Cable

Cable looks like it is breaking out at 1.60, with some heavy resistance still at 1.6140; however if "everybody" is looking at the breakout we may see a "false" break up.

Strategy seems to be wait and see, a fall back through 1.60 could be a short; Many shorts probably will have covered and new longs initiated on the break above 1.60  = BULL TRAP?

Anyway the next major resistance is at 1.6140 so not far away; Another level one could short at

Looking at the chart we can see going back that between 1,60 and 1.6140 there is heavy congestion.

Also on the bigger picture, we could still be in the process of forming a large HEAD and SHOULDERS formation, significantly above 1,6165 would invalidate this pattern.

We can also see that recent price action seems to be forming a MEGAPHONE or BROADENING WEDGE, usually a BEARISH pattern. 

Where are we part 2

Continuing from the previous post, "Where are we?" the markets have rallied after falling last week.

So is this the push to new highs?   Or a small push higher, and then a bigger fall? (In Elliott wave terms , the fall last week could be an "a", the rally today the start of a "b" wave and  if we get a new decline a "c" wave, which would form a larger 4th wave..
look at the 1 hour DAX chart

and the Daily chart shows the BIGGER picture

ONLY time will tell!!

Where are we?

Well "where are we?"  Well markets are near a TOP (IMHO) but today the equity markets are correcting, as is the fall in the YEN vs various currencies.  To get an idea where we could be, I look at the DAX, and even though ELLIOTT WAVE theory is not a good PREDICTIVE tool, looking back at where we have been can give us clues to WHERE we MAY be going !

so a look at the DAX daily chart


The preferred count is in RED (looks cleaner) which means we are now in a wave 4, and once this is complete we will head up in the last wave 5 to new highs (or equal if a truncated 5th)


If the count in BLACK is correct we should now start a LARGER correction or a change in trend to DOWN.  


looking at AAPL and equity markets it "feels" like we have just finished wave 3's (Wave 3: Wave three is usually the largest and most powerful wave in a trend  The news is now positive and fundamental analysts start to raise earnings estimates. Prices rise quickly, corrections are short-lived and shallow. Anyone looking to "get in on a pullback" will likely miss the boat. As wave three starts, the news is probably still bearish, and most market players remain negative; but by wave three's midpoint, "the crowd" will often join the new bullish trend. )

AAPL


This is classic wave 3 sentiment, prices rising rapidly, those wanting to get in on a pullback miss the boat and have to pay higher prices, analysts all getting bullish...crowd joining in big time!!

Almost there?

After the short correction last week, equities have jumped to the upside, and breakouts have occurred in DAX, NDX, and the DOW to name a few.  Notable in it's non participation the FTSE has been a laggard..and may have already completed a TOP..

May need a couple of weeks of distribution...

DAX chart daily


Arrows show possible topping action over next couple of weeks..anything LARGER and may even challenge the all time highs..

AAPL shares have soared and the bullish HYPE is growing which in the end will result in tears for the latecomers to the party.  Momentum s still on the bulls side, but AAPL has gone parabolic and when it ends parabolic moves usually give back a lot of not all of the rise.  For example SILVER..

compare to AAPL now

As with Silver the "analysts" and media extrapolated the recent gains so there was talk of silver going much higher, how silver was indispensable (in industry, health; silver lined fridges, washing machines etc etc).  Compare that to now how Ipads will be needed by everyone.  Problem is no one can see an Ipad alternative..but IT'S OUT THERE !!!

and here's SILVER after the parabolic move topped.

JUST SAYING!!

Finally ! The beginning of the end?

Well it finally looks like equity markets will resolve the last months trading range to the upside after a false downside break last week.  HOWEVER this looks to be the final move up before the SIGNIFICANT correction...

There seem to be a few divergences..

USD is rallying even as equity markets are rallying...(is smart money already going into safe (perceived) assets?)

Looks like new highs (if we get there)  will be diverging from RSI

DAX 3 hrs

DAX DAILY

A break above 7000 could see 7200 pretty quickly, but looks like that will be the end of this leg up or may be the end of the BULL run for now....either way the next big move will be down...

patience..wait for it !

FTSE DAILY




 Finally making a move to 6100?

DAX following corrective path

Well the DAX has recovered..
Now is it corrective with another leg down?  Or will we challenge the highs at 7000?

This DAX chart shows the projected correction of the move down
and below the current updated chart..

SO FAR it has followed the black arrows almost perfectly..
resistance looks to be around 6830 (good STOP area if shorting)

DAX 1 hour

Quick look at the FTSE 30 mins chart which also shows the rally has touched resistance at 5870..
may provide clues to overall market if we turn down again here

Cable ..BIG picture

While the markets are treading water today time to look at the longer time frames of various instruments.

Cable daily chart

The head and shoulders formation pointed out in this post seems to still be valid and actually LOOKS better as the left shoulder was a complex one and the potential right shoulder shows some symmetry with the left now.  Obviously there is quite a distance to the neckline of the formation at around 1.53,  BUT ....we could see that level if the dollar index continues to strengthen and heads to 81.  The important thing to watch is how it reacts to support at 1.53.

short term ... 1 hour chart


Looks pretty self explanatory

DAX different time frames. Full Moon tomorrow

After the DAX fell over 3 % yesterday, today SHOULD see some form of consolidation of the move down.  How it transpires will show if there is further weakness in the markets.  FULL MOON tomorrow

DAX 1 hour chart

On the chart are drawn black arrows (purely speculative) of how this correction could take place..

Targets around 6400 for DAX, before the rally continues.

DAX 3 hr chart


In this chart we can see that price is getting close to the top of the shaded rectangle, previous resistance, so a pause there should be in order.  A break below that would target the base of the rectangle.

DAX daily


The daily chart shows the NEGATIVE DIVERGENCE(price/RSI)  which translated into yesterday's fall.
Major support is now 6400, if this move is a correction it may take a few days/ week to get there.  
200 day ma support at 6274

DAX weekly

The DAX weekly shows the possible Elliott Wave count, and we can still be following either the red scenario, or the black arrow scenario.
Either way it is clear that the major support is at 6400 or just below

Correcto !

Well my gut feel as posted here was correct (so far)..

I LIKE BEAR moves..

They are normally quicker than BULL market moves..
Volatility tends to pick up so there  more intra-day opportunities

Just got to remember don't get married to the bear position YET..
Probably a good 10 % minimum correction and then it will be right to don the BULL outfit again!

AAPL

Apple looks like it will conform the negative divergence which has been forming..
watch out for sharp correction

Which will take NDX lower as well

AUDUSD at support..for the moment

AUDUSD 8 hr chart




At support around 1.0595.  Most significant event was the attempt to break out at 1,8 which failed.  If it breaks 1.0595 could be quick move to 1.05 before a corrective rally, or if support holds corrective rally could be happening now.

Waiting...

Still waiting for the markets to move one way or other..
FTSE still stuck in 100 point range, DAX near resistance at 7000, DOW near 13,000, NASDAQ Comp near 3000...

FTSE 

DAX


The large black arrow shows the RESISTANCE it has to go through for additional gains.
Methinks not this time..

BUT................

some warning signs in other asset classes like currencies and commodities. OIL is weaker and  COPPER also seems to want a bigger retrace before any greater rally.

AUDUSD is struggling after an attempt at breaking out of a BULL FLAG ..CONSOLIDATION last week at 1.08.  If it doesn't do it soon, a failed break out is a good signal for a decent move the oppsoite way..ir DOWN vs USD.

On the MONTHLY chart some Elliott Wave numbering for fun..
Could it be we are seeing a truncated 5th wave?Truncation A truncated fifth wave does not move beyond the end of the third. It can usually be verified by noting that the presumed fifth wave contains the necessary five subwaves, as illustrated in Figures 6 and 7. Truncation gives warning of underlying weakness or strength in the market. In application, a truncated fifth wave will often cut short an expected target. This annoyance is counterbalanced by its clear implications for persistence in the new direction of trend.

Here is a graphical representation of a truncated 5th wave

 

and here is the AUDUSD monthly chart

DULL...something's going to give soon?

Looking at the FTSE 3 hr chart it has moved in basically 100 point range for the whole of February.

Something's going to give..

either a break up out of the range

or a correction of the move up from December 2011

Bear in bull clothes

I've been bullish since Oct last year but now am leaning bearish at least short term expecting a decent pull back in markets soon , after which it will be a buy opportunity again
Prob a 10 % decline
Everybody on mainstream financial news turning bullish so going to do opposite!!

DAX nearing resistance band

DAX WEEKLY

Dangerous using Elliott waves , but looks good!

So IMO nearing some hefty resistance, question is "is there one more push up left?" before the correction?
DAX is up 30 % from the November 2011 lows..with barely a pause..

Maybe a push up to above 7000 to suck in late longs and stop out shorts before markets turn.
5-10 % correction would be healthy..

Ideally a small drop and new highs first before larger correction, but larger correction could start here.

Looking at AUDUSD (risk on risk off leading indicator) it has broken out of bull flag, so new highs SEEM likely..
BUT BE NIMBLE!!

DAILY CHART

On the daily the major resistance is the shaded light blue area (6990-7100).  Feeling is market will try and pierce this, before deeper correction.

Cable consolidation over? or topping?

Cable (GBPUSD) seems to have consolidated it's move up from the lows at  1.53

Now at resistance near the 200 day ma, and horizontal resistance.  A significant break above clears way to 1.6140 and beyond as per previous post  here

Looking at the daily chart

This shows the horizontal resistance levels clearly

Also the recent corrective action could be an Elliott wave ABC correction.

Move from Jan low (1.5256) to Feb high (1.5898) = 642 pips

 if next move is equal to this 1.5936 + 642 = 1.6578 (ie close to 1.66)

4 hour chart

Pull back possible before heading higher..

Can be short at 1.5930 with a tight stop

Or wait for pullback and stop below 1.58

If break out higher 1.62 target off the 4 hour chart ( close to 1.6140 target off daily chart above)

APPLE falling out of the tree?

APPLE still in the process of forming negative divergences, new highs in PRICE but RSI is struggling. Not a short yet, but could be time for taking some profits to re-enter long after the correction

Correction should be dramatic when it comes..

Aussie dollar vs USD

Looking at the AUDUSD which has been the RISK ON RISK OFF indicator for a good while now..

It looks like it is in the process of forming a BULL FLAG and very near resistance between 1.07 and 1.08.  If it breaks out expect a test of the highs at 1.11, which should also coincide with an upside break out for equity indices especially US ones, which could be the EXHAUSTION RALLY before a sizeable correction (or dare I say it the TOP?)

As I speak S&P 500 looks to have broken the high at 1370 (cash 1373) and may encourage short covering and momentum players in the market (GOOD TIMING ..NOT!)

Crude oil and petrol prices

Well after filling up the car a week and a half ago at 1.41€ per litre, and yesterday noticed that it has now gone up to 1.44€ a litre a 2.12 % increase in under 2 weeks!


So the increase is all blamed on rising crude oil prices ..HOWEVER in July 2007 crude oil was at a record 180 $ per barrel, and prices at the pump reached the low 130's (centimos) per litre...


Look at the graph below you can see that prices at the pump dropped when crude oil dropped , BUT since then have raced ahead of crude oil prices


The blue line = prices at pump
Since Jan 09 crude oil has been rangebound roughly 80-110 USD per barrel, yet the prices at the pump have continued to rise....


As usual Europeans continue to pay through the nose for petrol and governments continue to rake in tax revenues the higher it goes...

Commodities Gold, silver, Crude oil, Copper

GOLD

broke out now looking to challenge 1800 resistance level.

SILVER

Approaching down trend line, and 200 day MA at 35.03.
a break above could see sharp rally

CRUDE OIL


Above resistance at 104, after large consolidation.  Oil short term overbought, but with tensions rising with Iran, should not give much back and may well be on to much higher targets 129 (measured move). Initial target 111/115 before significant correction

COPPER


Copper may also have competed a correction from overbought levels.  Key level downside 365. If correction over should now be heading to 400, and beyond that the triangle target is still at 450 ish.