WTI OIL bouncing back

Hi Traders,

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ANALYSIS

As predicted in my previous post, the WTI Oil (now at USD 59.81) started a major downtrend on Oct 10 and it is on way to reach the target in the USD 55-54 area (see the weekly chart).

It should then bounce back to the area USD 65-66.


ELLIOTT WAVES

The daily chart and the weekly chart clearly show that the whole set of Elliott waves and sub-waves is religiously in place, confirming the assumption of the completion of major wave 4 and the start of a new downtrend (major wave 5)

Major wave 4 (in the monthly and weekly charts) was supposed to be made out of three or seven waves. In fact, it formed an a-b-c in the weekly chart which is equivalent to a seven waves pattern displayed in the monthly chart. 

CONCLUSION

The WTI OIL is on the way to complete five waves down to USD 55-54 (see 4-hours chart). After the completion, it's expected to stage a three retracement-waves up to USD 65-66 (see the monthly chart).





monthly chart - click to enlarge

weekly chart - click to enlarge

daily chart - click to enlarge

4-hours chart - click to enlarge

WTI OIL: end of the line?

Hi Traders,

Although the WTI OIL (now at 70.34) can still edge up a bit, it might not make it higher than 72.60 and the long awaited major downturn could set in soon. Targets: the area 68-67 followed by the supports at 64-63 and 61-60.


ELLIOTT WAVES

The weekly chart reveals that the inclination of wave 2 is perfectly identical to the inclination of wave 4 (see the gray lines) and this might be a indication that wave 4 just topped.

Previously, wave 2 topped and reversed after touching the inclination line. Similarly, wave 4 touched the inclination line at 75.34. This could be a top as well.

In addition, the top of wave 4 coincides with a major resistance (see the weekly chart) 

Most importantly, the daily chart clearly shows that the whole set of Elliott waves and sub-waves is religiously in place, confirming the assumption of the completion of major wave 4. See also the possible target at 72.26-72.60.

IDENTICAL INCLINATION

Identical inclination means that WTI OIL gained the same average dollars each week in both wave 2 and wave 4. Let's see how:

- Wave 2 lasted 99 weeks, from a low at 74.94 to a top at 112.20. Gain: 37.26
Average weekly gain: $0.37

- wave 4 lasted 128 weeks, from a low at 27.69 to a top at 75.34. Gain: 47.65
Average weekly gain: $0.37   

NOTE: W.D. Gann - and very few others later - developed studies about the interaction between a price unit ($0.37) and a time unit (1 week) in order to pinpoint time turning points. 

Unfortunately I don't possess the knowledge and the technology to indulge in such a time consuming study. However, I sometimes use "Time Turning Points" as further confirmation of the Elliott waves events, like the contemporary completion of major wave 4 in conjunction with a TTP.


CONCLUSION

Given that major wave 4 seems to be complete, the uptrend that started on Jan 20, 2016 appears to be over and the WTI OIL might soon head South.

weekly chart - click to enlarge

daily chart - click to enlarge

4-hours chart - click to enlarge

Gold to rebound?

Hi Traders,

XAUUSD (now at 1184) bottomed at 1160 and started a new rally. Target 1235 and 1250.

ELLIOTT WAVES

The identification of the Elliott Waves often poses some real challenges when it comes to some complex waves labelled by the purists "wyz-x-wyz". Hence, for the time being, I prefer to avoid that fancy stuff and stick to the hypothesis of a wedge formation, labelled 1-2-3-4. See the weekly chart.

Whatever you choose to call it, this kind of pattern can lead to very contradictory outcomes in the very long run. Let's see how.

1) Gold might stage a fifth wave up (wave e) with a "throw over" to the area 1433-1627 (see the weekly chart).
2) Gold might get to the 1337 area and then sink to the area 882-845 (see the monthly chart)
3) Finally, if the pattern on show right now is not a wedge (a-b-c-d) but just a  simple a-b-c, there could be a temporary rally to 1235-1250 followed by a  downtrend to the area 882-845.

Whatever it happens, all these postulations have just one thing in common: Gold should reach the 1235-1250 area.

CONCLUSION:  

With the exception of the above targets, there are too many possible outcomes to be able to identify the most likely pattern in  the long run. It is, therefore, wiser to stick to the close targets (see the 4-hours and the daily charts) and wait for more data.

Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hours chart, click to enlarge

YUAN: Top & Reverse

Hi Traders,

The USDCNH, (the inverse of Chinese Yuan), now at 6.83, topped and reversed the sharp rally started on March 27, as predicted in my previous post. Next target: 6.69.

ELLIOTT WAVES

The weekly and the daily charts showes that the USDCNH staged a very sharp rally by means of a five-pattern-wave. Unfortunately, given the limited history of the USDCNH, there are not enough elements to predict the most likely long term wave pattern.

At present, the only direction seems to be down and the most likely targets seem to be 6.686 and 6.60. See the blue horizontal lines in the daily chart.   

The 4-hours chart shows the big reversal pattern and all the other waves of lower degree.

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hours chart. Click to enlarge

The USDCNH to top soon?

Hi Traders,

The USDCNH, (the inverse of Chinese Yuan), now at 6.84, has reached the target area at 6.86-6.92 where it stopped and reversed the sharp rally started on March 27, at least temporarily.

ELLIOTT WAVES

The weekly and the daily charts show that the USDCNH has reached the target area (the blue horizontal lines) where it was expected to top. 

However, this might not be the "big reverse" that the Elliott Wave people are  waiting for. In fact, the wave count looks incomplete and it might not be final.

More exactly, this pattern seems to suggest that we reached the top of minor wave three (on the 4-hours and 1-hour chart) and the Yuan is probably unfolding minor wave four to the 6.77-6.76 area (see the targets in the weekly chart, blue horizontal lines)

The 4-hours chart shows a big reversal candlestick and the 1-hour chart shows that, although it could bounce back to 6.88, the Yuan is actually ready to resume the new downtrend.

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hours chart. Click to enlarge

1-hour chart. Click to enlarge

The pound to resume the downtrend?

Hi traders,

The GBPUSD (now at 1.31182) shows extreme weakness and should resume the downtrend to 1.30.


ELLIOTT WAVES

The monthly and weekly charts show that the Pound is unfolding "major wave five" (downward) with a very long term target below 1.18.

The daily, 4-hours and 1-hour charts reveal that we are witnessing the last leg of the very minor wave 5 (downward) that should take the Pound to 1.30.



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

Dow Jones looking really scary

Hi Traders,

The Dow Jones (now at 25375) seems to defy the good fundamentals of the US economy. In fact, it is now staging a correction heading to the area 25000-24700

ELLIOTT WAVES

As you can see in the weekly  chart, the DJ30 is unfolding a typical wave four, which is made of an a-b-c pattern. Wave a (down) and wave b (up) are completed and wave c (down) just started its way down.This is even clearer in the daily chart.

Finally, the 4-hours chart reveals the completion of wave b and the start of the new downtrend with the first two waves: wave 1 and wave 2. NOTE: the strong reversal candlestick pattern made of the last three candles.





Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hours chart, click to enlarge

FT100 & SPI200 to turn South?

Hi Traders,

Both the British FT 100 index (now at 7620) and the Australian SPI 200 index futures (now at 6230) might be aiming for a correction.


ELLIOTT WAVES

The fundamentals for this turnaround seem to be exclusively political for both countries but, on the technical side, the two indices might head to a similar destiny despite a different wave count.

FT 100 index

The daily and 4-hours charts show the completion of wave four. A drop to the 7280 area might follow soon to make room for wave five.

The weekly and monthly charts display the completion of five waves up, signalling a top and the end of a major wave count. A correction should follow. 

Finally, the weekly  chart reveals 4-5 doji candles. This is called "breakaway pattern". It's a continuation pattern aiming to continue the downtrend initiated after the top at 7884.6   

SPI 200 index futures

The SPI 200 (now at 6230) could still end its course around 6330 - see the top blue line in the monthly chart. In meantime, a correction might be under way. 

The daily and 4-hours charts show the completion of five waves as well as a dangerous double top. A drop to the 6098 or 6076 area might occur.

The monthly and the weekly chart shows that the huge a-b-c might not be completed yet and this correction might be only temporary. 


FT 100 CHARTS


FT 100 - Monthly chart, click to enlarge

FT 100 - Weekly chart, click to enlarge

FT 100 - Daily chart, click to enlarge

FT 100 - 4-hours chart, click to enlarge

SPI 200 CHARTS




SPI 200 - Monthly chart, click to enlarge

SPI 200 - Weekly chart, click to enlarge

SPI 200 - Daily chart, click to enlarge

SPI 200 - 4-hours chart, click to enlarge

THE OIL TO TURN SOUTH AGAIN?

Hi traders,

The WTI OIL (now at 66.63) is approaching the theoretical Turning Point at 67.20-67.42 where it should resume the downtrend to the area at 62.74-62.35.


ELLIOTT WAVES

The monthly chart shows that we might have witnessed the last retracement wave up (at 5 4 ) before the final dive which will deploy wave-5 downwards (not labelled yet).

The weekly chart shows the giant a-b-c started in Feb 2016 where wave-c is still in the making. Wave-a and wave-b are fully deployed whilst wave-c still needs another small leg down (wave-5, still to be labelled) to complete the giant a-b-c.

As for the daily chart and the 4-hours chart, see wave-4 approaching the theoretical Turning Point at 67.20-67.42.




Monthly chart. Click to enlarge

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hours chart. Click to enlarge

Time to Short the USDSGD?

Hi Traders,

The USDSGD (now at 1.3361) seems to be ready for a big dive as it shows clear signs of extreme weakness. It might be heading to the 1.3147 area sooner than later.

See the blue target lines in the monthly chart and in the weekly chart. 

ELLIOTT WAVES

The monthly chart shows the completion of major wave 4 around January 3, 2017. That Pivot Point marked the start of major wave 5 downwards (not labelled yet).

The weekly chart and the daily chart show the completion of another wave 4 of a lesser degree around May 10.

That Pivot Point marked the start of another wave 5 of a lesser degree downwards (not labelled yet).

Finally, the 4-hours chart shows a significant double top. Note the last 4 bars: it's a candlestick pattern called runaway pattern. This could be a nearly perfect time to short the USDSGD.




Monthly chart, click to enlarge

Weekly chart, click to enlarge

Daily chart, click to enlarge

4-hours chart, click to enlarge