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:


Sunday, June 30, 2013

Market Report: Low in for Gold Stocks?


I have been tracking a potential 5 wave decline in Gold stocks to help me also find a low in Gold

Fridays reversal in both the $HUI and Gold was an encouraging sign for the bulls and whilst its only a 1 day move, it has the potential for something much more.

Off the lows we don't yet have a small 5 wave move, but its encouraging to see a decent reversal, every turn starts out with the not many believing the market has turned, but when i can count a market having made a 5 wave completed sequence, i go into DEFCON mode looking for evidence a potential reversal.

The reason i was holding off suggesting to members to buy Gold and Gold stocks was the lack of evidence of a completed 5 wave decline in the $HUI.

But now we might have some evidence to suggest the trend from the Sept 2012 high (530) is over and a strong counter trend rally is under way, one that could possibly take the $HUI back to the $350 area.

Short term we need to see a small 5 wave advance, followed by a small 3 wave pullback, that will offer traders the chance to get long with limited risk.

So rather that "take a stab" at the low, we have a controlled setup that we want to see before we put $$ to work, whilst many others have been completely wrong footed by this decline.

I have been recommitting to members to stay well away from Gold and Gold stock until we have a completed 5 wave decline in place, we now have some evidence to suggest we could have a strong setup for a trade able move.


If you are aware of the component makeup of the HUI, you will be aware then that Barrick Gold is a large component of the $HUI, in fact its number 2 in the weighting of the HUI, so it pays to watch other stocks and their relative Elliott Wave counts.

The monthly chart of ABC suggests wave [3] of a larger wave C is close if not completed, with the evidence shown last week, there is a strong evidence a low could be in place

With a decent bounce expected on the HUI based on its wave count, that should also align nicely with a bounce to around $20-25 on ABX, before new lows would be expected and finally completing long term patterns.

With Gold stocks probably one of the most hated investment vehicles around and a wave structure that looks complete, it makes for a low risk setup for a decent profitable trade, to those that have waited for the conditions to align.

Its times like these, that the if the conditions dictate, we need to rise in the face of fear and buy when not many are interested, i find the most profitable trades are when i go against the majority of the crowd, that's not to say we just fade the crown at any point, we still need a certain number of things to align.

A i write this, those conditions appear to be in place to offer a low risk setup, with minimum risk, the reward could be a substantial trade if it works out the way i suspect it will.

One day does not confirm a reversal, but we have to start somewhere.

Until next time

Have a profitable week ahead

Elliott Wave Analysis of FTSE (Major High in Place)?

The case for a long term major top looks very compelling.

The advance from the March 2009 lows has a 3 wave look and to an Elliottician that's significant as it only suggests a corrective advance.

I strongly suspect the FTSE has indeed put in a major top, the subsequent decline off the 6876 high is impulsive and argues for a trend change.

I suggest traders that are holding stocks in the FTSE use the next bounce to sell into and off load all stocks and investment's, as if a major high is in place, then you may live to regret not talking prudent action.

So if the advance from the 2009 lows is finished, the question Elliotticians are asking themselves is where does it fit in on the macro wave count? Whilst i am not a fan of trading daily or weekly time scales, i suspect what we have seen is a large [B] wave as part of a lager flat pattern.

Wave [A] appears to be a 3 wave flat, [B] i suspect is a simple Zig Zag, which is a 3 wave pattern.

So the piece we are missing is wave [C], which is likely to be a 5 wave decline, back to test the March 2009 lows.

So if the FTSE has indeed put in a major high, I am looking for a price target under 3400.

The idea is invalidated above 6876.

I am watching 2 stocks that are heavily weighted in the FTSE, well in fact they are  the 1st and 2nd holdings according to this data http://en.wikipedia.org/wiki/FTSE_100_Index

The first is Royal Dutch Shell.


It looks like a 5 wave decline, from the same time the FTSE put in its yearly high, so with a 5 wave decline appearing to be locked in place, i am looking for a 3 wave bounce, once any correction is completed we should see more downside.

The other stock is HSBC.


The same idea, a 5 wave decline that appears to have started from the high on the FTSE.

So if we see a 3 wave correction, i suspect it will setup more downside much similar to  RSDA.

 I am sure its obvious what should happen to the FTSE should both HSBA and RSDA follow the script i have shown.

Saturday, June 29, 2013

Elliott Wave Analysis of USDJPY (short term)

One idea i am following is a potential 5 wave advance from 93.79, currently i suspect its on its finals stages, although any decline that holds up above 98.24 will keep the trend looking higher and target towards the psychological target of 100.

So on the open from Sunday, traders can look to buy into weakness with a stop at 98.24, as that is the risk point for continuous upside and completion of this setup.

Take profits on any new high, once wave [v] of the larger wave [v] appears to be in place, between 99.50-100.

Monday, June 24, 2013

Market report: Gold to go to $700 or $3000

That’s the question that Gold traders and investors are asking themselves.
Gold has now reached a climax point that long term traders get to really find out if Gold is still in a bull market or finally in a long term bear market.

No matter how you look at it, Gold has been in a bear market for the past few years, whilst long term you could argue its still in an up trend, I think the decision about the direction of Gold being in a long term bull trend is about to be decided shortly.

In my opinion Gold going to $700 or $3000 will come from this area $1250-1300.

Let’s face it, unless you have been living under a rock or something the fundamental guys have been completely ripped apart in their thesis that printing money equals Gold going higher.

But rather than face the choice of exiting long side positions at a loss they have made the classic trade mistake of adding to positions and doubling down, (trading mistake 101) and then praying that their thesis eventually works out, so much for the fundamentals, then rather admit they got it wrong, they come out with the Gold conspiracy stories about the bank cartels smashing it lower.

I am not suggesting there is not any corruption in the markets, but the fact that we trade price is all we need to know, as no matter if a market goes up or down, the trader/investor that understands this concept can take advantage of the markets.

Even if being short is a hedge against your physical long positions, it’s got to be better than trying to talk a market higher and following a bunch of gold investors that have been caught long and big time loosing $$. 
Patterns will help decide entry and exits points in a market, NOT the fundamentals.

I think it’s about time Gold bulls owned up to the fact they got their thesis wrong.

But I know they won’t ever admit that, as that’s going against any fundamental principle.
The dark side of technical analysis is always wrong? Or is it? 

I hope readers of this article finally see the light and come over to the dark side and use technical analysis for your trading and investing, the fundamentals have no part in my trading ideas and nether should it be in yours.

Up or down it really should not make any difference, as long as you have access to take advantage of price action, making $$ is the basic concept of why we trade.

Getting back to the ideas.

Bull Case

The market needs to make a stand here and the bulls need to step up, or the market is in serious trouble and the long term trend is about to be confirmed as being broken.

I was initially looking for a pullback to around the $1500-1550 area, but that “take down” or whatever it was called, clearly decided that there was something else on the agenda. As I suspected it was in wave 4, as soon as the market broke down under $1550, the 38.2% retracement came into focus around $1450, but the market could not stop there as the selling exacerbated and it now sits at a point where this “supposed” wave 4 needs to stop and reverse.

The ideal target pullback for a 4th wave is a 38.2% retracement of wave 3, so that’s around the $1450, but the fact it’s now hitting the 50% retracement of wave 3, its now at the limits of what I consider of an acceptable 4th wave.

The book says wave 4 should not overlap with the top of wave 1, so technically that could come back to test the 2008 highs around $1040, but I don’t consider the market to be in a 4th wave when it tends to exceeds more than 50% of a 3rd wave. So that area is $1300, which is why this area is important.

A breakdown or even failure to get back above $1400, would suggest the market is in serious trouble and the bull market is dead and targets of sub $1000 towards $700 will be seen over the coming months/years.

So far it’s a 3 wave decline which is ok for now for the bull case, but if this area around $1300 does not hold, then it’s likely to see much much lower and I am looking for well under $1000, so another 40-50% from current levels, if the bear case gets confirmed.

Bear Case

The bear case suggests the market is about to start to accelerate lower in what Elliotticians call a “3rd of 3rd”, so we are unlikely to see a strong break above $1400-1425 and any bounce will be corrective and more downside is expected.

The good point the bears have is price has tried on a few occasions to get above $1425 and failed and whilst its under that area the bears are clearly in control, whilst the market can see small bounces and even potentially back test of $1425, the technical’s are suggesting the trend is strong and likely to move lower.

The fact that we have not seen a strong reversal is not a good sign for the bulls.

Both ideas really suggest a bounce from the current levels as it appears short term there is a triangle, which I suspect it’s a 4th wave of either idea, so the next bounce will confirm which idea long term traders need to be following.

I will say no matter what your bias is, price is the final arbiter and traders and investors that fail to respect that will be the ones getting hurt. If they have not been run over already.

As for me, I simply trade what I see, it’s very easy if you remain biased to what price action suggests.

No need for any fundamentals just price and patterns.

Elliott Wave in the right makes sense

Until next time

Take it easy