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