HANG SENG INDEX: END OF THE LINE

This analysis has been further updated on Oct 9, 2017.

Hi Traders,

Dark storm clouds are gathering over the Hang Seng Index (now at 28,324) which just completed the whole set of Elliott Waves up. The HSI could start soon a sharp correction. First target around 26,000.

ELLIOTT WAVES

The monthly chart shows that the HSI started a huge wave 4 at the end of Sept 2004. This wave is usually made of 3 legs (a-b-c). The first two (wave a and wave b) are now fully deployed. Wave c downwards is on the making right now. Unfortunately, it can be a catastrophic correction. 

Note the possible  incoming targets around 26,000.

The weekly chart shows the double top that confirms an imminent reversal. Usually, the incoming wave c is a sharp downtrend made out of 5 waves. 

The daily chart reveals 9 waves up which are equivalent to a regular set of 5 waves up. Ralph Elliott used to label 9 waves wherever the correct labeling was  too hard.

The 4-hour and the 1-hour charts show two exhaustion gaps and the start of the new downtrend.



Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hour chart, click to enlarge

1-hour chart, click to enlarge

ASX 200: END OF THE LINE

Hi Traders,

The SPI 200 (now at 5660) seems to be close to the end of the line and the rats are leaving the sinking boat.

Although a small rebound to 5700-5730 is still possible, the SPI 200 is singing the swan song which could be followed by a deep dive to the major support at 5320-28.

ELLIOTT WAVES 

The daily and 4-hour charts show a huge round formation started on May 1st, 2017. This pattern is usually quite time-symmetrical.

Given that the centre of the round formation is the lowest low at 5592, we have 36 days from the centre to the high on the left, and 37 days from the centre to the high on the right. See the vertical lines. After the same number of days have passed, a new trend should start.

On a much bigger scale, the monthly chart reveals that the SPI 200 performed a huge a-b-c retracement from the low in March 2000.

The weekly chart also shows an a-b-c retracement up. It reveals that the present downtrend actually started around mid-March, 2015 at 6010. In fact, the low at 4643 on Feb 2016 was followed by a retracement rally to 5944 on April 30, 2017.

The latter was the very last top of the SPI 200 and it marked the completion of retracement wave 2. Note that the gap between 6020 and 6102 has never been filled.  

Finally, the faith of the SPI 200 is quite correlated to a possible downtrend of the AUDUSD. The drop of the ASX might be significantly mitigated if Australian Dollar is driven below the 0.70 level by the action of the markets or by the Central Banks (FED or RBA). Conversely, the SPI 200 would sink vertically.




Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hour chart, click to enlarge

GOLD: what's next

Hi Traders,

Gold (now at 1333) topped at 1336.82 and missed my target at 1337.3 by a whisker. After a limited retracement - theoretically, to 1322 or 1312 - it should resume the uptrend to 1532 or 1628.

ELLIOTT WAVES

The monthly chart  suggests that Gold is performing an a-b-c to 1532. The weekly chart display a set of possible targets:

- 1337
- 1433
- 1532 (my favourite)
- 1628.

The 4-hour chart  shows that Gold just started a wave extension. The 1-hour chart displays the targets at 1322 and 1312.




Monthly Chart, click to enlarge

Weekly Chart, click to enlarge

Daily Chart, click to enlarge

4-hour Chart, click to enlarge

1-hour Chart, click to enlarge

IS THE WTI OIL WARMING UP FOR A GOOD RALLY?

Hi Traders,

We might have some interesting weeks ahead as the WTI OIL (now at 45.75) is approaching the targets. 

The OIL is only inches from completing the whole set of waves down, being the theoretical target at 45.59-45.34. If this analysis is correct, we could witness the start of a new rally that could take it to 61.50 (see the weekly chart). 

ELLIOTT WAVES

The weekly chart displays the blue horizontal lines as possible targets. The daily chart shows the likely completion of wave 4 by hitting the target at 45.59-45.34. The 4-hour chart shows the recent low at 45.60 and the a-b-c that shaped wave 4.

NOTE: There might be another small ripple down - which will be visible on the 1-hour chart - before the start of the rally.




Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hour chart. Click to enlarge

1-hour chart. Click to enlarge

OIL flexing the muscles

Hi Traders,

WTI OIL (now at 48.65) is sitting on an important support/resistance. After a small drop to $48, it should move to a much higher ground. It could hit $61 soon and maybe $66-$68. Gann analysis suggests a final target of $75.

ELLIOTT WAVES

The weekly chart shows OIL is staging 3 major waves up. Wave 2 is complete and wave 3 just started.

The daily and 4-hour charts reveal that we just started minor wave 5, maybe to 51.65. The 1-hour chart shows the completion of wave 4 and the start of wave 5.




Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hour chart. Click to enlarge

1-hour chart. Click to enlarge

GOLD to top and reverse ?

Hi Traders,

GOLD (now at 1284.35) topped and reversed. At the moment, it's not clear whether this is a just a retracement to 1251-53 or it's the start of a real downtrend. Many traders remain cautious.

Gold weakness might be due to the recent Chinese ban on overseas investments. If this is the case, Chinese money simply dried up. 

However, as all major stock indices head South, money could be either re-directed to commodities (included Oil, Gold, and crypto-currencies) or simply to the USD and the CHF. If the market picks the first group Gold will rise. Conversely, Gold dives. 



ELLIOTT WAVES

The weekly chart shows that Gold topped around 1300 by completing wave 2. The daily chart shows a nice shooting star which usually is a reliable reversal pattern.

Finally, both the 4-hour and the 1-hour charts display a remarkable reversal candlestick (top right).




Monthly chart. Click to enlarge

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hour chart. Click to enlarge

1-hour chart. Click to enlarge

15-min chart. Click to enlarge

EUR, GBP and AUD: What's Next

Hi Traders,

The USD is flexing the muscles. EURUSD, GBPUSD and AUDUSD just completed an almost identical pattern. As announced in my previous POST, they all topped and reversed and a new downtrend just started.


ELLIOTT WAVES

This is all part of a five waves downtrend started in May 2011 for the Euro, in July 2014 for the Pound and on September 2009 for the Aussie Dollar.

All the pairs above mentioned completed four waves down - out of five - and started the last wave down. Wave four was the last retracement up and led to the last Top & Reverse.

The EURUSD (now at 1.1772) in the daily chart completed a perfect pennant and reversed.The first major target seems to be the area 1.10887-1.08718.

The GPBUSD (now at 1.3035) in the daily chart did the same. The first major target seems to be the area 1.2414-1.2380.

The AUDUSD (now at 0.7928) in the daily chart completed a different pattern but equally topped and reversed. The first major target seems to be around 0.7560.



EURUSD daily chart. Click to enlarge

GBPUSD daily chart. Click to enlarge

AUDUSD daily chart. Click to enlarge

EURUSD AND GBPUSD TO TOP AND REVERSE?

Hi Traders,

The Euro (now at 1.1729 ) and the Pound (now at 1.3139) achieved the targets. They could attempt another minor rally before staging a major top-&-reverse soon.

ELLIOTT WAVES

Check the weekly, daily and the 4-hour charts of both currency pairs: they show that they are on their targets. They also reveal that major wave 4 up is almost complete. 

Once wave four is fully unfolded, there is a very strong chance of a sharp and long downtrend.

NOTE: Both weekly charts show a "throw over", as anticipated in my previous POST.



EURUSD WEEKLY, click to enlarge

GBPUSD WEEKLY, click to enlarge

EURUSD DAILY, click to enlarge

GBPUSD DAILY, click to enlarge

EURUSD 4-HOUR, click to enlarge

GBPUSD 4-HOUR, click to enlarge

WTI OIL: What's Next

Hi Traders,

The WTI Oil (now at 45.75) did exactly as predicted in my previous POST. It has indeed a bleak future. After a small rebound up to 46.50, it should resume the downtrend to the area 40.3-37.6 and even 37.6-35.1 - see this targets in the weekly and daily charts.

ELLIOTT WAVES

All the targets/support below mentioned are supposed to be turning points where waves of any magnitude temporarily touch and rebound.

The monthly chart displays the following targets/supports:

1. 42.18-42.01
2. 39.40-39.17
3. 35.22-35.17

Fibo cluster (not displayed): 43.95

The weekly chart shows a band of targets between 35.01 and 37.60. In addition, the daily chart suggests another support area at 40.33-37.60.

The 4-hour and 1-hour charts show that the Oil topped in the previously designated area: 47.25-47.85. They also display wave C made of 7 waves up - equivalent to 3 waves - and the possible target at 46.50.

Monthly chart. Click to enlarge

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hour chart. Click to enlarge

1-hour chart. Click to enlarge

GOLD last dive , for now

Hi Traders,

GOLD (now at 1219.29) could end its course around 1195 (area 1191-1202) and begin a temporary bounce to 1240-1245.

ELLIOTT WAVES

The monthly chart shows that the final target of this 1-2-3 (in red) is around 1072 and this is confirmed by the weekly chart where wave 3 (in red) is currently unfolding from the top at 1196. 

The daily chart breaks down wave 3 in smaller waves and shows that Gold is targeting the area 1193-1197.

Finally, the 4-hour and 1-hour charts show clearly that the very small wave 4 is complete and that we are witnessing wave 5 to the area 1191-1202



Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hour chart, click to enlarge

1-hour chart, click to enlarge