[vc_row][vc_column][vc_separator border_width="5"][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Hi everyone,
I have seen the Future for the European Economy,
And it is not looking good.
The EU tracks a wide number of european wide economic indicators,
Everything from consumer credit,
to unemployment expectations in the future.
Much of the data is survey based,
and so it involves an individual opinion on a subject.
It is simply amazing how well much of these indicators work as contrarian indicators!
The old saying goes,
"when your taxi driver tells you to buy stocks, it is time to sell ".
Lets have a run down through some of these charts to set the scene in europe.
Consumer confidence rate of change:
This indicator increased at the highest rate in over 13yrs in December.
accelerating at a faster rate than every year running up to the 2007 high in stocks.
Consumer credit:
The level of revolving credit to the consumer has now hit its highest level in history!
The consumer has maxed out the credit card again.
EU economic sentiment indicator:
This index has hit a 18yr high,
Gross household savings rate:
People are so confident,
that they have stopped saving!
This index is now at the lowest level since they began tracking.
Unemployment expectations:
People in europe do not expect to become unemployed any time soon.
This indicator now matches the sentiment at the high in 2000 and in 2007!
And what happened following those particular sentiment extremes?
So,
according to the man on the street,
the general outlook for the european ecomony is for a bright future with absolutely no upsets whatsoever.
everything is just fine in Europe!
And of course the EURUSD is sitting at a three year high,
at the end of a very large corrective pattern.
What could possibly go wrong?[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]
UPCOMING RISK EVENTS:
USD: WEF Annual Meetings, Existing Home Sales, Crude Oil Inventories.
EUR: German Flash Manufacturing PMI, German Flash Services PMI, Flash Manufacturing PMI, WEF Annual Meetings
GBP: Average Earnings Index 3m/y, Unemployment Rate,
JPY: N/A.[/vc_column_text][/vc_column][/vc_row]
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EURUSD
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[/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.
Speaking of the EURUSD!
The contracting triangle wave [iv] is holding up well.
The price has possibly completed five waves in wave [iv] at the low of todays session.
And since the low,
The price has again risen out of the contracting range.
I have labelled the rise as a possible wave (i) brown.
A correction in wave (ii) should follow tomorrow.
The price must stay above 1.2222 for the pattern to remain valid,
While a break above 1.2322 will confirm wave [v] has begun.
For tomorrow;
1.2222 is key support in the short term.
the initial target for wave [v] green lies at 1.2628.[/vc_column_text][/vc_column][/vc_row]
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GBPUSD
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[/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 is likely extending higher in wave 'v' pink.
The rise out of the recent contracting triangle is breaking out into a larger pattern based on todays action.
Waves '1' and '2' are complete with wave '3' grey now underway.
The initial target for wave 'v' pink lies at 1.4138 where wave 'v' reaches equality with wave 'i' pink.
If wave 'v' reaches the upper trend channel line that will bring the price to about 1.4250.
For tomorrow;
Watch 1.3856,
This level must hold in this scenario.[/vc_column_text][/vc_column][/vc_row]
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USDJPY
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[/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
USDJPY dissappoints again!
The bullish setup is about to break.
The price is now sitting a mere 10 points above key support at 110.18.
If that level breaks it will rule out the short term bullish stance.
and the price will fall again to the lower trend channel line.
The price will meet the trend line again at about 1.0910.
For tomorrow:
110.18 is the price to watch.
if the correction extends lower,
we will have to wait for the next impulsive setup to turn bullish again.
The rally in wave [iii] grey is still expected once wave [ii] exhausts itself.[/vc_column_text][/vc_column]
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DOW JONES INDUSTRIALS
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[/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 is on track to complete a five wave pattern within wave '5' blue over the next few days.
The price is within reach of the initial target at 26336.
the high of the session reached 26243 today before correcting in a minor triangle this evening.
%he initial target will probably be surpassed once todays small correction completes.
So;
The upper target at 26587 will most likely be hit before the end of the week.
At that point we will have another pattern completed,
And I will turn my attention to the downside again to see of we get an impulse structure downwards.[/vc_column_text][/vc_column][/vc_row]
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GOLD
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[/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 likely completed the triangle correction in wave (iv) blue today.
The rise out of the contracting range this evening has an impulsive look to it.
Todays low reached 1331.98 cash,
This is the low of wave (iv) blue
and the price must remain above that level as wave (v) blue develops.
A break of 1344 will confirm wave (v) has begun.
For tomorrow;
Watch for an impulsive higher low in wave 'ii' pink to indicate wave (v) has begun.[/vc_column_text][/vc_column][/vc_row]
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U.S CRUDE OIL
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[/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 completed wave [iv] sooner than expected.
The choppy action over the last few trading sessions suggested a further decline was on the cards before wave [v] began.
But, todays breakout does fit a third wave rally.
I have labeled the rise off mondays low as an extension higher in wave (iii) grey.
Wave 'i' and 'ii' pink are complete,
And wave 'iii' pink is now pushing higher.
The wave'i' high lies at 63.99,
so the price must not correct below this level as the larger wave (iii) develops.
For tomorrow;
Watch for wave 'iii' to complete and wave 'iv' pink to correct the price slightly,
Wave 'iv' pink must remain above 63.99.[/vc_column_text][/vc_column][/vc_row]