Elliott Wave Training

Are you looking to learn the Elliott Wave principle? Or maybe you already have some experience and want to find the ways to improve your skills better.

Click on this post for details:

http://wavepatterntraders.blogspot.com/2012/04/elliott-wave-training.html



Monday, January 28, 2013

Market Report: Still Waiting

From last week's report, the markets have not done much, other that chop and around, although they did move a little bit higher. My main wave count is still applicable at this time; I don't see anything at this time to concern me, although should the markets go on a tear to the upside I will obviously have to consider my options, but as it stands I still like the idea of a potential reversal setting up.
Is it time to put on the bear suits? Currently the answer is still a no, although the potential is there, the trend is still up and must be respected until we see a breakdown.
I originally targeted the 1480-1500SPX as an area of interest, and we briefly hit the top end of that range, although the idea is not actually invalid until its above 1551SPX, although personally I wouldn't want to see this above 1530SPX, so we still have some room to spare should the market want to squeeze a bit higher first.


SPX
Larger Image


You can read the rest here: http://www.safehaven.com/article/28566/market-report-still-waiting

Saturday, January 26, 2013

Elliott Wave Analysis of USDJPY, EURJPY, GBPJPY

This latest advance has seen a strong upside move and literally run over anyone that dared short these JPY pairs.

When i look closer i can see an obvious theme with these 3 crosses, although i only provide analysis on 2 of the 3 crosses they all appear to be suggesting the same message




Currently i think that the are pulling back in a small 4th wave, and expecting a bit of early weakness next week but then move higher in a 5th wave

So for the aggressive trader, i think there is a trade for both bull and bear, the bulls will want to look to buy into weakness, as i suspect a 5th wave to come in all 3 pairs, still could be another 200 pips to the upside in all 3 pairs

Once we see a 5 wave advance, then the bulls need to be getting out and taking the $$$, that's when the bears will likely have their chance to push the JPY crosses lower

With some important wave structure at daily level being suggested on USDJPY and EURJPY, the best part of the rally IMO has likely been seen

Now we can see a pullback that will probably be around 300-400 pips shortly, but 1st we want to see these 3 crosses complete a smaller 5 wave advance as shown


Elliott Analysis of GBPUSD

This pair has been working well for us, i noticed many traders on twitter and social media sites still trying to justify that this pair would rally higher, but they failed to notice the link between EURUSD and GBPUSD had broken down

I was quick to notice that, and whilst its a great edge when we have strong correlations, price is still king and you must respect what you see

Currently it still looks like it needs a bounce (under 159 is OK) then a new low, its on that low that i suspect we see a better bounce

I am still targeting the 157-15715 area for the end of wave [iii] or [c], then the next bounce should help us confirm if this pair is bearish as any bounce will be a 4th wave in the trend that started from 16378 and probably target around 15950

We have been using the 159-15950 area as a cluster to sell rallies, and i still think that will be the case until we see a 5 wave decline from 16378


You can clearly see the support area, like most times the markets simply travel from support to resistance, with the market firmly under the 200DMA it remains on a sell below 159, although i do expect the 157-15715 area to see a decent bounce, likely to be back to 15950 area for a suspected wave [iv]


So where does that leave traders on the long term ideas?

Where if GBPUSD actually put in a high and ended the long winded triangle, we would need to see a 5 wave decline, currently its only 3 waves, but it has the potential to become a 5 wave decline

If however it remains a 3 wave decline from 16378 and we saw an aggressive reversal back above 160, then it can suggest a move back above 16378 and target 168 to complete a large WXY correction

So this decline from 16378 is important as depending if its a 3 or 5 wave move will confirm the likely path going forward for the next 6-12 months


Either way i am expecting some great trading in this pair, as long as it moves i can count it, if i can count it members can make $$$

Friday, January 25, 2013

Elliott Wave Analysis of DX (US$)

No matter how i try to label it all seems like some variation of a triangle, although most traders are looking at the obvious triangle as shown in this chart


Now i would tend to agree the obvious pattern appears to be a triangle, however the obvious may not be so obvious

When the market is so one sided, that's a time i get very cautious about following the herd, it seems virtually everyone is looking lower in the US$ and higher in EURUSD

I cant go against that sentiment as patterns and price suggest lower, but there is a way that could fool the majority as its something many will probably not be watching, as the obvious might just be too obvious

Alternative Wave Count

Whilst may are looking lower, it might actually be a B wave triangle and push higher, its something that i am considering as the US$ down, EURUSD up is pretty much embedded into forex traders, yet the biggest surprises usually happen when so many are one sided, such as now.

Although overall its bearish the US$ (DX) we could see many traders wrong footed if the US$ got a surprise bid




Tuesday, January 22, 2013

Time to Put on the Stock Market Bear Suits?

 http://www.marketoracle.co.uk/Article38591.html

In previous reports I have spoke at length about expectations for the US markets to push higher above their respective September 2012 highs.

I have been looking for the DOW and SPX to push higher as we had seen many other European and US markets take out those September 2012 highs, so I felt it was only a matter of time before we saw others play catch up.


Between the last time I wrote and this report we have seen the bears fold and the bearish wave count crumble as I expected it to, but when you count an obvious 3 wave decline as a 5 wave decline you are always going to run into trouble. The sad truth is the “experts of Elliott Wave” do this sort of thing very often and it gives other Elliotticians a bad name so much that other Elliotticians such as me get tarnished under the same banner and it ruins what is still a great trading tool if it’s used in the right hands.

So an update to where I think we are and what I expect going forward. If you have read the last few updates, readers will know that I have remained bullish and called for prices to push higher, I have wanted and indeed expected to see the SPX and DOW exceed those September 2012 highs, with the SPX clearing that target that ticked off 1 of the remaining 2 markets I have been tracking and as of Fridays close the DOW was a 11 points off from the September highs.

So we might see a spike higher in the DOW from IBM results which are due on Tuesday.

SPX



We have now hit my target range, although it can still run a bit higher as I was looking for 1480-1500SPX, based on the DOW needing to see around 13660-13700 we could push a bit higher on Tuesday.

You will note we also have a timing cycle that is also due on the 23rd Jan, so a potential timing high could be setting up this week, although we do have the bulk of earnings out this coming week so things could get very interesting.

I am still working an ending diagonal and if this interpretation is correct then once its finished I suspect we are about to see a strong decline as the market is involved in a topping phase and with the last two markets virtually at their respect targets, it’s now time to be looking for a potential major top in the markets.

Having remained bullish for a number of weeks, I am slowing dusting off the furry bear suit and potentially ready to put it on should we see some strong evidence of a reversal.

With everyone and his/her dog calling for higher this is exactly the sort of sentiment I wanted to see, in fact I would be cautious about looking lower if I never say this sort of sentiment.

We saw it at the 2010 highs, 2011 highs and 2012 highs, so why would we expect any different?

I just got one question to ask? Where were these so called pundits called for 1600 and 1700 on the SPX when the SPX was trading at 1380-1400SPX. All I can recall was the market was going to 1250SPX, or so everyone kept telling me.

Everyone is an expert calling for higher when a market has just made new highs, yet you can count on one hand the number of trader’s looking for a large move to the downside from here.

As it stands I put myself in the bearish camp at these levels, when so many are now on one side of the boat that’s the exact sort of conditions I thrive on and start looking at taking the opposite side to the majority.

I did the same at the 2010, 2011 and 2012 peaks, and it worked out well, I see the same ideas and conditions as I did back then, in fact the conditions I see now are conditions that are reminiscent of a top of a trend. Traders look higher at the highs and lower at the lows, but when I see patterns and potential setups for a reversal, that’s when I look to fade the crowd at the top of trend and at the bottom of a trend.

Many appear to forget that I have been looking for these targets so it’s no surprise that we have arrived, so to suddenly get bearish at the top of suspect trend is what many traders and investors are unable to do.

DOW



I am working the same ideas, as you expect on the DOW, but it’s lacked the extra needed push into the target zone, a little bit higher would give it a better look, so a bit higher next week would be fitting to end this idea after the majority of earnings are out.

The great thing about both the ideas on the SPX and DOW is we have clear guidelines and risk parameters where the ideas are wrong, so we can either start laying into shorts from current levels or a bit higher with risk controlled, or we can simply wait and watch to see if we see some evidence to suggest the market has topped the rally from the March 2009 low.

Either way it won’t take much to find out if we are right or wrong, I will discuss that in more detail with members. So whilst we appear to have a great setup we can always wait for some evidence of a move lower and be safe or as safe as we can and limit risk, after all that’s the most important aspect of trading, to limit your risk as the gains will take care of themselves.

Bull Case

Now it wouldn’t be fair to post only one side of the argument without suggesting what the other side is looking at.

This is the only feasible bullish wave count I can realistically come up with that remains within the rules and has the “right look”.



What you see here is something that I consider a low odds trade, as the ramifications of the next move higher in US stocks will be something that I don’t think many have took on board.

Forget 1600 or even 2000 on the SPX, try 2500SPX straight from here, as the next move is supposed to be a “3rd of 3rd” so a parabolic move to the upside, as the biggest and most strongest part of the move has yet to come.

So a near vertical move that will make the move in AAPL look like a $50 move, that’s how aggressive this wave count is.

I don’t believe you can label it any other way as I don’t see a strong 3rd wave yet and every bull cycle tends to see a strong 3rdwave, that’s how we can decide that it’s a strong impulse wave.

What we have been seeing the past 12 months is a series of waves that are overlapping, that’s the classic signature of an ending diagonal, not in my opinion of a market that is about to go parabolic to the upside.

I have to ask the question: If the market has needed 4 attempts (or is it 5?) of QE to get the market back to just underneath the prior all time highs, what is needed to take it far higher?

We are seeing each QE failing to push the market higher as the effects are weaker each time.

If we see stocks go parabolic and above 2000SPX, does anyone think that they will only go alone?

I strongly doubt that stocks will go it alone, many markets will join in, markets like Oil which probably is going to be at $150-200, Grains will likely go crazy on the upside and the US$ is likely to be crushed as hyper-inflation takes hold.

That is the scenario where I think you see a crazy spike higher in US stock as the bulls are suggesting.

Good luck on that trade, I think stocks will be the least of your worries as food riots will likely be seen as we saw the effects of what happens when markets go up in tandem, commodities join in as well.

So be careful what you wish for and the effects could be more damaging than you can imagine.

Bull or Bear we will know shortly, but as it stands I am happy to look for a reversal here and fade the crown, nothing is 100% but we have our risk parameters and we know where our ideas are wrong.

For $20 a month, come and joins us. With many of our stock ideas setting up I am sure there is a trade for everyone who trades US stocks.


Until next time

Have a profitable week ahead.

Saturday, January 19, 2013

Elliott Wave Analysis of EURUSD (Long Term)

From its interception in 1999, we can clearly see that its pushed higher in a 5 wave advance into the 2008 peak at 160, although the data goes back further than 1999, i suspect its simply calculating the difference if we were using the same currencies today that make up the EURO

But for this post i will simply start at the date the EURO was a valid currency which was 1st Jan 1999

Source: http://en.wikipedia.org/wiki/History_of_the_euro

The obvious pattern is a triangle, and working wave [E], there are still 2 outstanding targets at 13480 and the 138-13830 area where there is a confluence of fibbo resistance

How it gets to those targets is going to be the problem that traders will need to solve, although personally i like the idea of seeing 13480 if 132s can hold

But there is a more bullish idea if 13257 can hold, although holding 132 still can setup for a move higher, its just based on any declines



Long term targets are focused on the 1.10 area

Sunday, January 13, 2013

The Case For a Major High

With the "almost" new high on the SPX we are slowly moving into my much awaited target zone of 1480-1500SPX. I have been tracking a potential ending diagonal on the SPX and with some of the other US markets showing similar patterns, I knew sooner or later the SPX would need to play catch up.

As usual those that forced 3 wave declines as 5 wave moves got run over as the markets have rallied back to test the Sept highs. For me it was a no brainer, the European markets had exceeded those highs some weeks back and one by one markets like the RUT, XLF, and NYSE exceeded those highs, it wasn’t going to be long before the major indexes in the US played "catch up".

The DOW and the COMPQ are still behind their respective 2012 September peaks, so with approx 200 DOW points needed to exceed that Sept 2012 peak, the SPX probably pushes a bit higher towards 1500SPX.

You don’t need to be an Elliottician to notice the bearish looking wedge shape seen in many US markets, just pull up a chart of any of the major markets such as RUT, XLF, NYSE etc to see this shape.


 I have been expecting a new low in the VIX as the SPX pushes to new high, it amazes me how many people simply ignore history and feel deflated, especially bearish traders, the very fact that many have been ran over trying to sell into this current rally from November 2012 only further supports my thesis that you need the majority to be bullish at a market peak looking higher before a substantial reversal can be seen.




Is this chart screaming a buy signal?  Do you really want to buy at the highs knowing what has happened prior to the VIX reaching these levels, or will you succumb to the media hype that is always seen at the top and whenever a market makes new highs.

The media is ALWAYS bullish at the top of a peak, in fact I would be troubled if I never saw bullish sentiment, but just like the prior peaks, it seems many traders and investors fail to look at history and use that information. At the very least the bulls should be cautious as if history is any guide, the prior times the VIX has seen these levels a significant peak has been seen.

I am not one to fight price, but when I see clues such as the VIX as multi-year lows and other markets making multi-year highs, my radar goes into caution mode.

Although I am not convinced a high is in place just yet, just based on the DOW needed to exceeded its Sept 2012 peak it would need a bit higher in some major indexes, which brings me to some other clues I want to share, which could be beneficial to some readers.

Although I understand the negativity towards Elliott wave, but like all skilled professionals, we are not the same; some Elliotticians don’t have some perma bear bias where we are looking for wave 3 to DOW 1000 at every peak, and the end of civilization.

EBAY

I like this idea a lot; it looks like a potential ending diagonal (bearish wedge) and if my analysis is correct it needs to stay under $56.66, although I would like to see a rejection and reversal under the $55 area.




A strong move under $48 would suggest a high in place.

SRCL

Since its IPO it appears to be a 5 wave advance which is important as I suspect its entering into a stage where it’s going to see a substantial correction and one that I think will take it back to the $45-50 area.
If you look closer you can see the bearish wedge shape which suggests a terminal phase that coupled with a 5 wave advance suggests the trend is nearing a termination point.




CVX

I have been monitoring this stock for a while and it’s still not pushed high enough to count it completed, as I would much prefer to see this stock hit a new all time high. If you look closer once again you can see the bearish wedge shape, which we Elliotticians call an ending diagonal.




XOM

Its partner in crime has a similar pattern and what looks like an ending diagonal as well (bearish wedge to non Elliotticians). A new high is needed and a new all time high would setup the stage for a substantial reversal expected to take prices back to the $55 area.




Those are just a few stocks of a list that I am watching and many others have similar topping patterns, which suggests that the major indexes in the US are in my opinion carving out a major top and the rally from March 2009 appears to be nearing a climax. Based on some major stocks, I am seeing broad range of stocks suggesting the same message, not to mention patterns in other indexes such as RUT and XLF.

So bulls do need to pay close attention, although judging from this chart it seems not, and I wonder if the bag holders have finally been found for Wall Street?




Source: http://www.businessinsider.com/historic-equity-fund-inflows-this-week-10-2013-1#ixzz2HhDbfd00

That's a nice way to end the top of a trend.

Until next time

Nouf








Tuesday, January 8, 2013

Elliott Wave Analysis of Copper (HG)

Both these metals appears to move together, so it stands to reason that where one goes the other should follow

Well if you look at the overlay chart you can clearly see that to be the case, so if PA (Palladium) has topped and a major high in place at 719, one would think that HG (copper) would follow, dont you think? based on this overlay chart




Which then brings us to the question of what Copper is doing??

I suspect its in a larger triangle this past few months and potentially wave [E] has topped, if that is the case we should see a strong break lower and look towards the 2.80 area

So traders can look to sell any weak looking bounce against the last swing higher (blue line)


Elliott Wave Analysis of Palladium

With the strong reversal from the 719 area this looks like a potential major top is in place, for Palladium, so traders can look to sell any weak rally, against the last swing higher (blue line) at 719 for an expected move back under 525, that's a huge move that i am expected, but the last 15-16 months appear to be a simple 3 wave bounce, whilst it narrowly missed my target area, the reversal appears to be impulsive looking

Which argues for a major high in place


Tuesday, January 1, 2013

Market Report: Bulls Back in Town?

Firstly I want to wish readers and members a happy New Year for 2013 and look forward to making more successful trades with members, even more than we did in 2012 as I think 2013 is going to start out with a bang, and if my long term ideas plan out the way they have so far, then we are going to be seeing some very large swings in both directions. What you saw this past week or so is nothing, I suspect we will be seeing moves like we saw in 2007-2008.


ES

The past 10 days we have seen crazy swings in both directions, from the flash crash that saw a 50 handle spike down, to Monday's impressive near 40 handle rally.

Regular readers of my work will be aware that I have been looking for a move in the DOW and SPX to exceed their respective September 2012 highs. It's because I have missing pieces of the jigsaw puzzle that I refuse to give up and pin the market having a top in place as some bears have done.

Aside from the fact the decline from the September high into the November low is a 3 wave decline, but I covered that issue in my last article so I won't cover that again in this article.

Now as I pointed out in my last article some markets have made new highs above their September 2012highs, such as the XLF, NYSE, DAX & Value line index etc. But seeing major markets such as the SPX fail to exceed those September highs, has kept me looking for a move in the SPX above 1474.

Read the rest here: http://www.safehaven.com/article/28236/market-report-bulls-back-in-town