Hi there to all you fine people.
Jeremy Grantham of GMO: The price-to-earnings ratio for stocks is now in the top 10% historically, while the U.S. economy is in the worst 10%, or perhaps the worst 1%. “This is apparently one of the most impressive mismatches in history.”
Is this a 1st leg of new bull market or 2nd-largest bear rally of 125 yrs? The March low was 0-for-5 w/ conditions typical at cyclical bear lows. And the 30% surge off the low met 0-of-3 dynamics that usually accompany the 1st leg of a bull market. 0-for-8 is not encouraging.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
After a while waiting for this pattern to complete in wave ‘2’ blue,
it looks like we are pretty close to that point after todays rally.
The 78.6% retracement of wave ‘1’ is at 1.1326.
That level also marked the point where wave [c] would touch the upper trend channel line.
Todays high reached 1.1361.
So,
the price has traced out a three wave correction higher,
the pattern has filled the trend channel
and broken the 78.6% retracement level.
It seems to me that wave ‘2’ is now done!
Now I am going to look for a reversal to begin wave ‘3’ down.
Tomorrow;
it may take a few days for a lower high to build to begin wave (i) down.
Watch for signs of weakness soon off the current levels.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable has completed a five wave rally in wave (iii) of [c] today.
So we will likely see some sort of correction in wave (iv) over the coming days.
I am keeping in mind also that we are very close to the minimum target for wave [c] of ‘C’ at 1.2642.
That level marks the high of wave [a] of ‘C’.
So there is also a chance that we break that level and then simply reverse into wave ‘D’ of the triangle immediately.
Just keep an eye on that one.
Tomorrow;
Watch for wave (iv) to begin.
we should see a decline in three waves to hit 1.25 at a minimum.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
The action in USDJPY has been a bit of a mess over the last few sessions.
I am looking at the possibility that wave ‘iv’ completed as a running flat at todays session low at 108.61.
The price spiked higher off that level and it sure looks impulsive,
so I am labeling this move as wave ‘v’ of (iii).
The ideal target for wave (iii) would be to break 109.38 at the previous wave ‘B’ high as seen on the 4hr chart.
Tomorrow;
Watch for wave ‘v’ to continue higher towards that initial target and then we can look for wave (iv) to begin to correct lower again.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
The stock market is closed and for a change the aftermarket trade is not gaping higher!
Have the robinhood traders finally run out of credit cards to max out?
It is strange to see that even despite the drive to higher prices this week,
4hr momentum is still showing a very well established divergence to the downside.
I am sticking with my assessment that we are in very dangerous territory in this market.
The intense burning optimism on display here is simply outrageous!
The rally does not stand up to even the most rudimentary in passing questioning.
But that is the situation we are in.
Fantasy land.
When it comes to the character of a ‘B’ wave,
we are actually really on point right now.
Optimism is usually far higher at the end of wave ‘B’ than at the high of the previous rally.
That is the norm,
so the current UBER optimistic trade is par for the course really,
even if I did not think we would get this far!
Tomorrow;
We have endured another week of punishment in the bear camp.
I will wait for the bell tomorrow to see of we are at least thrown a bone to the downside!
May the carnage begin!
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
We got a larger rally today than expected in wave ‘iv’.
but the action does still look corrective to the upside so far.
I am still allowing for a drop into the lower trend line in wave ‘v’ to complete wave (c) now,
but that will have to come in strong tomorrow to stick with this idea.
The alternate count now shows wave [iv] complete at the recent low.
The low at 1689 did meet the minimum target for wave (c),
so there is a chance that todays rally is actually a developing wave (i) of [v].
Tomorrow;
watch for wave ‘v’ to drop back below 1689 again.
A break of 1745 again will trigger the alternate count and signal that wave [iv] is already done.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
The oil price did not follow through to the downside today as I though it might.
Instead we got a labored and corrective sideways trade.
I have labelled the action as a possible series of 1,2 waves to the downside.
this is a pretty aggressive bearish count though,
and it does suggest a further drop is imminent in wave ‘iii’ of (iii).
The key level now lies that the low of wave (i) at 35.88 cash.
A break of that level will signal wave (iii) is underway.
And wave (iii) should retrace much of the advance off the 31.00 lows of the previous rally.
Tomorrow;
38.18 must hold.
Watch for wave ‘iii’ of (iii) to carry lower and break below the left shoulder highs at 34.80.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The action today was flat with a very slight downside bias.
there is not much to go on here apart from the fact that the rally has halted,
at least for now.
The post market trade is currently pushing higher but still holding below the highs of the session.
The rally in the S&P off the lows in March has been marked with an ever present sign of doubt.
That is the continuous bearish divergence in momentum on the 4hr chart.
This measure is not to be laughed at,
especially at this time frame.
Because every major move shows up in the momentum first.
And now is no different.
Tomorrow;
I am not holding my breath for any major move tomorrow,
but it sure would be nice to end the week with a sharp move lower.
A break of 3000 again is the initial signal that I am looking for.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
We had a slight move higher today in silver to begin wave (b) of [a].
I am not sure if the move is big enough yet to call wave (b) complete.
Or if it has traced out three waves yet either.
So I am open to another move higher tomorrow to complete wave (b) at a lower high.
A drop back below 17.45 again will signal wave (c) has begun.
Tomorrow;
Price must hold below 18.37 now as wave ‘2’ continues to develop.
Wave (b) should close out and we might get the initial move lower in wave (c) also by the end of tomorrows trade.