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The 'doublespeak' out of the FED never ends.
It is like they wish to keep us in a permenant state of confusion and cognative dissonance!
See - Fed's Bullard says 'substantially' higher rates risk overly tight policy
Bullard thinks that raising rates too fast would create an overly tight policy.
And that could burst the bubble economy,
We wouldn't want that now would we?
So,
On the flip side,
It is axiomatic to believe that keeping rates pinned to the floor
for 8 solid years would constitute an overly loose policy??
And that could inflate a bubble in financial assets,
possibly even push the stock market to an over-bought and over-bullish extreme
Maybe even close to a horrible precipice?
No, no, no, no, the FED would never do something so stupid as that!
Well,
They would never admit it anyway......
Down to business.
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UPCOMING RISK EVENTS:
USD: Core Durable Goods Orders m/m, Fed Chair Powell Testifies, CB Consumer Confidence.
EUR: German Prelim CPI m/m, M3 Money Supply y/y
GBP: n/a
JPY: n/a
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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.
EURUSD has remained in a corrective 'holding' pattern since last Thursday.
The price fits nicely into a sideways trend channel
And this evenings action is rising off the lows at the lower trend line.
I have labelled the rise as waves 'i' and 'ii' complete at todays low.
1.2259 must hold for this pattern to remain valid in the short term.
Tomorrow;
Watch for a rally in wave 'iii' pink to begin soon.
a break of 1.2412 will confirm wave 'iii' has begun,
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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: completing wave (4) blue correction higher.
Long term wave count: decline in wave (5) blue, below parity
The contracting triangle in wave 'iv' (or wave (iv) alternate)
Is still working out very well.
The price hit the upper trendline and fell again as expected.
Wave 'e' of 'iv' is now nearing completion with a decline into the lower trendline once more.
The low of wave 'c', lies at 1.3855,
This level must hold for the short term pattern to remain valid.
Tomorrow;
Wave 'v' pink is expected to begin with an initial target at 1.4343.
A break above 1.4070 will confirm the triangle has completed and wave 'v' is underway.
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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
I realize that calling for a rally in USDJPY, EURUSD and GBPUSD at the same time
is unconventional to say the least.
But in USDJPY I am expecting a major trend change to the upside to take hold in the long term,
While EURUSD and GBPUSD are merely completing corrective patterns to the upside.
After which, both should fall precipitously!
In the short term, USDJPY has whipsawed sideways since last Thursday.
This is labelled wave 'ii' brown, wave 'iii' should follow.
On the 4hr chart,
The Price is now sitting slightly above the 50MA
Along with a possible rising trend in RSI.
The signs are here that the trend is turning positive at last.
Tomorrow;
106.37 is the low of todays session,
watch for that level to hold and a punch towards 107.89.
A higher low above 107.18 will be a bullish short term signal.
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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: topped in wave (5)
The pattern in the DOW has developed further into a possible flat correction 3,3,5 structure.
Wave (a) completed three waves in a simple zigzag,
Wave (b) completed three waves in a flat,
And wave (c) is now tracing out a five wave pattern to complete the correction.
I still view this rally as a correction in wave [ii]
The decline in wave [i] green traced out a near perfect five wave pattern.
So the rally is expected to be in three waves.
Momentum is already hitting overbought territory in the short term and on the 4hr chart.
Tomorrow;
Wave (c) should complete this week in a clear five wave pattern in pink.
We will have to wait for wave [ii] to complete
and a further impulse wave down off that high.
to signal a turn down in wave [iii].
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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 did push higher today,
But the rally off the low fits a three wave pattern better than an impulse wave.
So the alternate wave count remains a real possibility.
This views wave [ii] green as completing in a larger triple combination correction.
A break of 1321 will trigger the alternate wave count.
Tomorrow;
Watch 1321 as key short term support.
If we see a rally above 1342 tomorrow,
That will revive the current bullish short term count.
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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
Wave (c) reached equality with wave (a) today.
The target was set at 63.98 and the high of the session was 64.24.
I am now looking for the price to turn down again in the beginning of wave [iii] brown.
Momentum has diverged lower on the short term chart,
And flattened out on the 4hr chart.
The price is now ripe for a change of trend again!
Tomorrow;
I am watching for signs of a turn lower.
Wave (b) grey lies at 60.75 cash.
An impulsive break below this level will signal wave [iii] brown has begun.
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