Dec 232013
 
 December 23, 2013  Posted by at 3:31 am 2 Responses »

Ben Bernanke’s parting Xmas gift provided the impetus for the 5th wave kick-off as the equity indices have climbed to new all-time-highs as per my preferred count. With these new ATH’s, we are now well on our way towards my first 5th wave target of 1825-35 for the SPX before we start looking for a larger degree 4th wave correction. The trend for equity markets remains higher with impulsive advances and corrective 3 wave declines leading the way into 2014. The trend is your friend until it bends. With equity bullishness and “belief” in the Fed at all time highs along with the markets, I will continue to tread cautiously, trading the near term wave structure which shows no signs of a reversal as yet. With complacency at extremes and EVERYONE all-in long, I am alert for a swift reversal in the new year. My daily SPX roadmap has not changed…

SPX Daily

SPX Daily

With Wednesday’s strong move higher, the near term charts are more difficult to interpret in terms of micro wave structures so we must rely more on measured targets and bigger picture trendlines. The SPX 60m chart below clearly demonstrates the strong short-term momentum.

SPX 60m

SPX 60m

The BKX has FINALLY made new highs to achieve minimum targets for it’s 5th wave advance setting the stage for a decline of “at least” intermediate term degree. The Banks remain the “tell” for this market and have kept us on the right side of the rally. With significant momentum divergence associated with the new wave v highs, I am alert for a significant change of trend here in the new year. ย With all the ducks lining up in 5th waves, which are ENDING waves, now is the time to be vigilant in managing risk.

BKX Daily

BKX Daily

The FX markets remain at a critical juncture with the US$ holding critical trendline support following last week’s FOMC meeting. As long as DXI holds last week’s lows, I expect near term US$ strength towards the 82 area. So far, the DXI has 3 waves off the lows and has yet to confirm a change in trend higher.

DXI Weekly

DXI Weekly

The EUR/USD was unable to trade above prior swing highs at 1.3835 and reversed lower following the FOMC to print a weekly bearish key reversal bar. However, both bullish and bearish counts remain valid as the Euro has remained within its intraday rising trend channel and there has been no overlap of waves [i] & [iv] (red count). Trade below 1.36 trendline support will likely bring accelerated selling of the Euro.

EUR/USD Weekly

EUR/USD Weekly

EUR/USD 120m

EUR/USD 120m

USD/JPY has now achieved my initial measured wave 5 target of 104.72 (actual high 104.65) where wave 5 equals wave 1 and new highs above the wave 3 price extremes. This is an ENDING wave. Once we see evidence of a change in direction to down, MINIMUM expectations are for this pair to return promptly to the scene of the crime (or… origin of wave 5) around 97.00. That is the r/r opportunity in the near term.

USD/JPY Daily

USD/JPY Daily

EUR/AUD appears to have completed it’s 18 month long 5 wave rally from the 2012 lows. From a big picture perspective, assuming this 5 wave rally is complete for wave (A), I am looking for a corrective decline back down to the 140 level for wave (B).

EUR/AUD Daily

EUR/AUD Daily

AAPL found support at its previous swing highs so I’ve moved my SL to 555 above key overlap on a s/t basis. With news of the China Mobile deal it will be important to see the markets reaction. A pop and drop or gap and run to new highs. Having already covered half shorts for +$20, tonight’s price action will likely determine near term direction. NB. Exited remainder of AAPL shorts in pre-market @ $565 (-$1).

AAPL Daily

AAPL Daily

Wishing everyone a Merry Xmas and prosperous New Year.

Thank you all for your support as I journal my thoughts and trades on the world wide web ๐Ÿ™‚

Dec 182013
 
 December 18, 2013  Posted by at 4:49 am Comments Off on Brief Market Update: December 18th, 2013 – FOMC Breakout on deck…

With Bernanke’s final FOMC press conference tonight, does he go out with a bang or a whimper? The SPY and QQQ show bearish setups and no-one really believes the taper tantrum… may be a good r/r short here but very speculative standing in front of the Fed…

SPY – Decision time for the Fed. Classic bearish setup or bear trap?

SPY Daily

SPY Daily

QQQ – Bearish Setup… straddling the sma’s like an Adonis. Awaiting FOMC for breakout

QQQ Daily

QQQ Daily

The near term SPX chart reflects the indecision in the market with both bull (black) and bear (red) counts squarely on the table. The bulls were unable to take the ball and run with it yesterday, so the door remains ajar for the bears.

SPX 15m

SPX 15m

EUR/USD forming a bullish 4th wave triangle of smaller degree targeting new highs. Just in time for the Fed whipsaw.

EUR/USD 120m

EUR/USD 120m

USD/CHF weakness continues and the decline does not count as complete for our canary in a coalmine. This pair remains in sell mode

USD/CHF Daily

USD/CHF Daily

DXI holding the line for now. A break of 79 and nothing but air until 75

DXI Weekly

DXI Weekly

We are obviously at a very important inflection point here in equity and FX markets. The Fed runs the game now, so tonight’s FOMC meeting will likely determine if “santa claus is coming to town”

http://www.youtube.com/watch?v=cU2-xh484_s

Trade safe and watch those Central Bankers ๐Ÿ˜‰

Dec 172013
 
 December 17, 2013  Posted by at 5:59 am Comments Off on Market Update: December 17th, 2013 – Santa Claus Rally?

The equity markets rallied strongly from 4th wave support but was unable to close above the 10 and 20 day sma. My current preferred count (from last week) has not changed but this is no time for complacency with the FOMC this week. The major equity market indices (SPX/DJIA/RUT) look to have completed a 3 wave correction for wave 4 where waves C and A reached equality and we are headed straight to new highs. Unfortunately, my secondary target of 1756 was met in the overnight session with a 5th wave spike thrust out of a 4th wave triangle of lesser degree in ES. The 5th wave thrust tagged the 50 day sma and immediately reversed in 5 waves up past the origin of the triangle. Here’s where things get complicated. In an “ideal” world I like to see the cash SPX complete its structure rather than in the overnight markets. Experience has taught me that overnight price levels tend to be revisited by the cash markets. The preferred count remains on track but there remain questions as to the sustainability of Monday’s rally. I have no position here as I await further price confirmation.

The FX markets are providing little assistance in providing pre-FOMC clues apart from the fact that we have consolidation at critical support for the US$.

Bullish Case:

– Bigger picture trend remains up with higher highs and higher lows

– No key support broken

– Zigzag a-b-c (5-3-5) correction terminating where A = C

– Impulsive rally from the overnight lows on ES

– No clear impulsive decline from the highs

– Very strong liquidity provided by the Fed this week

Bearish Case:

– Incomplete structure on the cash markets

– NDX decline from the highs looks impulsive

– SPX unable to close above the 20 day sma, closed below 10 day sma

– Cash markets only show 3 waves up so far

– ES rally stopped at 0.618 retracement of previous decline

– FOMC uncertainty

To the charts… the near term structure of the ES tells the tale. As opined on Twitter on Friday night, ES was forming a 4th wave triangle of lesser degree. The corrective decline appears complete and the door is now open for a push to new highs targeting 1860 in the new year (black count). There is (of course) an alternate count where the counter-trend rally completed with a wave (c) higher for an expanded flat wave 2 (red count). The bearish count suggests a decline to 1750 in the near term.

ES 15m

ES 15m

The SPX continues to follow my preferred path to new ATH’s. The bullish case will be likely confirmed on a close above theย 20 and 10 day sma’s.

SPX Daily

SPX Daily

The near term SPX count shows both bullish and bearish counts in more detail. The bulls need to take the ball and run with it, otherwise we only have 3 waves up so far.

SPX 15m

SPX 15m

The DJIA has declined in a clear 3 waves reaching equality where c = a remaining within its corrective channel but has not yet invalidated the bearish nested decline potential (black count). Trade back above 16060 will “lock-in” a 3 wave decline and suggest the rally will continue to ATH’s in the new year.

DJIA 90m

DJIA 90m

A cautionary note for the bulls. The NQ (NDX Futures) continues to “look” bearish and counts best as a complete impulsive decline followed by an expanded flat correction. The 3 wave decline into the lows is what stops me from getting overly bullish here.

NQ 180m

NQ 180m

AAPL broke lower on Friday as expected but has not yet declined impulsively. Trade back above $571 will lock-in a 3 wave decline and be bullish for this stock. Lowered SL to this level. Monday was an inside day for AAPL finding strong resistance at the 10 day sma while the rest of the equity markets rallied. I expect a strong breakout from this range. Key trigger levels are $571 for the bulls and below $553 for the bears

AAPL Daily

AAPL Daily

The FX markets have been whipsawing over the last few weeks with the US$ coming under increasing pressure to the downside. The most important chart right now is the weekly DXI which shows very important support nearby at 79. This week’s FOMC will be pivotal in determining the near term course of the US$. Sustained trade below 79 will likely see 75.00 in the short term. US$ bulls need to find support here at the confluence of trendline support and 200 weekly sma.

DXI Weekly

DXI Weekly

The USD/JPY made new highs for the year last week. While minimum conditions have been met for a wave 5 thrust from a triangle (trading above the wave 3 high), the structure does not count as complete. My count suggests we are currently in wave (iv) of 5 with wave (v) to come towards my 105 target. I therefore expect more near term weakness in this pair as the wave (iv) decline develops.

USD/JPY Daily

USD/JPY Daily

Not unexpectedly, the Nikkei 225 counts similarly and is either in wave (iv) of a triangle (red count) or wave (iv) has already ended and wave (v) is nesting to the upside… either way, it appears that new highs are on the way

Nikkei 225 240m

Nikkei 225 240m

December’s liquidity schedule has been updated due to the fact that the Treasury has reduced it’s funding requirements by $15bln. Strong liquidity will likely provide a tailwind for these markets until Xmas but the FOMC on Wednesday remains the wildcard.

Updated December Liquidity Schedule

Updated December Liquidity Schedule

That’s all for now. ๐Ÿ™‚

Dec 132013
 
 December 13, 2013  Posted by at 7:46 am Comments Off on Market Update: December 13th, 2013 – Now for the hard Part…

Equity markets continue to follow my preferred path down with new lows this week and primary targets hit. However, I was completely wrong in my near term calls for a weak US$, lower bond yields and strong PM’s.

SPX reached my 1st target of 1777 yesterday, taking out last week’s lows as expected. The advantage of Elliott Wave Theory is that it gives you clear points of ruin (you know where you’re wrong) which is why the risk/reward of being short against new ATH’s was compelling. Now comes the difficult part… where to from here. Firstly, prices have met minimum expectations for this decline with new lows where c = a and the bulk of the initial decline “looks” nearly complete with an impulsive 5 waves down. However, a marginal new low may be required to complete the decline (the intraday decline into the LOD looks to be in 3 waves so a final 5th wave should be expected). The close below the potential H&S (pink) neckline warns of the air pocket below targeting TL and 50 day sma support. With many indices holding on to key support levels last night, traders need to be nimble here. While the preferred count remains on track, we should remain mindful of the potential alternate bearish count (red) with next week’s FOMC meeting and maximum bullish sentiment and complacency among investors.

SPX Daily

SPX Daily

The intraday 5m squiggle chart does not show a clean 5 waves into the lows which is what the bulls were looking for. My preferred count (black) suggests new 5th wave lows tonight to potentially complete the decline. The green bullish count is least probable where the decline ended on last night’s lows and we head straight to new highs. I covered most (4/5) of my ES shorts at the first target.

SPX 5m

SPX 5m

The Russell 2000 broke hard from TL support as suggested in my last update and reached my 1100 target almost immediately. So far, the internal TL has held as support but yesterday’s price action appears to be a 4th wave consolidation. Therefore, I expect this TL to be broken near term in a 5th wave with (2)-(4) trendline support (purple trend channel) at 1087 and 100 sma at 1077.

Russell 2000 Daily

Russell 2000 Daily

The NQ futures chart below makes me cautious on the near term bullish counts for the SPX and why we should remain nimble. What we have, is a completed 5 wave structure to the upside, terminating in a 5th wave ending diagonal. The decline from the highs is clearly impulsive in wave 1 / A suggesting that another decline of “at least” the same magnitude is expected following a counter-trend rally. Bulls beware.

NQ (E-Mini NASDAQ 100) 180m

NQ (E-Mini NASDAQ 100) 180m

AAPL has a “popgun” reversal set-up with bearish engulfing candle. A close below $559 will trigger the bearish trade setup. I am already short AAPL

AAPL Daily

AAPL Daily

The US$ has rallied against all pairs over the last 2 days which is NOT what I expected. Given the proximity to significant trendline support and Weekly 200 sma, I guess I should not have been surprised. The US$ rally is not yet impulsive so it is premature to call a low in the US$ yet.

DXI Weekly

DXI Weekly

USD/JPY – ย The Yen has achieved its bigger picture 5th wave “thrust from a triangle” minimum objective with a push to new highs for 2013 but the near term count is unclear. My best read is that wave (iii) may now be complete with the unwinding of nested 4th and 5th waves. The reason I am labeling this as (iii) is because the rally never left the 3rd wave acceleration channel which would be expected of a 4th wave. The nature of any near term decline should be instructive.

USD/JPY Daily

USD/JPY Daily

December’s updated liquidity schedule is attached below.

December Liquidity Schedule

December Liquidity Schedule

That’s all I have for now, trade safe ๐Ÿ™‚

Dec 112013
 
 December 11, 2013  Posted by at 4:49 am Comments Off on Market Update: December 11th, 2013 – Decision Time

Key themes – Weak equities, weak US$, strong PM’s and lower bond yields. Both the SPX and DJIA remain below ATH’s for now and the short term charts are at an important inflection point while the EW count remains unchanged from the weekend. So far, there are 3 waves up from last week’s lows and last night’s decline caught support at the 5 and 10 day sma. The bears need to make a stand here and defend Monday’s HOD. US$ weakness continues with the USD/CHF breaking key support and USD/JPY is threatening a bearish reversal with a 5 wave decline following marginal new highs and bearish engulfing reversal day. Gold and the Aussie$ are attempting an upside breakout which is what I was looking for in my weekend update and AAPL completed 5 waves down on an intraday basis from recent highs, setting up the short opportunity. I expect bonds to rally near term.

The Daily SPX chart shows support held at the 5 ema and 10 sma and the trend remains up. Below this and we likely head for the 50 sma which currently crosses at 1756 near red TL support (support is support until broken).

SPX Daily

SPX Daily

The SPX chart below shows the current near term structure ย – I am short so may be biased ๐Ÿ˜‰

Bear Case (black preferred): Wave (c) achieved measured target of 1.618x wave (a) without violating new ATH. The decline, while overlapping, may be nested forming multiple H&S. A break of last night’s lows will likely lead to an accelerated decline. Measured targets are 1777 where C = A, then 1745-56 at 1.618x A

Bull Caseย (red alternate) : The decline from Monday’s highs is overlapping and not clearly impulsive and “looks” like a wave (iv), holding the measured 0.382 Fib support and remains above wave (i) high of 1796. Measured target for wave (v) is marginal new highs at 1819 where (v) = (i)

SPX 15m

SPX 15m

The SPY (SPDR S&P500 ETF) has formed a potentially bearish island reversal while holding support at the 5 and 10 day sma. A convincing break below yesterday’s lows will bolster my near term bearish thesis

SPY Daily

SPY Daily

The Russell 2000 has been the clear laggard this week and is on the verge of breaking key trendline support and 20 day sma. A break of these levels targets 1100 in the very near term.

Russell 2000 Daily

Russell 2000 Daily

The DJIA weekly chart is never far from my mind because of the bearish implications and remains the key for the overall market’s larger structure. Above new highs and we’re likely off to the races but as long as we stay below, larger downside risks remain. With a potentially complete Elliott Wave structure to the upside, this is just a note of caution where we have all time highs in investor bullishness. The fact that so many people are also now following the 1929 3-domed house analog in which we blast higher in a parabolic blow-off concerns me greatly. The herd is rarely right…

DJIA Weekly

DJIA Weekly

AAPL refuses to die but its days are numbered. Yesterday was an inside day and now threatens to break out. On an intraday basis, the decline from 575 to 560 is clearly impulsive so I expect a break to the downside. The GTFO level for my short position is above 575.15

AAPL Daily

AAPL Daily

AUD/USD – Last week’s lows continue to hold as it tries to bounce impulsively. My expectations remain for a rally from here and further US$ weakness.

AUD 121113

AUD/USD Daily

USD/CHF – The US$ canary in the coalmine has broken critical support as warned in my weekend update which opens the door to much lower prices for this pair (and warning for other US$ crosses). How long before the Swiss National Bank steps in to halt the strength of the Swissie?

USD/CHF Daily

USD/CHF Daily

USD/JPY – Bearish daily engulfing candle warns of further downside to come. A break of the 10 day sma leads straight down to the 20 day at 101.70 – bearish for US equities near term

USD/JPY Daily

USD/JPY Daily

Gold has triggered my popgun bullish reversal with Tuesday’s close above 1260 and I’ll look to buy the dips for a wave C higher towards 1350

Gold Daily

Gold Daily

TLT – I haven’t shown a bond chart for a while but I like this for a long opportunity. With every man and his dog bearish bonds and a quadruple bottom with 3 waves into the lows, I am looking for an impulsive wave (c) counter-trend rally back above 108.73 to squeeze the near term shorts.

TLT Daily

TLT Daily

That’s all for now. Trade safe ๐Ÿ™‚

Dec 082013
 
 December 8, 2013  Posted by at 7:56 am 2 Responses »

We are now at critical junctures in equity, US$ and PM markets. Immediate reversals are required to maintain my primary counts on a number of markets. Key levels and trade setups are outlined below.

Well, the SPX has been following my playbook hitting my key targets all week but now comes the moment of truth. Was the last 2 week decline in equities all of wave 4 and we’re heading straight to new ATH’s (my red alternate count) OR are the bulls about to get cross-checked as we reverse course here and head to my preferred target in the 1740-1750 range? Friday’s rally was strong but EXPECTED for wave (c) of 2 / B and counts as complete. No doubt there are many bullish signals supporting the red alternate count where we head straight to new highs – gap and run breakout from congestion and strong support, close above 5, 10 and 20 day sma’s, new highs in the ndx, etc. The risk/reward trade for me here is to be short against new ATH’s with a 10 pt risk and targeted 50 pt reward. I know where I am wrong. The initial decline for wave 1 / A counts best as an impulsive 5 wave decline and the counter-trend rally is in 3 waves (so far). My initial target for this counter-trend rally was 1800/05 and this has been met with Friday’s HOD of 1806.4 at a 0.786 retracement of the initial decline, backtest of the green (ii) – (iv) trendline break and potential purple H&S resistance. I am short via one week ES puts near Friday’s close. Measured downside targets are 1772 (where C = A) and then 1750 (where C = 1.618x A, H&S target extension, 50 day sma and previous 4th wave support). This trade is wrong at new ATH’s.

SPX 15m

SPX 15m

The djia has also rallied strongly from its lows in 3 waves and has reached targeted resistance at 0.618 retracement of the initial decline. The decline is clearly impulsive in 5 waves and the rally is in 3 waves. I am expecting new lows below 15800.

DJIA 60m

DJIA 60m

As most who follow my blog would know, I rarely trade individual stocks unless I see something compelling. AAPL’s island bearish reversal last week (in a strong general market) from where (c) = (a); the 0.618 retracement of the wave (1) / (A) decline; trendline throwover and reversal; and RSI 5th wave divergence provide compelling evidence to me to short this stock against Thursday’s high.

AAPL Daily

AAPL Daily

As mentioned last week, the AUD/USD is attempting to find a tradable low above critical support and has helped its cause with a bullish key reversal on Friday after what is currently a 3 wave decline from the 0.9758 wave (i) / (a) highs. I will be looking to go long A$ in the 0.9040/70 area.

AUD/USD Daily

AUD/USD Daily

The EUR/USD has now extended its rally towards the top of its trend channel and 0.786 retracement of the wave (i) decline. The Euro needs to turn down NOW otherwise the rally will start looking very impulsive. I continue to patiently await a small 5 wave decline to trade against. I was short just before the NFP announcement of Friday and managed to cover for profits prior to the reversal higher. Ideally, I would like to see a marginal new high on Monday followed by a convincing 5 wave decline to initiate shorts. The recent severe weakness in USD/CHF makes me cautious on the Bullish US$ story and also needs to reverse ASAP.

EUR/USD Daily

EUR/USD Daily

The USD/CHF is warning of a continued decline in the US$ if it is unable to reverse higher immediately. The decline has now accelerated below the corrective green trend channel and is now within 30 pips of taking out critical support at 0.8890 (invalidating my bullish US$ count). Critical juncture here for the US$

USD/CHF 240m

USD/CHF 240m

The GBP/USD has been forming a bull flag all week in a corrective 4th wave decline and the advance does not count as complete. I’m expecting new near term highs in the GBP/USD supporting the idea of near term US$ weakness

GBP/USD 240m

GBP/USD 240m

Not surprisingly, given my views on the Euro and A$, the EUR/AUD looks like a complete 5 wave structure and ready for a reversal lower.

EUR/AUD Daily

EUR/AUD Daily

Like the SPX/DJIA, the USD/JPY wave 4 correction would “look” best with a wave c decline below 101.62 as the initial decline counts best as a leading diagonal wave a. Any push to new highs above 103.40 will invalidate this near term count and suggest we are in wave 5 towards 104. Remember, this will be a 5th and final wave terminating at new highs where we will be looking for short positions back to the origin of the triangle at 97.00 and likely below. Longs need to be very careful up here as the rally is extended and nearing completion.

USD/JPY 240m

USD/JPY 240m

The Nikkei 225 declined as expected to my 15160 wave (iv) target and reversed higher. If that was ALL of (iv) then the Nikkei is headed straight to new highs above 16000. However, this scenario conflicts with my count on the USD/JPY which expects a near term decline. ย I suspect we will get the answer as to which is right early this week.

Nikkei 225 240m

Nikkei 225 240m

Gold presents a near term speculative long opportunity with Friday’s wave (v) thrust lower from a running triangle and 5 wave rally off the intraday lows. I say speculative because Gold and PM’s in general are oversold and unloved and I’m only expecting a counter-trend rally with new lows in 2014. Gold has also formed one of my favorite reversal setups known as a “Popgun” (an outside range day followed by an inside range day followed by an outside range day). A daily close above 1260 would trigger the popgun and provide confirming evidence of a tradable low with targets above 1350.

Gold 240m

Gold 240m

Gold Daily

Gold Daily

That’s all I have for now. Trade safe ๐Ÿ™‚

 

Dec 052013
 
 December 5, 2013  Posted by at 11:37 am Comments Off on SPX Update: December 5th, 2013

SPX – upside (1800) & downside (1777) targets met. 1800/05 remains sell zone for preferred count… looking for 1740/50 for next downside target

SPX 15m

SPX 15m

 

Dec 042013
 
 December 4, 2013  Posted by at 6:27 am Comments Off on Market Update: December 4th, 2013 – SPX remains on track

The equity markets reversed lower from my targets impulsively, setting the stage for further near term declines after a wave (ii)/(b) counter-trend rally. The US$ strength I anticipated was shortlived and promptly reversed lower along with equity markets. The PM’s continued to make new lows which is not what I was looking for and there is no sign of a tradable low in place. CL has rallied strongly off it’s lows (which is what I was looking for) but I unfortunately missed the trade due to a very choppy setup wave. I managed to pull 19pts trading ES from the short side and got out of my long USD/CHF at BE. Overall, I good start to the week despite being wrong expecting US$ and PM strength.

The SPX continues to trade in line with expectations hitting my targets and reversing lower impulsively for wave (i) / (a). While this initial decline looks complete, the DJIA suggests another marginal low to complete its wave (i) / (a) decline before a wave (ii) / (b) counter-trend rally. The near term chart below counts as complete with an impulsive 5 wave decline where wave v = i. I now expect a counter-trend rally to the 1800/05 area which is my sell zone defined by a 0.50 – 0.618 Fib retracement of the initial decline to the area of the previous 4th wave. As this was an impulsive decline, I would expect another of equal length if wave (c) or deeper if wave (iii) towards my measured targets.

SPX 15m

SPX 15m

From a bigger picture perspective, the SPX found support from the 20 day sma and long term green channel trendline. The SPX closed below the 10 and 5 day sma’s but above the 20 day (no man’s land). My first target for this decline remains around 1777 with the potential down to 1740/50 shelf support, previous 4th wave and 50 day sma. The structure and length of the next decline should provide further evidence as to where we are in the bigger picture although I expect we target the lower objectives given the overbought and overloved nature of this market.

SPX Daily

SPX Daily

The DJIA weekly suggests further caution is warranted by the bulls with a reversal from the green megaphone trendline and potentially complete wave count at the highs. While the bears have stopped the rally where they needed to, we require more evidence of a sustained impulsive decline to suggest this is anything but another correction in an ongoing bull market. We know where we are wrong. Any rally above Friday’s highs will likely lead to an acceleration break out targeting 17000.

DJIA Weekly

DJIA Weekly

The Russell 2000 looks particularly vulnerable after forming an overlapping ascending wedge on the daily chart and impulsive intraday decline from recent highs. A close below the lower red wedge trendline would strengthen the near term bearish case with a decline towards key purple trend channel support .

Russell 2000 Daily

Russell 2000 Daily

The BKX has broken lower but still needs one more marginal new high to complete the count to the upside.

BKX Daily

BKX Daily

To the FX markets and the US$ started the week strong out of the gates but has reversed lower. I am still looking for a tradable low in the US$ to get long against Europe in particular.

The AUD/USD has been under continued selling pressure but has found support at the base red trendline. Below here and there’s not much support. The bearish MACD zero line reversal on the 240m chart threatens of more lows to come. This count is wrong below 0.8848 so this is the last chance chicken dance for the A$ bulls.

AUD/USD 240m

AUD/USD 240m

The DXI found support for the 5th time at the 80.50 level but the wave structure suggests further US$ declines to come in the near term. However, the decline IS corrective and overlapping which suggests the next impulsive move will be to the upside, so I am looking to go long the US$ following completion of this counter-trend decline ideally at the Fib 0.5 retracement level around 80.20.

DXI 60m

DXI 60m

The USD/JPY reversed sharply lower yesterday but held immediate trendline and 10 day sma support. That could have been the high for wave (iii) of 5 as it achieved an extended measured target of 2.618x wave (i). ย Wave 5 targets remain above 103.74 towards 105.00 for this rally.

USD/JPY Daily

USD/JPY Daily

The USD/JPY count matches well with that of the Nikkei 225 as I tweeted yesterday looking for a sharp wave (iv) retracement before wave (v) of (5) could gain traction for a FINAL push to new highs above 16000.

Nikkei 225 240m

Nikkei 225 240m

Unfortunately, I missed the tradable low in Crude Oil I had been looking for and it has launched to the upside as expected without me on board… ๐Ÿ™

Crude Oil Daily

Crude Oil Daily

That’s all for now, trade safe ๐Ÿ™‚

Dec 022013
 
 December 2, 2013  Posted by at 2:18 am Comments Off on Weekend Market Update: December 2nd, 2013 – Target Met, Now What?

The SPX finally met my November target sell zone of 1810/15 for this advance with a new ATH at 1813.55 in a complete 5 waves. While this rally may continue to extend, I am counting the near term advance as complete and I am now expecting a correction towards 1740/50 so I am short against Friday’s highs. The nature of this decline (impulsive or corrective) and trade below 1777 (key support) will provide important information as to where we are in the bigger picture. This count is obviously wrong at new ATH’s. Near term, Friday’s highs achieved a measured internal target where wave (v) equals 0.618x (i) through (iii) and culminated in a 5th wave thrust from a smaller degree 4th wave running triangle.

SPX 15m

SPX 15m

The Daily SPX chart shows diverging momentum at recent new highs but price remains above 5, 10 and 20 sma’s which shows a strong underlying trend. Top picking is always risky in a bull market but I like the r/r here. The red alternate count shows the potential for a long term top here but we need to see more evidence of an impulsive decline before we can move this to a preferred count.

SPX Daily

SPX Daily

The DJIA finally tagged long term megaphone trendline resistance and stalled. A strong close above this trendline will likely result in an acceleration of the advance. Another reason why this is an important inflection point here. With a clear 5 wave advance terminating at important resistance, the bears have an opportunity to take the ball and run with it.

DJIA Weekly

DJIA Weekly

The short term DJIA count is shown below.

DJIA 60m

DJIA 60m

The EUR/USD is finding strong resistance at the 0.618 Fib retracement sell zone with a potentially completed counter-trend advance. However, the decline does not yet look impulsive so bears may need to be patient and look for price confirmation. 1.3400 remains critical support and trade below this will “lock-in” a 3 wave advance. I remain bearish the Euro and bullish the US$.

EUR/USD 60m

EUR/USD 60m

The USD/JPY advance has continued unabated nearing my minimum upside target above the 103.74 highs to complete wave 5 of this 2 year impulsive rally. While extended, the Yen remains in wave (iii) of 5 with waves (iv) and (v) to come.

USD/JPY Daily

USD/JPY Daily

The USD/CHF has also found near term support at the 0.618 Fib retracement level in what looks to be a completed complex corrective decline where wave A equals C. Importantly, the decline is corrective and overlapping while remaining within its corrective green channel while the previous advance was strongly impulsive. I am long this pair.

USD/CHF 60m

USD/CHF 60m

Gold continues to hold last week’s support lows and its initial advance appears impulsive. Price needs to break back above $1260 to gain momentum with a higher s/t high. I have no position but am looking to go long gold following a clear 5 wave advance and 3 wave retracement.

Gold 240m

Gold 240m

That’s all for now.

PS: December Liquidity Schedule now completed and posted below…

December Liquidity Schedule

December Liquidity Schedule