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Gold Elliott Wave View: Pullback starting

Short term Elliott Wave view in Gold (XAUUSD) suggests that cycle from 4/10 low (1246.92) is unfolded as an impulse Elliott wave structure where Minutte wave ((i)) ended at 1257.2, Minutte wave (ii) ended at 1250.8, Minutte wave (iii) ended at 1279.75, Minutte wave (iv) ended at 1271.69 and Minutte wave (v) of (a) could be done at yesterdays peak 1288.42 in Minutte wave (b), although another push higher in Minutte wave (v) of (a) towards 0.618-0.764% fibonacci extension area of Minutte (i)+(iii) 1291.84-1296.48, cant be ruled out yet before ending the 4/10 cycle. However while below the 1288.42 metal could have started the Minutte wave (b) pullback to correct the cycle from 4/10 lows. We dont like selling the proposed pullback and expect buyers to appear again in Minutte wave (b) in sequence of 3, 7, or 11 swings provided that pivot at 4/10 low (1246.92) remains intact.

Gold 1 Hour Elliott Wave Chart

KBW Bank Index Extended Correction

KBW Bank Index is an economic index consisting of the stocks of 24 banking companies delivering a direct exposure to the banking sector and offering a targeted view to a unique corner of the U.S. financials sector. The top holdings Banks of the index are among the biggest financial institutes in the world and most of them will report earning during this week ( Citigroup, JPMorgan Chase, Wells Fargo, Bank of America). These companies have a big influence on the financial sector that can be measured by the ETF (XLF), which was up 30% from last year until last month, we mentioned in our previous financial article that XLF was reaching an inflection area which provided the expected pullback.
How this move is affecting the Banking sector ? Let’s find out by using the Elliott Wave Theory to analyse BKX.
KBW Bank Index Elliott Wave View
BKX made 5 swings bullish sequence from 2009 low which is different from the 5 impulsive waves used in Elliott Wave Theory. The advance is a part of the double three structure that KBW Bank Index is doing and after reaching the 61.8 – 76.4 fib ext area it started the 6th swing pullback against 2016 low. The retrace in wave ((X)) would ideally reach the 50%-61.8% Fibonacci retracement around 78.11 – 72.94 area before BKX can resume it’s move to the upside. However market isn’t perfect and we can’t determine how the pullback will unfold exactly so even a small 3 waves pullback can be enough to end it there.

To determine the potential pullback area, we take a look at the daily chart as the Index ended the 2016 cycle at 03/01/2017 peak from which it’s started a Zigzag structure. So BKX can still extend lower toward equal legs area 81.84 – 79.10 from which it can resume higher or bounce in 3 waves at least.
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If the bounce is not strong enough and the Index fails to break above 99.84 peak, then it will have the possibility of doing the double three correction lower toward the 61.8%-76.4% area and retesting the 2009 trend-line before it can be able to resume it’s uptrend.
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Recap
KBW Bank Index longer term technical structure remain bullish while it’s holding above 2016 low 55.99. But we need further data before we can determine if the index will be able to rally for new highs after this current shallow daily correction or it needs more time to consolidate. This decline will affect the whole Financial sector and its stocks can be fading the so called Trump rally so you need to be careful about holding a bank stock during this pullback.
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Gold Elliott Wave View: Pullback completed
Short term Elliott Wave view in Gold (XAUUSD) suggests that cycle from 4/10 low (1246.92) is unfolded as an impulse Elliott wave structure where Minutte wave ((i)) ended at 1257.2, Minutte wave (ii) ended at 1250.8, Minutte wave (iii) ended at 1279.75, Minutte wave (iv) ended at 1271.69 and Minutte wave (v) of (a) ended at yesterdays peak 1295.6. Below from there metal has started the Minutte wave (b) pullback to correct 4/10 (1246.9) cycle and that could be done already in 3 swings at earlier low 1281, where Sub minutte wave a ended at 1285.6 and Sub minutte wave b ended at 1292.6. However metal needs to break 1295.6 peak first for final confirmation of next leg higher started, If it fails to rally from here then Double correction from the peak within the Minutte wave (b) pullback cant be ruled out yet before the rally resume, where we would like to be buyers again. Now as far as trading above earlier low 1281 and more importantly as far as pivot from 4/10 low remains intact metal has scope to resume the upside. We dont like selling the metal into the pullbacks & favors the upside in metal as far as pivot from 4/10 low remains intact.
Gold 1 Hour Elliott Wave Chart

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EURAUD Technical Analysis April 17/2017

On April 11/2017 bears pushed EURAUD lower and it seems lower prices are yet to come in the following trading sessions. At the current moment, bias remains bearish and traders should look for any possible selling opportunities.
1 Hour Chart Bearish Pattern: Bearish pattern is visible on short term analysis but traders need to be patient and wait for price to retrace higher towards the BC 0.50% Fib. retracement level and wait for the point D (blue pattern) to enter the possible reversal zone (blue box) to trigger sells. We do not recommend buying the pair to the proposed selling zone but rather advise to wait for price to enter the possible reversal zone and look for selling opportunities. There is also support/resistance levels near the BC 0.50% Fib. level so we should expect a reaction/reversal in price action in this area. Only time will tell what EURAUD will do but for now bias remains bearish.

If looking to sell EURAUD traders should wait for price to move above the BC 0.50% and watch for price to stall in the possible reversal zone (blue box) for any selling opportunities. Waiting for price to move above the BC 0.50% Fib. retracement level will offer a better risk/reward trade setup. A break above the point B high will invalidate the bearish pattern. If the pair moves lower from the possible reversal zone traders should place targets below the AB 2.24% level.
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on Twitter for updates and questions> @AidanFX or chat me on Skype > EWF Aidan Chan
*** Always use proper risk/money management according to your account size ***
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Nikkei Elliott Wave structure calling the decline

Hello fellow traders. In this technical blog we’re going to take a quick look at the past Elliott Wave charts of Nikkei published in members area of www.elliottwave-forecast.com. We’re going to explain the structure and see how we forecasted the path.
Let’s start by taking a look at Nikkei 4 hour chart from 04.05.217. As we can see on the chart below, first leg from the 03/02 peak has ended as 5 waves structure. It’s labeld as A red. On the 04/04 date we got break below A red and new short term low suggested that it’s not part of the same cycle anymore. Because of that , we labelled wave B red is done at 19316 high and as far as the price stays below that level, we should be in wave C red targeting 18589-17917 area. As the first leg has 5 waves structure, leg C red should be also in 5 waves.

Now let’s take a look at the short term structure.
Nikkei Elliott Wave 1 Hour Chart 04/05 2017
Nikkei is bearish against the 19316 peak. Current view suggests the index is doing wave ((ii)) recovery which is unfolding as double three elliott wave structure. We expect it to make another leg up in wave (y) of ((ii)) toward 19034-19100 area. At that zone sellers will be waiting for furhter decline toward proposed taget area: 18589-17917
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Eventually, the price has reached proposed blue box at 19034-19100, complete short term recovery, make decline toward new lows and reached the target at 18589-17917 . However there’s no any sign yet that cycle from the 03/02 peak is done yet. Keep in mind that market is very dynamic. If you’re interested in new Elliott Wave analysis of Nikkei you can find them in the membership areaof EWF. We cover 52 instruments in total. If not a member yet, Sign Up for Free Trial nowand get new trading opportunities.
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Gold Elliott Wave View: pullback ending
Short term Elliott Wave view in Gold (XAUUSD) suggests that cycle from 4/10 low (1246.92) is unfolded as an impulse Elliott wave structure where Minutte wave ((i)) ended at 1257.2, Minutte wave (ii) ended at 1250.8, Minutte wave (iii) ended at 1279.75, Minutte wave (iv) ended at 1271.69 and Minutte wave (v) of (a) ended at 1295.6 peak. Below from there metal could have finished correcting the 4/10 cycle (1246) in Minutte wave (b) pullback as 11 swings Triple three structure within the blue box area at yesterdays low 1278.68 & should be risk free already, while above from there and as far as pivot from 1246 low remains intact metal has scope to resume the rally in Minutte wave (c). However metal still needs to see a clear break of 1295.6 peak first for final confirmation for next leg higher, above from 1278.68 low Minutte wave (i) ended at 1292.12 peak and Minutte wave (ii) is remains in progress & expected to end above 1278.68 low for continuation higher. If it manages to break 1278.68 low from here then metal could see 1275.38-1271.33 area next as double correction before resuming higher again. We dont like selling the metal and favors keep buying dips in 3, 7 or 11 swings as far as pivot from 4/10 low remains intact.
Gold 1 Hour Elliott Wave Chart

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INDU Elliott Wave View: More downside
Short term Elliott Wave view in INDU ( Dow) suggest that instrument is showing 5 swings sequence from 3/03 peak (21018) favoring more downside. From 3/03 peak INDU is following a Double three Elliott wave Structure , where Minor wave W ended at 20579 low and Minor wave X ended at 20887 peak. Index has since broken below the 20412 low, suggesting the next leg lower in Minor wave Y has started already. The Internal Subdivision of Minor wave Y is also unfolding as Double three Elliott wave structure where Minute wave ((w)) ended at 20453 and Minute wave ((x)) ended at 20645 peak. Below from there, index is following another double three Elliott wave structure in Minute wave ((y)) lower, where Minutte wave (w) is expected to end in between 20378-20315 area then should see a bounce in Minutte wave (x) before further downside is seen. Near term, while bounces stays below 20645 peak and more importantly below 20887 peak index has scope to extend lower 1 more leg lower at least. we don’t like selling the index.
Dow 1 hour Elliott Wave Chart

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INDU Elliott Wave View: Further downside
Short term Elliott Wave view in INDU ( Dow) suggest that instrument is showing 5 swings sequence from 3/03 peak (21018) favoring more downside. From 3/03 peak INDU is following a Double three Elliott wave Structure , where Minor wave W ended at 20579 low and Minor wave X ended at 20887 peak. Index has since broken below the 20412 low, suggesting the next leg lower in Minor wave Y has started already. The Internal Subdivision of Minor wave Y is also unfolding as Double three Elliott wave structure where Minute wave ((w)) ended at 20453 and Minute wave ((x)) bounce turns out to be a flat correction . Where the Minutte wave (a) ended at 20644 peak and Minutte wave (b) at 20379 low, above from there index could have ended the 5 waves in Minutte wave (c) of a flat within blue box area at yesterday’s peak 20629, while near term bounces fails below there & more importantly as far as pivot from 20888 peak Minute wave X connector’s peak stays intact index has scope to resume lower 1 more leg at least. we don’t like selling the index.
INDU 1 Hour Elliott Wave Chart

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USDCAD Elliott Wave View: Ending 5 wave Impulse

Short term Elliott wave view in USDCAD suggest that the cycle from 4/13 low (1.3218) is unfolding as an impulsive Elliott wave structure . This 5 wave move could be wave ((a )) of an Elliott wave zigzag structure structure or wave ((c )) of FLAT correction. In either case, after 5 wave move ends, pair should pull back in 3 waves at least as the Elliott Wave Theory suggests. Minutte wave (i) ended at 1.3337 peak, Minutte wave (ii) ended at 1.3261, Minutte wave (iii) ended at 1.3498, Minutte wave (iv) pullback ended at 1.3455 low and above from there Minutte wave (v) of ((a)) already reached the minimum extension area between 1.3509-1.3527 which is the inverse 1.236-1.618% Fibonacci extension area of proposed wave (iv) dip. This means cycle is now mature and can end at any moment resulting in a 3 wave pull back at minimum. The pull back is shown to be wave ((b)) and should correct the cycle from 4/13 low in 3, 7 or 11 swings. If the decline turns out to be stronger than expected and breaks the pivot at 1.3218 low, that would suggest 5 wave move up from 1.3218 low was a B wave FLAT from 3/21 (1.3261) low and pair could then see 1.3252 – 1.3187 area before bouncing again. Although Minutte wave (v) of ((a)) has reached the minimum extension area, another high towards (v) = (i) target @ 1.3571 can’t be ruled out to end wave ((a)) cycle from 4/13 low. In either case, cycle from 4/13 (1.3218) low is mature and should result in a pull back soon.
USDCAD 1 Hour Elliott Wave Chart



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USDCAD Elliott Wave View: Ending an impulse

Short term Elliott Wave view in USDCAD suggest the decline to 1.322 ended Intermediate wave (X). Up from there, the pair is showing 5 waves impulse structure where Minutte wave (i) ended at 1.3338, Minutte wave (ii) ended at 1.3258, Minutte wave (iii) ended at 1.3525, and Minutte wave (iv) ended at 1.3406. Near term focus is on 1.3596 – 1.364 area to complete Minutte wave (v) and also Minute wave ((a)). The next push higher towards above target should end the cycle from 4/13 low, after which the pair should pullback in Minute wave ((b)) in 3, 7, or 11 swing to correct cycle from 4/13 low before turning higher again. We don’t like selling the proposed pullback and expect buyers to appear again once Minute wave ((b)) pullback is complete in 3, 7, or 11 swing provided that pivot at 1.322 low remains intact.

USDCAD 1 hour Elliott Wave Chart

USDCAD Elliott Wave View: More Upside

Short term Elliott Wave view in USDCAD suggest the decline to 1.322 ended Intermediate wave (X). Revised view suggests that the rally from there is unfolding as a double three Elliott Wave structure where Minute wave ((w)) ended at 1.3525 and Minute wave ((x)) ended at 1.3406. Minute wave ((w)) is subdivided as a Flat Elliott wave structure where Minutte wave (a) ended at 1.3338 and Minutte wave (b) ended at 1.3258. Near term, pair is within Minutte wave (x) pullback to correct the cycle from 4/24 low in 3, 7, or 11 swing before the rally resumes. We don’t like selling the proposed pullback and expect buyers to appear once wave (x) pullback is complete in 3, 7, or 11 swing as far as pivot at 1.3406 stays intact.

USDCAD 1 hour Elliott Wave Chart

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Elliott Wave Theory: Is Elliotts Theory enough?

Elliott wave Theory: Is Elliotts Theory a system in itself?
As many traders know, The Elliott wave Theory is a form of technical analysis that finance traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors. Elliotts Theory was developed by Ralph Nelson Elliott and published in 1938 in the book The Wave Principle. The Theory states that collective investor psychology, or crowd psychology, moves between optimism and pessimism in natural sequences. These mood swings create patterns evidenced in the price movements of markets at every degree of trend or time scale.
In Elliotts Theory, market prices alternate between an impulsive, or motive phase, and a corrective phase on all time scales of trend, as the illustration shows. Impulses are always subdivided into a set of 5 lower-degree waves, alternating again between motive and corrective character, so that waves 1, 3, and 5 are impulses, and waves 2 and 4 are smaller retraces of waves 1 and 3. Corrective waves subdivide into 3 smaller-degree waves starting with a five-wave counter-trend impulse, a retrace, and another impulse. Motive waves always move with the trend, while corrective waves move against it.
We do understand the idea and we practice the idea every single day, we do over 4000 charts every month and we have seen that even when the Patterns happen because of the nature of the Market which comes with 2 sides, the bulls and bears which by definition is a fight between both of them. Reality is that most wavers practice the Theory looking for the 5 waves and 3 waves back and 90 % of the time they end up been wrong. We are not saying that Elliotts Theory cannot be used, but by nature the Theory is great after the fact and not enough to forecast the future. As Humans, we tend to live in a state of denial and taking the easier road always come by nature. I started ElliottwaveForecast in 2005 and did the analysis on the basis of Elliott Wave Theory. I was always looking for 5 waves and trading those waves 4s and 5s like everyone else does. With passage of time, I started opening my mind and understanding that the Theory is a way of communication instead of a way of forecasting. In simple words, the theory always is right after the fact but when market is moving and structures are developing, there is always more than one possible path and sometimes quite a few paths are there and none of them would break the rules of Elliott wave theory. That let me to believe that if Elliottwave-Forecast will stick around, it cant be based only in Elliotts Theory and other tools were needed. My Background comes from Engineering and consequently my mind is educated to see the patterns and think outside the box, I cannot be a blind follower, I need to think by myself, otherwise I wont be me and lose my identity.
As time passed by, I started noticing something in the market, it was contrarian to what the Theory states. Theory states that that trend always comes in 5 but I noticed that trends can come in 5 waves and also in 3 waves. I also noticed the market following a code either by nature or through Human manipulation. As I said before, by nature I need to think outside the box and consequently, cant follow blindly a Theory developed in the absence of Banks, Investment Houses and when the communication between humans was not even 5% of what it is today. There were no computers and consequently, no way Elliotts Theory will work today, like it did in 1930s. Today, we believe that: the Market follow patterns, but trend is not always in 5 waves, it can have an impulse sequence (5-9-13) or a corrective sequence (3-7-11). Traders need to have an open mind, otherwise will be showing only the charts or making money when the 5 waves happen which percentage wise are not that high specially when it comes to the Forex market. We believe in the Idea of cycles, sequences, time cycles, distribution, correlations and Elliott wave Patterns. We think a combination of tools makes up a forecast and not the Elliott Wave Theory or Market Psychology alone.
Few tips

1. The Market trends in 5 waves and also trends in 3 waves.
2. Elliotts Theory needs to be part of a system, its not a system in itself.
3. Trade areas when both bulls and bears are in agreement.
4. Always looks for combinations of time frames.
5. Follow the cycles in time and price, sequences and distribution.
6. Understand that the MARKET is created and manipulated by someone using a code.
7. Think outside the box.

A great example is the $SPX, looking at the Monthly chart, the instrument peaked either in 2000 or in 2007. If you are practicing Elliotts Theory like in 1930s, you will see 5 waves from 2007 which will make your mind completely bearish and when the 5 waves ended in 2009, you would be calling for a recovery in 3 waves and then another 5 waves lower to the 300-200 areas. Truth is nothing denies that looking at the 5 waves down and also practicing the 1930s Elliott Wave Theory. Reality is something else and needs to be seen with other tools and an open mind. The 2007 peak was a marginal new high above 2000 peak, also using a momentum indicator, it can be observed that momentum at 2007 peak is less than the momentum at 2000 peak which together with the 5 waves fast decline makes the case for a text book FLAT. As a new thinking with the Theory, we know that after 5 waves lower, a bounce will happen at least in 3 waves and before we start calling a huge crash in SPX and the World coming to an end, we want to see how the bounce develops and look for answers using market correlation. We are living in the present times, think differently and outside the box. Read the full article here

Walmart Stock Extending Higher

Walmart (NYSE: WMT) is the world’s largest company by revenue as well as the largest private employer in the world with 2.3 million employees. It’s an American multinational retailing corporation that operates as a chain of hypermarkets, discount department stores, and grocery stores. Despite being the biggest physical retailer in the world, Wal-Mart is still trailing back in e-commerce business as there is increased competition from online retailers in particular Amazon (NASDAQ: AMZN) which continues to gain market share as the world is merging to online shopping.
Warren Buffet reduced his shares in Wal-Mart, which he held since 2005, by roughly 90% last quarter. He indicated that the retail sector now looks too challenging and fewer people are choosing to go to physical stores, so Walmart’s competitive advantages in scale & distribution may not be as valuable as they once were.
Walmart’s stock is only up +9% this year compared to Amazon +19% rally which already made new all time high while WMT is still far from breaking its 2015 peak. However , last week it managed to break above 2016 peak so let’s the consequence for this technical move as the giant corporation already acquired a number of e-commerce companies, which means it’s looking seriously to move into the online retail world and investors seems to be liking the new changes.
Walmart Elliott Wave View:
Walmart stock dropped 37% from 01/13/2015 peak at $90.8 before finding ground later that year. So from 2015 low, WMT could either has started a new cycle to the upside as the weekly trend remain bullish or the stock is only bouncing to correct that cycle before doing the double three correction from $90.8. Either way, the recent break above 2016 peak opened a new short term extension to the upside as WMT is now showing 5 swing bullish sequence from November 2015 low. So unless the move truncates or it’s a part of an irregular correction, then the stock has a new target that can take it toward $84 area before a larger pullback is seen.

WMT established a low early this year at $65.25, from which it started a 7 swings structure move looking for a first target at equal legs area $76.62 – $78.61. From there the stock should pullback in 3 waves at least in red wave X before resuming the move higher while holding above January 2017 low.
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The stock doesn’t need a large pullback and could keep extending higher forming a diagonal with the current leg as wave ((iii)). The surprise would happen if the current leg higher is wave B of a Flat structure in wave (X) which means there will be a sharp 5 waves decline after ending the current leg higher. But we don’t call Flats against the main trend which remain bullish until the move happens.
Recap:
Walmart may not look as a good long term investment as it used to be but the technical bullish sequence is suggesting that WMT price will see more gains during the rest of 2017 as short term investors still believe in the company. So while this year’s low is holding, corrective pullbacks will remain supported by the bulls.
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USDCAD Elliott Wave View: Flat correction

Short term Elliott Wave view in USDCAD suggest the decline to 1.322 ended Intermediate wave (X). The rally from there is unfolding as a double three Elliott Wave structure where Minute wave ((w)) ended at 1.3525 and Minute wave ((x)) ended at 1.3406. Minute wave ((w)) is subdivided as a Flat Elliott wave structure where Minutte wave (a) ended at 1.3338 and Minutte wave (b) ended at 1.3258. Near term, pair is within Minutte wave (x) Flat pullback to correct the cycle from 4/24 low towards 1.346 – 1.3498 area before the rally resumes. We don’t like selling the proposed pullback and expect buyers to appear once wave (x) pullback is complete in 3, 7, or 11 swing as far as pivot at 1.3406 stays intact.

USDCAD 1 hour Elliott Wave Chart

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USDCAD Elliott Wave View: Extending Higher

Short term Elliott Wave view in USDCAD suggest the decline to 1.322 ended Intermediate wave (X). The rally from there is unfolding as a double three Elliott Wave structure where Minute wave ((w)) ended at 1.3525 and Minute wave ((x)) ended at 1.3406. Minute wave ((w)) is subdivided as a Flat Elliott wave structure where Minutte wave (a) ended at 1.3338 and Minutte wave (b) ended at 1.3258. Pair is currently within Minute wave ((y)) which is unfolding as a double three Elliott Wave structure where Minutte wave (w) ended at 1.3626 and Minutte wave (x) FLAT ended at 1.3526. Near term, while pullbacks stay above 1.3406, expect pair to extend higher towards 1.3714 – 1.3787 area to end cycle from 4/13 low before a larger pullback in 3 waves can be seen at minimum to correct cycle from 4/13 low. We don’t like selling the proposed pullback.

USDCAD 1 hour Elliott Wave Chart

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NZDUSD Elliott Wave View: More downside


Short term Elliott Wave view in NZDUSD suggests the decline to 0.6844 low ended cycle from 3/21 high in Minor wave W. Pair is currently correcting cycle from 3/21 high in 3, 7, or 11 swing in Minor wave X before the decline resumes. The rally from 4/27 low (0.6844) looks to be unfolding as a double three Elliott Wave structure where Minute wave ((w)) is expected to complete soon as a Flat Elliott wave structure , then pair should pullback in Minute wave ((x)) to correct cycle from 4/27 low before turning higher again. We don’t like buying the proposed bounce and expect Minor wave X rally to find sellers in 3, 7 or 11 swing for more downside as far as pivot at 0.709 high remains intact.

NZDUSD 1 hour Elliott Wave Chart

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NZD USD Incomplete Elliott Wave Sequence

NZD USD is showing 5 swings down from 2/6/2017 (0.7375) which means it’s an incomplete Elliott wave sequence and calls for another swing lower to complete 7 swings down from 2/6/2017 (0.7375) peak. First 3 swings completed on 3/9/2017 (0.6886) and bounce to 3/21/2017 (0.7091) was the 4th swing. Pair has since made a new low below 0.6886 which means we have started the next cycle lower with a target of 0.6739 – 0.6589 and ideally 0.6607 – 0.6492 area.
NZD USD Incomplete Elliott Wave Sequence

We can see 5 swings down from 2/6/2017 peak on this chart (please note these are 5 swings which is not the same as a 5 wave Impulse). As we explained above, 5 swings means the sequence is incomplete and makes the sequence bearish against 0.7091 high as indicated by the red invalidation line and the red arrow. Proposed 6th bounce should stay below 0.7091 high and pivot for the pair to continue lower in 7th swing. Ideally 6th swing should stay below the descending trend line as well which is currently at 0.7018.
NZD USD 1 Hour Elliott Wave Chart
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Preferred Elliott wave count suggests NZDUSD drop from 0.7091 was a FLAT which is proposed to have ended at 0.6844 i.e. wave W and a bounce in wave X (6th swing) is now in progress to correct the decline from 0.7091 high before pair turns lower again. Pair has already done 3 waves up which meets the minimum requirements for wave X bounce but market correlation is favoring the idea of a double three correction in wave X. Thus, we are looking for a pull back in wave ((x)) followed by another 3 waves higher to complete wave X before decline resumes. Ideally area for wave X to end would be 100 – 123.6 Fibonacci extension area of waves ((w))-((x)) and might coincide with 0.6966 – 0.6995 (50 – 61.8 Fibonacci retracement area of wave W). We don’t like buying the pair and expect the bounce to fail below 0.7091 high for another leg lower towards 0.6739 – 0.6589 area at least.

Trump tax cut can create the last rally since 2016


As part of President’s Trump campaign pledge, he wants to sharply reduce the tax rate for all businesses from multinational corporations to mom-and-pop shops to 15%. Treasury Secretary Steven T. Mnuchin said this is the biggest tax cut and the largest tax reform in the U.S history. Currently the U.S. corporate tax rate is 35% and it is the highest among developed economies. President Trump also plans to simplify and reduce individual tax rate with the highest individual tax rate dropping to 25%.
The stock market has stalled lately after hitting a record on March 1 due to the worries about soft economic data, the absence of clarity on Trump’s policies, and concern over his failure to push through a healthcare bill. But then last Friday, Trump said he will reveal a “massive” tax package that will deliver cuts “bigger I believe than any tax cut ever.” His statement on Friday was further affirmed by a Saturday tweet
Trump Tax Cut Announcement
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The plan however still faced a long road to enactment and signed into law, as the plan needs to get the approval by Congress and Democrats has expressed doubt about Trump’s plan as fiscally irresponsible. The plan still lacks on details on how to offset the reduced tax revenue, as budget experts believe that the tax cut could cost trillions of dollars in revenue in 10 years, ballooning the government debt. The stock market initial response was favorable and global indices gapped up on the Monday open on April 24. With the much-anticipated tax reform close to reality, investors are emboldened to chase stocks higher and the corporate-friendly tax rate adds upside momentum on the back of upbeat earnings season.
For us at EWF, we know before the news that indices still have more upside due to the bullish Elliott Wave sequence from Feb 2016 low, and we have been telling our members not to sell them and only buy the dips instead. With this latest rally to all-time high, we believe that the stock market rally could be entering the last leg of rally to end the cycle from Feb 2016 low. Let’s take a look at some U.S. stock markets below:
NASDAQ Daily Chart


Even before the news, we know that Nasdaq should extend higher as the Elliott wave sequence from Feb 11, 2016 low is showing a 5 swing bullish sequence, which favors more upside. After the news, Nasdaq gapped up then broke to new all-time high but we could see now that the cycle starting from Feb 11, 2016 low should reach extreme area in 7 swing at 6184 – 6455 area. This area could potentially end the cycle from Feb 11, 2016 and when that cycle is over, we could see a pullback in 3, 7, or 11 swing to correct cycle from Feb 11, 2016 low.

Overlay of NASDAQ, RUSSELL, and S&P 500
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An overlay of the three Indices above shows the same cycle starting from Feb 11, 2016 low, which suggests that the biggest tax cut news could create the last leg rally to end cycle from Feb 11, 2016 before a pull back is seen in the Indices.
By using Elliottwave sequence and cycle technique, we are able to forecast the market ahead of important market-moving news. Get a 24 hours forecast of 52 instrument in 4 time frames, live session, live trading room, 24 hour chat room and more, click EWF 14 days trials to try our services absolutely FREE.

Freeport McMoRan (FCX) Outlook Turning Bullish

Freeport McMoRan Incorporation (NYSE: FCX) is the world’s largest publicly traded copper and molybdenum producer and it’s also a major producer of gold but almost 70% of revenues are from the sale of copper. The Phoenix, Arizona-based companyis primarily engaged in mineral exploration and development, mining and milling of copper, gold, molybdenum and silver, as well as the smelting and refining of copper concentrates.
In the recent 2 months, Freeport’s shares dropped 27% as it had interrupted the production in Grasberg mine which is the largest gold mine and the third largest copper mine in the world because of a regulatory restrictions in Indonesia on its copper concentrate exports. However, the company recently announced that the matter was resolved as it’s looking to protect and support its past & long-term investment plans in Indonesia and it’s now resuming exports of copper concentrate from. The recent actions helped its stock to bounce, but the move is still weak so let’s take a look a the technical picture using Elliott Wave Theory.
FCX Elliott Wave View
Weekly Chart: FCX did a double three structure from both 2007 & 2011 peaks and managed to reach both equal legs target at $9.15 & $4.16 with 7 swings already in place before finding a bottom early last year. Since then the stock managed to rally and it both cycles from the peaks already ended even the price level still didn’t break above the descending trend-line . Consequently the sentiment for the stock is turning bullish and it should be looking for a bigger 3 waves correction toward the 50% area around $32.

Daily Chart: The stock is showing 5 swing bullish sequence from January 2016 low and will remain supported as long as October 2016 low keeps holding. Currently it ended a flat correction in wave ((X)) and would ideally resume the move to the upside looking for a target at equal legs area 19.82 – 22.24 to end 7 swings sequence around the weekly trend-line and start a 3 waves pullback.
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The short term turn around for FCX would happen if the stock has already ended the cycle from January 2016 low, in that case it will be only doing 3 waves bounce against the peak before another leg lower take place toward the 50%-61.8% Fibonacci area around $10.3 – $8.71 then the stock find buyers again as long as pivot at 3.52 is holding.
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Recap:
The mining giant Freeport McMoRan is in a good financial shape despite the Grasberg mine issue in Indonesia and the technical outlook for its stock is turning to the upside as long as the 2016 low at $3.52 keeps holding. This means unless the company go bankrupt then no matter what path it will take in the near term, it will end up bouncing to higher level around $20 at first stage either from current levels or from $10 area then it will be looking to extend toward $33 later on.
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Gold short term weakness likely

In the video below, we provide an update of the Elliott Wave view on Gold-to-Silver ratio and explain why Gold and Silver still may see further weakness in the short term.
Video
Gold to Silver Ratio Daily Elliott Wave Chart


Daily chart of Gold-to-Silver ratio above suggests that the ratio is correcting cycle from 2/29/2016 peak (83.68) before the decline resumes later, provided that pivot at 83.68 high stays intact. Short term, cycle from 7/4/2016 low (64.37) is showing a 5 swing incomplete sequence, favoring further upside in the short term. Expect the ratio to extend higher towards 76.55 – 78.68 area to end the rally from 7/4/2016 low, then it should at least pullback in 3 waves if not continue the next leg lower.
As the Ratio is inversely correlated with the underlying physical metals, this suggests that a higher ratio implies a lower XAUUSD and XAGUSD. Thus, we could expect short term weakness in both metals to persist until the Ratio reaches the target of 76.55 – 78.68, then when the Ratio turns lower, both metals can get support and start rallying also.
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