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Thursday, 24 July 2014

ASX 200 finally breaking through long term trend line resistance, what next?

Weekly chart shows the ASX 200 breaking through long term trend line resistance. Charts in this post include after hours trade through to the current European session. Barring a big reversal lower in the next 36 hours or so, the market should close the week above the trend line. So, what next?

Daily chart suggests that trend channel resistance would be tested around 5625. Given the potential that US stocks are very close to the end of their rally from the 2009 low, combined with the relatively weak weak weak performance of the ASX 200 since that 2009 low, I wouldn't be getting too excited about the bullish potential of this burst higher. I'm looking for the ASX 200 to complete a false break above that weekly chart trend line, some time in coming weeks. I'm fully aware that this market may not follow my roadmap, in which case I'll stay clear of it til either the market changes path, or I change my plan.

GBP/USD testing two key long term supports

GBP/USD is testing the trend line drawn from the 2013 low, plus the support zone around the 2005 low and 2009 high.

Wednesday, 23 July 2014

S&P 500 potentially embarking on final wave higher of entire rally from 2009 low, targeting 1998 or 2028

The S&P 500 is potentially embarking on a final 5th wave higher, to complete the entire rally from the 2009 low. To argue that point, in this post I have illustrated my Elliott Wave counts starting from the big picture, then repeatedly zoomed in to conclude with a short term chart of the market's current rally. All charts include all sessions trade through to the current European session.

First chart shows that since the year 2000 the S&P 500 has been forming a corrective pattern. Wave B is almost complete, and will be followed by wave C to (much) lower levels, certainly below the 2009 low.

Second chart chart zooms in on wave B from the first chart, to count the entire rally from the 2009 low, with the market approaching the end of the illustrated corrective pattern.

Third chart zooms in on wave 5 of the second chart, to show that the structure of the rally from the June 2013 low is nearing completion. I believe the pattern must be counted as an ending diagonal, due to the corrective action in each of the waves 1-2-3-4-5. It is an unusual ending diagonal as wave 4 does not overlap the top of wave 1, but although rare such a thing is not unheard of.

Fourth and final chart zooms in on wave c of the third chart, to count the rally from the April low, which is beginning its 5th wave higher. Importantly, the message of the preceding three charts is that this 5th wave will potentially be the final wave of the entire rally from the 2009 low. Common Fibonacci extension targets for the 5th wave in this rally are 1998 and 2028.

Many thanks to a reader for asking me about my S&P EW count. Whenever I look at a chart, always the first thing I "see" is the EW count, but I rarely label counts on my charts or share my counts on this site, mostly coz it's hard work, but also to avoid confusing casual chart watchers. I've enjoyed double checking my count tonight.

Tuesday, 22 July 2014

EUR/USD breaks trend line drawn from 2012 & 2013 lows, testing 2014 low

Key action in the EUR/USD today, right now.

Daily chart shows it trending lower, recently channeling lower, and testing the early 2014 low.

Weekly chart shows it has broken below the trend line drawn from the 2012 and 2013 lows.

Long term weekly shows it recently turned lower from the trend line draw from the 2008 and 2011 highs.

Monday, 21 July 2014

ASX 200 STILL testing long term trend line resistance

Weekly chart illustrates. Yet to beat the late April high, which could turn out to be a significant divergence from the cash market, which last week beat its late April high. Charts include all sessions trade through to the current European session.

Zooming in on the weekly.

Daily is a choppy mess, not worth posting in my books.

Dow bearish wedge STILL forming, S&P poised precariously atop even bigger bearish wedge

Daily chart shows the Dow STILL forming a bearish wedge. I write STILL due to having been banging on about this pattern seemingly forever. Maybe it will morph in to something else, but all I can do for now is describe as it is, and keep my eyes open for any changes. Charts in this post include all sessions trade through to the current European session.

Weekly chart of the S&P 500 shows an even bigger bearish wedge. Taking these two patterns together suggests that any near term weakness in US stocks has potential to signal a significant top.

Next chart zooms in on the S&P weekly. Below last week's low would complete a false break higher, and likely also move the Dow downwards beneath its shorter term wedge.