Hi there everyone,
The evidence is stacking high tonight in favor of the idea that this stock market rally is just a mirage.
data point after data point is printing huge negatives across the world.
Demand destruction is now a reality as the sudden economic collapse has wreaked havoc on those less fortunate to build any savings during the good times.
This really is a perfect storm, and it wont take long for the reality of weakness to hit the market in a big way.
I await wave (C) down,
And I think it starts very soon.
https://www.zerohedge.com/economics/us-leading-economic-indicators-crash-most-over-60-years
https://www.zerohedge.com/markets/conviction-less-comeback-stocks-smells-big-bull-trap
https://www.zerohedge.com/markets/overcapacity-oversupply-everywhere-massive-deflation-ahead
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
The market has failed to break lower than 1.0768 this week,
and this afternoon EURUSD again spiked higher pushing above 1.0880.
This action is a strong hint in favor of the call for run up higher in wave [c] over the next week.
If wave (i) and (ii) are complete this evening.
the wave (iii) must come in strong on Monday.
I walked through three scenarios that I am looking at in the video earlier today.
I introduced a new interpretation where wave [b] would create a larger three wave pattern and complete near 1.0650,
and then rally in wave [c].
At the moment, I favor the main wave count.
Monday;
wave (iii) must begin early on monday to avoid invalidating this count.
A break above 1.0990 will confirm wave [c] has begun.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable is stuck in a trading range today after a nice impulsive looking decline earlier in the week.
This action still looks like a correction higher in wave ‘ii’ of (i).
This action off the wave [iv] high indicates that the rally in wave [iv] is complete.
So I am still looking for that initial turn lower into wave [v] to come our way next week.
The confirmation that wave [v] has begun will only come when wave (i) has broke below initial support at 1.2161.
Monday;
It is still early days in wave [v],
and a few things have to fall into place first
before we get a more convincing move lower.
The high at wave [iv] must hold at 1.2648.
And wave ‘iii’ of (i) down should continue towards support on Monday.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
It is a similar story for USDJPY, except facing in the opposite direction.
The price is holding above the wave [b] low at 106.90 so far.
This low must hold in order for this short term count to remain valid.
I have labelled todays higher low as wave (ii) of [c] now drawing to a close.
Wave (ii) might hit a double bottom at 107.16,
before rallying again in wave (iii) of [c] next week.
And the minimum target for wave [c] remains at 109.38.
Monday;
Watch for wave [c] to rally into the target in five waves overall.
That will complete a flat correction wave ‘B’,
then we can setup for a decline again in wave ‘C’.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
This week did not produce the reversal that I was expecting.
That said, I think we are very close to the point of reckoning now.
Wave (B) is done but for the last unfolding sub-waves.
And wave (C) is knocking at the door!
I have considered a few different interpretations for wave ‘C’ over the last week.
Including an overall ending diagonal for wave ‘C’.
An ending diagonal for wave [v] of ‘C’.
But I think tonights count is closer to the mark than any of the rest in my view.
the correction in wave [iv] was a tricky one to read,
it ended up tracing out a running flat at last nights close.
Then we saw a big spike higher in the aftermarket trade,
which continued in the futures this morning.
But the ‘cash’ market is not holding the intra-day high as we approach the close.
The price is now back below 24040 again as I write.
This may well prove to be a spike to put an end to the rally in wave ‘C’.
We will know soon enough next week.
Monday;
If wave (B) is complete,
then wave (C) down is the next step for the market now matter what good news comes our way.
I will be looking for a five wave move to the downside beginning next week.
The initial level to watch is 23211 at the wave [iv] low.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
The price of gold has now traced out a three wave move lower off the recent high at 1746.
This initial move lower is labelled as wave (a) down,
of a larger three wave correction in wave [ii].
It looks like wave (a) is drawing to a close now,
and wave (b) will begin early next week.
Wave (b) will likely push higher in three waves up to about 1720.
And then wave (c) will be left to complete the pattern.
The initial target for wave (c) and wave [ii] lies at 1640 or there abouts.
This level marks the high of wave (iii) and a triangle correction within wave (v).
The alternate count shows this decline as wave (ii) of [iii] of ‘5’ already underway.
If this is wave (ii),
then we will see the price complete this correction earlier than expected.
With the initial support at 1672 offering a reasonable target.
Monday;
So the choice is clear from here.
Either wave [ii] continues lower in three waves as shown.
Or the alternate count takes over next week and pushes out to new highs above 1746.
A rally in wave (iii) of [iii] could very easily push out to new all time highs over the next few weeks.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Crude oil broke to new lows today in wave (v) of [iii].
I did expect a slightly bigger structure in wave (iv) of [iii] today,
before wave (v) carried lower again.
But the price broke lower overnight,
and now we seem to have a five wave pattern in place in wave (v).
This action is enough to call and end to wave [iii] now,
and wave [iv] is likely to begin soon.
The correction in wave [iv] should hit about 22.00 in three waves over the coming week.
And then the final decline in wave [v] of (3),
will drop back to a new low in the region of $15.00.
Monday;
Watch for a possible rally in wave [iv] to begin Monday.
There is a chance that wave the alternate count for wave ‘4’ will take over next week.
But we will know by the size of the reaction to these new lows which forms next week.
the bigger the rally,
the more likely that the alternate count becomes.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
I have shown the ending diagonal interpretation for wave ‘C’ in the S&P tonight.
But you can just as easily overlay the count of the DOW on top and you will get the same results,
This rally is done,
despite the spike to a new high today.
A new high which has now evaporated by the way!
The next major move will be to the downside in wave (C) of [A].
And wave (C) has an initial target in the area of 1680 to complete a three wave move off the highs.
Wave (B) was a hard and fast rally into the current highs,
that much is for sure.
But this rally is no more than we expected for wave (B) back when the lows of wave (A) were forming late last month.
The price has now reached into the target zone between the 50% and 62% retracement levels.
the rally has traced out three waves.
Wave ‘C’ of (B) is all but done according to two different interpretations.
All we need now is an initial impulse wave lower to begin wave ‘1’ of (C).
And that is where my focus lies next week.
Monday;
Wave [i] of ‘1’ of (C) should break 2753 at a minimum.
A more likely target for the low of wave [i] lies at the 2646 high of wave ‘A’.
Next week I want to see wave [i] begin and trace out five waves lower.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
Silver is simply meandering off the highs created early this week.
The action is very corrective looking so far.
And this is starting to look more like the action expect in the alternate count.
Rather than an impulsive move to the downside in wave [i] as suggested in the main wave count.
If the alternate count is correct,
then we will see a move back above 16.38 next week.
And that actoin will trigger the alternate count officially.
Monday;
Things are beginning to look a little brighter for silver now.
But the main wave count has not been invalidated just yet.
A break of 13.77 will rule out the alternate count.
so that level is key to this short term count.
I hope you all have a peaceful and enjoyable weekend ahead.
I will be pushing through the LOCKDOWN with the kids at hand of course!
Daily walks to wear them out,
and a continuously messy house and back garden.
In fact,
its the same as it ever was really!
Back on Monday evening.
God Bless you all,
over and out.
enda.