Market Swings and Deep Retracements

Do recent market swings and deep retracements have you confused? If so, bring clarity to your trading by taking a top down approach rather than focusing on the time frame that you trade.... much like working a puzzle.

Start your analysis, the same way you work a puzzle... that is, look at the picture first !  Looking at quarterly, monthly and weekly charts will allow you to gain insight as to how the lower time frame wave pattern fits into the  "BIG PICTURE". 

Let's look at an example that is possibly unfolding right now in currencies. The markets have been highly correlated to the EUR-USD pair and therefore I'm looking at the Euro for clues to explain the deep retracements and overlapping waves.

Did you miss this contracting triangle?

Triangles are important to an elliotician as they forewarn that an advance, or decline has about run it's course. The pattern, is considered a continuation pattern and occurs prior to the final wave in a wave sequence. As such, triangles can be found in waves B, X or wave 4 positions. At the quarterly chart level, we see a possible triangle occupying the w. B circle position that may be followed by a five wave sequence to complete w.C circle.

Dropping to the monthly chart, we can see the subdivisions of the pattern. Notice that each wave is made up of three wave zig-zag patterns that are common to triangular formations.  That being said, the question that remains is whether the pattern is complete as indicated in the quarterly or requires another up sequence to complete w.(E) as shown in the monthly chart.

Now review your weekly, daily and 240 minute chart levels and you should be able to accurately forecast and anticipate the next move in multiple markets.

I hope you found this trading lesson helpful.

Best of Trading

Silver and Gold: A Possible Turn?

SILVER:

 

Silver appears to have completed a flat correction that met resistance at 40.85- .95. A break of the w.iv circle low of 38.19 confirms that w.(2) had ended, setting the stage for a third wave decline.

Gold:

The call on Gold is a bit more complex than silver. At the weekly chart level, the price of Gold has reached a high of 1629 where w.(4) divides w.{(1)-(5)} into the Golden section.

 

Looking at the daily chart, the wave pattern is mature. Little, if any, upside potential remains. I would allow room for limited upside here with the understanding that the risk now is to the upside. Prints below 1478.5 would mean that a meaningful decline should follow.

You can learn more about the long term direction of Silver, Gold, global indices, commodities and currencies,  in my upcoming Mid Year Forecast.

Best of Trading 

Heard On The Street: $ES-F #Copper #Soybeans $EUR-USD

INTRODUCTION and ANNOUNCEMENTS:

Today the world finds itself at a crossroad of immense proportions. Possible European Sovereign Default and the U.S. Debt Ceiling /consequences of a possible downgrade remain atop of one's "Wall of Worry" list. Huge changes are coming in the near future whether we're ready for them or not. Many investors cling to the false hope that the economic storm is over and that their battered portfolios will recover from a decade of lost returns. As they will find out, it may be only just beginning.

Don't worry. The sky is not falling and the world is not coming to an end. In fact, the future has never looked brighter for traders and investors who take the initiative to "batten down the hatches" and position themselves properly in the market for the coming economic hurricane.

On December 20, 2010, I published my first edition of Global Gains where I released my market calls for 2011 with respect to the U.S, Asian and European major indices, Currencies, Metals and Energy. Whether you are a new subscriber or an existing follower, you may want to compare the market position as of  7/15/2011 for each market .... then compare it to my forecasts that were made over a half year in advance. Just click on the Global Gains link above. Every post on this site is dated and time stamped so you know the posts are authentic and NOT after-the-fact. As you will see, most of those calls are outright scarey while others invariably missed the mark. That's just the nature of long term forecasting.  

I'm not reviewing this information to impress you but to impress upon you the value of the Elliott Wave Principle. Secondly, it's nearly time to update my forecasts for the remainder of the year and I think that readers will find similar value in my forecasts. I'm contemplating presenting my forecast in a webinar format near the end of August.  Stay tuned for details!

Lastly, I launched Elliott Wave Live on July 2010 as a free service, consisting of analysis and commentary on the US, Europe and Asia-Pacific markets, commodities, currency pairs, stocks and ETF's using the Elliott Wave Principle, Fibonacci Ratio Analysis and Market Timing strategies. My primary focus has focused upon the E-mini S&P. My insight has been provided primarily through my blog site, video recordings and my Twitter account.

Shortly in the near future, I will be adding another level of service... a premium service, that provides more timely intraday analysis, charts and a greater in depth look at the markets. While I have not finalized all the details and cost of the subscription service, I will offer a free trial where you can kick the tires and slam doors to determine whether this service is right for you.  All will be explained in a short video presentation at a date to be determined.

THE MARKETS:

In this weeks edition of Heard On The Street I'll be covering the Emini SP, Soybeans, Copper and EUR-USD.

Best of Trading

USD : A thought

The most recent price action for DX-F can be interpreted as either bullish or bearish at the higher time frames. Here's the 120 min. chart level for consideration. I'll be devoting a considerable amount of time on the USD and Euro during this weeks video edition of Heard On The Street.

Best of Trading