We are standing at a really important juncture in the markets,
and there are a few comparisons that are helpful to understand where we go next.
And then there is this from the Crude market only last year!
I presented this chart last April the 27th 2019 in this video.
And we all know how that turned out!
Isn’t it funny how similar the stock market looks now to the pattern in crude oil a year ago??
Here we go.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
No change in EURUSD tonight.
Its been a negative trade today,
so I am leaning towards the idea that todays sharp spike lower is the beginning of wave ‘iii’ pink.
The acceleration lower does fit with this interpretation.
Wave (c) of [b] needs more downside before looking for any meaningful reversal higher.
The minimum target lies at 1.0725,
so we are looking at as least another 130 pips drop.
Tomorrow;
Wave ‘iii’ of (c) should continue lower and break 1.0725.
The price should hold below 1.0925 at wave ‘ii’.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
If wave ‘ii’ pink is now complete at todays highs at 1.2483,
then wave ‘iii’ down should continue lower for the next few sessions.
Wave ‘iii’ will find support at 1.2245,
but a break of that level is preferred.
And this will confirm that the larger trend has turned lower.
Tomorrow;
watch for wave ‘iii’ of (i) to drop below 1.2287 and continue towards initial support at 1.2245.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
The short term action in USDJPY is a little confused at the moment.
The action does not want to follow the path higher as suggested.
So tonight I want to concentrate on the alternate count shown circled in red.
I have shown the alternate wave ‘B’ as a contracting triangle,
which completed at 108.03.
The move lower off that triangle into 106.36 can be viewed as wave [i] of ‘C’
The rise off that low has created a lower high so far,
and this can be viewed as wave [ii] green.
Wave [iii] down down should accelerate lower this week if this count is correct.
An impulsive break of 106.36 will confirm this alternate count.
Tomorrow;
The low at 106.36 is key.
A break of that level will trigger that alternate count,
and then I will look to a lower low for wave ‘C’ at about 104.50.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
The DOW has retraced a solid 50% of the recent decline.
This depth of retracement is expected and common in a second wave for sure.
But there is one added element in todays rally,
that has caused a change in the wave count this evening.
The rally off the low on Monday has traced out a reasonable five wave pattern.
This suggests a zigzag correction is in play now.
So I have moved up the wave count by one degree,
and the rally into the high this evening is now wave (a) of [ii].
Wave (b) should fall in three waves off these highs.
And then wave (c) is expected to complete the correction in wave [ii] back above 24300 again later in the week.
Over all I expect a bearish impulse wave to complete this week.
With wave [ii] completing a bearish lower high and right shoulder by Friday.
At that point I will be looking for a much larger decline in wave [iii] to come our way next week.
And that decline could easily carry the market back below 22000 again.
Tomorrow;
watch for wave (b) to fall again in three waves and complete in the 23500 area.
Keep an eye on that alternate count for wave [ii].
If the market moves impulsively lower off this high,
then wave [iii] will be favored.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
It is tempting to jump right in on the bullish side right now,
given that I think we are close to a serious rally in gold.
The rise in wave ‘i’ of (iii) seems completed,
but I am not convinced on the pattern in wave ‘ii’ just yet.
The rally in wave ‘iii’ should com in strong,
and that has not happened yet.
So I think it is worth holding out and waiting for at least a break of that initial wave ‘b’ high at 1721.83,
in order to signal that wave ‘iii’ is in play.
I will be much more confident if and when the price breaks out above the 1746 level to confirm wave (iii).
Tomorrow;
Watch for the low at wave (ii) blue to hold at 1668.
Wave ‘iii’ needs to rally now and break above 1721.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
I did not expect that we would break above the 25.00 handle in wave ‘C’,
but wave [v] of ‘C’ has certainly gotten close in the cash trade after a blow off top of sorts today!
This action has surely brought out the bulls to tout the rally as a real recovery.
‘Oil surges 20% in fifth straight day of gains on demand recovery and production cuts’
Of course there is every reason to predict the rally after it has happened!
Back to the wave count.
Todays high hit 24.85 so far.
This is back into the price range of where I had expected this rally would get in wave (4).
So now I am hunting for a top to form in wave (4) sooner rather than later.
That means the next big move in terms of the wave count is down now up!
Tomorrow;
If we see a meaningful drop off these highs,
that will signal the rally in wave ‘C’ is done.
A break below the $20.00 level again will signal wave (5) has begun.
Lets see how this top forms over the coming days.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The S&P has traced out a five wave rally into the current highs now.
And this action has prompted a rethink of the short term count as in the DOW.
The decline off the recent highs is labelled wave [i] green now.
And todays rally is wave (a) of [ii].
This count implies a larger correction in wave [ii] is underway.
This will trace out a three wave correction as shown.
And wave [ii] should still hold below the high at 2954
I expect wave (b) of [ii] will test the lows at 2800 again.
And then one last rally in wave (c) to complete the correction later in the week.
I am now looking to next week for a major decline in wave [iii] to begin.
But it might come earlier,
given how easily this market can break into complete disorder these days.
So,
If we see a clearly impulsive decline in wave [iii] beginning this week,
that will signal wave [iii] is already underway.
Tomorrow;
watch for a decline in wave (b) at least to fall back into the 2800 level again.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
Silver is still holding out on us today!
The action continues to grind sideways,
and the range continues to contract even further.
this trade is getting very compressed now,
so there will be a break out of this tight range soon.
The question is which direction!
The main count allows for another drop in wave [c] of ‘2’,
which will find support at the previous fourth wave at 13.80.
The alternate count is looking at a larger wave [iv] of ‘1’ still underway.
Tomorrow;
A break of 14.59 will confirm the main count.
While a break above 15.51 will favor the alternate count.