Good evening folks.
Random chart attack to start with!
Google search data puts the level of this speculative extreme in context.
And to cap it all off there is this little matter;
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
EURUSD has thrown a spanner in the works today after a run back above 1.1200 again.
This move can still be viewd as part of an expanded flat wave ‘ii’ pink.
But we will need to see a decline again tomorrow into wave ‘iii’ of (iii)
in order to stick with this short term count.
The alternate count is valid also as a possible expanded flat.
The current decline would then be classed as wave ‘b’ of that wave (ii) correction.
I do not like this count because of the structure of the recent decline.
I think it fits a leading diagonal rather than a ‘b’ wave.
Tomorrow;
1.1185 marks the low of wave ‘i’.
A break of that level again will signal wave ‘iii’ down has begun.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable rallied today in a larger move than was expected for wave ‘iv’ of (c) of [a].
With that move,
I think we can call wave [a] now complete at 1.2328.
The move off this low is labelled as wave (a) of a three wave correction higher in wave [b].
this move in wave [b] will likely take most of the week to complete.
And the target range is between the 50% retracement at 1.2568
and the previous wave (b) at 1.2686.
Tomorrow;
Wave (a) seems to have a three wave structure already complete at todays high.
We are most likely close to a top in wave (a) now,
Wave (b) will follow with a three wave decline to a higher low.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
USDJPY has put in the weakest trade that I have seen in a while!
The price has been stuck in a 40 pip range for the last 3 sessions.
This action does fit a triangle in one of two scenarios.
Either this is a triangle in wave (b) of [b],
and wave (c) needs to push higher again to break 107.63 again to complete the larger wave [b].
OR;
there is a small chance that this whole sideways move is triangle wave [iv] of a five wave decline in wave ‘C’,
with wave [v] down left to complete wave ‘C’ and wave (E).
This is a low probability scenario at the moment.
Tomorrow;
I still favour a push above 107.63 to complete wave [b].
Then we should see another drop in wave [c] later in the week.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
Monday has put in a positive trade so far.
But the action in general looks like another corrective move higher.
I have labelled this three wave correction as wave (ii) tonight.
Wave (i) down is now shown as a leading diagonal.
That is five waves in the direction of the trend,
where the internal wave ‘iv’ breaks the low of wave ‘i’.
Wave (ii) is labelled as a simple zigzag at the moment,
and we are approaching the highs of wave ‘c’ of (ii) now.
If this count is correct,
then we should see wave (ii) complete and (iii) down take over tomorrow.
The alternate count shown allows for a larger wave ‘2’ blue.
In that case the current sideways trade is a complex [b] wave.
And wave [c] of ‘2’ will create a larger three wave lower high as shown.
Tomorrow;
25667 marks the cash low of wave (i).
If we see a sharp turn lower to break that level.
That will favour the wave (iii) down scenario.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
GOLD is now on the verge of breaking out above the 1764 high we have been looking at for some time.
It has taken a while to move back up to this point,
but if the current count is correct,
we should break above this resistance level and leave it behind as we accelerate into wave (iii) of [v].
If wave ‘iii’ of (iii) is now in force,
then we should see a continuation higher for the rest of this week.
The larger wave (iii) blue has an initial target at 1824 at the moment,
this is where wave (iii) reaches the 162% extension of wave (i).
Tomorrow;
Wave ‘iii’ needs to push out above resistance now.
Watch for the wave ‘i’ high at 1733 to hold as wave ‘iii’ up develops.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
If you scan back the history of the daily chart momentum,
you will not find many times that the oil market has been this overbought.
And you will never find a time when the market is this overbought,
in a recession
with demand for crude oil this subdued,
and producers going bankrupt like they are going out of fashion!
This rally is setup to fail right now.
The price has pipped above the previous wave [iii] high today.
This completes the minimum requirement for wave [v] of ‘C’ of (4).
I am not sure whether wave ‘C’ is an ending diagonal or a simple five wave pattern,
but either way,
at this point, there is no doubt in my mind that the next leg down is close at hand.
Tomorrow;
Watch for wave [i] down to begin this week with a five wave decline to push back into the mid 30’s again.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The S&P is following a different path to the DOW off the recent high.
The sideway corrective move in wave (ii) fits a running flat correction pretty well.
And the decline into wave ‘i’ of (iii) is impulsive.
Todays rally can be viewed as a three wave corrective move to a further lower high in wave ‘ii’ pink as shown.
This interpretation means that wave (iii) is already underway,
and we are on the verge of an acceleration lower.
Todays rally should now halt,
and tomorrows action must turn lower again if I am to remain with this short term count.
There is very little room above us now for the alternate wave ‘2’ scenario as I have shown in the DOW.
Tomorrow;
watch for wave ‘iii’ of (iii) to turn lower early tomorrow.
A break of 3039 again will signal wave ‘iii’ is in force.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
Silver is dropping this evening again after breaking the 18.00 handle very slightly this afternoon.
I am counting this decline as a corrective wave ‘ii’,
within a larger wave (iii) as shown.
Wave ‘ii’ must complete above 17.30 and then turn higher again in wave ‘iii’ this week.
If we are to see an acceleration in the metals this week,
that does signal danger for the stock market.
As this rally in the metals will likely correspond with a drop in stocks.
It is interesting that I am looking at a possible third wave acceleration in opposite directions in both markets!
Tomorrow;
watch for wave ‘ii’ to complete above 17.30.
Wave ‘iii’ should rally out above 18.00 again and extend back to the most recent highs at 18.90 again.