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Wednesday, July 31, 2013

Silver Vs Gold

The weakness in Silver is a concern for the bulls and in my opinion is suggesting the move to the upside for Gold is more corrective than impulsive, whilst we can make the case for an impulsive move on Gold, we simply cant make the same case due to the weakness shown in Silver.

Currently there are 6 swings, a WXY corrective sequence requires 7 swings, so a move to minor new highs would be fitting for both ideas.

Silver to $20.70-$21, Gold to $1380-1400 would complete a potential corrective bounce.

A rejection at those areas will be a bad sign for the bulls and suggest the move we have seen over the past 4 weeks is simply a corrective bounce in a bear trend from the last 18 months.

The FOMC is to issue a statement on Wednesday, for the bulls to revive any sort of bullish upside idea, the FOMC needs to be more supportive of QE, perhaps even expanding it and the market needs to believe the FOMC is committed to more QE and $$ printing.

Failing that, if the US$ sees more strength i suspect the previous metals setup for a reversal.

Sunday, July 28, 2013

Elliott Wave Analysis of YM (Dow E-Mini Futures)

Update to an idea i posted earlier in the week on Stock Twits see here: http://stocktwits.com/message/14761867

My initial target was the 15200 area, although based of Fridays reaction the odds of wave 4 being in place have shifted considerably to around 40%.

My preferred idea is that this is a trap for the bulls and early next week we see a new marginal low to end wave 4, before creating a trap for the bears and reverse higher in wave 5.

If however the market gaps up and we see a strong move in Europe on Monday, the odds will shift considerably to suggest the wave 4 low is in place and now in wave 5, which should target well above 15600.

The difference between the 2 ideas, is that any decline/pullback should be support by the bulls and setup a strong break higher if wave 4 is actually in place.

So Fridays low holds and the idea in blue will be the working wave count.

My daily and weekly wave counts are reserved for members, however i am looking for a significant top once we have a 5 wave advance finished from the June 24th lows. This latest advance is part of an idea i am working from the March 2009 lows. So its no surprise the market is moving higher.

Saturday, July 27, 2013

Elliott Wave Analysis of NQ

Potentially wave [iv] could be in place and if Monday we see a gap up and go, then i suspect its already in wave [v] and target well above 3100 possible even as high as 3150, but the target for wave [v] will be based on counting 5 waves for wave [v].

The alt idea is it ended a small [b] wave of the larger wave [iv] and reverses on Monday back under 3037 to target 3010-3020 to finish wave [iv], before reverses higher in wave [v] back above 3100.

I would need to see a strong reversal under 2950 before i turn bearish.

Elliott Wave Analysis of GBPJPY

Early this week I posted an idea on Stock Twits see here: http://stocktwits.com/message/14725828

I was looking for a spike higher into the 154 area, the reversal looks text book, its exactly what we should see after a triangle "thrust".

I am targeting the 145 area over the coming weeks, in a 3 wave decline for wave [Y] so i suspect its currently in wave A, and currently in a smaller wave [iii] of wave A

Staying under 152 should keep the trend looking lower. The target is towards 150-149.50 for the end to wave A, before a larger bounce in wave B in 3 waves, then setup for a move lower in wave C of [Y] towards 145.

The alternative idea is that the daily wave count could also be in a larger 4th wave triangle, so we fail to see a break lower under 147 and it gets a lot more choppy, but for now traders can look lower and sell bounces under 152.

Only a strong reversal back above 152.27 would negate to current idea.

Thursday, July 18, 2013

Elliott Wave Analysis of Hang Seng Index (HSI)

A great looking example of Elliott Wave in operation, and appears to need some finishing touches to the upside into the target area.

With a 5 wave decline, i suspect this is correcting the decline and I am working a 3 wave corrective ABC bounce.

Currently in a small 4th wave of wave [c], so we ideally get a pop inside the next 24-48 hours and setup for a  reversal to retrace the advance and target back under 19500.

A strong clue of a reversal is a move back under 21000.

Rather than try and front run a reversal conservative traders can wait for a pop then a reversal from the red lined area.

Or wait for a strong reversal under 2100 before putting on shorts.

The HSI is a good marker for the ASX, here we can see that they tend to follow each other, so if the idea shown above works out, it should suggest the ASX will follow, which is in alignment with my ideas on the ASX .

Tuesday, July 16, 2013

Elliott Wave Analysis of Gold (Priced in AUD$)

Depending on this current bounce will have a dramatic effect on the price of Gold in AUD$.

The current bounce has not impressed me, and it it fails around current levels and pushes back under $1380 i think the bulls are in trouble.


A large ABC decline has ended and about to continue higher, a strong break above the $1500 would be a bullish sign.

The market is currently in a bear market which will eventually see far lower prices, staying below $1450 is a sign that bears own this market and further prices lie ahead as shown.

The bounce is the key issue that both bulls and bears need to be watching, a strong move above $1450 would be a god clue for the bulls.

However, failure to see a move above $1450 is a major problem for the bulls and suggest a 3 wave bounce.

If the advance remains as a 3 wave move it likely part of the bear case.

Does looking at Gold in AUD$ help with Gold priced in US$.

Actually it does, you can see they are very closely linked, but that aside, XAUAUD is a trade on its own merits, as forex brokers offer this market to trade.

Thursday, July 11, 2013

Elliott Wave Analysis of ES (E-mini)

As long as it continues to move higher traders need to respect it

I have been posting updates quite frequently on Stock Twits, check the ideas here: http://stocktwits.com/Wavepatterntraders

But i figured the juncture where we are at, requires a bit more elaboration, so decided to make a post about it

Currently from 1552ES there is a 3 wave bounce and a measured move targets just over 1660ES, which has been hit

Whereas the bearish idea suggests this is only a 3 wave bounce, for a larger correction (Idea 2)

The more bullish idea i have been tracking is Idea 1 and potentially wave 3 could be counted completed and about to start wave 4 to around 1640ES

If we see a corrective decline that fits the profile of a 4th wave (sloppy and corrective decline) then it will argue for Idea 1

There is a very bullish idea as shown by Idea 3, the key to Idea 3 is staying above the red line (1641.90)

If so then this market is going to go crazy on the upside today and see a large move higher

Idea 2 requires to see a strong reversal back under 1620ES, but a decline that looks heavy under 1630ES is a warning for the bulls

Staying above 1635ES suggests more upside and the trend will continue higher and target new all time highs

Bottom line: Staying above 1635-1640ES keeps the trend looking higher, forget the news, forget the bearish sentiment

Only price rules

I have remained bullish this market, due to the trend simply impulsing higher, until the market confirms a bearish setup, higher prices are expected, but the market is at a point that requires some careful monitoring

Sunday, July 7, 2013

Elliott Wave Analysis of ZB (30 YR US Bond)

Staying below 137 suggests the US 30YR bond has much more downside to go, and it appears that its finally topped a 30 yr cycle, although i have been monitoring this for the past couple of years


It seems the pickup to the downside of the past few months mirrors that of a 3rd wave.

I am sure the FED is watching this decline, but unless there some sort of devastating market crash in US stocks to force traders into safety, i think the FED is powerless to do anything about this. I think even that wont be enough, it looks like a secular change has now started and the FED is powerless to stop this move.

Sentiment is dictating price and it seems traders and investors appear to have had enough of US paper.

Will the FED be forced to sit and watch and let the market go into free fall?

Elliott Wave Analysis of RDSA and HSBA

An quick update to this article http://wavepatterntraders.blogspot.com/2013/06/elliott-wave-analysis-of-ftse-major.html

We have what appears as a 3 wave bounce in both these 2 stocks, so both of these stocks will be crucial clues to the FTSE100 next direction.

If we see a strong sell off on Monday and follow through from Fridays decline it will suggest the bounce i was looking for in the FTSE is finished.

I was targeting 6500 in the FTSE, we achieved that on Friday.

If you have access to sell these 2 stocks (via options or spread bet if you live in the UK) it could be a good trade.

Or you could simply look to sell the FTSE under Fridays high (6500 would be the stop).



A reversal back above Fridays high will suggest some other variation of pattern