Good evening to one and all.
I feel a bit like chicken little these days, but for the sake of it!
Just take a look what hedge funds have been doing over the last few weeks.
They are now more short than at the all time highs in Feb.
Oh yes, there is the little matter of the Q2 GDP now estimate.
Thats coming in at negative 42% so far.
But other than that, this market is perfectly healthy and there is nothing to fear cause the FED has your back just like it did in FEB!
Here we go.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
EURUSD is close to completing a nice impulse wave up off the triangle low at wave [b] at todays highs.
This rally is viewed as wave (i) of [c].
And wave [c] should continue higher in five waves towards the upper trend channel line at 1.1296 over the coming week or so.
Wave (i) should be close to completing now.
I want to see a three wave decline in wave (ii) to a higher low above 1.0775 over the next day or two.
And then we should be ready to rally again in wave (iii) of [c].
Wave (iii) should push up above the minimum target at 1.1150.
Tomorrow;
Watch for wave (i) to complete and wave (ii) to decline back towards the 1.0850 area.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
I want to look at the alternate count on the 4hr chart tonight.
As I mentioned before,
this involves a very long triangle in the making in wave (4).
The recent low can be viewed as wave ‘B’ of that triangle.
And then the rally off that low is wave ‘C’.
Wave ‘C’ should trace out a three wave internal pattern.
And ideally wave ‘C’ should reach up to the 1.30 level before completing.
If the price continues higher off this weeks lows and breaks 1.2460 at wave (ii).
Then I think we can switch to the alternate count.
Tomorrow;
Back to the main wave count.
Watch for wave ‘ii’ to complete a three wave rally below 1.2400 again.
And then we should turn lower into wave ‘iii’ of (iii).
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
USDJPY completed a five wave rally into the high of the session at 108.09.
The triangle in wave (iv) completed earlier than I expected.
And wave (v) pushed out above the minimum target at wave (iii) earlier today.
the price is falling again this evening
and I am now looking for a three wave decline into initial support in wave [ii] for the rest of the week.
Once that completes,
then we are game on for a possible run higher in wave [iii].
Tomorrow;
watch for wave (a) and (b) to complete a lower high maybe by tomorrow evening.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
The DOW has not made a new high today even though we came very close last night.
The market was weak throughout the day,
and now the price is falling in a more impulsive manner at the close right now.
As it stands,
the bearish count of a running flat wave [ii] is still valid.
And if the market extends the losses tomorrow,
that will add weight to the idea that wave [iii] down has begun.
The high at 24708 must hold though.
I will note that todays volume was the lowest print since the all time price highs if February.
That is another hint right there!
I realise that I am sailing against the wind here with my bearish outlook.
Given that the FED is against me,
and every millennial is cranking up the credit card debt to buy apple on the Robin hood app.
But,
My thesis stands.
The excessive optimism that abounds now at the high of wave (B),
is only a mirror image of the excessive fear that displayed itself at the low of wave (A).
The rally in wave (B) has taken us up to the 62% retracement level.
And wave (C) will wipe that out the optimism and the gains of wave (B) completely.
Tomorrow;
Lets see if we can get a follow through on this evenings declines.
I am looking for a break of 23750 again to start with in wave (i) of [iii].
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
Gold seems to have corrected higher today,
And so far I am looking at this rise as a small internal ‘b’ wave within wave ‘ii’.
Wave ‘ii’ is expected to drop below 1725 again to complete the correction.
And then we should rally again back above 1764 to begin wave ‘iii’ of (v) of [iii].
If the price rallies again tomorrow and takes out the highs at wave ‘i’,
that will suggest that wave ‘ii’ is already complete.
Right now this is a low probability scenario.
Tomorrow;
watch for one more drop in wave ‘ii’ and a bullish higher low to form above 1691.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
The price is hanging on the the highs above the 30 handle again today.
The price action is looking corrective at the moment.
And I see a definite range contraction underway.
This action may be a triangle wave (iv) which should be complete at todays lows.
In this case,
wave (v) of [v] of ‘C’ will pop to a new high above 33.00 again before turning down into wave [i] again.
Tomorrow;
watch for wave ‘C’ to complete with that final rally above 33.00.
Any decline back below the 30.00 level again will be a sign that the top is forming and wave [i] down is getting started.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
So far the S&P has fallen in three waves off the highs.
The S&P did break to a new high today so the wave count is now slightly different than the DOW.
The difference being that wave (v) of [v] has the potential to push out to one last high above 3000,
before turning down into wave [i] again.
I must stress that this pattern is terminal.
Against all the bullish fawning on the media about a V shaped recovery and a new bull market.
Wave (B) is ending now.
And wave (C) will be devastating for all of us really.
Because the next wave down will begin a depression,
and then we can throw all ideas of a miraculous rebound out the window!
Tomorrow;
If the decline this evening accelerated and break the wave (i) high at 2868,
that will signal the top is in for wave [v].
And then we can concentrate on the downside again on wave [i] of ‘1’ of (C).
Otherwise look for wave (v) to complete at or near 3000 again.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
The price action may have completed a triangle in wave (iv) late last night.
The market rallied again today and came close to breaking above 17.57 at wave (iii).
So it is possible that wave (v) of [v] is now underway.
In that case,
we will see another high up near 18.00 again before any meaningful correction begins in wave ‘2’.
Tomorrow;
Wave (iv) can develop into a more complex pattern from here which will allow for some more downside.
But we will have to wait and see.
For the moment,
watch for a break of 17.59 again to confirm wave (v).