Good evening to you all folks, and the Lord’s blessings to you all tonight.

David Rosenberg – @EconguyRosie

As Bill Ackman tees off on the Fed, do you think he knows that both M1 & M2 contracted in April, taking their YoY growth trends back to where they were pre-COVID? Tack on the fiscal contraction & we have the makings of demand-led deflation ahead, regardless of supply-chain issues.

EURUSD.

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EURUSD daily.

Wave (iv) is on track today with a small lower high now in place below the wave (ii) high at 1.0747.
There is a three wave structure visible in wave ‘b’,
and I am looking for wave ‘c’ to fall again tomorrow and break 1.0642 at the wave ‘a’ low to complete this pattern.

Tomorrow;
Watch for wave ‘b’ to top out now and roll over into wave ‘c’ overnight.
Wave (iv) should be complete by tomorrow evening.
And that will leave next week for wave (v) to close out five waves up off the recent lows.

GBPUSD

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The price made a very slight new high today above the wave [a] top at 1.2600.
Because of this fact I have moved up the degree of the count off the wave [a] top.

This new high is still viewed as corrective in wave [b],
but wave [b] is now tracing out an expanded flat correction rather than a simple flat shown last night.

I am looking for wave (c) of [b] to continue lower and break the wave (a) low at 1.2471 at a minimum,
with the lower support at wave (b) at 1.2329.
Wave [b] should complete in that range.

Tomorrow;
Watch wave (c) down to trace out a five wave decline to complete the expanded flat correction with the minimum target at 1.2471.

USDJPY.

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USDJPY made a higher low today in wave ‘b’ of (ii), so the correction in wave (ii) is now in play.
The price has again bounced this evening and is holding just below the wave ‘a’ high at 127.58.
I am looking for wave ‘c’ of (ii) to break above that wave ‘a’ high at a minimum.
The 50% retracement level lies at 128.86,
so wave (ii) should complete between those target levels.

Tomorrow;
Watch for wave ‘c’ of (ii) to complete a three wave correction higher in the area of the 50% retracement level at 128.86.

DOW JONES.

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The Dow has confirmed the alternate count for wave (ii) tonight after a solid spike higher this afternoon.
This action has delayed the wave ‘iii’ of (iii) decline until next week now.
So an all out collapse has been averted for the moment it seems.

I am not getting complacent in the slightest here.
Wave (ii) has merely shifted to an expanded flat correction.
and wave ‘c’ of (ii) should complete five waves up most likely in the area of the 62% retracement level of wave (i).
That gives us a target at 33005 to watch.

Overall my bearish thesis remains intact.
This rally should rebalance market sentiment somewhat off the recent over bearish lows.
And then I suspect the trapdoor could open for wave (iii) down.

Tomorrow;
Watch for wave ‘c’ to complete a five wave pattern higher into 33005.
I will then be looking for a reversal patter to begin down into wave (iii) early next week.

GOLD

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I have switched to the alternate count tonight for wave (i) and (ii).
The action today does not seem like the beginning of a fifth wave rally.
So I have reverted to the previous high at 1869.75 for the wave (i).

Now we are working out a three wave decline into wave (ii).
With todays sideways trade correcting in wave ‘b’ of (ii).
Wave ‘b’ should complete soon.
And I am looking for another decline into wave ‘c’ of (ii) to begin tomorrow.

Tomorrow;
Watch for wave ‘b’ to complete a lower high below 1869.
Wave ‘c’ is expected to fall again in five waves and complete close to the 1828 level at the 50% retracement level.

CRUDE OIL.

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Crude oil has triggered the alternate count for wave ‘2’ this evening.
So wave [c] of ‘2’ is now viewed as an ending diagonal wave.
An ending diagonal wave forms a wedge pattern with a series of five internal three wave structures to make up to larger wave.

Todays rally is labelled as wave (v) of [c] of ‘2’.
and wave (v) is now close to completing that internal three wave structure.
Wave ‘c’ must hold below 116.26 at the previous high.
An break of that level will invalidate this count.

Tomorrow;
Watch for wave ‘c’ of (v) to top out below 116.00 ideally.
WAve (v) has reached the minimum expected level by breaking the wave (iii) high.
So technically we have a completed pattern already.

Lets see if the price will reverse lower to begin wave (i) of [i] as shown.
A break of the wave (iv) low at 103.20 again will really favor this new count.

S&P 500.

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We have divergent counts between both stock indices tonight!
The dow has triggered the larger wave (ii) scenario,
but the S&P has not triggered the alternate count for wave (ii) today.
The market has come close to that wave (ii) high at 4090.7 cash,
but so far the rally has failed below that level.

At this moment the three wave correction higher in wave ‘ii’ is still valid,
and will remain so as long as the wave (ii) high holds.
So,
a third of a third decline is not out of the question here yet.

The alternate count for wave (ii) will remain an option until the price moves lower in an impulsive manner and breaks the wave ‘b’ low at 3875.

Tomorrow;
Watch for wave ‘c’ of ‘ii’ to hold below that wave (ii) high at 4090.70.
If this short term count is correct,
then wave ‘iii’ down should begin in the premarket trade tomorrow.

SILVER.

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The action over the last few sessions is proving corrective to the upside at the moment.
I have labeled this small lower high as wave (b) of [b].
The pattern in wave (b) fits an expanded flat correction.
And as long as wave [a] holds at 22.19,
then wave (c) down is expected to begin tomorrow and fall in five waves towards that target at the previous fourth wave low at 21.27.

Tomorrow;
Watch for wave (b) to hold below 22.19.
Wave (c) down should begin early tomorrow and a break of 21.70 will signal wave (c) is underway.