Good evening folks.
I spoke about this piece a few weeks ago, but I think it is worth reading again given where we are in the wave structure right now.
A date with the CTA net positions is due!
on with the show.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
The FX market just does not know how to handle the deluge of money creation and economic sabotage that is happening right now!
EURUSD has been stuck in a range for over a month now,
and it is high time that we see a break out of this trading range.
The question is which count is more likely now.
I have two main short term counts,
both are long term bearish,
but the main wave count will allow one more rally into the 1.1200 area before turning down for the longer term.
The triangle idea for wave (b) of [b] is still in play this evening.
The price has dropped out below the lower trend line again today,
and then rebounded up to it this evening.
So far this triangle line is acting as resistance.
Tomorrow;
It is possible that we have a ‘i’ ‘ii’ pattern complete off the wave (b) high.
If the price accelerates lower to break 1.0755 again,
that will signal wave ‘iii’ of (c) is underway.
the target for wave (c) remains at 1.0530.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
The action in cable over the last while has stretched the effectiveness of the main wave count.
I am still open to the idea that wave [v] of ‘3’ will carry the price lower towards the 1.1000 area.
But I am also working on an alternate count now,
which does have some merit in explaining the recent action.
So I want to concentrate on that alternate count this evening.
If you look at the daily chart,
(click to open a larger version)
This alternate count is shown circled in red.
Wave (4) blue is now shown as a contracting triangle
which has been in force since late 2016.
The internal pattern of the triangle is tracing out a five wave contracting pattern.
The recent low can be viewed as wave ‘B’ of (4).
And the spike higher off that low can be viewed as wave ‘C’ underway.
Wave ‘C’ should trace out a three wave corrective rally into the 1.3000 level
to complete a three wave rise.
And then ‘D’ will fall again into the 1.1700 area again.
Wave (4) will eventually give way to a sharp and sustained decline in wave (5).
So in the case of this alternate count,
cable will continue to bounce around in a corrective fashion for the rest of the year.
Back to the short term:
The main wave count is still favored for the moment.
but the high at 1.2648 must hold.
Watch for wave (i) to complete with another drop below 1.2150 in wave ‘v’.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
I have switched to the alternate count in USDJPY also tonight.
The recent sideways action did not fit the previous wave count anymore.
Overall I view this decline as wave ‘C’ of (E).
And the recent sideways corrective action is now wave [iv] of ‘C’.
With one more drop into wave [v] of ‘C’ now expected to take us down to the 106.00 at a minimum level to complete wave ‘C’.
Tomorrow;
Watch for wave [v] to push below 106.90 to confirm the pattern.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
Its a day for alternate counts today.
But even so the general bearish setup in the stock market remains intact tonight!
Given the size of the rally this week,
I am now switching to the alternate count shown last night.
The recent lows of 22940 which we hit only yesterday morning,
is now viewed as the low of wave [i].
I did want to see wave [i] go a little lower before correcting higher in wave [ii].
But the decline did break the previous fourth wave,
and this was the initial target for wave [i] anyway.
The price spiked higher this morning in wave [ii] as shown.
The rally has hit the 62% retracement of wave [i] at that high,
and so far the price has hit resistance at that level.
This points to a weakness emerging in this rally.
So wave [iii] down is now expected to begin.
Tomorrow;
The outlook form here is simple.
If the price drops back below 22940 at the wave [i] low,
then wave [iii] has begun.
Wave [iii] of ‘1’ of (C) is expected to push back towards the 21500 level.
This is the level where wave [iii] will reach 162% of wave [i].
Watch for wave [ii] to hold at todays highs and wave [iii] down to pick up momentum as the week closes out.
22940 is the level to watch now.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
The action in gold is beginning to tilt in favor of the more bullish alternate count again tonight!
The main wave count will still stand for now,
but the rally in wave (b) has pushed higher than I expected it to.
So that alone does hint at the alternate count.
If the price holds above the recent low at 1657,
that will be enough to switch to that bullish (i) (ii) count shown on the short term chart next week.
Tomorrow;
As I said,
there is no harm in sticking with the main wave count right now.
it is more conservative in the short term,
but still calls for a rally in wave [iii] to begin next month.
So watch for a possible decline into the 1650 level in wave (c) of [ii]
before any rally occurs to begin wave [iii].
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Crude pushed into a high just below 19.00 today.
The form of the rally off the low is still in three waves.
And so todays high takes the wave ‘A’ label.
the reversal this evening off that high is expected to carry into tomorrow.
This decline should begin wave ‘B’.
The initial support within the previous wave structure lies at about 10.80.
If we see a three wave decline into that level,
that will complete wave ‘B’.
And then next week I will look for a return higher again in wave ‘C’.
Tomorrow;
I want to see wave ‘B’ take over tomorrow and drop in three waves into the wave [b] low.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The S&P has reversed off the days highs in a pretty meaningful fashion this evening.
The price reached above 2826 this morning.
This action triggered the alternate count for wave [i] and [ii].
So as it stands;
I was looking for a reversal to begin this week.
And now we have a possible impulse wave complete off the wave (B) high.
This initial move lower should be only the beginning of a much larger move down in wave (C) red.
Tomorrow;
Now we need to see a follow through to the downside to confirm wave wave [ii] is complete at todays highs,
and wave [iii] has begun.
An impulsive break of that 2727 level at wave [i] will do that.
Watch for wave (i) of [iii] to push lower again.
The low at 2727 will offer some support to wave (i).
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
I have had enough of silvers refusal to crash lately!
So tonight I am willing to look harder at the bullish alternate count.
The recent high now takes the wave ‘1’ label.
And the relatively mild decline off that high is labelled wave ‘2’.
Wave ‘2’ is not yet complete.
The market declined in three waves off the high in wave [a] of ‘2’.
The rise to a lower high is labelled wave [b],
and wave [c] of ‘2’ should fall again towards initial support at 13.79.
Tomorrow;
Watch for wave [b] to complete below 15.84.
And wave [c] should fall again with the target at the previous fourth wave low of 13.79.