Good evening to one and all.

The LORD’s blessings to you all tonight.

I think this says it all!

David Rosenberg;

The Case-Shiller 20-city home price index came in weak at -1.3% MoM in August, down back-to-back for the first time since February-March 2012… and the steepest one-month plunge since March 2009! Asset deflation first, consumer disinflation next. Dust off the 2008-09 playbook.

https://twitter.com/bullwavesreal

EURUSD.

EURUSD 1hr.

EURUSD 4hr.

EURUSD daily.

EURUSD is moving back into the pattern again today with a nice spike higher off a corrective start to the session.
The pattern suggests this rally is wave ‘3’ of ‘iii’ of (iii),
in that scenario we should see this rally continue for the rest of the week.

The price has not broken out to a new high above wave (i) yet,
and because of that the alternate count is still a valid option here.
So as this pattern develops I will continue to watch the corrective higher lows within each wave.
Todays low lies at .0.9847.
A break of that level will favor the alternate count again.

Tomorrow;
Watch for wave ‘3’ of ‘iii’ to complete five waves and push out above the wave (i) high at 1.00.
0.9847 must hold.

GBPUSD

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GBPUSD 4hr.

GBPUSD daily.

Cable has also followed the wave pattern in higher today.
This rally is viewed as wave ‘iii’ of (iii) of [c].
And this pattern should continue higher for the rest of the week in wave (iii).
the price is holding just below the wave [a] high tonight,
wave ‘iii’ of (iii) should easily break abvoe that resistance.
And wave (iii) blue should top out above 1.1737 at the previous 4th wave high.
I would like to see this impulsive action continue as wave (iii) develops.

Tomorrow;
Watch for 1.1256 to hold at wave ‘ii’ of (iii).
Wave ‘iii’ should close most of the gap up to 1.1700 before correcting in wave ‘iv’.

USDJPY.

USDJPY 1hr.

USDJPY 4hr.

USDJPY daily.

The action in wave [i] and [ii] is so extreme off the recent top,
that it is difficult to see how the following waves can manage similar size moves to remain in proportion!
But that is what wave [iii] requires here,
a sharp five wave decline towards 142.00 is needed for wave [iii] to be larger than wave [i] when complete.
Todays actoin is a step in that direction,
but there is much more downside needed and the action must remain impulsive to the downside in order to achieve that.

Tomorrow;
Watch for wave (iii) of [iii] to continue lower and break 145.38 in order to signal this pattern is correct.

DOW JONES.

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DOW daily.

The Dow has continued to track higher along that upper trend line today.
The advances get smaller as the days go on,
and now this evening we have reached the 78.6% retracement of wave ‘i’.
This is another milestone for this corrective rally,
and while the main count has not been ruled out by this rally,
I do think we can look closer at the alternate count given the size of the retracement in wave ‘ii’.

I have labelled the alternate count this evening and it shows a flat correction in wave (ii).
Wave ‘a’ is a three wave pattern,
wave ‘b’ is in three waves,
and wave ‘c’ should complete a five wave internal pattern if this count is correct.
This rally in wave (ii) has now retraced above 50% of wave (i).
Again,
this is a good time to top out a corrective rally and begin the next leg down.
We will have to wait and see if that materializes tomorrow.

Tomorrow;
Watch again for signs of a top in wave ‘c’ of ‘ii’ or wave ‘c’ of (ii).
A break of the internal low at 30060 again will signal wave ‘1’ is underway.

GOLD

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GOLD daily.

Gold does have a nice three wave pattern lower in place off the wave ‘i’ high today.
Wave ‘ii’ is now set at 1638.56.
The price did manage to spike higher off the session low,
If this count is correct here,
then wave ‘iii’ of (i) shuould be underway.
A rally back above 1670 again will strengthen the case here.

Todays rally came along with a general run into risk assets again today.
So as you might imagine,
I am a little skeptical when gold, rallies along with the crowd!
especially when gold is supposed to be a safe haven asset.

Tomorrow;
Wave ‘ii’ must hold at 1638.56.
Watch for wave ‘iii’ of (i) to continue higher to break 1700 over the coming days.
A break of 1670 will signal wave ‘iii’ is underway.

CRUDE OIL.

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CRUDE OIL daily.

Crude is flirting with invalidating this wave count for wave (iii) this evening.
The price has risen today,
but the pattern off the low at wave ‘ii’ is a clear three wave move.
So,
unless we see a solid rally tomorrow to break above the wave (i) high at .87.04 again,
then the scales will start to tilt back in favor of a more bearish short term count.
A break of 82.48 again at the wave (ii) low will invalidate this bullish count.

Tomorrow;
watch for wave ‘ii’ to hold at 82.48.
Wave ‘iii’ of (iii) of [c] must push back above 87.00 again to save this bullish count.

S&P 500.

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S&P 500 daily.

The S&P had a positive day today and made a solid move above the 38.% retracement level.
The price has failed to hit the 50% retracement level yet in wave (ii),
but this trend channel is not yet filled here for wave (ii)
so there is a reasonable chance that we will see that happen before wave ‘c’ of (ii) completes.

As with the Dow,
each new advance in this rally has been progressively smaller over the last few days,
a slowing momentum suggests we are close to a top for this pattern also.
But I am willing to allow another day for wave (ii) to top out and maybe we will see a reversal happen later in the week.
If the internal corrective lows begin to break that will favor a topping scenario for wave ‘c’ is already underway.

Tomorrow;
watch for wave ‘b’ to hold at 3630.
Wave ‘c’ should hit that upper trend channel line before topping out the larger pattern.

SILVER.

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SILVER daily.

The short term action is a little confused here in silver tonight.
The low of the session did break the wave ‘i’ high which suggests the rally is over in wave (c) of [ii].
But the decline into the low today is a clear three wave pattern,
suggesting a correction!
and we have a spike higher off the session low,
suggesting a new high is coming in wave (c) of [ii].

You can see my dilemma here!

Tomorrow;
The market is obviously undecided on how to proceed now.
So I will just have to wait until we see how this unfolds.

If the price reverses lower again tomorrow to take out the wave ‘iv’ low again,
that will favor the idea that wave [ii] is complete.

Otherwise,
watch for wave ‘v’ of (c) to break above19.66 to complete wave [ii].