Elliott Wave weekly picture – 09-10-16, gold rally just beginning, Dollar tipping point.
- September 10, 2016
- Posted by: E. Glynn
- Category: Elliott Wave Analysis
The Elliott Wave weekly picture analyses Gold, the Dow Jones and the three major Dollar cross rates. All from the perspective of an Elliott wave trader.
This article will give you a good grasp of what we believe are the most likely Elliott wave counts in each market.
1 hr chart.
It was a good week for my EurUsd wave count, I had predicted a rally and the rally came, which is always nice!
so far the decline off the high of wave 2 blue, has been encouraging so far, the current wave count calls for the market to decline substantially into the future.
But I am uncertain as of yet to whether that decline has started or will be postponed for another few weeks.
the point that will decide that, is at the wave 2 blue high.
should the market rally beyond that point, then we will almost certainly get another leg up to complete wave ‘B’ green.
So that is a critical high right now.
For next week I will be watching that high at wave ‘2’ blue, it needs to hold if the current count is to remain valid.
On Monday I may try placing a sell order at the recent low with the idea being if wave (iii) yellow is under way then substantial declined shoud begin soon.
Right now EurUsd is at a critical turning point in terms of the long term wave count, so investing some time and energy into analyzing the price structure and testing the developing wave counts with low risk bets is the course I will follow.
the turning point is coming in EurUsd,
I will be ready at the time.
1 hr chart:
GBPUSD is mirroring EURUSD right now, in the fact that we sit at a very interesting point in the overall wave count.
The long term count is pretty solid, and calls for a substantial decline in this market, against the backdrop of a big dollar rally across the board.
So far the wave count has held up this week.
I had speculated that the tag of the upper trend line was sufficient to finish wave ‘ii’ black. This is a longer term high, which would prove to be the turning point of the big decline I see coming.
the current wave count in green sees the recent decline as the beginning of that new down trend.
I placed a sell order at Thursdays low, with the view that wave ‘iii’ green might be developing to the downside, and on Friday the market did in fact decline past that low, I can count this as another signal that the wave count is correct.
we will see on that front.
If the market opens on Monday with another decline then it will add weight to the wave count, I will move the stop to a protective position then.
Another interesting thing happened on Friday.
the price came down through the wave (a) high in grey.
this occurrence points to a growing downside bias in the market, and gives another thumbs up to the current interpretation.
But like I always say,
For Monday we should get further declines in wave ‘iii’ green, the critical high for this wave count now lies at the high labelled wave ‘ii’ black.
1 hr chart.
Dollar Yen is also at a key pivot point, in terms of the medium term wave count.
I have been viewing the current corrective phase as an temporary pause within a larger decline that has possibly re-established itself this week.
The larger decline is labelled waves (a) and (b) with wave possibly underway as I write this.
This wave count calls for the market to undergo one last decline into the 9600 level before turning up in a new bull market phase.
Right now I think that we are seeing wave (c) grey developing in a five wave structure to the downside.
And again there could be an opportunity developing in wave (iii) black.
Wave ‘iii’ black will be where the power lies within this (c) wave.
currently the invalidation line for this wave count lies at the high labelled wave (b) grey.
A rally past this point would force a switch to my alternate wave count.
For now I think that is a low probability, and the market should begin a new decline next week.
For next week, wave (iii) black should begin and it will offer an entry opportunity to the downside.
a break of the low labelled wave ‘i or a’ in black, will conform the lower target is on the cards.
1 hr chart.
Last week I was speculating that the next leg up in GOLD was about to begin, I think we can now confirm this to be the case.
The overall wave count views the Gold price as in a large corrective rally in a triple combination wave labelled ‘w,x.y’ in green.
Wave ‘y’ is well underway and should see the market top out at about 1500 before the year is out.
Wave ‘y’ green is itself breaking out into a three wave form, which is labelled ‘a,b,c’ in blue.
I think we can now call the correction in wave ‘b’ blue as complete, the 1300 price level is now acting as support for this new advance.
The critical low is also at the 1302 level, where wave ‘b’ blue has completed.
This low should hold, to keep the wave count intact.
The advance in wave ‘c’ blue should take a five wave form from here.
Given that waves (i) and (ii) black are all but complete, then wave (iii) black should begin shortly.
this has the potential of being a powerful move to the upside.
For next week, I will be watching that low at wave ‘b’ blue, any advance past wave (i) black will confirm wave (iii) black has begun.
1 hr chart
Friday brought a moment of madness on wall street!
The Dow dropped about 500 points!
CNBC said it was because this that and the other and of course it was the second Friday in September and we all know that uncertainty thing was going on in Uzbekistan and Australia had a less than sunny day and to cap it all off that woman wore red shoes!
And if you haven’t guessed,
I am being sarcastic!
In saying all that it came as a bit of a surprise to me as the weeks action up to that point had been very choppy and flat.
the sudden drop came outta nowhere!
So, I am back to the pivotal question.
How does this decline fit into the wave count,
Up to this point I have been counting an ongoing bull market labelled in yellow.
From the lows in June, there had been a clearly developing 5 wave pattern within wave 5 blue.
So the question is:
Has the rally finished for good?
Hold on there cowboy!
I do not think this rally is anywhere near finished!
Let me tell you why I believe we are in for a big rally!
-In order for this wave count off the February lows to be completed properly, we need to see a tag of the upper trend line,
WE are nowhere near that right now, and that requires a push up to possibly the 20,000 handle at this stage.
-the decline off the high looks more corrective than the beginning of a new bear market. it has been more reminiscent of a three wave decline than an impulse wave to the downside.
-the daily RSI has now reached an oversold extreme so don’t be surprised if we get a substantial rally next week.
-the current wave count labelled in yellow is perilously close to invalidation at 18022, but If that invalidation line is hit, the next best wave count is a completed wave (i) and (ii) in yellow, with wave (iii) yellow to the upside to come.
that interpretation would be even more bullish than the existing count.
I think next week will tell an interesting story, if the market rallies back close to the current wave (iii) label in yellow, then we might be in for fireworks in a blow off rally to the upside, which in the long run, will be the last gasp of a huge bull market.
Roll on next week.
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