ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
3rd December 2022 - The disparative performances in U.S. indices since bottoming last October is revealing some alarming signals just ahead. Whilst the Dow Jones index has fulfilled its five wave upside objectives by retesting and even breaking above ###the August highs, the S&P 500 and Nasdaq 100 have failed to reach corresponding levels – besides, they’ve also failed to develop into five wave impulse patterns, the finalising sequence to corrective flat patterns that began from June’s lows. With the Dow’s rallies coming to an end now, we must consider the S&P 500 and Nasdaq 100’s rallies from October’s lows are completing [a]-[b]-[c] zig zags, corrections to August’s five wave impulse declines – if so, that explains their relative underperformance because as corrections, they’re only expected to partially retrace the preceding downswing. But it forewarns of a more imminent top for all the major indices, something we’d originally thought would extend into year-end – that’s unlikely now. There’s still a little more room left to the upside, but not a lot. These major indices are getting ready to resume this year’s declines, extending though Q1 next year, 2023. It’s the same for European indices – The Eurostoxx 50 and Xetra Dax’s advances from September’s lows have reached upside targets, a revisit back to last March’s highs – so they’re ready to turn down soon too. The higher the rallies, the more downside potential over the next several months. If stocks are ready to decline, then we’d expect … Read full summary in our latest report!
Currencies (FX)
3rd December 2022 - An alarming signal in stock markets suggests June’s/October’s upside counter-trend rallies are approaching completion with inherent downside risk of prices declining rapidly over the next several months. This translates into an inverse upside### rally for the US$ dollar. As September’s declines break below nearby support levels this week, confirming 114.78 was the peak dollar, the only way a dollar rally could begin soon is if it’s finishing five waves down from that September high. That certainly seems possible with next downside targets just below tonight’s closing level of 104.50 at 102.82+/-. Should the dollar finish five waves down around this area, coinciding with a stock market high followed by reversal-swings in both assets, then it…Read full summary in our latest report!
Bonds (Interest Rates)
3rd December 2022 - Major stock indices are approaching their upside targets for the completion of counter-trend rallies that began last June/October (U.S.), March/September (Europe). Relative underperformance in varying U.S. indices is providing### an early-warning of an imminent top, with heightened risk of declines beginning within the next week, maybe two. Ordinarily, the negative correlation with long-dated yields suggests we should be searching for a low in the US10yr and DE10yr yields, but there’s no such indication so far in treasuries – a five wave impulse pattern is in downside progress from October’s high of 4.323 but it still has a long way to go before completing wave (C) of an expanding flat correction where minimum targets remain towards 2.865 (closing tonight at 3.492). Does that mean the correlation breaks down temporarily or will the US10yr yield decline more rapidly in a catch-up scenario? In contrast, the DE10yr yield seems…Read full summary in our latest report!
Commodities
3rd December 2022 - The gold miners gave clearer Elliott Wave buy signals last month than did bullion gold and silver despite downside targets coming within close proximity of idealised levels last September. The US$ dollar has since declined rapidly, providing### bullish momentum for gold and silver and yet they’ve only unfolded into three wave sequences, so far, from those September lows. Overhead resistance is at 1804.60+/- (traded today) and 23.90+/- (23.16 tonight) so not far off in testing out these barriers. Should gold and silver turn down from these test levels, coinciding with a US$ dollar low, completing five waves down from September’s high of 114.78, then we can expect to see a dollar counter-trend rally begin, coinciding with a dramatic downturn for gold and silver. Crude oil has dislodged its correlation to just about everything else. The Group of Seven (G7) nations and Australia announced they had agreed a $60 per barrel price cap on Russian seaborne Crude oil…Read full summary in our latest report!
