ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
16th August 2019 - Last week’s decline in the benchmark S&P 500 was consistent within its declining five wave diagonal pattern that began from the late-July high of 3029.50 (futures). It hit a temporary low Thursday, then began a counter-trend rally### Friday which is expected to continue this coming week, perhaps a reattempt to last week’s high at 2944.25. That certainly seems possible basis the small-cap Russell 2000 index. That declined into a succinct zig zag pattern from the previous week’s high into Thursday’s low of 1455.10 – that ended the second sequence of a developing horizontal flat pattern which now requires a retest back to last week’s high. But these are just short-term rallies within those declining diagonal patterns. U.S. indices are required to break marginally below last June’s lows in order to complete 2nd wave expanding flat corrections that began from the early-May highs. By contrast, European… Read full summary in our latest report!
Currencies (FX)
16th August 2019 - The US$ dollar index remains in limbo, or at least, our observation of it is! So far, there’s an equal argument for both ongoing bullish and new bearish forecasts/wave counts. But fortunately, the complexity of the bullish count ###which has spluttered higher into several layers of 1-2’s means the cut-off levels to determine direction are not too far away. That makes the job of identifying the next major movement somewhat easier – so now we wait. Any immediate break above August’s high of 98.32 is bullish for the dollar, targeting original upside levels towards 102.79+/-, but any immediate break below the secondary retracement level of 96.67 would be bearish, confirming 2018’s zig zag upswing has already completed. We often wonder what… Read full summary in our latest report!
Bonds (Interest Rates)
16th August 2019 - We’ve revamped downside targets for the US10yr yield having seen the US30yr bond break below the July ’16 low of 2.088% into new record lows earlier last week. And is won’t stop there – an incomplete five wave impulse### pattern from last November’s high of 3.464% (US30yr) means it can drop another 40bps before putting in a major low. For the US10yr yield, that translates into an eventual break below its July ’16 low of 1.316% towards 1.120%. Like the bond yield, the ten-year yield must decline from last October’s 3.262 high into a five wave impulse pattern before a new major uptrend can get underway. Thursday’s… Read full summary in our latest report!
Commodities
16th August 2019 - These are the gold headlines: Goldcorp founder holds firm on his call for $5,000 gold – ‘gold to rise to $1,650 by Q2 2020’ UOB private bank – Mainstay Capital says ‘there are reasons to own gold now’ – Deutsche Bank raises ###gold price targets to $1,575 and even to $1,700 – BoA/Merrill Lynch says ‘gold may hit $2,300 – UBS ‘gold to reach almost $1,700 next year’ – Cramer says ‘everyone should put 10% of their money in gold’ – TD Ameritrade posts ‘$2,000 price level a possibility for gold’. The reason for highlighting these expectations is to expose the high level of optimistic sentiment – where were these comments last year when gold was trading at $1160? Well, things were pretty bearish back then. Such bullish extremes are backed by the latest COT net-speculative positioning report – longs are at 292,500 contracts, back at levels of July/August ’16 when gold peaked at $1,375 then declining for several months to $1,123. It was back in June ’16, over three years ago that our Elliott Wave forecasts first projected gold into the future, testing the $1,523.29+/- level (see mid-year Commodities Part II 2016 video report). That day has arrived. How gold responds at this area, around… Read full summary in our latest report!
