Monday, September 28, 2009

The very last up wave

We might be in the very last wave of this Primary wave before the market starts to collapse.

SPX: Last weekend, I wrote that I expect a correction from higher levels. This actually happened; the market moved higher till Wednesday, corrected after the FED announcement and nearly reached the wave [i] high @1040.

So far, I labeled the low on Friday as a wave [iv], thus I expect a last try of the bulls to avoid the unavoidable and reach 1090 or 1120 before the collaps begins. If the market should drop below the wave [i] high today I'mma switch my two counts (i.e., the alternative count will be my primary one and vice versa ; ))

Primary count: at the beginning of [v] of C of (Y) of [2]/[B]
Alternative count: P2/B has already peaked at 1080

DAX: The DAX is making a really nice Ending Diagonal (ED). So far, I can only count 4 waves, thus I expect a last a-b-c move to the upside to complete the ED. After that, this rally should be over and we should see new lows next year.

Primary count: in [v] of C of (Y) of [2]/[B]
Alternative count: P2/B has already peaked

USD: I think the USD has bottomed and is now ready to take-off : D. As you can see in my last post about the USD/CHF I preferred the 1,02 area as a possible bottom. It reached 1,0188 last week, thus I think the low is in. This count will be correct as long as it doesn't make new lows.

Primary count: at the beginning of Primary [C] up
Alternative count: still in the last down wave

Sunday, September 20, 2009

I'm fed up...

...with bearish charts. ; ) Thus I present you one of my most bullish charts:


That's the number of bulls left in the USD. As we've learnt throughout history, when the sentiment reaches an extreme then it's likely that the market is about to do that, what nobody is expecting.

Hence, when everybody is expecting a collapse of the Dollar, then we should look for a bottom. The wave structure (shown for the USD/CHF) favors this scenario as well. It should be in the last wave of Primary [B]. Some fibonacci relationships are at 1,02ish, thus I expect the bottom to take place in this area.

After that we should see a nice rally possibly up to 1,30 over the next few months/years.

Saturday, September 19, 2009

Another 50 points to the upside?

Although 1070 was hit, I still prefer the second target at 1125ish for the following reasons:

- the 50% retracement lies at 1121
- A=C at 1128
- if you label the (W) high at 930, (W) equals (Y) at 1132

Friday, September 18, 2009

First target hit

This week I haven't spent a lot of time looking at the stock market. And to be honest, I haven't really missed anything since last week. Then, on Thursday, after the breach of 1039 I called for a wave [iii] to the upside to reach at least 1070. As I'm writing this, the market is exactly at this level and struggling a bit.

It's very well possible that it will even reach my second target around 1125 but I don't wanna chase the last few points, thus I've drastically reduced my long position.

EWI: EWI's free week is back. Just click on the banner below and sign up if you aren't a member already to get the European (and Asian-Pacific) Short Term Update till Wednesday. It's completely free so don't hesitate. ; )

I'm gonna post some charts tomorrow.

Friday, September 11, 2009

Thursday, September 10, 2009

Hugo is cycling...

I had a free morning and didn't really know what to do. So I thought I could play a bit with cycles (yep the first thing that came into my mind lol).

However, the picture above is the result of this morning. All you have to do now, is to compare my chart with an SPX Chart (mainly compare the turning points (labeled in red in my chart)).

So far, the turning points in my cycle fit quite well with the important lows/highs in the SPX and if the market should turn in September I might try to improve the cycle a bit ; )

SPX: Made a new high, thus I expect 1070/1120 to be tested next week. After that, the market should turn and begin Primary 3/C what actually fits very well with my cycle ; )

Primary count: in [iii] of C of (Y) of [B]/[2]
Alternative count: none

Tuesday, September 8, 2009

New low for the USD

SPX: In my weekend update I said: "Anything below 992 should confirm a wave [iii] down, whereas a break of 1039 would be the trigger for [iii] up." So, we are still between these two figures and waiting for a break. The new low in the USD though could be the trigger for the SPX to make a new high.

Primary Counts: [iii] of 1 down or [iii] of C of (Y) up
Alternative Count: none

EUR/USD: While the stock market showed indecision and neither confirmed the bullish nor the bearish count, the Dollar made a new low (and the EUR/USD a new high). This invalidated the bearish count for the latter. At the moment I see two possible counts how this fifth wave could finish. It is either forming a bearish wedge or probably going to 1.50 before it turns.

Regardless of which count will be the right one, the ultimate result will be the same: After topping out the EUR/USD will very likely start a long decline which should carry it way below 1.2.

Primary Count: at the end of [iii] of 5 of C
Alternative Count: in the middle of [iii] of 5 of C

Sunday, September 6, 2009

979 holds so far

On Wednesday I expected a bounce to 1016ish to complete wave [ii]. The market finished the week at this very level, just to leave the door open for both counts. So far, there is no reason to change my primary count with the little exception that the rally from 992 looks quite bullish.

Regardless of which count will be the right one, we should see a big move in the coming week, either a wave [iii] down or a [iii] up. Anything below 992 should confirm a wave [iii] down, whereas a break of 1039 would be the trigger for [iii] up.

Primary count: finishing wave [ii] of 1 of (1) of [3]/[C]
Alternative count: in [iii] of C of Primary [2]/[B]

The big picture: No need to change it. Still expecting the top between 1014 and 1120.

EUR/USD: It tested the lower trendline of the rising wedge, but didn't really sell off afterwards. So far, it's still possible that a new downtrend started a few weeks ago. A break below 1.4050ish would confirm this. Anything above 1.4446 would invalidate it.

P.S.: I labeled all waves since 1039 a degree lower now because the first wave was to short in terms of price and time to be one of Minor degree

Wednesday, September 2, 2009

The beginning of the end?

Already on Monday the SPX fell below 1016, what I considered to be a first indication that the bear market rally is finished. The next very important support lies at 979, the low of Minor B. I expect this level to be tested to finish the first wave down. Afterwards a wave 2 should occur, possibly to challenge the resistance at 1018. This rally should be a great short opportunity (with a stop at 1039).

Primary Count: in [iv] or [v] of 1 of (1) of Primary [3]/[C]
Alternative Count: finishing [ii] of C of Primary [2]/[B]

EWI: You might have already seen all the EWI Banners which will be decorating my blog from now on. Last week I recieved an e-mail from an EWI employee. He wrote that they are interested in working with me. I accepted of course and so, from now on, I'm an official affiliate of Elliott Wave International : D.

I can highly recommend all the free stuff they provide. If you haven't read yet Prechter's 10-page letter (it expires in a week), just click on the first banner in the sidebar on the left to be able to read it. If you aren't a member, just sign up (it's completely free).

EUR/USD: It breached the support line of the rising wedge and will possibly test it from below later this week.