Out of Sync Again!
This weekend, the fragmented market sent me mentally back to the music of the 60s …
“Set me free why don’t cha babe
Get out my life why don’t cha babe
‘Cause you don’t really love me
You just keep me hangin’ on”
That’s the chorus from “You Keep Me Hanging On,” a big hit for both the Supremes (1966), pictured to the left) and Vanilla Fudge (1967).
This market from a big picture perspective just keeps “hanging on” — this weekend, it seems to be everything other than the US indices that are doing the “hanging.” While the US indices appear to have topped, other asset classes have not.
I’ve spent a lot of time this weekend pouring over the charts, doing a lot of measuring, and arriving finally at a medium to high level of confidence in short-term direction across everything I cover.
The question is in timing.
I have a high level of confidence that SPX has completed the A wave of a zigzag and that we’ll see a B wave bounce this weekend. That suggests a turn on Monday to the downside again.
Currency pairs have not turned. Expect tests of highs and lows across the USD pairs that I cover (EUR, AUD, CAD, and JPY). I’m unsure of the timing because DXY still has some work to do (it appears to be in an ending diagonal).
On a larger scale, DXY has dropped to a level now that can only put it in a second wave category, and I’d expect the turn in the 94.00 area.
Oil requires a new high, as it appears to be near the fourth wave of an ending expanding diagonal. It needs about a $2 rise to the 43.50 area and I don’t think we’ll accomplish it this weekend.
Gold and silver appear to be very close to turning points, but my sense is that we still have a fourth and fifth wave to do, but I want to see if gold and silver move with my expectations for DXY (the US Dollar). If they move in unison, then we can expect gold and silver to top when DXY bottoms. As DXY appears to be in an ending diagonal, that’s likely a week or so from now. There’s lots of time to contemplate an entry as these assets have multi-year bear markets ahead of them.
The Federal Reserve has an announcement scheduled for Wednesday, the last one until September, but I don’t expect anything dramatic to come out of this one.
If we indeed see a turn down from a three wave correction on Monday, you can expect a very bearish week in the US indices.
The big question is timing of the turns for the other asset classes. It makes the most sense to me that they turn at the top of a second wave, but I can’t see how it can be this weekend. My sense is that we might not see a turn until next week, after we’ve finished the first zigzag down, probably to the ES2920 area.
Know the Past. See the Future
_______________________
Want some truth?
My new site and discount for monthly articles and video on how to stay healthy and wealthy over the next five years is now live. Getting to the real truth, based on history, is what I do, inside the market and out.
To sign up, visit my new site here.
All the Same Market.
I’ve been mentioning for months now that the entire market is moving as one entity, the “all the same market” scenario, a phrase that Robert Prechter coined many years ago, when he projected the upcoming crash.
We’re in the midst of deleveraging the enormous debt around the world. Central banks are losing the control they had and we’re slowly sinking into deflation world-wide, with Europe in the lead.
The US dollar is fully in charge of both the equities and currencies markets. They’re all moving in tandem, as I’ve been saying since September of 2017. Over the past three years, their movements have been moving closer and closer together and one, and now they’re in lock-step, with the major turns happening at about the same time.
it’s challenging because often times currency pairs are waiting for equities to turn, and other times, it’s the opposite. The other frustrating thing is that in between the major turns, there are no major trades; they’re all, for the most part day-trades. That’s certainly the case in corrections, where you very often have several possible targets for the end of the correction.
We’re now close to a turn in the US indices, currency pairs, oil, and even gold. Elliott wave does not have a reliable timing aspect, but it looks like we should see a top very soon.
_________________________________
Elliott Wave Basics
Here is a page dedicated to a relatively basic description of the Elliott Wave Principle. You’ll also find a link to the book by Bob Prechter and A. J. Frost.
______________________________
Have not had a losing week RW 2
 | Have not had a losing week …I have been with Peter almost a year. The only thing that matters is have I made money with his service. I think I have finally turned the corner using Peter’s EW. I have not had a losing week in the last 5 months. Thanks Peter, for your amazing amount of hard work. —RW |
Get an upper hand … JC 2
| Get an upper hand in trading …Seeing all the different currency pairs and the wave structures and hearing you explain why this has to do that on a nightly bases gives one a upper hand when trading. Elliott Wave applies to all stock and indices and can be applied to any candlestick chart. If someone ask what you want for Christmas – Tell them a membership to Peter’s “Traders Gold!”—JC |
The best of them JL 2
| The best of them …Last couple of years, I subscribed to several ‘market traders’. You are by far the best of them and the personal contact is awesome. Daily and daily updates are very well written! Besides your expertise in EW, I also like your cycles analysis. Best investment I ever made! —JL |
Couldn’t be happier … KK 2
| Couldn’t be happier …The analysis and insight you provide is simply amazing! I’ve been trading the futures and equity markets for well over thirty years and usually average around 5% monthly. Since joining your Traders Gold Service two months ago, that number has better than doubled. I couldn’t be happier.—KK |
the real deal SM 2
| The real deal …‘Educational, insightful and thorough market analysis for all levels of traders. It’s Elliott Wave at its best….Peter Temple is the real deal’ —SM |
A true expert in Elliott Wave FL 2
| A true expert in Elliott Wave …You are a true expert in EW analysis. What you provide is not available anywhere and is priceless. Subscription on your services is the best thing I have ever done. Many thanks for your effort to make me a better investor. I now have more trust in my investment decisions. I hope you will continue the excellent work! —FL |
Rise above the rest … SM 2
| Rise above the rest …I have only ever met a few people who, in their chosen fields (astrology, medicine, music, martial arts, technical analysis), rise above all the rest and you are one of them…you have ‘the gift’…and that’s why I’m a Trader’s Gold member. —SM |
Tops in your field DZ 2
| Tops in your field …You are tops in your field. Tried to follow Elliot Wave international for years. They were always behind the market. After discovering you, I perceive that you are an expert in reading the waves, which puts you way ahead of the rest of your peers. And you can read the Waves like you are reading tomorrow’s financial section. I pray you stay healthy. —DZ |
US Market Snapshot (based on end-of-week wave structure)
This chart is posted to provide a prediction of future market direction. DO NOT trade based upon the information presented here (certainly NOT from a daily chart).
Above is the daily chart of ES (click to enlarge, as with any of my charts).
After about 21 days (a month) in an ending diagonal, on Thursday this week, we finally broke to the downside, as predicted earlier in the week. Initial indications are that we're beginning a series of zigzags down, but it's still too early to be certain. The other option is the C wave of a flat.
It's still early to call a top with absolute certainty. The Elliottwave methodology calls for a first wave down in five waves followed by a second wave retrace and turn to the downside after. In the case of zigzags (which are corrective waves), the second wave may be muted and only reach a 38% retrace level, or slightly above.
There's an additional challenge in that none of the other asset classes I cover have, in fact, turned. They all appear close, however.
The only potential trend change is in the US indices, so far; they appear much weaker (and have appeared so for over a week) than currencies, oil, gold, or silver. However, all these other assets classes are very near trend changes and I expect we'll see them all join the party before with the next week to ten days.
DAX and other international indices, appear to have also turned with the US indices, as expected.
I've updated the US Dollar Index (DXY) this weekend to suggest a turn up is imminent and that we are near the bottom of a second wave. This means that as the US indices head down, we're headed for a deflationary environment over the next couple of months, as DXY rises. It may be heading into another impulsive set of five waves to the upside.
___________________________
Summary: We appear to be in a "combination" fourth wave down from the 3400 area. We have an A wave down in place from 3400, a B wave up almost to that same level, and now we're completing the C leg down to a new low below 2100. There are several possible measured objectives below that point.
The balance of the drop from February should be a combination pattern and, as such, may contain zigzags, flats, and possibly a triangle or ending diagonal at the bottom.
Once we've completed the fourth wave down, we'll have a long climb to a final slight new high in a fifth wave of this 500 year cycle top.
______________________________
Trader's Gold Subscribers get a comprehensive view of the market, including hourly (and even smaller timeframes, when appropriate) on a daily basis. They also receive updates through the comments area. I provide only the daily timeframe for the free blog, as a "snapshot" of where the market currently trades and the next move on a weekly basis.
I do a nightly video on the US indices, USD Index (and related currency pairs), gold, silver, and oil) right down to hourly charts (and even 5 minutes, when required).
______________________________________
