next week.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
The sideways action continue today in gold.
This action opens up another option for the wave count in the short term.
It is possible that this whole sideways move is wave (iv) already underway.
the price continues to contract in range as you would expect,
and we are close to completing a five wave internal pattern as shown.
If the price pushes higher overnight and breaks above 16.42,
that will signal wave (iv) is done and wave (v) is underway.
Tomorrow;
Watch for the price to hold above 1590 for this triangle interpretation to remain valid.
Wave (v) should begin very soon,
and we should see a challenge of the recent high at 1703 again as wave [i] compeltes.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Crude prices fell again today, and broke out of the triangle pattern I have been following in wave [iv] green.
The action looks like a possible decline in wave [v] is already underway.
Wave [v] of ‘3’ should break below the $20 handle again before completing.
It is hard to know how much further the price will fall though before completing wave [v] and wave ‘3’.
But the minimum target lies at the previous wave ‘3’ low at 20.51.
The decline is looking very weak now,
downside momentum is very weak indeed.
So we should see an end to this wave ‘3’ decline this week.
Once we have a five wave pattern in place for wave [v],
I will look for a return higher in wave [a] of ‘4’.
Tomorrow;
Watch for wave [v] to continue lower and break below the $20 handle again before completing.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The S&P completed a three wave decline in wave [a] early this morning.
And off the lows the price has now rallied back in three waves today.
the price is still holding below the wave ‘a’ high at 2646 so far in wave [b].
And wave [c] is expected to fall back towards 2400 again to complete the larger wave ‘B’.
If the price breaks above that 2646 high at wave ‘A’,
it will mean that wave ‘B’ is tracing out an expanded flat correction,
and wave [c] will still be expected to fall back into the target later this week.
Tomorrow;
This week looks like a it should conclude a three wave decline in wave ‘B’,
with a higher low in the area of 2400.
watch for wave [c] to turn lower tomorrow.
Wave [c] down should fall in five waves as part of a 3,3,5 flat pattern.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
It looks like wave (iv) completed this evening at the low of the session at 13.80.
Wave (iv) did not take the triangle form as I had expected.
It seems to be a combination correction instead.
The price is now bouncing off that 13.80 low and heading higher to begin wave (v).
Wave (v) of [c] of ‘4’ should break the 14.68 high at a minimum,
before turning lower again in wave ‘5’ red as shown.
Tomorrow;
Watch for wave [c] to complete with a break of 14.68.
The minimum target for wave ‘5’ lies at 11.32.