Good evening and welcome to a new week.
The inevitable buying after hours came in this evening and created the spike I was looking for the complete the expanded flat idea in the stock market.
We are ready for another downdraft now, and I think it comes this week.
Without further adieu, here we go.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
Another flat day on the books for EURUSD!
This action is beginning to strain the short term wave count right now.
I am looking again at wave ‘ii’ pink this evening.
The price declined in three waves off Mondays high.
And now we see another retracement higher again.
this action does fit with a possible flat correction in wave ‘ii’,
and after this completes at 1.1292 at the upper trend line,
then I will be expecting wave ‘iii’ to begin.
Tomorrow;
Watch for the upper trend line to hold and then for wave ‘iii’ to accelerate lower to break 1.1168.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
The rebound in price today has forced a rethink of the short term pattern.
The larger Idea on the 4hr chart is still in play,
with wave ‘D’ coming to an end soon,
and wave ‘E’ then expected to push back to the 1.2600 handle again.
But the short term pattern in wave [c] of ‘D’ is causing some issues.
Todays rally raises the possibility that wave [c] is tracing out a three wave decline,
rather than the five wave structure I was following.
Wave (b) will now top out at the upper trend line again,
and then wave (c) of [c] should fall back into support in the area of 1.2060.
Tomorrow;
Watch for wave (b) to complete at about 1.2420,
and the wave [c] should fall again for the rest of the week.
The high at wave [b] must hold for this interpretation to remain valid.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
USDJPY has traced out a clear five wave rally in wave (c) of [b] into this evenings highs.
Wave ‘v’ of (c) has now completed a smaller degree five wave rally also.
The correction higher in wave [b] has traced out three waves up,
and is within reach of the 50% retracement level of wave [a] at 108.20.
so we are in the right place now for a return lower into wave [c] to begin.
Tomorrow;
Watch for wave (c) to complete very soon and then wave [c] should begin.
A drop back below 106.79 will signal wave [c] has begun.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
One thing is certain now in the market,
the action over the last few weeks suits no-one!
The bullish side of the argument has to contend with this fact;
– the rally we have experienced over the last three months is dead in the water.
In fact the main impetus of the action since June 9th is to the downside.
With most of the impulsive looking moves coming on the downside.
The market continues to create lower high after lower high,
and that includes today so far.
The momentum setup and sentiment indicators are all firmly in favor of the bearish outlook.
The only bullish wave count I have now,
is for wave [c] of ‘2’ to complete a larger three wave pattern back above 26611.
And then decline again in a serious way into wave ‘3’.
The main count is calling for that decline in wave ‘3’ to come earlier.
But we will have to wait and see on that front.
All in all,
I really think we are sitting at a major turning point.
The market is balanced on a knife edge, and wave (C) of [A] is calling.
Tomorrow;
Todays trade may have traced out a small triangle as shown.
This suggests a small pop above 25780 again to complete wave ‘ii’ and then a reversal into wave ‘iii’.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
Gold spiked higher again today and broke above the 1780 level again.
this creates a new 8 year high in the metal as we have not seen this level since October 2012.
It’s been a long time coming!
This rally should not be over yet either.
I am viewing todays move as an internal third wave within wave ‘v’ pink.
Where wave ‘v’ should trace out a five wave rally overall.
The upper trend channel line marks the main target level for wave ‘v’ to complete at about 1810.
Tomorrow;
The low at 1764 created in Mondays correction must now hold as wave ‘v’ completes,
so that level is initial support.
Watch for wave ‘v’ to continue higher in five waves.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
It is now possible to view todays high as a right shoulder now in place
to complete a large head and shoulders pattern around the recent high.
Crude did push to a slight new high this afternoon,
but the price seemed to touch the upper trend channel line,
and again we saw another rejection of the 40 handle with a sharp spike lower this evening.
If wave [ii] is now complete as I suspect,
then wave [iii] is the next phase in the cycle.
And this wave has the potential to push price down below 35.00 again with ease.
Tomorrow;
Watch for waves (i) and (ii) to create a further lower high over the next few days.
Ideally,
wave (i) down should drop into the 38.00 level in five waves tomorrow.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The rally in the S&P this week has now traced out five waves up off Fridays lows.
This action should complete an expanded flat wave ‘ii’ very soon.
And with that,
wave ‘iii’ of (iii) down is now ready to get underway.
Wave ‘ii’ has retraced back to the previous high at 3093 today.
And wave ‘ii’ is now sitting just between the 50% and 62% retracement levels overall.
As with the DOW,
I think the balance of probabilities lies in favor of the bearish setup.
Wave (iii) has the potential to fall quite rapidly from here.
So be alert for weakness in the action tomorrow.
Tomorrow;
Watch for wave ‘ii’ to top out and reverse into wave ‘iii’ of (iii).
Any break of the 3000 level again will signal that the larger wave (iii) has begun.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
Todays rally has ruled out the alternate count for wave ‘2’ for now.
The action is looking quite favorable in terms of the main wave count.
So I am reasonably confident that wave ‘i’ of (iii) of [i] is now underway.
If I am correct here,
that will mean we have a pretty substantial rally dead ahead of us now in wave (iii).
And that could push the price up as far as the 20 handle again in short order.
the price action in wave ‘i’ is a little choppy so far,
but so long as we keep creating higher lows from here,
then I am happy to stick with this interpretation.
Tomorrow;
Watch for wave ‘i’ of (iii) to continue higher and create a five wave pattern over the coming days.