Wednesday, May 23, 2012

Hi Traders,

I couldn't wait to tell you that we just created a new MeetUp Group in Sydney about Option Trading.
Please click on "Sydney Option Traders"

Cheers. Mario

AUDUSD, Tuesday May 22, 2012

Hi Traders,

As predicted, the AUDUSD stopped  the downtrend at 0.98 USD as displayed in the monthly chart below. Theoretically, given the new temporary USD weakness against all currencies, we could see the Aussie very last rally to 1.0220-1.0450 and maybe to 1.0760 before starting the big downrend.

If this happens,it would complete "every wave 5" of major, medium and minor grade. See the 4 waves in white at the top right end of the chart.

As a confirmation we have the channel being touched 4 times, so we expect a small rally followed by a breakout to the downside

In the weekly chart below there's a bullish reversal candlestick formation called "the three crows" confirmed by the chart touching the channel at level 0.98 USD which is also a 61.8% retracement down of the last rally. From here we should start the very last wave 5 up.

The daily chart below shows the "engulfing" reversal candlestick and this confirms the level 1.0220 as possible tartget. The last wave down (C) was performed in 5 waves and should be finished.

Finally, the 4hour chart below shows the new trend direction and the possible tartget at 1.0220 (red line)



WTI OIL,Tuesday May 22, 2012

Hi Traders,

It's actually Monday night: I've been asked to check the WTI OIL and I found the task a bit hard.

After taking a bit dive to $35.50 from $147.50 in 2008, the commodity is sitting now at $92 which is exacly 50%  of that range.

As you can see by the weekly chart below the WTI performed 3 waves up, reaching $115 (wave 3). Now the question is: why 3 waves only and not 5? A plausible explanation could be that it's now unfolding "major retracement wave 4" (out 5 waves up).

In its simplest espression, "major retracement wave 4" is a big zig-zag made of 3 to 5 retracement waves. The OIL so far performed 2 of those retracement waves and now it's trying to complete wave 3 down.

On its way down, it stopped on the most important support. Hence, it might bounce back for a while (rally) before resuming the downtrend and breakout the channel on the downside.

If this happens, the target could be $97-$98.5. Then down again to $80. Also, the channel was touched 4 times and this prelude to a bounce back (rally) usually followed by a breakout on the downside.

This could be confirmed by the 3 red candles down that usually indicate a bullish reversal formation named "the ladder bottom".

The daily chart below confirms the wave count (1-2-3 in red). There might a attempt to reach a low around $91.67 as the last bit of the wave is still missing.

This is confirmed by the 4hour chart below which shows 8 waves out of 9, The 9th should be the last leg down and it usually shows a reversal candlestick (which is not there yet). The channel was touched 4 times and this is the prelude to a breakout.

The 1 hour chart below show the last le down missing (wave 5). It also dispays 4 contact point in the channel. hence there could be a breakout soon.

Note the last orange numbers 1-2-3 in the 15min chart below where the last wave 3 is still missing at level $91.67 or lower. That could be our reversal point.

GBPUSD, Monday, May 21, 2012

Hi Traders,

Dealing with GBPUSD has never been an easy task as this currency is heavily traded by the smartest operators in the world, Bank of England included.

The Pounds dived to almost 1.35USD in Jan 2011 from over 2.11USD in Nov 2007. It barely recovered 50% of that loss (1.70USD)

Since then, it performed an oscillation around the 1.58USD fulcrum. We are still there now, in May 2012.

This time, given the temporary weakness of USD against GBP, Gold, WTI Oil, Euro and Aussie, there might be a chance for the last rally.


SITUATION

See the 4 sideways waves in the monthly chart below. Hence there could be the chance for a short rally of 5 waves up, whereas wave 1 and 2 (in turquoise) have already occured.

The currency touched 4 times the channel in the weekly chart below and it's supposed to breakout on the upside, unless it follows through the support at 1.5770 USD. 

This is confirmed by the daily chart below which shows a reversal candlestick (Hammer) right across the 50% support.  

The "Hammer" of the daily chart above is confirmed by the "Kicking"reversal pattern of the 4hour chart below. Also, note the completion of the Elliott pattern 5-X-3-X-5 (called 5-3-5 by Elliott) that formed wave 2.

The 1hour chart below shows the breakout of the channel on the upside and the targets of 1.5930 USD and maybe 1.6050 USD  

 Surprisingly, the 15 min chart below shows that the pair could move slightly down before starting the rally

 This is confirmed by the 5min chart below in which the Pound didn't reach the support at 1.5860- 1.58040 USD yet.

USDJPY, Monday May 14, 2012

Hi Traders,

Sorry for disappearing for 2 weeks but I have been pretty busy.

Here is my analysis of the USDJPY. There's in incoming setup you don't want to miss out. But ... don't rush: you're plenty of time.

----------------------

In the Monthly chart below the USDJPY completed a 5-3-9 (according to my wave Elliott wave connotation). This means that it's now reversing up to a possible tartget of 94.000 and 98.500

This is confirmed by an engulfing pattern - at the very bottom right - followed by a new little uptrend marked 1 and 2 - in white.

It's hard to figure out the extension of this uptrend: it could be a 1-2-3 up (also named a retracement Xwave up) or even a 1-2-3-4-5 up (making this the very start of a new trend up).

So far we assume the first hypothesis for good, (only 1-2-3 up) given that this is all part of a huge down trend started in 1949. Hence, we expect only an Xwave up. In the best case scenario this could run up to 101.00.

In the worst case scenario, the downtrend will resume at 94.00.

The weekly chart below shows that the little 1-2 of the monthly chart is actually 1-2-3-4 within a channel (in turquoise).

Hence we expect the 5th wave up and then a little reverse down.

 This is confirmed by the daily chart below which also shows that:

• both retracement waves (wave 2 and wave 4 in turquoise) are structured in seven waves,
• wave 4 is not completed. The little wave 7 down (in red) is still missing,
• with the completion of wave 7 the channel will be touched 4 times,
• we're hoping for the chart to bounce back as soon as it touches the channel.

The 4hour chart  below  shows that the wave 6 is actually a retracement X-wave (only 1-2-3 up).

We expect a 3 wave down or a 5 wave down. These waves will be very short waves.

Note the stochastic in negative divergence signalling the incumbent - very last - downtrend.

 There's a surprise in the 1hour chart below:  the very last leg up of  wave 5 is missing.

Therefore, the X-wave of the 4hour chart is not completed yet.

It will probably unfold to the upside, touch level 80.200 and maybe reach the upper boundary of the small channel.

Then down to complete wave 7 of the daily chart. 

All the above confirmed by the 30min chart  below. See the chart touching the channel only 3 times (out of 4). See also the completion of only 4 waves up (in turquoise) out of 5.

Conclusion:

The USDJPY will rally a bit to complete the 5th wave in the 4 hour chart and then down to complete wave 7 of the daily chart. That will be your first entry point for our long position, provided that there will be a reversal candlestick

No reversal candlestick? No trade

EURUSD, Monday April 30, 2012

Hi Traders,

The Euro could be on the verge of a major rally.
Last week close: 1.32517.
Close targets: 1.34275 and 1.38450.
Entry: wait for a minor pulback in the 1hour-30min chart.
This could happen at the opening on Monday.

SITUATION

The monthly chart below shows the completion of 4 major waves up (see the numbers in turquoise). We also completed 3 (of 4) cycles of 3.5 years in January 2012.

Besides, wave 4 (down)  lasted  about 36-37 weeks.

Furthermore,  the chart also completed wave 1 and wave 2 (in white),  being the latter part of a set of 5 waves developing within the boundaries of the channel in turquoise.

It might be hard to believe but, if this wave count is really correct, the Euro will start a good run to 1.57500 and 1.70000.

Note: currently, the Euro closed at 1.32517, meaning that it's now sitting over a  the major supp/res (1.32500). Also note that all major supp-res appear to be set every 1250 pips.

 

The weekly chart below touched the torquoise channel 4 times and it's now close to the upper boundary of the  channel, heading for a breakout.

The immediate target is the DiNapoli Confluence (K) at 1.38450. Note wave 1 and 2 (in white).

Note the green line in the daily chart below. It belongs to the channel of the weekly chart above. The Euro must breakout both them to be able to reach the confluences (K)  at 1.34275 and 1.38450. 

Finally, note the 6 waves up in the 4hour chart. This is a wave count that I use when it's hard to label waves. Typically, this is a set  of  9 or even 13 waves up.

There could be a gap at the opening.   

  

Dow Jones 30, Sunday 22, 2012

Hi Traders,


It seems that the game is over with DJ30. There's only one way: down.
This could be one of the rare chances to jump on a long downtrend from the beginning.

Now: 12,985.5
Targets: 12,220 - 11.842 - 11,175 - 10,333 - 10,000 - 9,580
Fib nodes: 10,633 (38.2%) - 9,850 (50%)

Entry point: at the opening


SITUATION

The weekly chart below shows the completion of 5 waves up (light blue). Note the reversal candlestick (tweezer top) in the blue rectangle.

The DJ30 in the daily chart below showcases the last major wave up with a triple top at the very end (around 13,225). It also started the downtrend with wave 1 and 2 of a minor grade (in red). Note the first target a 12,220 (support).

The 4hour chart below confirms the triple top, plus the retracement waves 1 and 2 (in orange).

The 1hour chart below confirms tha wave 5 up (in turquoise) unfolded in 5 minor waves. Note the reversal evening doji star at the top of wave 5.  

 

In the 15min chart below shows the evidence that wave 2 unfolded in 5 waves up. The DJ30 is now sitting on the lower end of the channel, waiting for the breakout.  

SPI200, Saturday 21, 2012

Hi Traders,

I afraid that "that's it". The ASX has completed all possible waves up.

There's only one way: down.
This is confirmed by the analysis of the DJ30. See my post about it.

Entry point: at the opening.
Target: 4230 and 4010. There's a chance for 3800 and 3710 in the longer run. The latter confirmed by the Pinocchio candlestick in the weekly chart.

SITUATION

The monthly chart of the SPI200 below completed wave 4 by retracing 50% (in turquoise) of wave 3.

The weekly chart below shows the 4 major waves down in orange, all contained in the major channel in purple. Also, the chart touched the red channel 4 times and it's time for a breakout to the downside.

 

The daily chart below shows the 7 retracement waves up that completed the last leg up. They really were supposed to be 7 waves (according to the way to count waves) and they are equivalent to a 3 wave up (3-1-3).

At the top right of the chart you see 3 numbers: number 7 in white indicates the completion of 7 waves up; number 4 in orange shows that we completed the 4th wave down of a major downtrend started in November 2011; number 5 shows that the major wave 4 unfolded with 5 waves up.

Note the reversal spinning top at the end of wave 7.

 

 

The 4hour chart below shows that the last 5 wave up (wave 7) ended up with a double top and an reversal evening star. Also, the top resistance line in red confirms that the SPI200 didn't have enough momentum to move above 4393.

 

The 1hour chart below shows the very last 5 waves up, the double top and the reversal gravestone doji.

WTI, Saturday, April 21, 2012

Hi Traders,


I updated my post on Oil.
You still have he best entry point and set up on oil (WTI).
Please take a good look of the 4 hour chart.


Now: $104.04. It's now retracing slightly to $103.96 and could go even to $103.76.
Entry point: $103.76 or $103.96-104.00 if it doesn't retrace much.
Position: long.

Immediate target: 105.39.
Final target: up to $112.70-$114.70, then down to $95.00 and lower.

Note: there seems to be a strong resistance at $104.57.
Warning: if the Elliott wave count stops there or some other resistance ($108.18 and $109.72) it might not make it and it will reverse sharply.

SITUATION

Check the weekly chart below. The West Texas Intermediate is performing the very last wave up (wave 9). It's the very last leg up of major wave 5.

The chart touched the channel 5 times already. Consequently, after the last rally, it will breakout to the downside.

The Stochastic shows a divergence already for the long run, meaning that we're doing the last leg up and the down.

The daily chart below confirms the Elliott Wave count to 9. For some of you the count to 9 might sound wierd but it's equivalent to a count to 5.

The 4hour chart below shows that we started the uptrend already with 4 waves up. They are the first manifestation of wave 9 (weekly chart) that should unfold in about 13 - 21 waves

Finally, the 30min chart describes the A-B-C which formed the wave 4. Plus, see the candlestick reversal (hammer).

GBPJPY, Wednesday, April 18, 2012

Hi Traders,

The Yen seems to have issues against almost every currency, included the British Pound.
New trend up. Objectives: 134.800, 140.240, 145.480, 148.200.
Entry point: wait for the retracement to 38.2% or 50% in the 1hour chart.
Than entry only when you see a new bullish reversal candlestick.

DESCRIPTION

In the monthly chart below it's clear that we completed the very last 5 waves down plus a double bottom (near number 5).

This means that the major downtrend is over and it just reversed with a new rally up.

Note the vertical lines: it took precisely 11 years (132month) from low to low. We're likely to see something significant at the completion of the 144 month from September 2001 (12 years). 

The weekly chart below shows an imminent breakout on the upside given the 5 contact points of the blue channel. The number 5 (bottom right in orange) signals the end of the major trend down and the beginning of a new major rally.

Wave 2 unfolded in the daily chart below by means of 5 waves down, just on the 38.2% retracement line. It's now on the 23.6% line. The channel was touched 4 times and we expect a breakout on the upside.

The 4hour chart below shows the completion of the retracement wave 2 (in turquoise), given the Elliott Wave count over the minor waves. See also the 5 waves up. 

Finally the 1hour chart below shows that the chart could try a small leap up before starting the retracement down that should stop around level 128.700 (38.2%) or 128.400 (50%).

USDJPY, Tuesday, April 17, 2012

Hi Traders,

Nice setup for a long position on USDJPY. It could be the rare chance to get a very long trend from the beginning.

If your target is the long term and you are not in already, wait for the completion of 5 waves up and a retracement down before getting in.

You might not know how to handle the Elliott Wave count. If you don't feel confident enough just ring me up on Skype: "mariodconti"

Targets: 85.540 and 88.130 but the closest targets should be 80.730, 81.200, 81.850. The final target could be up to 98.500, 101.350 with a chance of 103.460 and 105.470.


SITUATION


I've already analysed this currency few weeks ago and I didn't change a thing.
Basically, we completed a cycle of 120 month at the beginning of February: a major top in Feb 2002 followed by a major low on Feb 2012).
We are now bouncing back after completing a 5-X-5-X-5 (or 5-3-5-3-5). In the monthly chart below I marked 9 waves down = 5-3-5

As you see in weekly chart below we started impulse wave 1-2-3 and 4 and we're now  started wave 5 that will be followed by and a series of retracement waves

The daily chart below shows that the retracement of wave 4 (in turquoise) stopped exacly on the 50%  line (in blue)

The 4hour chart below rings some bells as the chart touched the channel 4 times (yellow triangles). At this point in time we should have a breakout, hopefully on the upside.  The Elliott count after wave 5 (in turquoise) is a 3-X-3-X-5.

In the 30min chart below we had 9 waves down and a sort of triple bottom. The chart also performed a breakout of both channels.