Good evening folks.
Time for another look at some interesting charts that have popped up today.
Sentiment extremes again!
Lining up nicely with the dot com crash now!
Current conditions align with FEB 2020 and March 2000!
Never before seen levels of option activity among small traders.
Bullish to the heavens and beyond!
EURUSD.
EURUSD 1hr.
EURUSD 4hr.
EURUSD daily.
EURUSD is lower this evening and the decline is beginning to take on an impulsive look also.
The market has not made a new low yet,
but if wave (iii) down is just beginning as I have shown,
then we should see further declines for the rest of the week
as this market shifts into a new trend to the downside.
Tomorrow;
Wave [i] down is not yet confirmed,
but another drop below 1.1211 will be enough to signal that wave (iii) is underway.
I expect wave (iii) to drop into the next support level at the 1.1000 area.
GBPUSD
GBPUSD 1hr.
GBPUSD 4hr.
GBPUSD daily.
There is a few ways to few the recent action off the high,
last nights wave count is still valid.
But tonight I have switched to show a possible three wave decline into wave [a].
This would suggest a flat correction in wave ‘D’ of the larger triangle pattern.
3 waves down in [a],
3 up in [b],
and then five down to complete wave [c] and wave ‘D’.
Again this is all speculation at this early stage,
but given the size of the decline off the high in (a) was so large,
an equal size decline in wave (c) will,
bring us right down into the centre of the longer term range at about 1.2300.
Tomorrow;
Watch for wave (c) to continue lower.
and 1.2686 must hold.
USDJPY.
USDJPY 1hr.
USDJPY 1hr.
USDJPY daily.
USDJPY is holding firm today without any significant move in either direction.
This lack of action suggests that wave (b) is still in control here.
And the pattern may well develop into a triangle or complex flat now.
The action is way too overlapping to count as the beginning of wave (c) up yet.
Tomorrow;
Watch for wave (b) to continue to to range sideways tomorrow.
If we see a drop back below 106.98 again,
that will rule out the triangle wave (b).
And then wave (c) should begin off those lows.
DOW JONES.
DOW 1hr.
DOW 4hr
DOW daily.
The DOW put in a massive rally early today to complete wave ‘2’ blue.
The price then dumped off the highs falling back another 1000 points into the session lows.
The size of the price action has cemented the idea
that we are now moving at one degree higher than previously suggested.
Todays top did not last long,
and that rapid decline off the high is now viewed as wave (i) of [i],
Which should begin the next leg down in wave ‘3’ blue.
Wave ‘3’ is expected to continue much lower over the next few weeks.
And I suspect that wave ‘3’ will drop back below the previous wave ‘B’ low at 22765 again.
Todays action is seriously unhealthy now,
with the rally occurring on falling volume and extreme bullish sentiment.
In fact on the daily candlestick chart,
todays action is close to completing an evening doji star pattern.
This is one of the most bearish candlestick patterns if I am not mistaken.
Add this to the fact that we are sitting just off a lower high wave (B),
and possibly completing a second wave within a reversal to the downside,
then you get a prefect bearish masterpiece.
This one is fit to hang in the Louvre!
Tomorrow;
Watch for a decline into wave (iii) of [i] of ‘3’ to begin tomorrow.
The high at wave ‘2’ must hold at 26611.
GOLD
GOLD 1hr.
GOLD 4hr.
GOLD daily.
Gold has held above the wave (ii) lows quite well today.
The action today looks corrective to the downside,
and the price did not react much to the insane trade in stocks.
All good signs that gold is actually solidifying now,
and we may well be building a base to rally off.
I do want to see some followthrough to the upside now though,
wave ‘i’ of (iii) should push above 1745 in a five wave pattern.
Tomorrow;
watch for 1704 to hold at wave (ii).
Wave ‘i’ of (iii) needs to break resistance now and shift the market into wave (iii) up.
CRUDE OIL.
CRUDE OIL 1hr.
CRUDE OIL 4hr.
CRUDE OIL daily.
Today rally has really pushed the limits of the short term count now.
The rally off the lows has extended higher than expected,
So,
unless we see a serious move to the downside again tomorrow,
then I may have to start from scratch,
and look for another high to form back above the 40 handle again.
While the action is not favourable to downside right now,
the short term bearish count is still valid.
So a reversal tomorrow will swing the balance of probabilities back in towards the bearish side.
Tomorrow;
I am going to hold out and see what happens tomorrow before judging either way.
Watch for the high today to hold at least.
And for the beginning of an impulsive move lower again.
S&P 500.
S&P 500 1hr
S&P 500 4hr
S&P 500 daily.
The top tick today hit the 78.6% retracement of the previous declines.
The market continues to hold on with both hands to optimistic extremes.
As always with extreme bullish sentiment,
we are hitting these levels at a major lower high off the all time highs in wave (B).
And now a possible wave ‘2’ lower high below wave (B).
You really couldn’t dream up the excesses that people will stretch to when they just can’t help themselves!
But here we are!
If wave ‘3’ down is about to begin,
then we need to see a move to the downside begin immediately.
Tomorrow;
Watch for the highs registered today to hold.
Wave [i] of ‘3’ should push back to the recent lows again in short order.
SILVER.
SILVER 1hr
SILVER 4hr.
SILVER daily.
A similar positive setup exists in silver this evening.
And now we have both metals lining up on the bullish side at the same time.
We still need confirmation of the larger trend up into wave ‘3’ red,
but the action off the recent lows is looking impulsive at the moment,
and we are holding above the lows after a corrective trade today.
Tomorrow;
watch for the lows of wave ‘2’ to continue to hold at 16.95.
Wave (i) must begin to push higher again,
I expect wave (i) to break out above the 18.18 high of wave (b) over the next few sessions.