GOLD PERSISTENT WEAKNESS

Hi Traders,

I think that everybody got the message. A at this point, the combination of crypto-currencies and low inflation is probably the worst enemies for GOLD (now at 1275).

Hence, it's probably a good time for some trades to the South side as Gold might target the 1200 level in the short term (see the monthly chart).

Furthermore, the XAUUSD might not be able to find a serious support before hitting the area 1155-1130 (see the weekly chart).

ELLIOTT WAVES

I must admit that the identification of the Elliott Waves posed some challenges. Initially, the monthly chart displayed essentially the following waves:

• five impulse waves up from Sept 3,1999 (at $253) to Sept 5, 2011 (at 1920) Timing: 144 weeks. 
• three retracement waves down  (a-b-c) from Sept 6, 2011 (at $1920) to Dec 15, 2016 (at $1046). Timing: 64 weeks, so far.

That looked very much as a case study and I honestly thought that, at 1046,  the downtrend was over.

Instead, I overlooked  an important detail: the candlestick pattern at 1046 (see the low at 55C) was a clear warning that the incoming uptrend was going to be only temporary.

Conclusion: even if a rebound to 1281-90 is still possible, Gold should resume the downtrend to the 1200 area.

Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hours chart, click to enlarge

The Euro next move

Hi Traders,

After a small rebound to 1.18-1.19, the EURUSD (now at 1.1852) should resume the downtrend. First intermediate target: the area 1.174-1.172

ELLIOTT WAVES

The monthly chart and the weekly chart reveal that the Euro might have  entered a pattern that could last years in the making. If this is the case, the present wave configuration is the typical wave 4 of a downtrend which is made of:

• three-five waves up to 1.21 (wave a),
• three waves down to 1.08 (wave b), 
• followed by five waves up to 1.30 or so (wave c). 

At present, the Euro seems to be running wave b down to 1.08.

The daily chart and the 4-hours chart show a small downtrend made of five waves, four of which are fully deployed already. The fifth wave down just started unfolding.

NOTE the target at 1.174-1.172 in the 4-hours chart and the target at 1.136-1.124 in the daily chart.

Monthly chart. Click to enlarge

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hours chart. Click to enlarge

WTI OIL CLOSE TO A TOP?

Hi Traders,

The WTI OIL (now at 56.70) might stage a temporary retracement to the 56.3 area before the final rally to 61.3-61.8. However, the theoretical target at 66-69.15 cannot be discarded at this stage.

ELLIOTT WAVES

The monthly chart reveals that retracement wave 4 (in magenta) has already retraced 38.2% of wave 3. Within one-two months, it could top around the 61.3-61.8 area, although we shouldn't discard the higher cluster of blue lines at 66-69.15 (50% retracement).

The weekly chart doesn't add much information to the picture but the daily chart and the 4-hours chart draw out attention to the fact that, after point b, the OIL has fully deployed four waves up, plus a number of "extensions" of the "still unfolding" wave 5.

At present, this "extension pattern" suggests that OIL might bottom around 56.3 and launch the very last assault to the target at 61.3-61.8. However, if further extensions occur, OIL might reach the theoretical target at 66-69.15 in a much longer time.

Finally, the 1-hour chart displays the incoming target of this retracement wave at 56.31 (blue horizontal line)

NOTE the vertical lines on the weekly chart. WTI OIL took 99 weeks to develop wave 2 (in magenta). In case wave 4 takes the same amount of time, it would top around Dec 22. 




Monthly chart. Click to enlarge

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hours chart. Click to enlarge

1-hour chart. Click to enlarge

The Aussie close to a trough

Hi Traders,

The USDAUD (now at 0.7594) is getting close to the target area 0.7533-0.7439 where it could set off a new low before bouncing back to 0.773-0.783.

ELLIOTT WAVES

The best way to get the big picture is to look at the historical chart. The long term wave pattern from 1983, as well as the shape of the past waves, are now indicating the direction and the shape of the long term trend.

If the AUDUSD sticks to the expected Elliott Waves, it could reach a minimum close to 0.61 within 5 years. Within 10 years, it might bottom around 0.48 or lower.

Let me recall a few historical facts. In 1967 the AUD was pegged to the USD at the rate of 1.12 USD and, on Sep 9, 1973 it was adjusted to a fixed rate of 1.4885 USD

On Dec 12, 1983 the AUD was finally floated and it started a downtrend immediately. On Apr 2001 it reached the lowest low at 0.4775 USD.

The historical chart below reveals that, from that low in 2001, the Aussie performed an a-b-c retracement up to 1.1080 (July 2011) followed by a downtrend that it's still in the making.

This large a-b-c was just the retracement-wave-4 of a massive five-waves-downtrend started in 1983. That downtrend is not even half away.

Besides, the monthly and weekly charts cast doubts about the last top at 0.81. In fact, after the incoming new low, the Aussie could still stage a surprise jump to 0.85 before resuming the main downtrend.

The weekly chart also reveals the incoming targets and so the daily chart.




Historical chart. Click to enlarge

Monthly chart. Click to enlarge

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hours chart. Click to enlarge

The YEN: what's next

Hi Traders,

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ANALYSIS

The present rally of the USDJPY (now at 113.50) started on Sept 8th, 2017 and  should temporarily top around 115.6-116.0. The subsequent retracement could bring it back to 112-111 before resuming the uptrend.

ELLIOTT WAVES

The red trend line on the historical chart and the magenta trend line on the monthly chart represent the 69 y/o historical trend line drawn from level 320¥ through the tops at 280¥, 265¥ and 126-125¥.

That trend line is about to be crossed (breakout) around the 116-119 level by the present uptrend.

The monthly chart shows a huge retracement  a-b-c on the making where wave-a and wave-b are fully deployed already. Conversely, Wave-c is actually unfolding right now and should top around 150-165. Others think it will top at 230.

The weekly chart reveals that the present uptrend - started in June 2016 - has already completed 4 waves up.  Wave-5 should reach level 127 as a minimum.

The daily chart shows wave-4 and the unfolding of wave-5. The 4-hours chart reveals that we are approaching the top of wave-3 (in blue, font 12) around 115.6-116.0.

Historical chart, click to enlarge

Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hours chart, click to enlarge

EURO: what's next

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ANALYSIS

Although the Euro (now at 1.181) is retracing down to 1.1773-1.1762 in the very short term (1-hour chart), it should be able to resume its limited uptrend to 1.1932 in five  waves (4-hours chart). At that level, the dominant downtrend (daily chart) will resume its course to 1.1459.

ELLIOTT WAVES

The monthly chart reveals that the EURUSD is presently unfolding a wide wave-four upwards, which is usually a very articulated a-b-c. Given that wave-a is complete, we now need to focus on the trajectory of wave-b.

Wave-b should drop the Euro to 1.1220. This should be followed by the wave-c rally to 1.24, although the final theoretical target is actually 1.3016. The blue horizontal lines mark the possible targets/supports/resistances.

The weekly chart shows that wave-b has already started its way down from the top at a. See the targets at 1.1459 and 1.1220. The blue line at 1.0889 is actually a Fibo Cluster and a very possible target too.

The daily chart displays the possible tops at 1.1930-32 which will be followed by the lows at 1.1327-1.1299 and 1.1220.

The 4-hours and the 1-hour charts reveal the short term lows at 1.1773-1.1762, followed by the top 1.1932-34.





Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hours chart, click to enlarge

1-hour chart, click to enlarge

ASX: is this the final top?

Hi Traders,

The futures of the ASX 200, the SPI 200 (now at 5828) might have staged the last rally. If this is the much expected top (note the exhaustion gap in 4-hours chart ), it should be soon followed by a sharp correction 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 kind of pattern is usually time-symmetrical. Check the magenta lines and the vertical lines on the daily chart. 

Placing the centre of the round formation at the lowest low at 5592, we have 60 days from the centre to the highest top on the left, and 60 days from the centre to the highest top on the right.

After the same number of days have passed, a new trend usually starts.

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.

Moreover, it reveals that the present downtrend actually started around mid-March, 2015 at 6010 and made the lowest low at 4643 on Feb 2016 (wave-1). 

This, in turn, was followed by an a-b-c retracement rally to 5944 on April 30, 2017 (wave-2).

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 so far.  



Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hour chart, click to enlarge

EURO: What's up

Hi Traders,

The EURUSD (now at 1.1838) should bounce back to 1.1857 but only to resume the correction down to the next support at 1.1774. Overall, this correction could go on down to the area 1.1327-1.1299 (theoretical targets: area 1.1449-1.1425 and especially the area 1.1220-1.1208).

ELLIOTT WAVES

The big picture is explained in the monthly and weekly charts which revels that the Euro is unfolding retracement-wave-4 to 1.3016 with an a-b-c pattern. The theoretical targets of wave-b could either be at 1.1453-1.1424 or even at  1.1220. At that point, the new wave-c-rally to 1.3016 would start.

Letter a was placed to indicate the completion of the first leg of the a-b-c retracement up. Those waves would be the three components of wave-4 ending at 1.3016.

The daily and 4-hours charts show the target of wave-b at 1.1934-1.1932 as well as  the target around 1.1774. The 1-hour chart also displays the target at 1.1857.



Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hours chart, click to enlarge

1-hour chart, click to enlarge

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