Cycling on...

Just an exact overlay of my cycle and the SPX ; )

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

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

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

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]

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