S&P 500, Thursday, June 21, 2012

Hi Traders,

Before getting into our usual analysis, let me answer to one of your questions.

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I keep being asked about organising training seminars and webinars about my way to use Elliott Waves in everyday trading (and more). This what I do

TRADING SEMINARS

I organise large trading seminars (2.5 days - 5+5+3 hours) on a quarterly base in

• Brisbane,
• Gold Coast,
• Sydney,
• Melbourne,
• Adelaide and
• Perth.

I will take you to a practical way to trade through

• a new way to master Elliott Waves and Entry Points.
• a simple system to recognise Reversal Candlesticks and calculate Fibonacci Targets.
• the right combination of Psycology of Trading
• and Money Management.
• A lot more.

This includes a lot of practical trading on a demo account and, when possible, on a live account.

TRADING WEBINARS

I'm also organising monthly webinars around the same topics. It can be on a one-to-one or on a collective base (up to 5 people).

Anyone interested please contact me at the numbers below.

Cheers. Mario. Organiser.
W: 02 800 34 618
M: 0405 233 578
E: info@fxtutors.com.au
Skype ID: mariodconti

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ANALYSIS: S&P 500 started "The rally of the last leg up".

In the weekly chart below the S&P 500 completed wave 5.4 (out of 5 waves) and just started wave 5.5, which is the very last 5th wave up within the 5th wave of major grade. In few words: it's fifth of the fifth.

The 161.8% target calculated upon the range of wave 5.1 should take the index in the vicinity of 1,420, generating a double top as the last one topped at 1,418.

Only in the remote case of the Federal Reserve implementing a substantial QE3  there would be an extension of the wave 5.5 that would push the index to level 1,643. But this seems to be quite unlikely at this stage.

This is comfirmed by the daily chart below: see waves 5.5.1 and 5.5.2. Wave  5.5.3 in blue was able to breakout the channel and should be able to reach a minimum target of 1,387.

The 4hour chart below confirms this hypothesis: wave 4 touched the magenta channel. it's supposed bounce back and generate a rally to form wave 5. This would actually complete wave 5.5.3 of the daily chart (above)

Finally, see the 1hour chart below with wave 4 performing a 3-X-3 and touching the lower boundary of the channel. Unless a last minute surprise, it's supposed to rally from now on.

Note: the volatility around wave X was caused by Ben Bernanke announcing another round of  "Operation Twist" by $267 billion. The market mistakenly thought that the FED was injecting more liquidity. 

Instead, it will sell that amount of short-term securities to buy longer-term ones to keep long-term borrowing costs down. The program, which was due to expire this month, will now run through the end of the year.

That announcements caused a roller coaster of the market for about 3 hours.

EURUSD, Monday, June 18, 2012

Euro: R.I.P. 2002-2012.


This could be the commemorative epitaph on the Euro tombstone as Greece's  could push the debt-ridden country out of the European single currency, rocking the Euro to its core and sowing turmoil in global financial markets.

But the Euro is a big animal. As of February 2012^[update], with more than €890 billion in circulation, the Euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the US dollar.

Meanwhile, the Technical Analysis seems to confirm that we might be at a reversal point, although anything can happen at this stage.



SITUATION

Check the monthly chart below. If the timing is right, we are completing the 131st month out of 144. This means that the "Euro Saga" might take till the end of July 2013 before coming to a solution. (or an end).

 
The new wave down might be a 5-X-5 (5-3-5 for the Ellott purists). Based on the Fibonacci Expansion calculation, the next target could be 1.1058 usd (100%).

 
Furthermore, if it performs a 5-3-9 it could go as far as 0.96 usd (expansion to 161.8%), considering that the historical low was around 0.8234 in Oct 2000 (Metatrader).

The very last green candlestick retraced exactly 38.2% of the long red one which could be a sign of weakness.

NOTE: this is dangerous stage as it's too early to ascertain the type of Elliott wave is unfolding. It could be a wave X up, signalling the start of a new downtrend or a wave 1 up which starts a new uptrend.

So please check carefully your entry point as there could be some creazy volatility.

The weekly chart below is the most interesting. It shows 2 Flag formations with a Gann Throw Over (see triangles) which are usually followed by panic downtrends.

 

Note that wave 5 retraced only 38.2% of the last downtrend and this is a sign of weakness. This level also coincides with an historical low which is acting now as a resistance.

 

The magenta channel was touched 5 times and it's now expected to breakout.

The top of the last wave X also coincide with the historical Supp/Res and the 38.2% retracement of the last downtrend.

 

The daily chart below which shows the completion of 3 waves down and 3 up (wave 1-2-X). The latter stopped right on the resistance level. This should be followed by some 5 or 9 waves down.

Further confirmations come from the 4hour chart below that shows a bearish Shooting Start a the end of the last wave up.

 

The 1hour chart below shows the completion of the very last 9 waves up and a reversal candlestick named Dark Cloud Cover. It looks a valid Turning Point. A channel breakout on the downside would confirm this hypotesis.

SPI200 (AU) vs US indices, Friday June 15, 2012

From positive to negative correlation?

Hi Traders,

Hard to believe for some of us but it looks that the correlation between the Aussie SPI200 and the US indices went from positive to negative.

To make it short, the S&P500 and DJ30 show the genuine will to complete the last  Elliott wave up whilst the SPI200 in Australia is set to reach a new low at 3700 (as a minimum target).

See the weekly chart of the S&P500 below where this index is set to complete the (very last) 5th wave up within the 5th wave of major grade.

And so does the DJ30 in the weekly chart below. This index too is set to complete the (very last) 5th wave up within the 5th wave of major grade

Instead, what happened to the SPI200 weekly below? It seems to be heading down to 3700 (as a minimum target)

See also the monthly chart of the SPI200 below for further confirmation of the target. Furthermore, this could take the Aussie index to the levels of 2001 and even below.

Wednesday, May 23, 2012

Hi Traders,

I couldn't wait to tell you that we just created a new MeetUp Group in Sydney about Option Trading.
Please click on "Sydney Option Traders"

Cheers. Mario

AUDUSD, Tuesday May 22, 2012

Hi Traders,

As predicted, the AUDUSD stopped  the downtrend at 0.98 USD as displayed in the monthly chart below. Theoretically, given the new temporary USD weakness against all currencies, we could see the Aussie very last rally to 1.0220-1.0450 and maybe to 1.0760 before starting the big downrend.

If this happens,it would complete "every wave 5" of major, medium and minor grade. See the 4 waves in white at the top right end of the chart.

As a confirmation we have the channel being touched 4 times, so we expect a small rally followed by a breakout to the downside

In the weekly chart below there's a bullish reversal candlestick formation called "the three crows" confirmed by the chart touching the channel at level 0.98 USD which is also a 61.8% retracement down of the last rally. From here we should start the very last wave 5 up.

The daily chart below shows the "engulfing" reversal candlestick and this confirms the level 1.0220 as possible tartget. The last wave down (C) was performed in 5 waves and should be finished.

Finally, the 4hour chart below shows the new trend direction and the possible tartget at 1.0220 (red line)



WTI OIL,Tuesday May 22, 2012

Hi Traders,

It's actually Monday night: I've been asked to check the WTI OIL and I found the task a bit hard.

After taking a bit dive to $35.50 from $147.50 in 2008, the commodity is sitting now at $92 which is exacly 50%  of that range.

As you can see by the weekly chart below the WTI performed 3 waves up, reaching $115 (wave 3). Now the question is: why 3 waves only and not 5? A plausible explanation could be that it's now unfolding "major retracement wave 4" (out 5 waves up).

In its simplest espression, "major retracement wave 4" is a big zig-zag made of 3 to 5 retracement waves. The OIL so far performed 2 of those retracement waves and now it's trying to complete wave 3 down.

On its way down, it stopped on the most important support. Hence, it might bounce back for a while (rally) before resuming the downtrend and breakout the channel on the downside.

If this happens, the target could be $97-$98.5. Then down again to $80. Also, the channel was touched 4 times and this prelude to a bounce back (rally) usually followed by a breakout on the downside.

This could be confirmed by the 3 red candles down that usually indicate a bullish reversal formation named "the ladder bottom".

The daily chart below confirms the wave count (1-2-3 in red). There might a attempt to reach a low around $91.67 as the last bit of the wave is still missing.

This is confirmed by the 4hour chart below which shows 8 waves out of 9, The 9th should be the last leg down and it usually shows a reversal candlestick (which is not there yet). The channel was touched 4 times and this is the prelude to a breakout.

The 1 hour chart below show the last le down missing (wave 5). It also dispays 4 contact point in the channel. hence there could be a breakout soon.

Note the last orange numbers 1-2-3 in the 15min chart below where the last wave 3 is still missing at level $91.67 or lower. That could be our reversal point.

GBPUSD, Monday, May 21, 2012

Hi Traders,

Dealing with GBPUSD has never been an easy task as this currency is heavily traded by the smartest operators in the world, Bank of England included.

The Pounds dived to almost 1.35USD in Jan 2011 from over 2.11USD in Nov 2007. It barely recovered 50% of that loss (1.70USD)

Since then, it performed an oscillation around the 1.58USD fulcrum. We are still there now, in May 2012.

This time, given the temporary weakness of USD against GBP, Gold, WTI Oil, Euro and Aussie, there might be a chance for the last rally.


SITUATION

See the 4 sideways waves in the monthly chart below. Hence there could be the chance for a short rally of 5 waves up, whereas wave 1 and 2 (in turquoise) have already occured.

The currency touched 4 times the channel in the weekly chart below and it's supposed to breakout on the upside, unless it follows through the support at 1.5770 USD. 

This is confirmed by the daily chart below which shows a reversal candlestick (Hammer) right across the 50% support.  

The "Hammer" of the daily chart above is confirmed by the "Kicking"reversal pattern of the 4hour chart below. Also, note the completion of the Elliott pattern 5-X-3-X-5 (called 5-3-5 by Elliott) that formed wave 2.

The 1hour chart below shows the breakout of the channel on the upside and the targets of 1.5930 USD and maybe 1.6050 USD  

 Surprisingly, the 15 min chart below shows that the pair could move slightly down before starting the rally

 This is confirmed by the 5min chart below in which the Pound didn't reach the support at 1.5860- 1.58040 USD yet.

USDJPY, Monday May 14, 2012

Hi Traders,

Sorry for disappearing for 2 weeks but I have been pretty busy.

Here is my analysis of the USDJPY. There's in incoming setup you don't want to miss out. But ... don't rush: you're plenty of time.

----------------------

In the Monthly chart below the USDJPY completed a 5-3-9 (according to my wave Elliott wave connotation). This means that it's now reversing up to a possible tartget of 94.000 and 98.500

This is confirmed by an engulfing pattern - at the very bottom right - followed by a new little uptrend marked 1 and 2 - in white.

It's hard to figure out the extension of this uptrend: it could be a 1-2-3 up (also named a retracement Xwave up) or even a 1-2-3-4-5 up (making this the very start of a new trend up).

So far we assume the first hypothesis for good, (only 1-2-3 up) given that this is all part of a huge down trend started in 1949. Hence, we expect only an Xwave up. In the best case scenario this could run up to 101.00.

In the worst case scenario, the downtrend will resume at 94.00.

The weekly chart below shows that the little 1-2 of the monthly chart is actually 1-2-3-4 within a channel (in turquoise).

Hence we expect the 5th wave up and then a little reverse down.

 This is confirmed by the daily chart below which also shows that:

• both retracement waves (wave 2 and wave 4 in turquoise) are structured in seven waves,
• wave 4 is not completed. The little wave 7 down (in red) is still missing,
• with the completion of wave 7 the channel will be touched 4 times,
• we're hoping for the chart to bounce back as soon as it touches the channel.

The 4hour chart  below  shows that the wave 6 is actually a retracement X-wave (only 1-2-3 up).

We expect a 3 wave down or a 5 wave down. These waves will be very short waves.

Note the stochastic in negative divergence signalling the incumbent - very last - downtrend.

 There's a surprise in the 1hour chart below:  the very last leg up of  wave 5 is missing.

Therefore, the X-wave of the 4hour chart is not completed yet.

It will probably unfold to the upside, touch level 80.200 and maybe reach the upper boundary of the small channel.

Then down to complete wave 7 of the daily chart. 

All the above confirmed by the 30min chart  below. See the chart touching the channel only 3 times (out of 4). See also the completion of only 4 waves up (in turquoise) out of 5.

Conclusion:

The USDJPY will rally a bit to complete the 5th wave in the 4 hour chart and then down to complete wave 7 of the daily chart. That will be your first entry point for our long position, provided that there will be a reversal candlestick

No reversal candlestick? No trade

EURUSD, Monday April 30, 2012

Hi Traders,

The Euro could be on the verge of a major rally.
Last week close: 1.32517.
Close targets: 1.34275 and 1.38450.
Entry: wait for a minor pulback in the 1hour-30min chart.
This could happen at the opening on Monday.

SITUATION

The monthly chart below shows the completion of 4 major waves up (see the numbers in turquoise). We also completed 3 (of 4) cycles of 3.5 years in January 2012.

Besides, wave 4 (down)  lasted  about 36-37 weeks.

Furthermore,  the chart also completed wave 1 and wave 2 (in white),  being the latter part of a set of 5 waves developing within the boundaries of the channel in turquoise.

It might be hard to believe but, if this wave count is really correct, the Euro will start a good run to 1.57500 and 1.70000.

Note: currently, the Euro closed at 1.32517, meaning that it's now sitting over a  the major supp/res (1.32500). Also note that all major supp-res appear to be set every 1250 pips.

 

The weekly chart below touched the torquoise channel 4 times and it's now close to the upper boundary of the  channel, heading for a breakout.

The immediate target is the DiNapoli Confluence (K) at 1.38450. Note wave 1 and 2 (in white).

Note the green line in the daily chart below. It belongs to the channel of the weekly chart above. The Euro must breakout both them to be able to reach the confluences (K)  at 1.34275 and 1.38450. 

Finally, note the 6 waves up in the 4hour chart. This is a wave count that I use when it's hard to label waves. Typically, this is a set  of  9 or even 13 waves up.

There could be a gap at the opening.   

  

Dow Jones 30, Sunday 22, 2012

Hi Traders,


It seems that the game is over with DJ30. There's only one way: down.
This could be one of the rare chances to jump on a long downtrend from the beginning.

Now: 12,985.5
Targets: 12,220 - 11.842 - 11,175 - 10,333 - 10,000 - 9,580
Fib nodes: 10,633 (38.2%) - 9,850 (50%)

Entry point: at the opening


SITUATION

The weekly chart below shows the completion of 5 waves up (light blue). Note the reversal candlestick (tweezer top) in the blue rectangle.

The DJ30 in the daily chart below showcases the last major wave up with a triple top at the very end (around 13,225). It also started the downtrend with wave 1 and 2 of a minor grade (in red). Note the first target a 12,220 (support).

The 4hour chart below confirms the triple top, plus the retracement waves 1 and 2 (in orange).

The 1hour chart below confirms tha wave 5 up (in turquoise) unfolded in 5 minor waves. Note the reversal evening doji star at the top of wave 5.  

 

In the 15min chart below shows the evidence that wave 2 unfolded in 5 waves up. The DJ30 is now sitting on the lower end of the channel, waiting for the breakout.