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Evening folks!
Here's a picture to start your week!
Below is a model of a market mania theorized by Dr. Jean-Paul Rodrigue from hofstra university.
It involves 'phases' of involvement by different groups buying into the uptrend.
The market cycle begins with the 'smart' money,
and it always ends with the general public, diving in headfirst in a complete speculative delusion.
The initial decline off the high is usually sharp, which freaks out the public and sparks a defensive denial phase from commentators.
" No the bull market is not over, this is just a normal correction, you should buy the dip! "
And then comes the dead cat bounce, where the fools rush in to buy again in what they think is a continuation of the uptrend.
Only, it's a trap,
And in fact the market is about to totally capitulate!
Does this model remind you of any particular market right now?????
Mean reversion is hell of a thing!
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UPCOMING RISK EVENTS:
USD: n/a.
EUR: n/a.
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.
Another sideways day in EUSUSD,
This suggest that wave (ii) brown is not yet complete
and a further rise in wave 'c' pink is nedded to create a three wave corrective rise in wave (ii).
Wave 'b' pink may not be finished either,
I have shown a further fall into 1.2260 to close out wave 'b'.
If the price breaks above the wave 'a' high at 1.2364,
That will signal wave 'c' has begun
Wave 'c' is targeted at to a minimum of 1.2400,
the 61.8% retracement level.
The alternate wave count will not be ruled out until the price breaks below 1.2154.
Tomorrow;
Watch for wave (ii) brown to complete a three wave pattern in the region of 1.2400.
At that point I will be looking for a turn lower again.
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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
Todays rise in Cable is in a clear three wave pattern.
This suggests a rise in a 4th wave within wave 'c' grey.
A further decline is needed to complete a five wave pattern in wave 'c' grey.
If we see a break of 1.3705 that will confirm wave 'c' is completing in five waves down.
Support at 1.3612 is still the most likely target for wave (iv) brown.
After which wave (v) should carry the price into about 1.4350.
tomorrow;
Watch for a break of 1.3705,
And a decline into support.
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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
The key level in the short term chart for me is 107.20.
This is the level of the previous wave 'iv' brown.
A break above this level will indicate another possible change of trend for USDJPY.
On the positive side,
The minimum target for wave 'v' has already been hit
with the break of the previous wave wave 'iii' low.
The price is right in the zone of where I expect the change of trend to occur,
But I need to see an impulse wave form to the upside to signal that change is underway.
For tomorrow;
This week will be a 'wait and see' period,
If the price traces out a clear impulse wave to the upside this week,
Then things get interesting again.
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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 alternate wave count for the DOW shown circled in red,
views the current corrective rise as a possible wave (ii) grey,
This is a correction at one degree higher than the operating wave count.
In both wave counts,
This is a corrective rise and will be fully retraced.
I was suggesting a rise back into the 25000 level for wave (ii),
And the price is fast approaching that level now.
So I am interested to see if the market rejects that level
That would be a definite bearish sign in terms of market psychology!
A failure at a major milestone like that would indicate risk aversion.
That would create a perfect storm scenario give the current wave count.
Also,
On the 4hr chart, you can see the price now sits right under the 50MA,
Lets see if that level offers any resistance to todays rally.
Tomorrow;
Watch for a turn lower in either wave 'v' pink or wave the beginning of wave (iii) grey.
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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 was down slightly today in a possible expanded flat wave '2' pink.
Thursdays low at 1303 is initial support for this developing impulsive wave up.
So 1303 must hold,
And wave '3' pink should carry the price higher towards resistance at 1340.
I am looking for a five wave pattern to the upside in wave 'i' brown.
Followed by three waves down in wave 'ii'
At that point we will have a bullish elliott wave signal in place for a rally in wave 'iii'.
Tomorrow;
The price must hold above 1303 and wave '3' pink should begin.
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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' pink carried higher again today
hitting the 61.8% retracement level at 62.48 and holding slightly above it at 62.67 as I write.
On the 4hr chart,
the 200MA lies at 62.71 right now.
A failure at that level will be a vote in favor of the immediately bearish short term wave count.
Right now we have a series of 1,2 waves to the downside
visible off the recent high at wave [4] red.
So the wave count is set for a sharp decline in wave (iii) of [iii].
The high at 63.98 must hold for this to remain valid.
Tomorrow;
Wave (ii) should end now,
watch for an initial decline to begin wave (iii).
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