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EURJPY Elliott Wave Analysis: More Downside Expected
EURJPY short-term Elliott wave analysis suggests that the decline to 129.13 low ended Minor wave A. The internals of that decline unfolded in 5 waves impulse structure in a lesser degree cycle. Thus suggests that the pair can be doing a Zigzag correction lower. Up from there, a bounce to 130.18 high ended Minor wave B bounce as a Flat correction where Minute wave ((a)) ended in 3 swings at 130.30. A decline to 128.32 low ended 3 waves in Minute wave ((b)). Then a rally to 130.18 high ended 5 waves in Minute wave ((c)) & also completed Minor wave B bounce. Down from there, Minor wave C remain in progress & has managed to make a new low below 128.32 low confirming the next extension lower. Where Minute wave ((i)) of C ended in lesser degree 5 waves at 128.22 low. Up from there, pair is doing a 3 wave bounce in Minute wave ((ii)) of C towards 129.64-129.84 area. Then as far as a pivot from 130.18 high stays intact pair is expected to fail for more downside. We don’t like buying it and prefer more downside against 130.18 high.
EURJPY 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

Amazon Elliott Wave View: Favoring More Downside
Amazon ticker symbol: $AMZN short-term Elliott wave view suggests that a decline to $1685.99 low ended primary wave ((W)). The internals of that decline unfolded as Elliott wave Flat structure. Up from there, a bounce to $1856.92 high ended primary wave ((X)) as Elliott wave zigzag correction. Where intermediate wave (A) ended in lesser degree 5 waves at $1809.88 high. A pullback to $1734.23 low in 3 swings ended intermediate wave (B). And finally, a push higher towards $1856.92 high ended intermediate wave (C) of ((X)) in another 5 waves.
Down from there, Amazon has made new lows already confirming the next extension lower in primary wave ((Y)), thus favoring more downside. The initial decline to $1714 low ended Minor wave W as a zigzag structure where Minute wave ((a)) ended in 5 waves at $1753. Minute wave ((b)) bounce ended at $1809.50 and Minute wave ((c)) of W ended at $1714 low. Then a 3 wave bounce to $1784 high ended Minor wave X. Near-term, while bounces fail below there and more importantly below $1856.92 expect stock to extend lower for more downside towards $1488.28-$1401.41 100%-123.6% Fibonacci extension area of primary wave ((W))-((X)) before upside renew or stock produces a 3 wave bounce at least. We don’t like buying it.
Amazon 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

Elliott Wave: Further Downside Looming Large For IBEX?
IBEX short-term Elliott wave view suggests that a decline to 8850.20 low ended Minor wave A of a zigzag structure. The internals of that decline unfolded as 5 waves impulse structure where Minute wave ((i)) ended at 9471.20 low. Minute wave ((ii)) ended in 3 swings at 9542.80 high. Minute wave ((iii)) ended in lesser degree 5 waves at 8971.30 low. Then Minute wave ((iv)) bounce ended at 9120.80 high and Minute wave ((v)) ended at 8850.20 low.
Up from there, the index made a 3 wave bounce to 9141.92 high & ended Minor wave B in lesser degree zigzag structure. Where Minute wave ((a)) ended at 9021.10. Minute wave ((b)) ended at 8986.80 low. And Minute wave ((c)) at 9141.92 high. Down from there, the index has made new lows already confirming the next extension lower in Minor wave C and creating a short-term bearish sequence from 9/21/2018 peak. Where a decline to 8639.70 low ended Minute wave ((i)) of C. Near-term, while below 9141.92 high expect index to fail in Minute wave ((ii)) of C in 3, 7 or 11 swings for more downside. We don’t like buying it and expect bounces to fail in 3, 7 or 11 swings against 9141.92 high.
IBEX 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

BTCUSD Soon To Break Sideways Consolidation?
Bitcoin ticker symbol: BTCUSD short-term Elliott wave view suggests that instrument is trapped in a sideways price action since August 2018 lows. Which suggests that pair can be doing a bearish triangle structure. Where lesser degree price action shows Minutte wave (b) ended at 6656.63 as a bearish triangle. Down from there, Minutte wave (c) ended at 6055.28 low and also completed Minute wave ((b)).
Up from there, a rally to 6771.82 high ended Minute wave ((c)) of a triangle. The lesser degree cycle of that bounce unfolded as a Flat where Minutte wave (a) ended at 6349.47 high. Minutte wave (b) ended at 6143.08 low and Minute wave (c) ended at 6771.82 high. Below from there, Minute wave ((d)) of a triangle remain in progress as a zigzag structure where Minutte wave (a) ended in 5 waves at 6365.34 low. Minutte wave (b) bounce ended in a lesser degree bearish triangle at 6450.30 high. And Minutte wave (c) of ((d)) remain in progress in another lesser degree 5 waves towards 6169.70-6076.18 area approximately. Afterwards, the pair is expected to do another 3 wave bounce in Minute wave ((e)) before the triangle gets matured & a thrust lower is seen provided the pivot at 6177.82 high remains intact. We don’t like buying it.
BTCUSD 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

EURNZD: Elliott Wave Showing Incomplete Sequence
EURNZD short-term Elliott wave analysis suggests that the decline from 10/08/2018 peak is unfolding as Zigzag structure. Where a bounce to 1.7881 high ended Minute wave ((ii)), Minute wave ((iii)) ended in lesser degree 5 waves at 1.7528 low. Minute wave ((iv)) ended at 1.7596 high. And Minute wave ((v)) ended at 1.7493 low which also completed the Minor wave 3. Up from there, a bounce to 1.7556 high ended Minor wave 4 bounce. Down from there, a decline to 1.7354 low ended Minor wave 5 & finally completed intermediate wave (A) in 5 waves impulse.
Above from there, a bounce to 1.7587 high ended intermediate wave (B) bounce. The internals of that bounce unfolded as double three structure where Minor wave W ended in 3 swings at 1.7534 high. Minor wave X pullback ended at 1.7399 low and more Minor wave Y ended in another lesser degree 3 waves at 1.7587 high. Down from there, intermediate wave (C) remains in progress in another 5 waves. Near-term, while below 1.7587 high expect bounces to fail in 3, 7 or 11 swings for more downside towards 1.7004-1.6642 100%-161.8% Fibonacci extension area of intermediate wave (A)-(B) to end the cycle from 10/08/2018 peak & finding buyers again. We prefer more downside against 1.7587 high.
EURNZD 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

Dow Jones Elliott Wave View: Correction Completed
Dow futures ticker symbol: YM short-term Elliott wave view suggests that a bounce to 25845 high ended cycle degree wave “b”. Down from there, cycle degree wave “c” unfolded as ending diagonal structure i.e lesser degree cycles within primary wave ((1)), ((3)) & ((5)) also unfolded in 3 swings structure. Where primary wave ((1)) ended at 25220 low as zigzag structure. Up from there, a bounce to 25594 high ended primary wave ((2)). Below from there, primary wave ((3)) ended at 24515 low in another 3 swings.
Above from there, a bounce to 25075 high ended primary wave ((4)) bounce. Then finally a decline to 24089 low ended primary wave ((5)), which also completed cycle degree wave “c” & super cycle wave (IV) pullback. Up from there, the index made a strong bounce higher & broke the pivot from 25845 thus suggests that the next leg higher in super cycle degree wave (V) could have started. Near-term, while dips remain above 24089 low the index is expected to resume the upside. But a break above 26962 10/03/2018 peak remains to be seen for final conviction of this bullish view & to avoid double correction lower in super cycle degree wave (IV) pullback. We don’t like selling it.
Dow 1 Hour Elliott Wave Chart

BAC Elliott Wave Analysis: Correction Ended
Bank of America corporation ticker symbol: BAC short-term Elliott wave analysis suggests that a decline to $27.26 low ended intermediate wave (3). The internals of that decline unfolded in 5 waves impulse structure in lesser degree cycles. Up from there a 3 wave bounce to $29.19 high ended intermediate wave (4) as double three structure. Down from there, the stock declined lower in another lesser degree 5 waves structure. That completed the intermediate wave (5) lower at $25.91 low. Which then also completed primary degree wave ((C)) & the cycle degree wave IV pullback.
Above from there, the stock is expected to resume the upside in cycle degree wave V ideally. Or should do a larger 3 wave bounce to correct the cycle from 3/12/2018 peak. Currently, the rally from $25.91 low is nesting higher as impulse structure looking to extend higher 1 more push higher to end intermediate wave (1). Afterwards, the stock is expected to do a pullback in intermediate wave (2) in 3, 7 or 11 swings before further upside extensions are seen provided the pivot at $25.91 low stays intact. We don’t like selling the stock as we are expecting BAC to turn higher against $25.91 low pivot.
BAC 1 Hour Elliott Wave Chart

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AAPL Elliott Wave Analysis Suggests Selloff Close to Ending

Apple (AAPL) short-term Elliott wave analysis suggests that the decline from $224.23 high, i.e. Primary wave ((X)), is unfolding as a Flat Elliot Wave structure. Down from $224.23, Intermediate wave (A) ended at $206.09, Intermediate wave (B) ended at $223.49, and Intermediate wave (C) is currently in progress.

Internal of Intermediate wave (C) is unfolding as a 5 waves diagonal. Down from $223.49, Minor wave 1 ended at $205.16, Minor wave 2 ended at $213.71, and Minor wave 3 ended at $198.17. Expect Apple to bounce in Minor wave 4 then extend lower 1 more leg in Minor wave 5 towards $189.32 – $197.56 to end a 5 waves down from $223.49 as a diagonal.

Once Apple ends the 5 waves down, it can also end Cycle degree wave IV and complete cycle from Oct 3 peak ($233.47). Afterwards, expect Apple to either rally to new high or at least bounce in larger degree 3 waves to correct the decline from Oct 3 peak. We don’t like selling Apple as it has reached the extreme area from Oct 3, as indicated in the blue box.

AAPL 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

Elliott Wave Analysis: Oil (CL_F) looking to end 5 Waves

Oil (CL_F) short-term Elliott wave analysis suggests that the decline from Oct 3rd high is unfolding as a 5 waves impulse structure. In an impulse structure, the internals of wave 1, 3, and 5 also subdivide in another 5 waves of lesser degree. With Oil, we propose Minor wave 3 ended at $62.52 , Minor wave 4 ended at $64.12, and Minor wave 5 is still in progress as 5 waves of lesser degree.

Looking at the internal of Minor wave 3, a clear 5 waves subdivision can be observed. Minute wave ((i)) ended at $70.51, Minute wave ((ii)) ended at $72.70, Minute wave ((iii)) ended at $65.74, Minute wave ((iv)) ended at $67.95 and Minute wave ((v)) ended at $62.52. After a relatively shallow bounce to $64.12, Oil has extended lower again which we think is the last Minor wave 5 from Oct 3rd high.

Near term, while bounces stay below $64.12, Oil still can extend a bit lower towards $59.4 – $60.3 area before ending Minor wave 5. Once Minor wave 5 completes, expect Oil to at least rally in 3 waves to correct the decline from Oct 3rd peak.

Oil 1 Hour Elliott Wave Chart

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Brexit Progress May Turbocharge Poundsterling

There’s no question the most important risk event and near term key driver for Poundsterling remains to be Brexit. This week may shape up to be an important week for Poundsterling as Prime Minister Theresa May’s Cabinet discusses about it today (Tuesday Nov 6th). The Sunday Times reports last weekend that Mrs. May has secured concession from the EU on the Irish border. The issue of Irish border backstop remains to be the key sticking point.
The government spokesman however has denied the report stating that it was merely speculation and that negotiations remain ongoing. Sunday Times also reported that the U.K will get an agreement on economic partnership with EU similar to the Canada’s free-trade accord. Mrs. May will need to get support from her cabinet before finalizing an agreement with the EU. So far, there has not been enough progress from the U.K. side to call for a special summit.
The parliament goes into recess this week, and the government wants progress made on the Irish border by Friday so that the EU can call a special Brexit summit on late November to seal the deal. The cabinet meeting today thus may see some progress from the UK side, paving the way for the withdrawal agreement to be finalized by December. A progress this week from the Cabinet meeting can potentially boost Poundsterling against other major currencies. On the other hand, further delay may not necessarily result in Poundsterling major sell-off, but it can cause further volatility in the currency.
GBPAUD Elliott Wave Forecast Update on Oct 25 looking for more upside

GBPAUD shows an incomplete bullish sequence from Oct 2016 low (1.5665) and suggests that further upside is favorable. The pair has reached the target blue box area now to end wave (X) pullback as a double correction (WXY). Tentatively, wave (X) can be complete at 1.7857 on Oct 31 low. While near-term pullbacks stay above there, pair can see more upside. We took a long position at 1.796 in Live Trading Room, the top area of the blue box, and have moved stop loss to entry level at 1.796, thus creating a risk free position.
At this stage, good news from the Brexit front can potentially turbo charge the Poundsterling pair, enabling us to reap a nice profit. However, in case there’s no progress made, the position is already risk free so there’s nothing to worry about. We use a safe trading methodology by trading at inflection areas to increase chance to create risk free trade. If you are interested more to learn about our trading approach, you can join our Live Session or browse our educational page. We also offer 14 days FREE trial to check our services without further commitment.

Elliott Wave View: SPX Starts a New Impulsive Rally

Short term S&P 500 (SPX) Elliott wave view suggests that the selloff starting from Sept 21 high (2940.9) has ended at Oct 29 low (2603.54). We take the most aggressive view and call the low at 2603.54 as wave IV in Cycle degree. This suggests that SPX is ready to rally in a new bullish cycle towards a new all time high. However, for this view to gain validity, the Index must first break above the previous all-time high, labelled as Cycle degree wave III at 2940.9. Without this confirmation, the Index technically can just correct the selloff from last month in 3 waves ABC zigzag, then continue the selloff again.

Looking at the internal subdivision, it appears the selloff from Sept 21 to Oct 29 low took the form of a double three Elliott Wave structure. Down from 2940.9 high, Primary degree wave ((W)) ended at 2710.5, wave ((X)) ended at 2816.94, and wave ((Y)) ended at 2603.54. This move lower also ended a higher Cycle degree wave IV. Since then, the Index has rallied strongly, further getting acceleration to the upside after U.S. midterm election.

Rally from Cycle degree wave IV at 2603.54 is unfolding as a 5 waves impulsive structure where Minor wave 1 ended at 2756.55 and Minor wave 2 ended at 2700.25. Index has since extended higher again above Minor wave 1, suggesting that Minor wave 3 has started. Near term, while pullbacks stay above 2700.2, and more importantly above 2603.54, expect further upside in the Index. As an alternate, the rally from 2603.54 can take the form of a zigzag Elliott Wave structure, where the first leg higher to 2756.55 ended Minor wave A instead of Minor wave 1, and the pullback to 2700.25 ended Minor wave B instead of Minor wave 2. In this scenario, then SPX should finish Minor wave C as 5 waves then start to turn lower again.

SPX 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

Elliott Wave Analysis: GBPJPY in Correction Before Next Leg Higher

Short Term Elliott wave view in GBPJPY suggests that the decline to 142.77 ended wave (2) in Intermediate degree. Up from there, the pair rallies as an impulse and ended Minor wave A at 149.49. Minor wave B pullback is currently in progress to correct cycle from Oct 26 low (142.77) before the next leg higher. We can see internals of wave A unfolded in 5 waves where Minute wave ((i)) ended at 144.39, Minute wave ((ii)) ended at 143.19, Minute wave ((iii)) ended at 147.77, Minute wave ((iv)) ended at 146.83, and Minute wave ((v)) ended at 149.49

Subdivision of Minute wave ((iii)) and ((v)) further reveals another 5 waves of a lesser Minutte degree (blue color), fulfilling the rule of an impulse wave. This rally from 142.77 low to 149.49 high completed Minor wave A of a larger degree and ended cycle from Oct 26 low. Pair should now pullback in Minor wave B to correct this cycle in the sequence of 3, 7, or 11 swing before the rally resumes, provided that pivot at 142.77 low stays intact.

Minor wave B pullback is currently proposed to take the form of a zigzag where Minute wave ((a)) of B is in progress as a diagonal. Afterwards, pair should bounce in Minute wave ((b)) of B before turning lower in Minute wave ((c)) of B. We can measure potential target for Minor wave B pullback with more precision once Minute wave ((a)) and ((b)) swing have formed. The potential target for Minute wave ((c)) of B should be at the area of 100% - 123.6% fibonacci extension of Minute wave ((a)) of B.

A rough estimate of 50 - 61.8% fibonacci retracement can be used for the time being to estimate the Minor wave B target while waiting for the Minute wave ((a)) and ((b)) to fully form. A 50 - 61.8% Fibonacci retracement of Minor wave A comes at 145.3 - 146.1 for potential support area where Minor wave B pullback can complete. We don't like selling the pullback and expect buyers to appear again when the Minor wave B pullback is complete in 3-7-11 swing.

GBPJPY 1 Hour Elliott Wave Chart

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Attached Image (click to enlarge)

Recession in 2020? Technical or Fundamental

If you have been reading the headlines lately, something would have come to your attention, several prominent economists and investors are calling for a recession in the year 2020. Market is a product of many participants, some trade on Fundamental grounds and some trade on Technical or a combination of both. Many keep calling and saying that only Blue skies are ahead for the US Economy, many believe the US President is responsible for the latest rally in the US Indices and many of the big stocks. The Fundamental argument is that the latest economic expansion is too good and consequently will leave Federal Reserve with no other choice but to raises Interest rates to cool the economy down which can creates the housing market to slow down and also investors and consumers to get out of the long side.
We are seeing all time records low in unemployment and rising wages which should create inflation and again pressurise the FED to raise interest rates, a lot of speculations there, Honestly, it can happen and even when we do not follow or use Fundamentals in our trading, we understand how it works, but when we see the Technical analysis supporting this argument, it gives us more conviction For years, we have been telling members at Elliottwave-Forecast.Com that something will happen in 2020, either a Financial crisis or a US Constitutional crisis, we don’t know exactly what it would be and we are not in the business of guessing that either. We believe that World Indices will end the cycle from 2009 at sometimes around 10.2020 in which case a Mid level correction will take place or a huge correction, the degree is unknown, Indices like $XJO-ASX which is the benchmark of the Australian equities will be the key to determining the degree, the Index should be reaching the 7322 area by 2020 and breaking the peak at 2007 will create a Bullish sequences against the low at 2009 and then Bulls will be in control. The Following charts show the Grand Super cycle and the Super cycle in the Index. Please note that numbers represent swings count and not Elliott waves count.
XJO-ASX Grand Super Cycle could provide timing for the Recession

Now the question is why 2020, the idea is simple, the Market, even when many don’t believe, follows a natural code, which off course is related to the Golden ratio which we have explained in the Gold ratio sequence article in the past. The code is visible in 1 minute time frame and even at the Yearly higher degree cycles, 2020 is a time, when many Indices across the world will reach the 100% extension in the Grand Super cycle like we are showing in the chart below the $UKX-FTSE which is presenting the Blue Box within the Grand Super cycle, a reaction lower will happen from the Blue and minimum Super cycle degree will be corrected.
FTSE 100 Super Cycle from 2009 low


We are seeing a perfect alignment in price and time around the same time, most of the times when that happens, a cycles ends, we are seeing many Indices with the alignments, look at the following chart of the $UKX-FTSE which is showing 5 swings from 2009 low and needs to trade higher into 7 and into the Blue Box which is the 100% extension within the Super cycle and a reaction lower will happen from there which could coincide with a possible recession in 2020. The following chart shows the idea within the Super cycle degree.
FTSE 100 100% Fibonacci Extension area within 2009 Super Cycle

The following chart is showing the time aspect, the 100% in time will be reached around the time for the US General Election.


Cycle degree from swing 4 in Black took 23 months and the 100% in time is 9.2020 which very close to the US General Election. The Technical trade is calling for a peak around 2020, so even when many economist across the World are seeing the Fundamental side of 2020, their case is further supported by our Technical analysis. We believe something will happen between 2020-2022 which will cause the slow down and a possible recession. We highlighted the importance of 2020 – 2022 back in February 2018 also in this article: World Indices: What will happen in 2020-2022 Something will happen, but until then another Bulls should remain in control for another 22 months.
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Filed Under: Stock Market

EURGBP Found Sellers After Double Three Pattern

In this technical blog we’re going to take a quick look at the past Elliott Wave charts of EURGBP published in members area of the website. We’ll explain the Forecast and the Price Structure. As our members know EURGBP has ended April 2018 cycle at the 0.90976 peak. We were calling for pottential turn lower as far as the pivot at the 0.9097 peak holds. Recovery against the mentioned peak has been unfolding as Elliott Wave Double Three Pattern. We expected the pair to find the sellers for a short term pull back at least.
EURGBP 4 Hour Elliott Wave Analysis 10.27.2018
As of right now, the pair is correcting cycle from the 0.9097 peak. The price is showing incomplete sequence in the short term cycle from the August 10th low. Short term recovery is unfolding as Double Three Pattern when we’re now in ((y)) leg. We’re looking for more s hort term strength toward 0.89342-0.90197 area to complete proposed recovery. At mentioned zone the pair should find sellers either for further decline or 3 wave pull back alternatively.


EURGBP 1 Hour Elliott Wave Analysis 11.05.2018
Eventually the price gave us forecasted leg up and reached reversal area at 0.89342-0.90197 . The pair found sellers and we’re calling wave 2 red recovery completed there at 0.8938 high . As of right now, cycle from the mentioned peak looks incomplete to the downside. We got 5 waves in decline, short term bounce, and then another low. Current price structure suggests more weakness is possible as far as 0.8800 high holds in first degree. We should be ideally in wave (c) , as presented on the chart.
Keep in mind market is dynamic and presented view could have changed in the mean time. Not every chart is Trading Signal. Best instruments to trade are those presented in Sequence Report and in the Live Trading Room.

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NJ Bullish Sequence Calling for New All Time Highs

Johnson & Johnson (NYSE: JNJ) is one of the oldest companies around the market as it was founded in 1886. It manufactures medical devices, pharmaceutical and consumer packaged goods and its stock JNJ represent 10.8% of the Health Care ETF “XLV” weight.
J&J beats Earnings & Sales Estimates in Q3 and since the release in mid October the stock has been rallying higher looking to challenge 2018 peak. So let’s take a look at the technical picture of the stock using Elliott Wave Theory.
JNJ Weekly Elliott Wave Chart

As we can see in the above weekly chart, JNJ is advancing in an impulsive structure since 2009 low. The stock is still looking to extend further higher before ending the 5th wave of the Grand Super Cycle wave ((III)) after taking 2018 peak. Consequently, the healthy uptrend is still in progress and investors shouldn’t be worried about it yet.
JNJ 4H Elliott Wave Chart

Switching to the recent 4 Hour chart, the stock managed to take September peak during the recent week rally. This move opened a new bullish impulsive sequence to the upside as it will be looking for a minimum target around the equal legs blue box area $156- $162. Therefore, as long as October low $132 remains intact then the stock will find buyers in 3, 7 or 11 swings short term pullback and will be able to make new all time highs.
In conclusion, the drug and consumer products giant has a clear bullish path in both short & long term which can last for few years, allowing investors and traders to take part of this impulsive trend.
Get more insights about the Health Care Sector and it’s related stocks by trying out our services 14 days to learn how to trade our blue boxes using the 3, 7 or 11 swings sequence. You will get access to our 78 instruments updated in 4 different time frames, Live Trading & Analysis Session done by our Expert Analysts every day, 24-hour chat room support and much more.

Knowing Your Identity is Important to Trading Success

It’s important for financial market players to know their identity to be successful in the world of trading. A mistaken identity is often the cause of a failure for new aspiring traders. There are at least 3 distinct categories of financial market players and some combination of them:

1. Investor
2. Speculator
3. Gambler

1. Investor
An investor is someone who buys low and sells high. This group of people buy when the asset is undervalued and unloved by the general public. They buy with the intention of holding it for a long term. They don’t flip their position very fast. This category of people generally don’t care too much about day-to-day fluctuation. They understand they may not be able to pick the exact low thus they enter the market gradually in stages. Since they intend to buy and hold, they generally will not use any leverage as they plan to accumulate and hold it for long term. They understand patience is virtue and not in a rush to realize any profit. Usually they hold positions for a long term such as months and years.
2. Speculator / Trader
A speculator (trader) on the other hand is someone who buys / sells with the intention of flipping their position relatively fast (frequent) to make profit. Professional traders will use some leverage to magnify their gains while still limiting their losses. As they don’t intend to hold it for a long term, they often trade within a framework. This framework is what we call a trading system. There are many different trading system and these system usually have specific rules of entry, stop, and target profit.
When the framework fails, professional traders will get out of the position. A failure in the framework, such as when certain price level gets violated will trigger the stop loss. True professional traders always know how much money they bet on a single trade and they will limit their risk in a single trade to a certain percentage of their capital. A smaller percentage of speculator group does a long term trade with the intention holding positions for months / years. Majority of retail traders however are short term / medium term speculators who intend to hold position for few hours to few weeks at most.
3. Gambler
The third category is a gambler. A gambler is someone who intends to make a huge return by taking excessive amount of risk either knowingly or not. This group of people comprise the biggest percentage of the financial market players and they are generally the losers in the world of trading. One category of gambler knowingly takes excessive amount of leverage in the hope of getting excessive return. These types will make money as far as luck is on their side. When trades go wrong (which they will eventually encounter), they will have major losses / margin call. Another category of gambler is the most dangerous but yet most common and apply to many new aspiring traders. This type of gambler unknowingly takes excessive amount of risk. They may think they only use a little leverage, but they trade without any framework / system. This group usually don’t have an idea of when and where to get out of a failed trade until it’s too late. They trade without stop loss and keep holding losing position until either they couldn’t bear it anymore or get a margin call.
Correct identification for successful trading
Based on the categories above, you can now identify yourself which group you belong. Traders need to realize that every single trade can be a losing trade. Any forecast or system, whether human or machine, can not give you 100% accuracy at all times. The most dangerous category is a gambler who doesn’t realize that he / she is actually one. This type unfortunately applies to majority of new aspiring traders.
To give you an analogy, let’s suppose you bring USD $10,000 to gamble at a casino in Las Vegas. Let’s say there’s a game table in the casino which gives you a 70% chance of winning. You are very excited that you find such table. However, even in your excitement, you know you will not put all your USD $10,000 in 1 single bet. The reason is that even though you have a high chance of winning (70%), you still can lose. If you happen to be unlucky and lose, then you will no longer have any capital left to continue playing the game. Thus, even with 70% chance of winning, you still will limit your risk in 1 single bet.
The analogy of a gambler who bets all his money in 1 single bet applies to new aspiring traders. These types of traders tend to hold and nurse large losses as they have no idea when and where they should get out of a failed trade. They trade without a framework, stop loss, and risk management. They think they are traders when they are in fact gamblers. Unfortunately, gamblers always lose at the end.
It’s very important for every aspiring traders to identify themselves correctly and change their mindset if they want to have a breakthrough. Start trading with a plan. Use a system / framework, use stop loss, learn to limit the risk. Know beforehand how much money is at risk if a trade fails. We realize there’s no single forecast that can always be 100% accurate. That’s why in EWF, it’s our passion and goal to help our members understand how to trade the right way professionally. We don’t believe in just providing a forecast, that’s why we also offer educational and coaching service. Our service also includes live session, live trading, and 24 hour chat room to help members on the right side of the market. Check our forecasting service to see if we can help you in your trading career, we offer Trial without further commitment. Click here –> 14 days FREE Trial.

Palladium Bullish Elliott Wave Sequence: Buyers Awaiting Pull back

Palladium recently broke above January 2018 peak which has brought about a new wave of optimism in the commodity but is it the right time to jump into the longs or there could be a better time and levels to buy the commodity. In June 2018, Palladium was in a pull back to correct the cycle from January 2016 low and we said the pull back was a buying opportunity.
Palladium Bullish Elliott Wave Sequence from January 2016 low
Below is the weekly chart of Palladium which shows rally to January 2018 was an ((A))-((B))-((C)) which completed wave “w” and hence 3 swings. Dip to August 2018 low was wave “x” and completed 4th swing while new high above January 2018 is the 5th swing and has created a bullish 5 swings sequence. Cycle from August 2018 low has ended at 1137.30, this was an impulsive rally and has been labelled as wave (A). Palladium is currently in a pull back to correct the cycle from August 2018 low and that’s why we believe now is not the right time to jump into the longs and we like waiting for a pull back in wave (B) in 3-7-11 swings to buy the commodity. We will highlight the buying area with a blue box in the charts presented inside members area when we see it developing.

USDCHF Could Provide The Timing to Buy Pull back in Palladium
USDCHF also has incomplete sequences from 2.16.2018 and 9.21.2018 lows. As far as dips hold above 11.7.2018 low and more importantly above 9.21.2018 low, we expect the pair to see more upside toward 1.0413 – 1.0620. From there, US Dollar should get weak and USDCHF should turn lower in larger 3 swings at least. This area could provide the timing to buy the pull back in Palladium

Elliott Wave Analysis: Further Downside Expected in EURUSD

EURUSD has broken below Nov 1 low (1.13) and now the pair shows a 5 swing bearish sequence from Sept 24 high (1.1815), favoring further downside. Short term Elliott Wave view suggests that the move higher to 1.15 ended wave ((2)) in Primary degree. Internal of wave ((2)) unfolded as a double three Elliott Wave structure. Wave (W) of ((2)) ended at 1.1455, wave (X) of ((2)) ended at 1.135, and wave (Y) of ((2)) ended at 1.15.

Primary Wave ((3)) is currently in progress lower and the subdivision is unfolding as a zigzag Elliott Wave structure where Intermediate wave (A) of ((3)) is in play as an impulse Elliott Wave structure. Down from 1.15, Minor wave 1 ended at 1.1411 and Minor wave 2 ended at 1.1447. Minor wave 3 is further subdivided into another impulse of a lesser Minute degree. Minute Wave ((i)) of 3 ended at 1.1326, Minute wave ((ii)) of 3 ended at 1.1359, and Minute wave ((iii)) of 3 ended at 1.1214.

Near term, while rally fails below 1.15, expect pair to extend lower towards 1.111 – 1.118 area to end Intermediate wave (A) as 5 waves. Pair should then bounce in Intermediate wave (B) in 3-7-11 swing to correct cycle from Nov 7 high (1.15) before the decline resumes again. We don’t like buying the pair and prefer more downside as far as rally stays below 1.15.

EURUSD 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

Elliott Wave View: Nifty looking to resume rally

Short term Elliott Wave view on Nifty suggests that the decline to 10004 on Oct 26 low ended Primary wave ((2)). This means that Index has ended the selloff which started from Aug 28 high (11760.20). It is currently either in the process of eventually breaking to new high again or at least rallying in 3 waves to correct the cycle from Aug 28 high before turning lower again.

Up from 10004, Minor wave 1 ended at 10645.5 and unfolded as a 5 waves impulse Elliott Wave structure. Minute wave ((i)) of 1 ended at 10128.85, Minute wave ((ii)) of 1 ended at 10012.65. Minute wave ((iii)) of 1 ended at 10606.95, Minute wave ((iv)) of 1 ended at 10477 and Minute wave ((v)) of 1 is proposed complete at 10644.55. Near term, while below 10644.55, Nifty has scope to turn lower 1 more time in Minute wave ((c)) of 2 before the rally resumes. We don’t like selling the Index and expect Index to extend higher at least 1 more leg higher as far as pivot at 10004 low stays intact. It’s imperative for dips in Nifty to hold above Oct 26 low (10004) as a break below indicates a double correction and can potentially exposes a lot more downside.

Nifty 1 Hour Elliott Wave Chart

Attached Image (click to enlarge)

Attached Image (click to enlarge)

SPX RSI Analysis Suggests the Sky Isn’t Falling – Yet

To be kind, it’s been quite a challenging couple of months for the emotional health of all of us, including traders.
There’s been state sponsored attempted cover-up of a murder that could threaten the geo-political environment depending upon what the strong hand of the U.S. considers toward a so called “ally”, world record lottery jackpots in the U.S, pipe bombs mailed to politicians, The Twitterer in Chief going after the FED, multiple 300++ point swings (sometimes in the same day or session) in the major indices, great earnings reports that get shorted, one of the most intense hurricanes on record hitting the U.S., Brexit go and a no go then a go again and now who knows, mid-term election fiascos, apocalyptic California wildfires, and I could go on and on. Based on all the aforementioned one would think we’re heading toward the end especially with regards to the volatility in the markets. The markets are no doubt jittery with every single rally having very weak hands. There is a smell of panic mode in the air.
I’ve traded for a while now and I can still tell you that one of the hardest things to do is be calm while the masses are puking with panic. This is especially true when your analysis tells you to be looking the opposite direction of the manic herd behavior. The old saying of ‘buying when there’s blood in the streets’ is definitely easier said than done. But, if you, like me, have developed a system of what to do when these times come then you’ll be better off than the herd when all the dust settles and the hind-sighters appear saying they were with you all along.
A different perspective.
We’re going to look at something a little different (for us anyway) in this blog and get away from our normal Elliott wave inspired analysis and look back at history for some perspective. Today we’re going to look at price momentum in terms of Relative Strength and how it relates to the past compared to where we are right now in the SPX coupled with our proprietary Sequence Report. If you watch and listen to the financial news talking heads on tv or print the common theme asserted seems to be driving impressions through emotional headlines or special “segments” when a correction or rally has been underway for quite some time. But, how do you, as a private investor or trader, know when to really pay attention so to speak or just ignore the sensationalism as I do 98% of the time. So what’s one simple way of ascertaining if we’re truly in some entrenched bear market or simply a correction? One way is utilizing certain aspects of the RSI.
The Relative Strength Index – RSI is a momentum indicator that measures the degree in magnitude of the recent price changes to be able to analyze “overbought” and “oversold” conditional analysis. Traditional interpretation of the RSI states that if the RSI value is above 70 then the instrument being analyzed is considered becoming “overbought” and one would use that information to look to reverse the uptrend. Inversely, a reading of RSI of 30 or below is regularly interpreted as indicating an “undersold” situation within a particular instrument. The RSI is calculated using the formula: RSI=100-100/(1+RS) . RS = the average gain of up periods during the specified time frame divided by the average loss of down periods during the same specified time. The default specified time frame for comparing these up periods to down periods is 14. But, here at EWF, we prefer to use 13 as it relates to our cycle analysis better being that it is a number in the Fibonacci sequence which has significance within the process of our models of growth and regression. That’s a whole other topic we’ll save for another blog.
The Problem with RSI.
The problem with using the RSI as an independent determinant of a particular instrument’s direction and change in trend is that sudden large price movements can create false “buy” or “sell” signals in the RSI as the Index can remain above or below the specified “extreme” triggering levels for a considerable amount of time. This would leave one just holding on for hope that the instrument reverses before they run out of capital in their trading account to cover the drawdown. In the aforementioned statement we’re assuming the trader is using this simple method of selling at the overbought signal and buying at the oversold signal level without sound risk management.
At EWF we use RSI as well, but as you will see if you accept the invitation into our world, it’s not in the traditional sense. RSI should be used as a complement to your analytical methodology and not the sole reason to make any decision to risk capital. In fact, we don’t use the overbought or oversold levels at all. Our method is centered on using RSI trend line analysis with notations of divergence to determine when a particular cycle has ended or a pivot level has lost support well before the price action would overtake said level. It reads a lot more complicated than it is and I invite you to join us to learn how you can intertwine Elliott wave, RSI, and our Cycle and Sequence Analysis to trade on the correct side of the market in terms of direction over 80% of the time. So while you’re contemplating on trying our service for free. I’ll throw in another freebie perspective below.
Some Free but Valuable Insight.
In the chart below we show a very simple interpretation of the SPX on a monthly basis. That seemingly small move down at the end of the price action was at the time of printing the month of October 2018. Doesn’t look like much compared to where we’ve been, does it? But, from the headlines nearly every day you’d think we were already in another depression or financial crisis. In the chart you’ll see something that’s rare in these days of instant gratification or disappointment and that’s a broad perspective. Look at the RSI underneath the chart’s price action and notice the horizontal line colored fuchsia/pink at the 50.00 level. RSI at 50 represents neutrality or “the line in the sand” between the bulls and bears so to speak. On a monthly basis the market’s natural trend is very clearly to the upside or bullish. The bullish times going back in this chart to the early 1990s are highlighted in light green and the downturns or bearish times are highlighted in light red. What you can see is that while the RSI is above 50 the price action remains entrenched in a bullish trend and while below 50 we see periods of significant bearishness. This helps to give the trader an edge on bias from a Macro level to look for confirmations to go long while above 50 in the RSI and confirmations to go short or cover longs when the RSI reads below 50.

So, for now, as you can see at the far right of the chart above we’re still in bullish biased territory on the monthly time frame and would take a much more relative move down compared to what we’ve already witnessed this month to change this trend. This couples well with our overall view that the market is simply correcting the cycle that ended on September 21, 2018 in the weekly chart below. While this chart below has now been updated with greater precision the idea still remains the same and the monthly RSI still supports further upside for now.

To update this simple analytical view I wanted to show you what the Monthly chart of SPX looks like now after a big down day in the broader market indexes. The RSI is still holding up well above the 50 level and is starting to “hook” up after the bounce seen in the first few days of November. The lows put in at the end of October continue to hold for now. There will come a time when the market is blazing with bearishness again similar to what we saw in 2000 and 2008/9. Is that time now?

So, is the sky falling? We say, emphatically not yet. To add to that our non-biased process tells us there’s quite a bit (over a year) more upside before we get to the extreme levels of the Super Cycle top. That may sound like smug contrarianism, but our method is sound with time stamped documented analysis. Our research team does this day in and day out all the way down to the hour time frame to provide our subscribers with consistent and accurate market insight. I’m not trying to leave you hanging here on purpose but to fully understand our process it would take more than this very simple blog. Take a peek underneath the hood of Elliottwave-Forecast.com with absolutely no risk for 2 weeks. Wishing you nothing but success as you navigate these choppy waters of Mr. Market.
James Tipton
EWF Analytical Team