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Sunday, September 28, 2014

Elliott Wave Analysis of JPM (J.P. Morgan)

I have been monitoring this stock for a while now, the thing that stands out is the remarkable similarities between now and the rally from 2002 - 2007. Its almost like a twin of the prior rally, if thats the case we can expect some fireworks soon as this is now hitting both time and price fibonacci targets.

Lets take a look at the time equation aspect. its overshot the 86 months cycle date, but still inside a small cycle date of a poss 45 months cycle high, whilst price is the arbiter of any analysis its pleasing to see that we so have some potential symmetry in time, as well as price.

Lets look at price. We can also see that we currently have a 3 leg advance from the 2009 lows, price has just hit the measured fibonacci target where [C] would equal [A], thats important as a common target for a Zig Zag correction is where wave C would equal wave A, the next common fibonacci relation should be where wave C = wave A x .618.

If we take a look at a possible wave count, its could be at an interesting junction, if the move from 2007 - 2014 is a repeat of the rally from 2002 - 2007 then we potentially are on the cusp of a reversal.

Lets look back at this idea in a few months.

Saturday, September 27, 2014

Elliott Wave Analysis of Gold (GLD) (Update)

Update to this post http://wavepatterntraders.blogspot.com/2014/09/elliott-wave-of-gold-gld.html

Currently the market appears to be in wave 3 of [5] (alt idea is in wave D of the triangle). A closer look suggests its in a smaller degree 4th wave, so a bit more downside is needed to complete wave 3. My guess is around 115-116, then set up for a rally back to 120 before continuing lower towards its long standing target of 110.

Based on some of the Gold stocks and Gold stock indexes a great buying opportunity is setting up. Sentiment is at its worst, no one is interested in this sector, yet we are are looking forward to getting long the metals and Gold stocks. we like to "buy em when no one wants em".

Contrary to what others think, we simply follow our script and look to get members positioned for the moves, Forget what the perma bears are saying, the trend is likely coming to an end soon, and a great opportunity to buy is at hand for those that can control their emotions and ignore the "noise".

Whilst everyone can fight amongst themselves we at wavepatterntraders.com will be getting members ready for the rally that is going to setup and surprise most traders.

The time to buy is when no one is interested, Elliott Wave is not perfect, but its closest thing i have found to perfection and a great tool that if used in the right hands is a tool we can use to get positioned BEFORE the move.

Interested in getting positioned before the move and making $$$.

Take a trial here: http://www.wavepatterntraders.com/

Sunday, September 21, 2014

Elliott wave Analysis of Russell 2000 (RUT)


Initially i placed a potential peak for wave 3/C at the last swing high [where i marked wave B]. However the decline off the highs still looks corrective, so i can rule out a triangle here, although wave B really counts best as a 5 wave advance. (hence i initially counted it complete at the July 2014 highs ).

If the RUT holds above 1107 then it can still setup for a rally higher for wave [5].

If the high is in then i am looking for weakness under 1107 and target 950 for wave 4.

Elliott Wave Analysis of GDX

Should it be a surprise to you that Gold stocks are puking again?

Well it maybe a surprise to you, but not to us. Members have been fully expecting lower prices for a number of months now.We still think we see more downside to complete wave 5 of [3], so under $20.00 is likely but ideally a move towards. $17.00 - 16.00 is seen.

That's where i think it will offer the bulls a great chance to start to accumulate this stock, so as price moves lower and if you are a bull, embrace the opportunity to buy at great levels.

Once wave [3] is completed i am expecting a move towards 35.00 for wave [4] so the potential for a "2 bagger".

Monday, September 15, 2014

BRK Vs SPX (Where Buffett goes so does the SPX) Update

This is an update to my prior update http://wavepatterntraders.blogspot.com/2014/01/brk-vs-spx-where-buffett-goes-so-does.html

Initially i thought we may have a potential peak in Jan of this year for this stock , thus i was going on the basis of a potential peak for the SPX. However seeing as the SPX has continued to push higher, its inevitable that BRK was going to follow higher. As you can see essentially BRK is the SPX (or vice vera).

However having followed the SPX higher for the last few months i though it would be a good time to review BRK and see if it offers a clue to the direction of the SPX. I can make the case (well for the bullish case anyhow) that its close to ending wave [3] and a potential decline for wave [4] is close by. If the SPX pulls back in wave [4] we should see BRK pull back in sync,I estimate around 110 can be seen,  there are enough gyrations to warrant caution now for the bulls.

Both the SPX and BRK have met a 1.618 fibbo extenion which is a common area for a 3rd wave

Sunday, September 14, 2014

Elliott Wave Analysis of EEM

The advance from the Oct 2011 has been a messy, corrective set of waves and clearly supports a corrective wave structure. There are some cycles that strongly suggest a possible peak.

The difference between the SPX and EEM is astounding, i am working a larger double zig zag, which appears completed. The impulsive decline argues for a potential peak, if any bounce is corrective and holds below the last swing high it will setup for more downside.

Bearish below 45.84.

USDJPY Vs YM (Dow Futures)

The move from Oct 2011 is the most important chart to follow in my opinion, as i am still looking for a 5 wave completed advance in the US markets from the Oct 2011.

Overlaying the USDJPY against the YM futures we can see we have a high correlation, the thing to note is if USDJPY is ending a 5th wave from the Oct 2011 lows then it stands to reason that YM should also be ending a 5 wave move.Thus if both markets are now in a terminal 5th wave we should be very close to completing the cycle from the 2011 lows.

So it seems the more important chart to follow is USDJPY, aka JPY carry trade.

For those that have been in the markets will note that leverage works both ways, and once the leverage component of the markets reverses, nasty things happen.

I want to expand on the last Gold post. lets add Gold to the mix.

It still seem the markets are still linked the USDJPY (aka JPY carry trade). So one could reasonably come to the conclusion that until USDJPY reverses, we are unlikely to see a big reversal in either YM or GC.

Of course its never as easy as it seems, we may see some diveregcnes but there is still a high correlation between YM (US markets) Gold and USDJPY (JPY carry trade).

Elliott Wave Analysis of Gold (GLD)

This is an update to the prior posts (see blog).

Just to show readers that i don't always show the ideas that work out i am updating an idea that never worked out and to hopefully guide readers to the next direction of Gold.

The prior idea has been negated, so the question needs to be asked. Are we now in wave [5]? Or is it still in the wave [4] triangle? I cant say want to see this weakness so quickly, I would have preferred to see a better bounce then setup for a strong decline.

But the market always rules and we need to adjust and follow the market.

I have been targeting $1150 on Gold (17.50 on Silver) for a while, although how it got there was always going to be an issue, we have done really well with the swings on Gold over the last 12-16 months, although the last setup was a failed trade setup.

But rather than cry about it we simply need to adjust the ideas and try to understand where we are on our working map.

I suspect its still in wave D, although if Gold complete pukes under $1220 (approx 117.50-118 on GLD), I will likely concede that this is actually now in wave [5] and on its way to wards 110 which has been a long standing target for a while (Gold under 1150).

Once we see 5 waves from  the 2011 top, its then I will be come "raving" bullish, I have been one of the biggest bears on the planet, but if i see a completed 5 wave pattern from the 2011 highs i will be recommending that members start looking to buy Gold for a larger bounce. its then I will be turning bullish on a weekly time frame.

For now we are watching 118-117.50 for support to see if it buyers support the market, any bounce for wave E will likely fail around 126 before a move lower. A strong break of 117.50 will likely suggest this is already in wave [5].

Elliott Wave Analysis of Palladium


I posted a chart on Stock Twits a few months back suggesting this market was likely in a terminal 5th wave and around 900 could seen.We have since hit that target, although there have have been a couple of time I actually did think wave 5 was completed.

However in light of the recent decline it could now have a peak in place. What i am looking for is a 5 wave decline from the yearly highs, that would offer evidence to suggest a peak was likely in place. Any bounce should stay below $865 then continue lower to complete a 5 wave decline, any bounce thereafter in 3 waves will offer a setup to sell again.

This has the potential to see a strong decline now.

Sunday, September 7, 2014

Elliott Wave Analysis of Gold (GLD)

This is an update to this post:  http://wavepatterntraders.blogspot.com/2014/08/elliott-wave-analysis-of-gold-gld.html

The decline still suggests the move from 129,51 is in 3 waves, furthermore if you look closely we can see a potential "wedge". Elliott wave calls this pattern an ending diagonal.

What is needed now is a strong break above 123 to suggest a low. So conservative traders can wait for a strong break above 123 (1280 on Gold) before getting long, then stick a stop under the last swing low. Aggressive traders can look to buy (its got risk) stick a stop at 119.59.

I still like this setup, it seems no matter where i go many traders are bearish, it reminds me of the low into 119.43, bearish traders were caught offside back then and i think they could be caught off side now.

As always, it comes with risk, but the risk is small now compared to the upside potential.

Edit: This idea has been negated, so as traders we simply need to respect the breakdown and adapt, it offered a limited risk setup, but when you are wrong you are simply wrong.

New ideas have been posted at www.wavepatterntraders.com

Elliott Wave Analysis of the SOX

Like many US markets the SOX appears to be in a 5 wave impulse move from the Aug 2014 lows. Some US markets could do with a minor move higher, so i suspect the SOX will see a bit more upside towards the highs made in Jul 2014 and target around 655, but it should see above those July highs.

As i suspect its ending a 5 wave, readers can start to look for ways to sell the SOX, one such way is to buy the share SSG, this is the inverse ETF, so as the SOX moves lower SSG moves higher (although options could also be a decent play as well).

My guess is SSG could see towards 11.20-30 if the SOX moves above the Jul 2014 highs, This looks a great opportunity to look to sell SOX (ie buy SSG).

Saturday, September 6, 2014

Fun Facts About History

For those that refuse or shall i say dont believe we are in a bubble i would like to bring your attention to some interesting facts. Whilst this facts alone are not sell triggers i do find it ignorant of others that fail to use history as a guide.

Both time and price "screaming" a warning for those that are interested in understanding history.

The last prior crash to the 2000 high was the 1987 crash, if we take a measurement from the 1987 lows until the 2000 top and add the distance to the low of the 2009, we get a nice target that has just been hit at 2005SPX,that took a total of around 13 years, the current move is into its 6th year.

Around the beginning of 1995 it starts to move higher but the ascent is much steeper. If we take the angle and add it to the 2009 lows we can see the angle is virtually the same as the current rate of ascent.

Time wise the move from 1995 - 2000 took 63 months The move from 2002 - 2007 took 60 months, the advance from the March 2009 lows is past both those time advances (currently on month 66), so if the prior advances lead to a crash, why would this time be any different?

I remember both the 2000 and 2007 peak, good news was abundant back then just as it is now. If anything the angle is far worse than the 2000 and 2007 top.

Its never a bubble until after the fact, just ask stock traders at the 1987, 2000 or 2007 tops or what about Oil traders in 2008 or the Gold and Silver traders in 2011.

If seems no matter how many bubbles we get, traders have amnesia, greed does bizarre things to peoples memory.

So if it was a bubble in 2000 and 2007, why is it not a bubble now?.