GBP/USD Approaches Important Long Term Price Zone...

In our last report, we noted how the Elliott Wave technical picture cleared up. Though GBP/USD sliced right through 1.3450 like a hot knife cutting through butter, the bigger wave picture is still intact. Despite the Bank of England and market participants believing a rate hike is coming, the technical picture for GBP/USD is not as rosy. We believe Cable is in a terminal wave at three different degrees of trend. This suggests a reversal may be looming overhead. The Elliott Wave model we are following points our trend “GPS” to the coordinates of wave v of ((C)) of Y of 4. For those familiar with Elliott Wave, those first three coordinates are ending waves. That means once this move higher exhausts, GBP/USD may stage a top that lasts for several months. We are seeing a cluster of wave relationships appear in the 1.3775 to 1.3918 price zone so a reversal (if one happens) may take place there. Struggling with your trading? This could be why. Since this could be the final moves of wave 4, that implies a fifth and final wave to come. We know from our Elliott Wave lessons that fourth waves inArticle source:...

Gold Prices Dive for 3 out of 4 Days

The gold price correction has been more resilient than we have anticipated. Gold prices have sold off about 4% since the September 8 high was registered at $1357. Due to the break below $1300, our models are forecasting and giving more weight to continued weakness. The chart pattern we are illustrating today is that gold prices finished a ‘C’ wave of a very large triangle pattern. ‘C’ waves of triangles tend to be complex waves and this one fits that bill. Assuming the wave count listed below is correct and then there are a couple of items we can imply: First, we can anticipate a deep retracement of the December 2016 to September 2017 wave. It would be normal for the ‘D’ wave of this pattern to correct down towards $1215 and possibly even lower. Alternating waves in triangles tend to have Fibonacci proportion to one another. This could drive gold prices down towards $1215. Secondly, the triangle pattern implies two more waves to finish the triangle, the ‘D’ and ‘E’ waves. The Elliott Wave triangle pattern is a five wave pattern. Since this is a large degree triangle pattern, it may take several months for these final two wavesArticle source:...

Gold Prices Dive for 3 out of 4 Days

The gold price correction has been more resilient than we have anticipated. Gold prices have sold off about 4% since the September 8 high was registered at $1357. Due to the break below $1300, our models are forecasting and giving more weight to continued weakness. The chart pattern we are illustrating today is that gold prices finished a ‘C’ wave of a very large triangle pattern. ‘C’ waves of triangles tend to be complex waves and this one fits that bill. Assuming the wave count listed below is correct and then there are a couple of items we can imply: First, we can anticipate a deep retracement of the December 2016 to September 2017 wave. It would be normal for the ‘D’ wave of this pattern to correct down towards $1215 and possibly even lower. Alternating waves in triangles tend to have Fibonacci proportion to one another. This could drive gold prices down towards $1215. Secondly, the triangle pattern implies two more waves to finish the triangle, the ‘D’ and ‘E’ waves. The Elliott Wave triangle pattern is a five wave pattern. Since this is a large degree triangle pattern, it may take several months for these final two wavesArticle source:...

Crude Oil and Natural Gas Prices Grind Higher...

Crude oil prices have been pressing the higher end of its trading range for the past two weeks. We previously wrote how we think the 14 month triangle pattern may have ended on August 30. If so, this is a likely a bullish triangle leading towards a retest of $55 and possibly higher. According to the Elliott Wave model we are following, we can count five wave impulsive moves higher, though they are not the cleanest. Therefore, we need to keep an open mind that the pattern is illustrating an inability to punch higher with vigor. This in itself is weak so stick to your technical levels and if they break, move on to other patterns. The key level to watch here is the red upward sloping trend line. So long as prices remain above this trend line, then we can maintain a bullish bias. The red trend line runs near $48 today. If crude oil prices move below this red trend line, then it acts like a red warning signal on the dashboard. There are still bullish patterns available like a diagonal. However, the odds of other bearish patterns increases diluting the opportunity at a good risk to reward ratio. BottomArticle source:...

Dow Jones Industrial Average Flying with Wind Beneath Its Wings...

Dow Jones Industrial Average has been flying high lately. DJIA will meet its next obstacle on Wednesday, the Fed. FOMC meets to discuss their latest round of monetary policy. An aggressive balance sheet reduction plan may create jitters among traders as the proverbial punch bowl of monetary easing is emptied. (Join my colleague John for a live webinar as FOMC releases their statement Wednesday.) The technical pattern for DJIA has a couple of main options available. If DJIA can break and hold above 22,372 (where the 1.382 expansion is), then there is an immediate bullish move we are anticipating. There is an immediate bearish option that calls for DJIA to pivot now and return lower towards 21,800. The bearish option would be an expanded flat pattern or triangle pattern where DJIA is currently within the ‘b’ wave of the pattern. This implies another correction lower in wave ‘c’. If the expanded flat pattern plays out, then price may dig towards 21,400-21,800. A ‘c’ wave of a triangle would hold above 21,600 and continue to grind sideways. Both the expanded flat and triangle imply the same thing. That is to say that once those patternsArticle source:...

USD/JPY Advance May Kick off a New Uptrend...

The advance by USD/JPY has kicked off what we believe to be a new uptrend. The Elliott Wave model we are following indicates this could be powerful wave higher that retests and possibly exceeds the 2015 high of 126. You can see from the daily chart below, USD/JPY advanced in five waves in late 2016. Since then and for all of calendar year 2017, USD/JPY has been correcting lower in a complex pattern. This w-x-y-x-z dip has retraced 61% of the previous up trend. Under this interpretation, the September 8 low of 107.32 is a key level. Learn more about the patterns and trading with Elliott Wave with these beginner and advanced Elliott Wave trading guides. USD/JPY Daily Elliott Wave Count Since September 8, prices appear to have advanced in another five wave impulse which sets into motion a larger up trend. USD/JPY has already broken above the orange trend line. A break above the red trend line will provide further confirmation an important low may be in place. We cannot rule out a dip next week to 109.60. A correction of that nature is normalArticle source:...