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

 

 

 



 

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

 
 
 

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.