Elliott Wave Analysis by EWF

Discussion in 'Market Forecasts and Analysis' started by ElliottWave-Forecast, Mar 10, 2017.

  1. Nasdaq Elliott Wave Analysis 12.6.2017

    Nasdaq Intraday Elliott Wave view suggests that Intermediate wave (3) ended with the rally to 6429.5. Intermediate wave (4) pullback remains in progress to correct cycle from 8/21 low (5753.6) in 3, 7, or 11 swing before the rally resumes. Intermediate wave (4) is unfolding as a double three Elliott wave structure where Minor wave W ended at 6246 and Minor wave X ended at 6391.75. Minor wave Y of (4) is currently in progress towards 6096.24 – 6209.28 area. Afterwards, Index should resume the rally higher or bounce in 3 waves at minimum. We don’t like selling the proposed pullback and expect buyers to appear from the above area for at least a 3 waves bounce provided that pivot at 8/21 low (5753.6) stays intact.

    NQ_F Nasdaq 1 Hour Elliott Wave Chart
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  2. Sterling Volatility In Crucial Week of Brexit Talk

    Sterling fell versus the dollar earlier this week as Brexit talk between the UK and EU falter at the last minute. British Prime Minister Theresa May is on the race to break the deadlock on the issue of Irish border. Irish border is one of the three key issues required to be settled before the U.K can move on to the next stage of Brexit talk. The next phase of talk involves trade negotiation at the crucial EU summit on December 14.

    Early on Monday, Ms. May met with EU leaders Jean Claude Juncker and Donald Tusk in Brussels to settle the terms of Brexit with the EU. The UK is reportedly prepared to accept that Northern Ireland may remain in the EU’s custom union and single market. However, the potential agreement fell through at the last minute due to the intervention from Northern Ireland’s Democratic Unionist Party (DUP). The Unionist party currently provides the Tories with a working majority in the Commons. The DUP leader Arlene Foster has indicated that she could not accept any Brexit deal that separates the Northern Ireland from the rest of the UK.

    Pound fell versus the dollar and reversed earlier rally as news about the failure to reach agreement started to surface

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    The EU says it will only recommend the start of talks about future trade arrangements when sufficient progress has been reached on three key issues: Status of expat citizens, the “divorce” bill, and the Northern Ireland border. On the “divorce bill”, the UK has increased its offer up to 50 billion Euros. On the issue of EU citizens in Britain, the UK agrees that they don’t need to pay to apply for settled status if they already have permanent residence. However, those who apply for the first time for the right to stay will need to pay some fees.

    The Sterling will remain volatile ahead of the upcoming EU leaders summit on December 14. However, a “no deal exit” would mean substantial wealth losses in both the UK and EU. It’s therefore in everyone’s best interest to seek progress. Interestingly, despite the lingering uncertainties around the U.K’s exit from the EU, Sterling is still very resilient and ranks the top three best performing currency among G-10 peers this year

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    Sterling Technical Outlook
    Technical positioning of two Sterling pairs confirm that the markets are becoming less sensitive to the ups and downs of the Brexit process. With some more breakthrough on the negotiation, Sterling could see more recovery in 2018, especially if the talks progress sufficiently to open up negotiations on trade.

    We will take a look at two Sterling Crosses below: GBPAUD and GBPJPY

    GBPAUD Daily Technical Chart
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    GBPAUD Daily chart shows a 7 swing bullish sequence from 10.7.2016 low and it appears the pair still could extend higher to 1.815 – 1.862 area, provided that pivot at 8/25 low (1.615) stays intact. Please note that these numbers refer to swing counts and do not denote Elliott Wave labels, such as impulsive 5 waves.

    GBPJPY Daily Technical Chart
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    GBPJPY also show 3 swing bullish sequence from the same pivot at 10.7.2016 low. The pair also appears to have scope to extend higher towards 161 – 167 area, as far as pivot at 4/17 low (135.6) stays intact.
     
  3. Nasdaq Elliott Wave Analysis 12-8-2017

    Nasdaq Short Term Elliott Wave view suggests that Intermediate wave (3) ended at 6429.5 and Intermediate wave (4) pullback is proposed complete at 6231.75. Subdivision of Intermediate wave (4) is unfolding as a double three Elliott wave structure where Minor wave W ended at 6283, Minor wave X ended at 6391.75, and Minor wave Y of (4) ended at 6231.75. Index still needs to break above Intermediate wave (3) at 6429.5 for this view to gain validity. Until then, we still can’t completely rule out a break below Intermediate wave (4) at 6231.75 in a double correction.


    Near term, cycle from 12/5 low (6231.75) is mature and expected to complete soon with Minute wave ((w)). Index should then pullback in Minute wave ((x)) to correct cycle from 6231.75 low in 3, 7, or 11 swing before Index resumes the rally. We don’t like selling the proposed pullback.

    NQ_F Nasdaq 1 Hour Elliott Wave Chart

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  4. Nasdaq Elliott Wave Analysis: More Upside Favored While Above 6232.3

    Nasdaq Short Term Elliott Wave view suggests that the Index remains bullish as far as pullbacks stay above Intermediate wave (4) at 6232.3. Rally from Intermediate wave (4) low unfolded as a double three Elliott Wave structure where Minor wave W ended at 6545.75 and Minor wave X is proposed complete at 6432.25 in the green box. Internal of Minor wave W unfolded as a double three Elliott Wave structure where Minute wave ((w)) ended at 6427.75, Minute wave ((x)) ended at 6383, and Minute wave ((y)) of W ended at 6545.75.

    Internal of Minor wave X unfolded as a double three Elliott Wave structure where Minute wave ((w)) ended at 6463.25, Minute wave ((x)) ended at 6520.75, and Minute wave ((y)) of X ended at 6432.25. Near term, while dips stay above 6432.25, but more importantly as far as pivot at 12/5 low (6232.3) stays intact, expect Index to extend higher. Unless already long with a risk free trade from the green box area, we prefer to wait for the Index to break above Minor wave W at 6545.75 before buying the dips again. Until the Index breaks above Minor wave W at 6545.75, a double correction in Minor wave X still can’t be ruled out.

    If the Index breaks below 12/26 low (6432.3) from here, then it could either form a triple three or double three correction from 12/19 peak. In the case of a triple three correction, Index should then extend lower to 6371 – 6391 area to end Minor wave X before the rally resumes. In the case of a double three correction, then Index can go to as low as 6234 – 6361 to end Minor wave X before buyers appear for at least a 3 waves bounce.

    Nasdaq 1 Hour Elliott Wave Chart
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  5. Is the World coming to the end?

    We now live in an interesting time. Every day we wake up with the news about either World Indices make all-time records or bad news about terrorist attack and nuclear test. Historically, humans have gone through these stages and we were able to withstand all these events. At ElliottwaveForecast, we try to ignore all these events because, at the end, we believe in the Market Nature or code.

    The Market or World Indices is not ready for a crash and we have been saying that for a while. $SPX had a chance for a major correction when it reached the 100% extension at 2234.00 area, but the Index hasn’t done anything and keeps going higher. We believe that the Market works as a whole and that looking only at the $SPX or an individual Index is not enough. For the last 6 years, many Elliott wave Theory participants have been calling for a 50% crash and the crash has never happened.

    We have been able to stay bullish during this period as we use other tools in our forecast including correlation and also sequences. However, we do understand that nothing runs in a straight line in trading and one day we will get an All-time correction in World Indices. Based on our time and sequence study, we are looking at the 2020-2022 period for the period when we could get major problems in the world and this will be used to justify the all-time World Indices correction.

    Many followers may ask why we believe at year 2020-2022 as the period for major All-Time correction. At Ellitottwave-Forecast.com, we follow a system which includes Elliott wave Theory, cycles, sequences, time, distribution, correlations, and Fibonacci. We do not use Fundamental or sentiment, because it provides us neither an actionable trade nor ways to manage the risk.

    After providing members with over 7000 charts every month, we discover that majority of news or events happen when the Market reaches the extremes areas, which in our charts is represented by the blue box. The Market follows sequences, cycles and always has a target in each sequence and cycles. Indices are within the Grand Super cycle and only $SPX and $DOW have reached the target, which is the 100% extension from all time low related to 2009. See the chart below.

    $SPX Long Term Chart
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    Overall the idea is that the Grand Super cycle has more upside and the upside will come from Super cycle degree which started in 2009. Lets concentrate on 2009 and we can see many World Indices showing an incomplete sequence within this cycle, which started in 2009 and related to 2016. Therefore, even though $SPX and $DOW have reached the 100% extension as shown in the Blue Box within Grand Super cycle, the rest of Indices have not. This means that the Super cycle will push the Grand Super cycle higher.

    Traders need to understand how to relate the cycles, measure extension targets and be able to adjust when the cycle has ended. As of right now, we do not see any possibility of a 50% crash or correction. All we see is a Cycle degree from 2016 low ending and thus correction will be only towards the cycle from 2016 low with more upside again after. Below charts of Hangseng Index and Nikkei show incomplete sequence in Super Cycle degree since 2009 and thus further upside is expected.

    Hangseng Long Term Sequence Chart
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    Nikkei Long Term Sequence Chart
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    We also see time as an important aspect when it comes to forecasting. In this case, we see still some World Indices shy of the 100% in time. Usually in an ABC or WXY structure, the wave A is equal to C in time related to B. Similarly, wave W is equal to Y in time related to X. If we look at the Hangseng chart below, we can see how the Market still needs more time within the Y leg which started at 2008. The first 3 legs higher from 2008 low – 2015 high took 79 months, so the Y leg which started from 2016 low needs similar length of time. This is the reason why we believe that 2020 is the minimum time for the rally in World Indices as it is the minimum travel distance to make a reasonable parity with the first leg. See the chart below for Hangseng time cycles.

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    Elliott wave Theory is giving us the idea that only the cycle degree since 2016 will end when current rally in World Indices ends. Thus correction will be only to the cycle from 2016 low and not the all-time crash that many people are forecasting. $APPLE further provides us with this confirmation as it is showing a clear 5 waves advance from 2016 low which will provide a 3 waves back. The following two charts of Apple and Nasdaq both show the 5 waves higher from 2016 low.

    Nasdaq Daily Elliott Wave Chart
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    Apple Daily Elliott Wave Chart
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    As we can see, three instrument have been used to determine 3 cycles degrees and we have used more that 1 Index or instrument to forecast the next few years of trading. As we have explained, we do not only look at 1 Index, we look at the whole Market and we can conclude that nothing significant should happen until 2020-2022 and we will see where the Market stands by then. However, glancing ahead in the political world, the 2020 US Election could be very significant, and it can drive the Market down into a huge pullback. This will all depend on the American Indices and the 1.618 level in the Grand Super cycle. Until then, decent corrections will happen, but nothing very significant such as 50% crash will happen in the World Indices. The strategy will stay the same until then, that is to relate the cycles, degrees and buying the dips. It looks like the World is not coming to the end just yet.
     
  6. Nasdaq Elliott Wave Analysis: Ending Impulsive Move

    Short Term Nasdaq Elliott Wave view suggests that the rally from 12/5 low unfolded as a double three Elliott Wave structure where Minor wave W ended at 6545.75 and Minor wave X ended at 6383.25. This week, the Index made a new high above Minor wave W at 6545.75, suggesting the next leg higher has started. Internal of Minor wave W unfolded as a double three Elliott Wave structure where Minute wave ((w)) ended at 6427.75, Minute wave ((x)) ended at 6383, and Minute wave ((y)) of W ended at 6545.75.

    Internal of Minor wave X pullback unfolded as a triple three Elliott Wave structure where Minute wave ((w)) ended at 6463.25, Minute wave ((x)) ended at 6520.75, Minute wave ((y)) ended at 6432.25, and second Minute wave ((x)) of X ended at 6382.44. Near term, rally from 12/30 low (6383.25) is unfolding as an impulse Elliott Wave structure and could see more upside to end 5 waves up in Minute wave ((a)). Afterwards, the Index should pullback in Minute wave ((b)) in 3, 7, or 11 swing to correct cycle from 12/30 low (6382.44) before the rally resumes. We don’t like selling the Index and while Minute wave ((b)) dips stay above 6382.44, expect Index to extend higher.

    Nasdaq 1 Hour Elliott Wave Chart
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  7. Gold is Ready for New Rally

    Gold closed above $1,300 per ounce for the first time in 5 years as the U.S. dollar saw it’s worst decline over the past 14 years. Despite a strong start in 2017, XAUUSD spent most of the year in a sideways range around $1250 area before the final bounce came by year end to allow the precious metal to close for +13% in gains.

    During the past 4 years, Gold has been repeating the same pattern over and over again, bottoming around December then rallying during the first quarter of the new year.

    GOLD Previous December Lows
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    In 2017, Gold peaked in September at $1357 before starting a 3 months decline to correct the the rally from December 2016. I reached the 50% – 61.8 Fibonacci retracement area ( $1251 – $1226 ) where buyers where waiting to start a new cycle higher again in December. Up from there, XAUUSD rallied strongly breaking above $1300 to end the correction.

    GOLD Daily Chart 2017
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    The move in metals led by Gold helped The Dow Jones Commodity Index to continue it’s bullish uptrend since 2016 low showing higher highs then higher lows and making a new high above September peak which opens a another bullish extension for the index supporting the rest of commodities to remain strong during 2018.

    DJCI Daily Chart
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    Recap
    Gold is looking for a strong rally during 2018 and breaking above September 2017 peak is the key level for the precious metal to target $1450 area. The move will be supported by the rest of commodities as DJCI has a bullish sequence to the upside following the same path.
     
  8. Bitcoin: Technical and Psychological Perspective

    Hello fellow traders, in this blog post, we will discuss the most hyped cryptocurrency Bitcoin in a technical as well as psychological perspective.

    From the zero line, we are calling bitcoin completed in the super cycle blue wave (a) at 17/12/17 top. From that high, the market completed the first leg of 3 of a double correction. You can see the scenarios in the picture below (blue and black). For now, it needs to be seen which path bitcoin takes. The recent drop in bitcoin is for us nothing surprising. The market just pulled back 50% from 09/15/17 low. However, the drop was too short in time. Anyway, our forecast is still for more upside, nothing has changed so far for us. It only needs to be seen whether it can make a double correction or keeps just rallying to the upside. Either way, it should extend higher.

    Bitcoin Daily Chart 12/31/17


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    But why do mainstream Media and many other traders think this the starting of a bubble, you might think. Well, that I want to explain in the next paragraph. It has something to do with traders emotions. Let’s have a look:





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    Generally, speaking we can say that markets are driven by either fear or greed. Why you may think. Well, it because these are the primal human emotions and markets and algos move accordingly to them. Above you can see the overall greed and fear cycle. Because of the recent drop and mainstream media hyping it. Weaker traders are overwhelmed by emotions. And their running trades.



    The objective in trading crypto and other instruments are clearly defined. It’s all about achieving profits and not suffering losses. But what you should understand is that every winner faces a loser on the other side.



    The truth is that we will have to deal with losses sooner or later again and again. And that is the problem for the 95% of the traders! An unsuccessful trader can NOT deal with losses. Traders tend to get overwhelmed with their emotions. Once they face a loss. Why is it like this? Well, by winning or losing money we have earned, we mostly become emotional. Why? Because a rising account puts us in joy and euphoria. Whereas a falling account will put us in scare and anxious. Overall, we can conclude that in trading perspective it’s very clear as I write this blog.



    The possibility that bitcoin make new highs are there, we only change our view when the market tells us to do so. We do not change our forecast until the market tells us to change.
     
  9. DAX Elliott Wave Analysis: Ending 5 Waves

    DAX Short Term Elliott Wave view suggests that the Index ended Intermediate wave (X) pullback at 12731.46. The rally from there is unfolding as a 5 waves impulse Elliott Wave structure where Minutte wave (i) ended at 12943, Minutte wave (ii) ended at 12881.5, Minutte wave (iii) ended at 13408.5, and Minutte wave (iv) is proposed complete at 13328.5. Index has scope to extend 1 more leg higher in Minutte wave (v) before ending 5 waves up from 1/2 low (12731.46).

    The move higher in Minutte wave (v) should also end Minute wave ((a)) of a larger degree. Afterwards, Index should pullback in Minute wave ((b)) to correct cycle from 1/2 low before the rally resumes. Chasing the Index higher from here is risky, but we don’t like selling the Index either. We expect buyers to appear during Minute wave ((b)) pullback in 3, 7, or 11 swing for an extension higher as far as pivot at 1/2 low (12731.46) stays intact.

    DAX 1 Hour Elliott Wave Chart
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  10. Why Oil Should Be Supported in Weekly Chart

    Hello fellow traders, in this blog post, we will discuss oil in a more bigger picture.

    In the chart below, you can see crude oil futures on the weekly chart.

    From the 02/08/2016 low, we can clearly see that the market has a potential 5 swing incomplete bullish sequence. It seems like that it is still in the fifth swing. The weekly target for us is between 68.53-86.82. Please note a 5 swing sequence is different than 5 waves impulse. Overall, we can conclude that we need more upside in oil and we suggest members to buy the instrument in 3-7-11 swings to the upside.

    Oil Weekly Chart
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    With that said I want to present to you another important instrument we follow. It is called the Wisdomtree Continuous Commodity Index (GCC).

    The GCC is basically a basket of diversified different commodity exposure. In the image below you can see the different components of the index.

    GCC Components
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    Source: https://www.wisdomtree.com/etfs/alternative/gcc



    But why do we need the GCC to forecast crude you might ask yourself. Well, that’s pretty easy to answer. Please have a look at the chart below. You can see the crude chart simply overlayed with the GCC index. You can clearly see, that both markets are correlating big time. Obviously, we need to understand that correlation is never pip by pip. This means that we have times where both the markets are diverging to each other. As you can see in in the arrows below. Oil is going higher whereas the GCC made new lows. But that doesn’t change the overall degree of correlation.

    Oil vs GCC
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    Now let’s have a look at the GCC chart below. You can see that the market never broke above 07/04/2017, whereas oil broke the high. However, from the 06/19/2017 low, the GCC has, in fact, a bullish sequence, targeting the area of 19.89-20.85. Which makes it bullish against that level. This means that oil will also continue higher in a longer-term perspective.

    GCC Weekly Chart
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  11. DAX Elliott Wave Analysis: Correction in Progress

    DAX Short Term Elliott Wave view suggests that Intermediate wave (X) ended at 12731.46. Rally from there is unfolding as a 5 waves impulsive Elliott Wave structure where Minutte wave (i) ended at 12943, Minutte wave (ii) ended at 12881.5, Minutte wave (iii) ended at 13408.5, Minutte wave (iv) ended at 13328.5, and Minutte wave (v) of ((a)) is proposed complete at 13421.5. Index is correcting cycle from 1/2/2018 low within Minute wave ((b)) in 3, 7, or 11 swing before the rally resumes.

    Internal of Minute wave ((b)) is unfolding as a zigzag Elliott Wave Structure where Minute wave (a) is proposed complete at 13219. While Minute wave (b) bounce fails below 13421.5, Index has scope to extend lower in Minute wave (c) of ((b)) to finish the zigzag correction. Afterwards, expect Index to resume higher as far as pivot at 1/2 low (12731.46) stays intact. We don’t like selling the Index and expect buyers to appear for more upside in 3, 7, or 11 swing, provided pivot at 1/2 low stays intact.

    DAX 1 Hour Elliott Wave Chart
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