Elliott Wave Training

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Showing posts with label Elliott Wave. Show all posts
Showing posts with label Elliott Wave. Show all posts

Sunday, December 7, 2014

Elliott Wave Analysis of the SPX

I posted a short term count on StockTwits a few days back see here:

http://stocktwits.com/message/29926681

It never spiked higher as I thought it might, it appears that it could be morphing into a small wedge, we call that an ending diagonal, if that is the case, it can suggest a termination to the rally that start from the October 15th lows. Ideally if I had my way we would see a minor high, then a strong reversal, if a strong gap down under 2060SPX that would support the idea of a potential peak in place.


I am still working the idea that the move that started from the October 2011 lows is potentially coming to an end, that would suggest a significant decline is setting up. A decline that I think will surpass the move we saw in September - October 2014. Already I reading the same sort of comments that I was reading at the Sept highs, I was looking for a significant decline back then.

With the market struggling to break above the upper trend line, it think its a sign suggesting a decline is setting up. In a trending market, 4th waves tend to spike under the lower boundary of the trend channel only to see it move to the upside to finish a 5th and final wave.

So the September-October 2014 decline I think is a larger 4th wave and we are now likely in a 5th wave.

I am targeting the 1800 - 1750SPX area as the initial 1st target




Saturday, December 6, 2014

Elliott Wave Analysis of Gold (GLD) (Update)

A lot has gone on since my last article on GLD see here:

http://wavepatterntraders.blogspot.com/2014/09/elliott-wave-analysis-of-gold-gld-update.html

We found the low to wave 3 and looked for a bounce towards 120 for wave 4, as you can we pretty nailed that target for wave 4, whilst many were bullish at those highs we again turned bearish and started looking for wave 5 towards our 110 target which I have had for a while.

Again we found the low to that move and members were looking to buy at the exact time the world turned really bearish, so far that call has turned out to be correct.

The low so far is 109.51, considering we have been looking for 110 when GLD was at 129, i think its a great example of Elliott Wave used correctly.

Looking ahead we like the setup we have atm, whilst its above 110.90 I am still bullish, there is a strong bullish setup here if the market can hold around 113 - 114.50. A 3 wave pullback from the last swing high is a good sign and will support the idea of a strong rally higher.

Readers can look to buy the pullback against 110.90 stops. If the preferred idea works out, I think it could surprise most traders, just like it surprised most traders by rallying higher when it was at 110 back in November.

Are you ready to jump on the bull bus? It not too late.

Before


After



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Elliott Wave Analysis of Russell (R2K)

The Russell 2000 appears to have decline in a 5 wave decline from the highs at 1191, the subsequent rally appears to be corrective, i think this setup offers the shorts a great low risk entry to sell the market, against 1191 traders can sell the market, the setup has limited risk as we know its simply wrong above 1191.

TWM is an ETF we like, it moves inversely the direction of the Russell 2000, if this idea is correct, readers can look to buy TWM.


Thursday, December 4, 2014

Elliott Wave Analysis of DAX

The move from 9159 appears to be in a 5th wave, a closer look reveals the prior price action is a sideways messy pattern, i strongly suspect its a triangle, I initially thought the pattern has ended at the point where I marked wave b, but its since morphed into a larger triangle.

A spike to new high is all that is needed, although I suspect this will attempt to make a new all time highs.



A spike higher, then a strong reversal back under 9950 is what i am looking for.

Wednesday, December 3, 2014

Elliott Wave Analysis of GDX (update)

This is an update to this idea http://wavepatterntraders.blogspot.com/2014/11/elliott-wave-analysis-of-gdx.html

Currently I think we will likely see a bit lower to complete a small correction from the 18.09 lows, ideally we see buyers step up around 18.75, but a bit lower should complete a corrective decline.

I am looking for the bulls to step up above 18.09, so readers that wish to take long positions can do so buy using 18.09 stops. This is a very aggressive idea, but if its correct we could be on the verge of a strong break out higher in what we call a "3rd of 3rd". That will be a great move for the bulls.

Below 18.09 will negate the current short term idea, but its still valid on a larger time frame as long as it remains above the November 2014 which is at 16.44.

Do you need more updates like this? Come join us, GDX is part of the commodities section, for $15 a month will get you access to road maps just like this.




Sunday, November 30, 2014

Elliott Wave Analysis of EEM (update)

Back on September 14th I wrote a post suggesting there was strong grounds for a decline
you can read that here:

http://wavepatterntraders.blogspot.com/2014/09/elliott-wave-analysis-of-eem.html

So far its declined nicely as I expected it to, the bounce off the Oct 15th lows is very corrective looking, so I still strongly believe we should see more downside from here. once wave 2 is completed, wave 3 should take it back under the Oct 15th lows and target much much lower, initial targets are around the 32.50 area.



A simple way to play this idea is to look to buy the ETF EEV, as EEM moves lower EEV will move higher.


Elliott Wave Analysis of USDCAD (Short term)

Short term patterns suggest USDCAD can see a bit more upside and make new yearly highs.

From 1.1181 Its working a 5 wave impulse wave, furthermore I suspect its ended (or close to ending) wave [iii], so a pullback that holds above 1.1317 should setup for a move higher and target new highs.

Trade idea: Readers can look to buy a pullback around 1.1360-380. stops needs to be placed at 1.1317

Take profits at 1.1470 or above.


Saturday, November 29, 2014

Elliott Wave Analysis of USDJPY

Update to this chart i posted on StockTwits: http://stocktwits.com/message/29564320

Wave [iv] took on a slightly different pattern, but it held nicely above 117.00, I am still looking for a new high towards 119+ to complete what I believe is a 5 wave advance from the Oct 15th lows.

The RSI is showing some heavy divergence, which fits in with the idea of a 5th wave.

The trend from Oct 15th is getting stretched and i suspect its close to a significant reversal, initial targets are back to the 115 area.


Tuesday, November 25, 2014

Elliott Wave Analysis of Visa (V) & MasterCard (MA)

VISA

 The advance from the 2009 lows appears to be in a 5th wave, so is suspect its a terminal wave. It met its objective where wave [5] = [1], just a general look suggests it counts well for a 5 wave move, so that's generally a clear sign of an impulse wave.


A closer look at wave [5] also suggests a 5 wave advance, although wave 5 of [5] could do with a bit more upside to complete its move, a strong break back under 250 would offer evidence that wave [5] is complete.



1st targets are 195 - 180

MASTERCARD

This stock virtually has the same look to Visa, so i strongly suspect when Visa reverses, so will MasterCard, it may see a bit more upside 1st, but a strong break back under 80.00 would be the 1st signs that wave [5] could be completed.

Target is 65 - 60










Elliott Wave Analysis of Walmart (WMT)

The recent strong move suggests Walmart could be approaching a significant top, with sentiment now very bullish, that would align nicely with a terminal 5th wave from a triangle 4th wave. The sideways price action over the last year or so has created what seems to be a triangle, so the thrust to the upside is the expected move, triangles are commonly seen in the 4th wave position of a 5 wave impulse move,

If this idea correct we are likely on the cups of a significant reversal. A strong break back under 80.00 would suggest a possible peak to wave [5].

The 1st target is the $70 - 72 area.



Sunday, November 23, 2014

Elliott Wave Analysis of EURUSD

Do you remember the cheer leading for the EURUSD back in April - May 2014? All I read was EURUSD is going to 150 160, sell the US$ etc .

Back then I was looking for a major peak for EURUSD I posted a couple of charts on Stocktwits.

See here: http://charts.stocktwits.com/production/original_22387342.PNG?1398488058

Sentiment was really bearish for the US$, but the complete opposite pattern was also setting up for the US$ (aka DX). Its not easy looking to fade the majority at major turns, but this is where Elliotticians have a distinct advantage.

Fast forward to today, we now have the same setup for the US$, sentiment has completely reversed against the EURUSD, In May 2014 everyone loved EURUSD, but now everyone hates it.Yet we are actually looking for a major low for EURUSD, we feel there is a high reward and once again we find ourselves looking to fade the crowd, just like we did at the May 2014 highs.

There is a strong reward trade setting up for those that are looking to fade the majority.



A 5 wave advance appears to be close to ending on the DX, so subsequently we see a 5 wave looking decline on EURUSD, we can clearly see a large RSI divergence also setting up for both markets.



If we are correct (we think we are) then expect a larger reversal, a turn that the majority will miss, just like they missed in May 2014.

Target is 132-134, that's going to be a great trade for those on the right side, another way to trade the move is to sell USDCHF, either way we think a larger move lower is setting in for the US$

So the trade will be to sell DX (aka USD) and USDCHF, buy EURUSD and GOLD



Elliott Wave Analysis of GDX

The reversal is no surprise to us, we have been expecting it, what happens from here is the important part.

In my last post  http://wavepatterntraders.blogspot.com/2014/09/elliott-wave-analysis-of-gdx.html

We were still looking for a bit more downside around the 17-16 area, so far the low is on that area, so a great start for our ideas. However, we still don't have the important clue of a 5 wave advance from the November 2014 lows.

Above 18.76 we are targeting more upside, wave [iv] may already be in place, if so we should see a move higher early next week. Another idea is that wave [iv] could take the shape of a triangle, which would suggest a bit more sideways price action, followed for a "thrust" for a 5th wave.

Currently bullish above 18.76.

If we do see a 5 wave advance, the bulls would have strong evidence of an intermediate low, any subsequent pullback would be a setup to buy at a future date.

Below 18.76 negates the idea.

Come join us, you can see our ideas for GDX along with the HUI and GLD, all 3 markets are part of the commodities package.

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Sunday, November 16, 2014

Elliott Wave Analysis of the SPY (SPX)

I decided to get the book out and look at a detailed look at each of the characteristics of a 5 wave impulse wave and see if it fitted well to the move we have seen from the Oct 2011 lows. Its my belief that we are nearing the end to the trend from the Oct 2011 lows and a significant decline is setting up.

I initially thought we had a peak back in Sept 2014, you can read that here: http://wavepatterntraders.blogspot.com/2014/09/brk-vs-spx-where-buffett-goes-so-does.html

However with the last rally I have been forced to adjusted the idea. whilst its was a great move that I forecasted it was not the move I was expecting. I am expecting a larger move than 200 points on the SPX.

Lets take a look at the chart and see if we can cross reference the thoughts at the time to what we have now.



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

1) Wave one is rarely obvious at its inception. When the first wave of a new bull market begins, the fundamental news is almost universally negative. The previous trend is considered still strongly in force. Fundamental analysts continue to revise their earnings estimates lower; the economy probably does not look strong. Sentiment surveys are decidedly bearish, put options are in vogue, and implied volatility in the options market is high. Volume might increase a bit as prices rise, but not by enough to alert many technical analysts.

I think we can all agree, at the time it was very bearish, and the bounce was considered a "dead cat" the bears were expecting much more downside as the next bear market hard begun or so the bears thought. So we can tick the box on that wave.

2)  Wave two corrects wave one, but can never extend beyond the starting point of wave one. Typically, the news is still bad. As prices retest the prior low, bearish sentiment quickly builds, and "the crowd" haughtily reminds all that the bear market is still deeply ensconced. Still, some positive signs appear for those who are looking: volume should be lower during wave two than during wave one, prices usually do not retrace more than 61.8% (see Fibonacci section below) of the wave one gains, and prices should fall in a three wave pattern.

Well wave [2] did correct wave [1] and that would have got many bearish as that's what a 2nd wave does. Volume was lower as well, prices retraced around 61.8% of the prior wave [1]. So we can tick the box on that wave.

3) Wave three is usually the largest and most powerful wave in a trend (although some research suggests that in commodity markets, wave five is the largest). The news is now positive and fundamental analysts start to raise earnings estimates. Prices rise quickly, corrections are short-lived and shallow. Anyone looking to "get in on a pullback" will likely miss the boat. As wave three starts, the news is probably still bearish, and most market players remain negative; but by wave three's midpoint, "the crowd" will often join the new bullish trend. Wave three often extends wave one by a ratio of 1.618:1.

Well we can count a large 3rd wave, the news was getting better and more positive economic reports were seen, even earnings were getting better if you believe the financial bubble media. Hardly any pullbacks so that's a characteristic of a 3rd wave as well. By the mid point many are joining in and "buying the dip" aka BTD or was it BTFD. I cant remember these days, there is a new one as well which is BTFATH. Wave [3] is longer than a 2.618 extension of wave [1]. So we can tick the box on that wave as well. 

4) Wave four is typically clearly corrective. Prices may meander sideways for an extended period, and wave four typically retraces less than 38.2% of wave three (see Fibonacci relationships below). Volume is well below than that of wave three. This is a good place to buy a pull back if you understand the potential ahead for wave 5. Still, fourth waves are often frustrating because of their lack of progress in the larger trend

Wave [4] is clearly a corrective decline, its in 3 waves, so that's the definition of a correction, its not in 5 waves, hence we are seeing a new ATH. In a strong uptrend when a 3rd wave is far more than a 2.618 extension of the 1st wave, we tend to see shallow 4th waves around the 23.6% of the 3rd wave, that's an acceptable 4th wave target. The Oct 2014 low was almost a 23.6% correction of wave [3]. The only negative is there was no alternation between wave [2] and [4], although not a rule it would have been nice to have seen that. So we can tick the box on that was as well.

5) Wave five is the final leg in the direction of the dominant trend. The news is almost universally positive and everyone is bullish. Unfortunately, this is when many average investors finally buy in, right before the top. Volume is often lower in wave five than in wave three, and many momentum indicators start to show divergences (prices reach a new high but the indicators do not reach a new peak). At the end of a major bull market, bears may very well be ridiculed (recall how forecasts for a top in the stock market during 2000 were received).

Well the news is "almost universally positive"  Investors have now bought into the trend (see the last weeks readings )

Survey Results

Sentiment Survey
Results
Week ending 11/12/2014   Data represents what direction members feel the stock market will be in the next 6    months.
 
Bullish 57.9%
up 5.2
Neutral 22.8%
down 9.5
Bearish 19.3%
up 4.3
Generally this is considered to be the reading of the public I believe its a new high since the Oct 2011 lows. so the "public is on board". What can go wrong?

Volume is showing a clear trend moving lower as price moves higher. We have many momentum indicators showing divergences, and the bears are well and truly being ridiculed, if you mention that the market can move lower you are labelled a pariah, i have first hand knowledge of this, i was suggesting (although telling members to expect a strong decline) to people that the market was setting up for a significant decline in Sept 2014, only to be abused. so we certainly have the bears being abused and laughed at. So we can tick the box on that wave as well.

Conclusion

I believe this is a standard text book 5 wave impulse from the Oct 2011 lows and I think the risk for a significant decline is very high. so i strongly suggest anyone that is invested, take appropriate steps to protect yourselves, You saw how fast these markets can unwind, the Sept -  Oct  decline was speeding down before anyone even thought about a correction and fooled many. The next decline may shock many.

Time will tell.




Sunday, November 9, 2014

Market Report: A Major Low in Gold?

It's been a while since I have written an article on Gold, but the recent price action could well be the very clue we have been looking for. I have been very bearish Gold for a number of years/months, month by month the market has slowly moved towards the $1150 target we have been looking for.
You can clearly see its not hearsay, the result speaks for itself, our target was hit this past week, whilst many Gold pundits have been trying to pick a low, we are wavepatterntraders.com stuck to our guns and kept looking lower, one by one the Gold bulls seem to be capitulating, as the market moved towards our long standing target.
We went into this week looking for a low on Gold, with sentiment so bearish it was the perfect setup for us to look for a low and buy those lows, whilst most traders and pundits were bearish we were very bullish and the reversal after a spike lower on Friday was the trigger we want to see to finish off the last few gyrations.
Puking Camel Gold Chart
Even CNBC got in on the act and posted silly charts, such it further supported the case to be looking for a low and fade the crowd, doing what we do best, finding low risk setups to make $$$.
So whilst CNBC was making fun of the Gold bulls, members were busy looking to fade the "puking camel" and buy. So far since posting the "puking camel" the market has rallied, time will tell if this proves to be an important low.
We got the reaction to the upside we wanted to see, we think there is a very strong case that wave A and the decline from the 2011 high is finished, although we are looking for any pullback to remain above last week's low. If so it will offer a get setup for more upside.
Readers now can look to buy any pullback that is in 3 waves and stick stops at last week's low, the risk is minimal now; the reward could surprise many that are anti-gold. If wave B has started, we are then expecting to see well above $1400, possibly $1600 over the next few months. We know we are wrong below last week's low.
Until next time,

Have a profitable week ahead.

Monday, October 27, 2014

Market Report: Has The FTSE Put in a Major Top?

The strong decline on the FTSE over the past few weeks may have come as a surprise to many traders but for us it was expected. It really could not have gone any better for members. I have been warning members for a number of weeks to expect a strong reversal and a crash style move, although we have been preparing for a strong decline; members have also been trading the upside, as before members could trade the downside we needed to see the 6900 area tested.


Before


After

Short term we can count a 5 wave decline from 6904, so that's a positive sign for the bears, currently we are looking for a corrective bounce in 3 waves to end around 6400-6500. Once any corrective bounce and retracement of the prior decline is finished. We are looking for the next leg lower, that move is expected to exceed 6000, if it's as aggressive and bearish as I think it will be, it's going to be a terrific trade and better than the initial decline from 6904. Our risk point at this stage is 6904, which is too large, so we are looking for evidence of the next leg lower.
The key now is the make sure any retracement is in 3 waves, if so then we will be looking to put on shorts and advise members to sell this market, if it's really put in a long term major top we are expecting a serious decline over the next few months and potentially retesting the March 2009 lows again.
As always the long term ideas are subject to revision as a lot can happen between now and a few years out, but as our primary focus is on the short term charts the long term charts usually take care of themselves.
If this style of analysis is the sort of analysis that you are interested in, then I encourage you to check out our site, if you need to know what is likely to happen before it happens then I think our work can help you, no matter if you are an investor or trader.
Until next time,
Have a profitable week ahead

Saturday, October 18, 2014

Elliott Wave Analysis on USD/SGD

A pair that i track closely for clues on the DX momentum, is USD/SGD, although we don't actually follow it regularly over at wavepatterntraders.com, it is a good proxy for the US$ movements.

You can see that its stalled a bit over the last few days, i suspect its a triangle, so once its finished we should see more upside and "thrust" higher towards 1.1283 - 70 to end wave [v]. As USD/SGD moves higher so should the DX and USDCHF.

So by using other closely correlated patterns we can get a strong opinion now on what the US$ should do over the week ahead.




The price structure on both USD/SGD and EURUSD is very corrective looking and supports the idea that once they are both finished the US$ should resume higher. Which fits in with our thesis that as EURUSD moves lower, the DX and USD/CHF move higher.



Sunday, October 12, 2014

Elliott Wave Analysis of Coffee (JO)

Back in April I issued a couple of warnings on StockTwits that a significant pullback was setting up, I was targeting the $32.00 area, which around the 50% retracement of the prior rally

See here: http://stocktwits.com/message/22165570

And here: http://stocktwits.com/message/22388553

As you can see those charts nailed the top and bottom near $32.00, virtually to the tick and that warning was very real. I noticed at the time that  sentiment was very bullish, which is usually the case when a market makes a 5th wave, yet those that understand price action were the ones trying to "get out" as most traders/investors were trying to "get in".

Such is the way with the markets, most are bullish at the top and bearish at the lows.

I am now issuing another warning for those that wish to listen. Sentiment is once again bullish and many are expecting the market to race higher, but i urge some caution here as a suspect this maybe a "B wave trap".

The move from the lows in Jul 2014 appear to have a 3 wave look, further more the measured move target where the 2nd up leg equals the 1st leg sits at around 43. Hence it could be a B wave of a flat pattern.

If the market finds trouble at 43 and we see a strong reversal back under 37.00 I fear traders will again buying a bull trap just as they bought the Apr 2014 highs only to see it crash 50%.

In order to confirm a strong 3rd wave to the upside, the bulls need to see a strong gap up over 44.00 and blast higher, failing that i suspect the bulls maybe disappointed.



A bit of patience here could save you making a big mistake buying the market.

If a 3rd wave to the upside you will have plenty of time to get on board as there will be plenty of upside.


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/