[vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Good evening people!
today was one of those history making moments which everyone will talk about,
But for exactly the wrong reason.

The DOW topped 25000 today after a strong open.
The VIX broke below the 9.00 handle for a short while today.
All is rosy in the garden here.

Tell me,
In your heart of hearts,
what do you think the outcome of this hyper valued market will be on a 5yr timeline?
Where you you think the volatility profile is likely to go from its now historic lows??
Do you think we have abolished even the idea of a recession from the economic dictionary?

Today,
I present one more nail for the coffin of this bull market.
The chart below is one very big hint of where the markets and economy stand in the big picture landscape.
It presents corporate profits as a % of gross domestic income since 1929.


Profits have flowed in a pretty predictable pattern for the last 90 years.
the chart usually tops out at an average of about 6% and then declines before each recession,
And once the excess is cleared in the economy by the recession,
the profit % rises again in a new credit cycle.

This current cycle topped out at 7% in 2014,
And has been on a downtrend since then.
This chart is clearly showing us that the U.S economy has begun its slide into recession already!
We just haven't taken note of it yet!

Take a look at the last three cycles in the next chart.
The decline in the profit % leads the market,
and the market decline leads the economic contraction,
As is the usual in life.

So with todays new highs being celebrated all round.
I needed to fulfill my role as reality naysayer in chief!
As far as I can see,
The downward spiral has begun.........[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

UPCOMING RISK EVENTS:


USD: Average Hourly Earnings m/m, Non-Farm Employment Change, Unemployment Rate, SM Non-Manufacturing PMI.
EUR: German Retail Sales m/m, CPI Flash Estimate y/y,
GBP: N/A
JPY: N/A[/vc_column_text][/vc_column][/vc_row]

 

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EURUSD

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: long term bearish
Wave Structure: Topping in wave [B] black.
Long term wave count: lower in wave [C] black.

EURUSD rallied in wave 'v' pink as expected today.
but resistance at 1.2092 has not broken just yet,
but I expect that will happen in wave 'v' as the price should rally to the upper trendline of the price channel.

on the 4hr chart the momentum indicators have topped out and turned down off the high again.
So, in the short term,
we can expect at least a correction in wave (iv) brown to arrive soon.

For tomorrow;
Watch for wave (iii) brown to complete and wave (iv) to get underway next week.[/vc_column_text][/vc_column][/vc_row]

 

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GBPUSD

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: short below parity in wave (5).
Wave Structure:  continuing impulsive structure to the downside in wave (5)
Long term wave count: decline in wave (5) blue, below parity

Cable held above yesterdays lows but the rise has been very weak.
This could be hinting at the alternate count.
The high at wave 'i' pink must break in order to switch the wave count.

For tomorrow;
We can still expect a rally into the upper trendline in either wave 'v' or wave 'c'.
1.3456 is the level to watch in the short term.[/vc_column_text][/vc_column][/vc_row]

 

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USDJPY

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: LONG
Wave Structure: rally in wave [C]
Long term wave count: wave [C] is underway, upside to above 136.00

The rise off Tuesdays low of 112.05 looks to be in a five wave form.
I have labelled this rise as wave '1' pink of a possible developing wave 'i' brown.
If we see a three wave decline off nearby highs in wave '2' pink,
which holds above 112.05,
Then we will have another established bullish elliott wave signal off the low.

If this wave count is correct,
Then we are on the verge of a powerful move up in wave (iii) green.
And this rally might arrive quickly.

For tomorrow;
watch for that three wave decline in a possible wave '2' pink to hold above 112.05.[/vc_column_text][/vc_column][/vc_row]

 

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DOW JONES INDUSTRIALS

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: market topping process completing
Wave Structure: Impulsive 5 wave structure, topping in an all time high.
Long term wave count: topping in wave (5)

The DOW broke the much sought after 25000 level today.
The short term price structure is hard to dissect,
As the individual price bars are packed tightly together and there is very little variability in the structure.

I have shown an extended third wave and
the slight decline this evening may be an internal fourth wave of this final wave '5' blue.
If the price tapers off tomorrow in a flat or triangle wave,
Then the idea of a fourth wave gains strength.
The price should then rally again into the target I have set at about 25350 to reach equality with wave '1' blue.

For tomorrow;
Watch for a possible internal fourth wave correction in wave '5' blue.
Next week should bring the last rally phase of the current fifth wave.[/vc_column_text][/vc_column][/vc_row]

 

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GOLD

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: Long to a new all time high above 1827.
Wave Structure: Impulse structure to a new high.
Long term wave count: wave (3) above 1666.

GOLD has rallied out of the three wave decline completed yesterday.
The rally is labelled as wave 'v' brown within wave (iii) blue.
the initial target for wave (iii) blue lies at 1330.
But the elliott price channel projects a higher level for the top of wave (iii).
The price would reach the upper trendline at about 1340.

So for tomorrow;
watch for the completion of a five wave pattern in wave 'v' brown.
With a likely target at 1340.
Wave (iv) blue should then begin.[/vc_column_text][/vc_column][/vc_row]

 

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U.S CRUDE OIL

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_separator][/vc_column][/vc_row][vc_row][vc_column width="2/3"][vc_custom_heading text="30 min" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][vc_column width="1/3"][vc_custom_heading text="4 Hours" use_theme_fonts="yes"][vc_column_text][/vc_column_text][vc_custom_heading text="Daily" use_theme_fonts="yes"][vc_column_text][/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: topping in a large correction wave [4].
Wave Structure: Double combination higher in wave [4] red.
Long term wave count: wave [4] target $63 - $70

Crude has possibly completed a minor fourth wave correction within wave 'v' pink.
Wave '4' black has taken the form of an expanded flat,
With the price now turned up again in wave '5' black
which should complete the larger wave 'v' pink.

The minor trend channel for wave 'v' pink
suggests the price will rally into the target area at 63.00 to complete.

For tomorrow;
watch for todays low to hold at 61.59.
A larger correction is due next week in wave (iv) grey.[/vc_column_text][/vc_column][/vc_row]