Good evening folks,
I thought I would start the week with a little video to set the scene.
https://www.ft.com/content/4be0d6d3-ccab-48df-83e4-0b726273ccac
In January Mr Mallett opened a brokerage account with Royal Bank of Canada and as the rally intensified he has traded more, investing C$3,000 of stimulus money he received from the Canadian government into US stocks including Lyft and Tesla.
“I’m a little bit up,” he said. “I cut grass at a golf course. I’m on a lawnmower refreshing the app every few seconds — it’s great.”
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
EURUSD is heading higher today after faltering late last week in wave (ii).
The main wave count calls for a five wave rally this week,
up towards the minimum target at 1.1150 at a minimum in wave [c] of ‘2’.
If wave (iii) of [c] is now underway,
then we should see this rally continue tomorrow
and a clear five wave pattern should emerge in wave (iii).
I would like to see wave (iii) break the minimum target at 1.1150.
before the correction in wave (iv).
Tomorrow;
watch for wave ‘iii’ of (iii) to continue higher to about 1.1050.
The price should then hold above 1.1008 for the rest of the week.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable rallied in a nice impulsive fashion today,
to close out a three wave pattern in wave ‘ii’.
The rally into the upper trend channel line may not be done just yet though,
one more pop above towards 1.24 will complete a five wave pattern in the rally off 1.2155.
then we can look for a reversal into wave ‘iii’ down.
Tomorrow;
Watch for wave ‘ii’ to complete.
A spike lower off the upper trend line will signal that wave ‘iii’ down has begun.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
USDJPY reversed lower today after completing a three wave correction in wave (b) at the high of the session.
This decline is labelled as wave (c) of [ii],
and we should see a five wave decline and a break of 107.31 at a minimum in wave (c)
this will complete the larger wave [ii] green.
And then I will be looking higher again in wave [iii] green.
Support for wave [ii] lies at the previous fourth wave low at 107.03.
Tomorrow;
Watch for wave (c) of [ii] to complete near support.
We should see the beginning of wave [iii] up by the end of the week.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
The rally into todays highs has completed a pretty standard five wave pattern off 22785.
The overall pattern off the March lows is still best viewed as a three wave corrective rally,
with a large extension in wave ‘C’.
Believe it or not,
todays rally only takes us back to the 62% retracement level again,
So we are no better off than where we were a month ago!
In terms of Momentum,
this rally continues to print a bearish divergence on the 4hr chart,
And the daily chart shown MACD and RSI falling off an extreme overbought level.
Volume still remains muted,
with todays trade holding below 300m issues again.
Volume is now exactly on par with the all time price highs of January and February.
This suggests that anyone who wants to buy,
has already done so.
And of course the bag holders are in there biting each others hands off to get some of the action.
I know that I have repeated over and over again these facts,
And I know that this rally has gone on farther than I expected it to.
Believe me,
it even pushes me to doubt myself at times.
I usually take this as a contrarian indicator though!
I cannot see any other way to resolve the current market imbalance than a massive selloff.
Tomorrow;
This week mantra will be ‘patience is key’.
I need to see an impulsive decline to signal a turn into wave (c).
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
The further we go without an impulsive rally into wave (v) of [iii],
the more likely that alternate count becomes.
The alternate count views the recent triangle at one degree higher than the main wave count.
Wave [iv] green rather than wave (iv) green.
And this will still allow for a rally in wave [v] green over the coming weeks.
In both cases, the price must hold above 1691.
So wave ‘ii’ pink and wave (ii) blue must complete soon.
And the next leg up must begin.
Tomorrow;
watch for wave ‘ii’ to hold above 1691 and reverse higher tomorrow.
A higher low above the current levels will signal wave ‘iii’ of (v) has begun.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Crude managed a very slight new high today,
and this rules out the idea that last weeks decline was the end of the rally.
Just like the stock market,
I expect a turn lower in crude in wave (5) down very soon
This should bring the price back down to the single digits again when complete.
Wave (4) is close to exhaustion now,
and wave (5) awaits us.
Tomorrow;
Watch any decline beck below 30.00 again this week as the initial signal that wave ‘1’ of (5) is beginning.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The very same goes for the S&P this evening.
New highs in a mirage of wave (B) doens not mean that suddenly everything is fine and dandy again.
This market has too many problems to list least of all the technical setup that is on display.
And all roads lead to a collapse in my book!
The rally out of the wave [iv] low has completed a five waves pattern now.
Todays gap higher is also a rally out of a fourth wave correction from late last week.
The larger pattern in wave (B) is completing at lower and lower degrees,
until the point where there is no road higher left!
And then we turn into oblivion in wave (C).
Tomorrow;
I have been patient for the last month awaiting the next leg down.
So far to no avail.
I am again looking for the initial move into wave (C) to begin this week.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
The price action in silver seems to be tracing out a flat correction in wave (iv) now.
The price rose in three waves into the wave ‘b’ high early this morning.
And now the price is falling this evening in a possible wave ‘c’ of (iv).
Wave ‘c’ should trace out five waves lower this week,
and the trend channel suggests a low in wave ‘c’ below 16.50 to complete wave (iv) later this week.
Tomorrow;
Watch for wave ‘c’ to continue below 16.69.
Any spike higher off the 16.50 level will signal wave (v) is underway.