Evening folks!
The market exploded to the downside today, and I may be one of only a few that are sighing with relief this evening!
At least for the moment the bearish outlook is intact.
And if todays action has taught anything, it is that this market is not invincible and that there are serious problems still lurking.
Without further adieu.
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
EURUSD is still too close the that upper invalidation line at 1.1492 today.
The price has fluctuated around the highs today.
And so far the action off the high looks corrective.
With that in mind I am looking again at the larger alternate count on the daily chart just in case.
I do want to see the declines continue tomorrow in five waves,
and a drop back below 1.1000 again.
This will add confidence to the idea that the top is in for wave ‘2’.
Tomorrow;
watch for wave [i] down to continue.
Wave (i) of [i] should break 1.1240 again before any correction in wave (ii) begins.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
Cable has moved lower today and the structure looks to be in five waves.
This is in line with the idea that we have a top forming in wave ‘C’ now.
And as long as 1.2811 holds,
then I am looking for a long decline in wave ‘D’ to take hold now.
The price has broken the previous fourth wave lows at 1.2617 now.
I have labelled this decline as wave (i) of [a].
Tomorrow;
Watch for wave (i) to complete soon and wave (ii) to create a right side shoulder.
If this count is correct,
then we can expect a more sustained move lower over the coming week in wave (iii) of [a].
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
If this decline off the recent high is wave [i] of ‘C’,
it sure has extended quite deep.
There has not been an answer to this sharp selloff,
and that does raise some questions in my mind.
The first being,
Maybe I am allowing for a larger correction in wave [ii] that will not materialize.
Maybe wave [ii] is already complete as one of those very minor upside moves.
Or,
Maybe wave ‘C’ will be an ending diagonal.
That is what I have shown this evening.
If we do see a more substantial correction higher tomorrow,
I will revert to the previous idea.
Tomorrow;
watch for a correction in wave [ii] to push back towards 107.40 in three waves.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
Now thats more like it sonny boy!
That is the sort of action I have been looking for for some time.
The market has fallen this week even sharper and more vigorously
than the rally which brought us up to the highs.
And that is a good sign in terms of the outlook that I have.
The bearish outlook got a solid vote in its favor today,
but we are not out of the woods by any means yet.
It is hard to know if todays drop is wave [i] green now completing as I have shown,
or if this is only wave (iii) of [i].
I have shown that interpretation as the alternate count,
the inevitable correction off these lows will tell which count fits better.
A shallow correction higher followed by a sharp decline again will favor the alternate count.
Tomorrow;
I suspect we will see some sort of correction higher beginning soon.
If not tomorrow, then early next week.
We are very close to that 24880 level at the wave ‘A’ high.
This level should offer some support.
But a break of that level will bring the market back below the wave ‘A’ high.
And then the next major support lies at 22780 at the wave ‘B’ low.
In general,
this is something we can work with!
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
Gold is jumping around like a 3yr old kid over the last few sessions.
(I know a few things about how 3yr olds jump!)
I can see the possibility that this action is corrective in a possible wave ‘iv’ of (i).
Wave ‘iv’ may be tracing out an expanded flat correction,
where we see an initial three wave decline off wave ‘iii’,
and then a new high and new low after that.
The initial target for wave ‘iv’ to complete is 1720.88.
I will be looking for another bounce tomorrow off that level in wave ‘v’ of (i).
And I would still like wave ‘v’ to continue higher towards that 1760 level to complete.
Tomorrow;
Watch for wave ‘iv’ to complete this correction.
A rally back above 1745 again will signal wave ‘v’ is underway.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Crude is moving lower again today which is adding weight to the idea that we have another top in place for wave (4).
I have labelled this decline as wave (iii) of [i] to the downside.
There is also the chance that we are building a series of 1,2 waves off the high.
That should also lead to an acceleration lower in wave [i] down.
So far the price has only created a three wave decline,
so I want to see a continuation lower over the coming days to create a five wave decline overall.
Then we can start to look for a bearish lower high to develop,
and that should offer an opportunity to the downside.
Tomorrow;
Watch for wave (iii) of [i] to continue lower.
34.75 marks the left side shoulder at wave [iii].
That level should offer support to wave (iii).
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
After a wicked day of selling off the recent euphoric highs,
I can finally exhale and begin to get constructive to the downside again.
In general I am looking for a five wave decline to build off the highs.
And this should complete wave ‘1’ of (C).
Ideally wave ‘1’ will retrace most of the recent rally in wave ‘C’.
but I will have to wait and see on that front.
The speed of the decline today does suggest a third wave is underway.
The cluster of support levels at 2980 is coming up fast now.
This level should offer support to wave [iii].
And maybe even begin the correction in wave [iv] as shown.
I want to see a clear break below that support band to complete wave [i] over the coming days.
Tomorrow;
watch for wave [iii] down to complete soon.
Once we break down below 3000 as wave ‘1’ completes next week,
then 3000 should become resistance to any correction higher in wave ‘2’.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
Silver is taking a hit this evening as wave [c] of ‘2’ takes over the reins!
Wave [c] should continue lower over the coming few sessions,
and complete five waves down overall.
the initial target for wave [c] to bottom out is around the 17.00 handle again.
That will be enough to fill the trend channel and complete wave ‘2’ as shown.
Once wave ‘2’ looks complete,
then I will begin to look higher again into wave ‘3’.
Tomorrow;
Watch for wave (iii) of [c] to drop back into the previous wave [a] low at 17.17.