Good evening to you all, and may the Lord bless you all tonight.

John P. Hussman, Ph.D.

@hussmanjp – after a massive selloff, we’ve clearly reached “despair”

EURUSD.

EURUSD 1hr.

EURUSD 4hr.

EURUSD daily.

Now that was a move to confirm this wave count change alright!
the pattern off the low has been moved up by one degree today and now it seems we have [a] of ‘A’ now in place.
I expect the recent high at wave [iv] will provide enough resistance to top out this initial rally,
and then we should see a decline into wave [b] over the coming week.
The previous fourth wave low at 1.1268 is the target for wave [b].

Tomorrow;
Watch for wave [a] to top out near 1.1483.
Wave (a) of [b] should fall into the 1.1350 area possibly by tomorrow evening.

GBPUSD

GBPUSD 1hr.

GBPUSD 4hr.

GBPUSD daily.

On the daily chart.
I have labelled the alternate five wave pattern for wave (C) in red.
in this scenario,
last weeks low is wave ‘4’ of (C),
and the rally off that low is wave ‘5’ of (C).
A break above 1.3748 again will be a good sign that the alternate count is in control here.

Tomorrow;
As for the main count,
The price must reverse very soon and fall back below 1.3358 again to confirm the pattern.
Waves ‘i’ and ‘ii’ must now form a bearish lower high below 1.3627.
And then down again into a third of a third decline.

USDJPY.

USDJPY 1hr.

USDJPY 4hr.

USDJPY daily.

The main count for USDJPY seems to be on track this week.
I have relabeled wave (i) and (ii) after todays rally.
The price should reverse lower again by tomorrow evening to begin wave (iii) down.
And wave (iii) should break 113.47 again at a minimum over the next few sessions.

Tomorrow;
The high at wave [b] lies at 115.68.
That high must hold and wave (iii) of [c] should return lower again.

DOW JONES.

DOW 1hr.

DOW 4hr

DOW daily.

There is a pretty compelling case to be made that we have a correction complete at todays high.
The pattern fits all the internal tests and expectations of a second wave correction.
Three waves up to a lower high,
solid internal pattern,
62% retracement of wave [i] down.
And now add to that, a pretty heavy consensus view that the dip is over and the market is set to rally to new highs.
Big time retail buy in to the dip.
And of course, the Fed is now all in for a tightening cycle after the rally is over!
Something tells me we will be worrying about deflation in 6months time rather than inflation as is the mantra right now.

Tomorrow;
This is a really opportune time for wave [ii] to top out,
with all the sings pointing to that outcome.

Watch for a five wave decline to begin again into wave (i) of [iii] over the coming few days.
Wave ‘i’ of (i) is expected to break back below 35000 again at a minimum.

GOLD

GOLD 1hr.

GOLD 4hr.

GOLD daily.

The pattern in wave [b] is becoming clearer now after a nice spike to a higher low
and a total retracement of that drop this evening.
So the pattern now shows a five wave rally in wave (a),
and an expanded flat correction in wve (b).
Wave (c) should trace out a five wave rally again from todays lows.
And wave (c) should top out near 1820 again.

Tomorrow;
Watch for wave (c) to continue higher and trace out five waves up into early next week.
Wave [c] down is ecpected to come in by mid week next.
And that should bring the price down towards 1760 again.

CRUDE OIL.

CRUDE OIL 1hr.

CRUDE OIL 4hr.

CRUDE OIL daily.

Maybe a little more clarity on crude tonight also!

I am now bringing forward this count for wave (5) green.
I think todays rally has done enough to consider this pattern off the recent lows as wave ‘5’ of (5),
rather than the lower degree pattern that I was working with even earlier today!
The whole sideways pattern that was confusing the matter this week is now resolved as a series of fourth and fifth waves.
With todays rally a final sprint higher in wave [v] of ‘5’ of (5) of [C].

On the 4hr chart;
you can see the target at 92.50.
This is the level where waves ‘1’ and ‘5’ reach equality.
So that is a reasonable level to look for an overall top in wave [C] of ‘b’ also.

Tomorrow;
There is a five wave pattern in place for wave ‘5’ blue even at this stage.
So any sharp reversal off a nearby high will be interesting to look at as a sign that a top is in place.

Watch for wave [v] of ‘5’ to complete five waves up over the coming days.

S&P 500.

S&P 500 1hr

S&P 500 4hr

S&P 500 daily.

In terms of my bearish outlook,
it is interesting to watch the s&P fall off the 62% retracement level of the wave [i] decline.
I am looking for the initial decline in wave ‘i’ of (i) to fall break below the wave (a) high at 4454 again.
If this ‘i’ ‘ii’ count is correct here,
then we should see a lower high build again tomorrow at wave ‘ii’,
and then a more substantial decline early next week in wave ‘iii’ of (i).

Tomorrow;
Watch for five waves down to break 4454 in wave ‘i’.
The high at wave [ii] must hold now,
and I want to see a larger decline build next week in wave (i) of [iii].
Wave (i) should break the wave of wave (b) again at 4269 again.

SILVER.

SILVER 1hr

SILVER 4hr.

SILVER daily.

I am working with the idea that wave [ii] is tracing out an expanded flat correction now.
The new low in wave (b) after a three wave decline is the giveaway here.
In this scenario,
wave (c) will rally back above 23.04 again to complete the pattern and then next week will bring a larger decline into wave [iii].

The alternate view here is that wave (i) of [iii] is already underway.
and we will see a five wave decline to a new low tomorrow if this is the correct count here.

Tomorrow;
Watch for wave [ii] to complete with a rally in wave (c) to break 23.04.
A break of 22.00 again will signal wave (i) of [iii] is already in force.