Sunday, 3 March 2013

AUDUSD, Sunday March 3, 2013

Hi Traders,

The Aussie Dollar that set a low at 1.018 could stage a very limited rally before finally heading South and start a new major downtrend.

SITUATION:

In the monthly chart below the AUDUSD has completed all 3 major waves up typical of a "Giant Two-Step-Pattern" started in April 2001 and ended in July 2011 at 1.1085.

After performing wave 3 up to the top (there are supposed to be only 3 waves), we started 4 retracement waves out of 5 (in magenta) in trading range.

NOTE: see the "breakaway" candlestick around number 4 in magenta , which is a powerful reversal pattern (4 doji candles + a wide red real body).

 
click the chart to enlargs, esc to exit
 

 
See the 4 waves in magenta in the weekly chart below

 
click the chart to enlargs, esc to exit


 
As shown in the daily chart below there should be a little correction upwards to the resistances at 1.0317-1.0336-1.034 followed by a major downtrend.

Note: the above targets could be a good Entry Point for a great short, provided that you wait for the complete development of an a-b-c up (two-step-pattern).


 



Se wave 1 and 2 in grey and the the double bottom in the 4-hour chart below to indicate the start of the new little trend up






Finally, please use the "wave oscillator" plotted in the 1-hour chart - or lower - before entering the new trade.

SHORT RANGE TARGET: to 1.0317-1.0336 or even 1.034.
MEDIUM RANGE TARGET: 0.939 and 0.88.



 
THE WAVE OSCILLATOR

The wave oscillator in the 15-min chart below shows that the new little retracement up is already started.
 
 
 

HOW THE OSCILLATOR WORKS

The red and grey lines swapped positions as soon as the new uptrend started: the red lines - which run inside in case of downtrend - moved outside and the grey lines moved inside, showing a new uptrend.

Friday, 1 March 2013

GOLD, March 1, 2013

Hi Traders,

Are we done with the Gold's retracement wave started in September 2011?

SETUP

As of the weekly chart below, Gold (now at 1582) has almost completed the "a-b-c-d-e" wave that contitutes "wave 4".  If this is true, this should mark the end of the last retracement down before the start of the final major rally made of "impulse wave 5".

NOTE: I want to underline that some major Elliott Wave Theorists disagree with the idea of another leg up, arguing that Gold has already completed all 5 waves and there's only one way: down.


CONCLUSION

Whichever perspective you decide to pursue, Gold should still move down the area around 1540-60 (now at 1582) and then start a rally but:
  • in the first case Gold should initiate a major rally from the area 1555 with a target well above level 2100. 
  • in the second case it should stage a minor rally to 1700 followed by the start of a major downtrend which would be confirmed by the breakout of the support at 1533.

See the "a-b-c-d-e wave" (major wave 4) in the weekly chart below



click the chart to enlarge and "esc" to exit
 
 
 
 
 See the almost completion of "wave e" with the display of 5 waves down in the daily chart below
 
 
 click the chart to enlarge and "esc" to exit
 
 




See that the "fifth of the fifth of the fifth" is not completed yet in the 4-hour chart below (but it's a matter of hours). This should be done by reaching level 1555 or so.
 
TRIGGERS:
  • There's a good chance of a double bottom in the 4-hour and 1-hour chart.
  • Check for the reversal candlestick in the 1-hour chart before entering any trade.
  • make sure that the "wave oscillator" reverses in the 1-hour charts. To do that you should be able to observe:
  • two little spikes (sharp angles) in the upper lines (the red and the grey line) followed by the position swap of the lines meaning that:
  • both grey lines should get inside and both red lines should move outside 

 click the chart to enlarge and "esc" to exit



Thursday, 28 February 2013

AUDUSD, Thursday, February 28, 2013

Hi Traders,

The Aussie Dollar - now at 1.027 - could stage a limited rally before finally heading South by starting a major downtrend.

SITUATION:

The AUD completed all 5 major waves up. Then it started a major downtrend with the completion of wave "a" down of a very minor grade. 

Now, there should be a correction upwards to the resistances at  1.034-1.0365 or even 1.039 - to be labelled wave "b" (of a minor grade) - followed by a major downtrend.

Note: the above targets could be the perfect Entry Point for a great short, provided that you wait for the complete development of 3 waves up (two-step-pattern).

At the top of the two-step-pattern there should be a clear reversal candlestick.

Finally, please use the "wave oscillator" (see below) plotted in the 1-hour chart - or lower - before entering the new trade.

SHORT RANGE TARGET: wave "b" to 1.034-1.0367 or even 1.039.
MEDIUM RANGE TARGET: 0.939 and 0.88.






THE WAVE OSCILLATOR

The wave oscillator in the 4-hour chart below shows that the new little retracement up is already started. 

HOW THE OSCILLATOR WORKS

The red and grey lines swapped positions as soon as the new uptrend started: the red lines - which run inside in case of downtrend -  moved outside and the grey lines moved inside, showing a new uptrend.

This is a confirmation of the new retracement up (wave "b").
Also, note the completion of the last 5 waves down.




Saturday, 16 February 2013

Turning Point of all Stock Indices? Saturday, February 16, 2013

Hi Traders,

Please don't forget that we hold two webinars every Wednesday:
  • one at 7pm (Sydney time)
  • one at 7pm (Perth time)
Back to trading, there are rumors about the stock markets topping and reversing. To read some confirmation let's see a comparison of the major daily charts: DAX30, DJ30, FT100, S&P500 and SPI200.
 
ps: Don't miss the last chart at the bottom

SITUATION

Although waves 1 to 4 somehow coincide in each daily chart, this correlation looks broken afterwards, with only FT100 and SPI200 showing 5 waves (of a minor grade) to the top.
 
This means that:
  • all charts might start a major reversal in the the week 25Feb-1Mar or even the incoming one
  • OR
  • they are actually starting a very minor reversal down (wave 4) followed by a minor double top (wave 5). Only then, the major reversal would take place.
The DAX below shows a little downtrend. Basically, if it bounces back on the channel line, it might form a double top or even reach level 8000 where a major reversal would start.



click on the chart to enlarge and "esc" to exit
 
 
 
See the double top in the FT100  below - which comes usually a week earlier then the other markets. Note the Stochastic in negative divergence although both the awesome osc. and the wave osc. don't give us any go yet.
 
 
 
click on the chart to enlarge and "esc" to exit 
 
 
 
 
 
DJ30 and S&P500 below show a very distressed reversal candlestick formation called "wheezing pattern" at the top, meaning an imminent reversal.
 
Whether this is  going  to be a major reversal or instead a small a-b-c down followed by a double top this is not  clear.
 
At present there seem to be only 3 waves up out of 5. Note the Stochastic in negative divergence although both the awesome osc. and the wave osc. don't give us the go yet.
 
 
 
click on the chart to enlarge and "esc" to exit 
 
 
 
Yet again 3 waves up only - out of 5 - for the S&P 500 below with the wheezing formation which is by definition a very bad sign. Note the Stochastic in negative divergence although both the awesome osc. and the wave osc. don't give us the go for a major reversal yet.
 
 
 
click on the chart to enlarge and "esc" to exit 
 
 
 

Instead,the SPI200 below shows the completion 5 ripples up plus the reach of the expected target at level 5000. Actually, level 5041 is the perfect "50% retracement up" of the major slump occurred in 2007-09.

 
 
click on the chart to enlarge and "esc" to exit
 
 

 
Finally, note the weekly chart of the SPI200 just below. We have some significant coincidences:
  • we reached the same top 3 times
  • the last wave looks a "two step pattern" which is a 3-wave pattern (completed or almost near 5041)
  • Note the TIMING:  if the 18 weeks pattern will be repeated, the reversal should occur the week 25Feb-1Mar or even the incoming one.
 
 
click on the chart to enlarge and "esc" to exit


Thursday, 14 February 2013

EURUSD, Friday, Feb 15, 2013

Hi Traders,

Here some good news first.

  1. We moved back the webinars to 7pm (from 8pm)
  2. From Wednesday 20th, we are going to run 2 webinars each Wednesday:
  • one at 7pm (Sydney time)
  • one at 7pm (Perth time)
This way everyone in Australia, Singapore, Indonesia and around the  same longitude wiil be able to attend our webinars. Hence, the next one is scheduled for Wed, Feb 20, 7 (NOT 8pm).

Back to Trading Markets now.


SITUATION

Markets seem to be reversing quickly - almost every market - and so the EURUSD.

As you can see by the monthly chart below the EURUSD has reached the same top of January 2004 and then it started reversing. 
Now, if this is a "two step pattern" like it seems to be - a three wave pattern up - there is NOT going to be any wave 4 and 5 up.

Hence, this new downtrend could take the pair to some of the below mentioned targets, according to the completion and amplitude of the new 5 waves down, being the first two targets more likely to be reached:

  • 1.230
  • 1.191
  • 1.160
  • 1.121
  • 1.065








Judging by the weekly chart below the two-step-pattern seems to be  completed and the new downtrend has started already. See the reversal candlestick as a confirmation.










The daily chart below shows the nearest target being at 1.33 (blue line) - for those of you who want to take a short downtrade - but also even lower if the area 1.3188-1.3139 is reached. Then there should be a retracement up in three waves.







There are 4 well shaped waves - out of 5 - in the 4-hour chart below. Consequently:
  • you may want to take a quick short to 1.33 or lower
  • you may want to wait for the completion of wave 5 down and then take a long position to get the retracement up.
  • you may wait for the retracement up to be completed and then short EURUSD again .






ENTRY POINT:

The 1-hour chart below shows 4 litlle waves (out of 5). The fifth will be up. Just wait for the fifth wave to be completed before taking a short position. You'll see a reversal candlestick at the top of this new little ripple 5.

There are also three oscillators below:
  • the "wave" oscillator, similar to the Bollinger bands (but it's not). This is going to give you the earliest entry signal. Check this oscillator near the last candle in the 1-Hour chart below.

  • It shows the red lines still running inside and the grey lines still running outside. This is an indication that the downtrend is still on. Again, just wait for the fifth ripple to be completed before taking any short position.

  • EXIT SIGNAL. This oscillator will alert you that you reached the bottom of the big wave in 1-hour chart when the two lower lines (both the lower-red and the lower-grey) perform a sharp angle up. 

  • Note: DON'T enter any new long trade till all four lines swap position (the grey lines getting inside and the red lines moving outside)

  • Also, enter the new long trade ONLY when both grey lines narrow down.
  • The "awesome oscillator" provides a slower but sometimes safer signal.  Just wait for it to get to zero line before getting any position.

  • Finally the "Stochastic Oscillator": Entry only if the the stochastic of the 1-hour chart (or 15min-chart) shows a divergence, never before.













Sunday, 3 February 2013

WTI Oil, Sunday February 3, 2013

Hi Traders

Many stop loss went burst on Friday due to a volatile session. No wonder: Wti Oil is a volture's market by definition. That's to say, we need to pay twice as much attention to identify setups, triggers and entry points.

As you can see in the weekly chart below, the Oil seems to undergo a "two step pattern" which is basically a 1-2-3 up.

Possible SETUP

The chart could get to the area around $99.30-50, then some  zig-zag retracement down (a-b-c-d-e) to the area around $94 followed but a top around $101.8.


click the chart to enlarge, "esc" to exit



There's always some Fibonacci simmetry in these two-step-patterns.

In this case - as in the daily chart below - if we project the 76.4% of major wave 1 (grey, font14) from point 2 (grey, font14), we get level $101.8.

SITUATION
The Oil is now trying to complete wave 3 out of 5.



click the chart to enlarge, "esc" to exit
 
 
 
As you see in the 4h-chart below, minor wave 5 (of wave 3) is almost complete. There should be one more little rally to $99.30-50 before the temporary reversal that starts wave 4.
 
ENTRY POINT
 
Our indicators show that it's almost the moment to get in for a quick long to $99.30-50, provided that your get a nice candlestick reversal in the 5-15 min chart, maybe around $97.30-97.15.
 
  • The "Wave" oscillator (similar to Bolliger bands) warns us that the session on Monday could be slowly downwards during the day (Sydney time)
  • The Awesome Oscillator didn't get to zero yet - therefore wait for it.
  • the Stochastic is not oversold yet
 
 
 click the chart to enlarge, "esc" to exit



In the 1-hour chart below there are 5 nice waves down (a-b-c-d-e) and a Reversal Candle. Still, it may retrace to $97.30-97.15 were the should be another reversal candle.



click the chart to enlarge, "esc" to exit


Thursday, 31 January 2013

Comparing Indices, Thursday January 31, 2013

Hi Traders,

The technique of comparing charts is a useful if things get a bit confused. What is a mistery in one chart maybe clear in another one, especially when it comes to:
  • labelling waves
  • and checking the correlation amongst indices
SITUATION

Each index has almost completed all waves up and the last wave has already made 3 ripples out of 5, as the S&P500 clearly shows.

Consequently, we assume that the other indices with a strong correlation to S&P500 sit in the same situation.

Furthermore, the volatility dropped drammatically in each index after wave 4 and candle's real bodies shrank significantly and so the trading volume.

These are indications to me that the big investors have left already or are leaving now the stock markets.

Furthermore, even if the S&P500 as reached its target at 1,500 it might retrace a bit and re-test it.

The FT100 as well is already on target at 6,300 and might retrace a bit and re-test this top.

Other  indices might still have some little ground to cover. ie: DAX to 8,000, DJ to 14,000 and SPI200 to 5,000.

After this top a contraction of a major grade will take place.

TRADING
Better wait for the major downturn and a good reversal candlestick in the 15min and 1h charts before going short.

DAX30 daily

Starting a retracement Zig-Zag (ripple 4), then maybe rally to the resistance at 8,000.


click the chart below to enlarge and "esc" to exit.




DJ30 daily

Definitevely more volatile then the Dax. That gap after wave 2 looks like an exaustion gap. Starting a retracement Zig-Zag (ripple 4), then maybe rally to the resistance at 14,000.


click the chart below to enlarge and "esc" to exit.



S&P500

The significant difference with the DJ above is that the S&P500 is already on target at 1,500. It might retrace with a zig-zag and test the same resistance again.


click the chart below to enlarge and "esc" to exit. 

 
 
FT100

This was really hard to label. Also, there's no gap after wave 4. The Footsie seems to be already on target: 6,300. It might retrace and re-test this top.



click the chart below to enlarge and "esc" to exit.



SPI200

It might retrace to 4,660 (blue line) and rally to 5,000 (It's about the time!)



click the chart below to enlarge and "esc" to exit

 
 
 





 

Tuesday, 29 January 2013

STOCK INDICES, Tuesday 29, 2013

Hi Traders,


First, just let you know that I will host a free trading webinar and presented by ChaseJonesFX, the stockbroker I recently started co-operating with.

To login to this week’s webinar please follow- http://www.elliottwaves.com.au/webinar/free-trading-webinar or visit www.elliottwaves.com.au

PASSWORD = chasejonesfx

Webinar's Discussion Points: setting up your charts to identify Elliott Waves, Pivot point and Candlesticks trade set ups. The webinar will last 1 hour. Please feel free to ask any questions during the webinar.

Secondly, many thanks to Vikram Singh - one of our active traders and member of Sydney Traders - whom kindly allowed me to use his broadband as mine runs pathetically slow.
 
Following: the situation of some stock indices
 
SITUATION
 
DJ30
 
Elliott Waves
As in the monthly chart below the DJ30 has gone up in 4 waves and it's completend the chart with wave 5, the latter being "the 5th of the 5th" since feb 2009.
 
Fibonacci
As you can see the Fibonacci expansion applied to wave 1&2 and the one applied to wave 3&4 concide around a couple of targets: 14,300 and maybe 15,400.
 
Moreover, let's make the amplitude between 4 (dark blue, font 11) and 1 (light blue, font 9) equal to 100%.
 
Then let's project this distance from point 4  (light blue, font 9) upwards. At level 61.8% we have 14,300 once again. At level 100% we have 15,400.
 
This clusters of Fib-Nodes are names Confluences (K) and are usually likely targets.

click the chart to enlarge, "esc" to exit
 

This clusters of Fib-Nodes are names Confluences (K) and are usually likely targets.

Conclusion

The weekly chart below shows only 3 waves up (top right) out of 5. This means that wave 3 will be soon completed soon, followed by the retracement wave 4 and the last impulse wave up to tartget 14,300 (top red line).

now, if there is no further wave extension the market will complete this upward cycle to 14,300 and maybe 15,400 within few weeks. Then it will retrace down for month.

But, if there is one or more wave extensions - maybe due to FED expansion policy - the market will point North for months.

 
 click the chart to enlarge, "esc" to exit












 
 
 

Sunday, 27 January 2013

EURJPY, Sunday, January 27, 2013

Hi Traders,


First, just let you know that I will host a free trading webinar and presented by ChaseJonesFX, the stockbroker I recently started co-operating with.

To login to this week’s webinar please follow- http://www.elliottwaves.com.au/webinar/free-trading-webinar or visit  www.elliottwaves.com.au

PASSWORD = chasejonesfx 

Webinar's Discussion Points: setting up your charts to identify Elliott Waves, Pivot point and Candlesticks trade set ups. The webinar will last 1 hour. Please feel free to ask any questions during the webinar.

Secondly, many thanks to Vikram Singh - one of our active traders and member of Sydney Traders - with whom I recently discussed some application of the "Awesome Oscillator" to identify safer entry points within the Elliott Waves (see some comments below). 



EURJPY ANALYSIS


To start I'd like to draw a parallel with another competitive devaluation of the YEN in history as it happened during the great depression under the Finance Minister Takahashi Korekiyo.

To bring Japan out of the Great Depression of 1929, he instituted dramatically expansionary monetary and fiscal policy, abandoning the gold standard in December 1931, and running deficits with considerable success before being assassinated in 1936 for his attempt to reduce the military expenditures.

Well, here we go again.

In Feb 2012 the BOJ started an action that brought the YEN almost 20% down against USD and, from July 2012, the YEN lost over 28% against the EUR.

Just bear in mind that this is just the beginning of the sequence of Elliott waves.


SITUATION

As you can see in the Monthly chart below the EURJPY started wave-1-up with some insane volatility. There's no candlestick reversal in sight yet. However, there seem to be a resistance in the area 123.34-124.38.

click the chart to enlarge and "esc" to exit



The weekly chart below shows that wave 3 (out of 5) retraced almost exactly 61.8% of the last downtrend. Level 123.3 is also the 38.2% retracement of the downtrend started in Aug 2008.

This coincidence forms a so called confluence (K) and it's the area where the retracement caused by the new wave 4 could start soon.  



click the chart to enlarge and "esc" to exit




Yet, in the daily chart below there's no Reversal Candlestick in sight. However there are 4 contact points in the channels - see the blue ellipses - meaning that we're almost there and there's the chance of a reversal and a breakout of the channel soon (downwards).



click the chart to enlarge and "esc" to exit





The 4-hour chart below demonstrates that, often, when the "Awesome Oscillator" indulge around zero we have a good buy signal as it happened with wave 2 and wave 4. 









Finally, there seem to be only 4 waves out of five in the 1-hour chart below, meaning that, when the correction (wave 4) is completed, a very last attempt upwards should occur (wave 5). 

No buy signal yet from the "Awesome Oscillator" as the little retracement wave 4 is not completed yet.













Saturday, 19 January 2013

EURUSD, Sunday, January 20, 2012

Hi Traders and Happy 2013,

Before getting into our usual analysis let's see what's on for 2013. I've signed up as agreement with a British Stockbroker (to be revealed soon) to get good trading conditions as well as some other benefits  for our members.


They're also in charge of scheduling/organising our Elliott Waves & Candlesticks Courses, Webinars and Meetups all around Australia. This means that I will  have much more time to run courses, webinars and newsletters. More details very soon. 


Finally, we have a new Trading Meetup: http://www.meetup.com/CairnsTrader.

Please also check our existing Trading Meetups, Facebook and Websites:

Websites, Facebook, Blog and Linkedin: 


http://www.ElliottWaves.com.au
http://www.FXTutors.com.au
http://www.facebook.com/elliott.waves.1
http://au.linkedin.com/in/sydneytraders

Trading Meetups:

http://www.SydneyTraders.com.au
http://www.meetup.com/OptionTrading
http://www.MelbourneTraders.com.au
http://www.BrisbaneTraders.com.au
http://www.PerthTraders.com.au
http://www.AdelaideTraders.com.au
http://www.GoldCoastTraders.com.au
http://www.meetup.com/CairnsTrader



EURUSD - SITUATION


Check the monthly chart below: since the top in July 2007 the EURUSD entered a huge trading range between 1.60 and 1.19 labelled 1-2-3-4.


From the last top at 4, EURUSD performed 5 waves down to 1.2043, followed by the last rally to 1.34. 


The rally in parole looks very much like a two-step-pattern which, at completion, would bring soon a new downtrend.


Basically, if this analysis is correct,  the pair is performing a well known 5-3-5 starting from the last top at 4, with 5 waves down and 3 waves up (the two-step-pattern) likely to be followed by another set of 5 waves down.




click the chart to enlarge and esc to exit




See the two-step-pattern (1-2-3) in the weekly chart below.


NOTE: if there's no further breakout above level 1.34, the downtrend will start earlier (if not immediately) as it happens with double top formations (in the 4-hour chart well below).


Instead, if it goes through level 1.34, it should make a new top within the range 1.3450-1.3558), as per Fibonacci calculations.

Consequently, now - or after this new top - the downtrend should resume. Possible targets: 1.1916, 1.1532 and 1.1244, the latter being my favourite.



click the chart to enlarge and esc to exit




In the daily chart below there's the evidence that the uptrend is finished (double top) or almost finished. Just click and enlarge the chart and check the very last numbers in green (1-2-3-4-5)

Wave 5 - in green - is a bit suspicious. Although it's good enough and it  shows a good reversal candlestick (engulfing pattern) it looks a bit too short, meaning that it might attempt to break up again a bit higher.





click the chart to enlarge and esc to exit






See the double top in the 4-hour chart below but be careful: there could be some minor waves up in case it gets through level 1.34 to form a new top within the range 1.3450-1.3558).




click the chart to enlarge and esc to exit





In the 1-hour chart below see the (theoretical) completion of 5 waves up with the formation of a double top



click the chart to enlarge and esc to exit




CONCLUSION

If there's going to be a major downturn we certainly want to be part of it but it's hard to identify an entry point at this stage till we figure out weather this is a genuine double top.

ENTRY POINT

The attention must now shift to another set of charts: 4-hour, 1 hour, 15-min and 5-min. Reversal Candlesticks showed up in every chart from daily downwards and this is good enough to me to SHORT at 1.3350 although I never enter the market before 5.30pm (Australian Eastern Time).

If the chart goes well above that level, there's the chance that the double top is not genuine

FINALLY

Some might argue that there are not sound economic/financial reasons for such a move down at these stage. Is the USD going to strength or is the EUR weakening? The truth is that we don't really need a reason. We're Elliott Guys.