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DOW jones triangle - Get ready for the blow off top??


30 min

4 Hours


My Bias: short in wave (3) red.
Wave Structure: downward impulse wave
Long term wave count: lower in wave (3) red
Important risk events: EUR: n/a. USD: Fed Chair Yellen Testifies, Crude Oil Inventories.

Evening Y'all!

Just when you think You hit a top in EURUSD, the market comes in to teach you a lesson!
And for those who think the markets are simply mechanical devices which act in perfect correlation to each other, just look a GBPUSD today!
Cable acted exactly opposite to what one might expect!

EURUSD triggered the alternate wave count today with that rally.
The ranging price over the last two weeks is viewed as a running flat wave (iv) brown.
This is the best fit wave count given the price action.

The rise off the low of wave (iv) brown has traced out a further five wave structure after todays rally.
So nothing changes as per the short term outlook.
This market is topping out,
and is is prudent to keep looking for signs of the turn down.

So with that in mind;
I am still on the lookout for an elliot wave signal on the 30 minute chart.
That is, five waves down and three waves up.

Both the daily and 4hr chart are showing momentum divergence from extreme highs right now.
So momentum is on the verge of a cyclical downturn.
The wave count is extended in the extreme,
And calls for a major move down.
All the indications are set, the price will follow.

1.1616 is the upper invalidation line for this short term wave count.


30 min

4 Hours


My Bias: short below parity in wave (5).
Wave Structure:  continuing impulsive structure to the downside in wave (5)
Long term wave count: decline in wave (5) blue, below parity
Important risk events: GBP: Average Earnings Index 3m/y, Claimant Count Change, Unemployment Rate. USD: Fed Chair Yellen Testifies, Crude Oil Inventories.

Cable pushed lower today as the short term wave count suggested
The price has so far failed to break the lower trendline, but it is close.
The initial support at 1.2818 is the next target,
A break of this level will shift the focus to the downside for the longer term.

The alternate wave count will not be ruled out until 1.2710 is broken.
although the probability of that alternate count is diminishing by the minute now.

The target for wave 'iii' pink is at 1.2759, shown by the Fib extension of wave 'i' pink.
For the next few days,
Watch for a break of 1.2818,
The high at 1.2927 at wave '2' grey must not be broken.


30 min

4 Hours


My Bias: LONG
Wave Structure: rally in wave [C]
Long term wave count: wave [C] is underway, upside to above 136.00
Important risk events: JPY: n/a. USD: Fed Chair Yellen Testifies, Crude Oil Inventories.

The correction in USDJPY began today as expected.

So far I can see an expanded flat correction, with wave 'c' pink ongoing as I write.
I was expecting a triangle to develop, and that is still not out of the question.

For now we can work on the flat correction idea.
Initial support comes in at 113.68, the high of the previous wave '4' pink triangle.
The low of that wave was at 113.02,
And this forms the lower bound of the target range for wave 'iv' brown.

The price should not drop below 112.47 for this wave count to remain valid.

For tomorrow I will be watching this correction to see how wave 'c' pink develops.


30 min

4 Hours


My Bias: market topping process ongoing
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Long term wave count: Topping in wave (5)
Important risk events: USD: Fed Chair Yellen Testifies, Crude Oil Inventories.

A very interesting thing happened in the DOW today!

The price action opened up another possibility for the final leg of this bull market run.
I have adopted this alternate wave count this evening as I think it explains the recent action more clearly.

The current short term chart shows a developing contracting triangle in wave (iv) grey.
The choppy overlapping action over the last three weeks does seem to fit this wave form.
And more importantly,
This wave structure is leading us to a high probability, low risk long trade as the triangle closes out.
The wave count calls for another three wave rise in wave 'd' pink,
And a further three wave decline in wave 'e' pink to complete.

That is the point where the risk reward ratio will be the most attractive.
Wave (v) grey will be the last all time high we will see in this market for a long time to come.
So this is most definitely a short term play.
ave (v) grey is projected to complete in the range of 21670 and 22000.

For the next few days:
Watch for the completion of waves 'd' and 'e' in pink.
if the market approached 21300 again, it will be time to pay attention.


30 min

4 Hours


My Bias: Long towards 1550
Wave Structure: ZigZag correction to the upside.
Long term wave count: Topping in wave (B) at 1550
Important risk events: USD: Fed Chair Yellen Testifies, Crude Oil Inventories.

GOLD reached the initial resistance at 1217 today,
So far the rise is in three waves,
this need to develop further into a five wave structure to complete a possible wave 'i' brown to the upside.
1229.18 remains the first target to break the downside momentum.

On the 4hr chart the RSI is moments away from a momentum buy signal.
This will happen with an upside cross of the centreline.
For now,
Momentum has diverged in a bullish fashion from the price,
And this divergence is pointing the way for the price action to follow.

for tomorrow,
look for 1208 to hold and a break out of the rising trend channel.
A break of 1229.18 will be the first signal that the price has bottomed.