ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
11th December 2018 - Last Friday’s report noted that even a modest break of the S&P 500’s late-October low would not necessarily result in the negation of a more immediate, bullish recovery. Monday’s excitable### sell-off did just that – the S&P broke below 2603.54 to 2583.23 in a carry-over of bearish weekend sentiment but it ran higher immediately afterwards, following on through Tuesday’s session to 2674.35. This action maintains this year’s triangle pattern and a bullish bias, particularly given how the latest COT readings show a massive decline in net-speculative long-positioning. They’ve halved in just one week from 215,400 to 104,100 contracts, the largest one-week decline since last February when the markets were again under long-liquidation pressure – they eventually bottomed in March at 83,300. But that doesn’t pinpoint a low, the COT report simply indicates an important low is being approached. From an Elliott Wave perspective, rather, from a ratio/proportion perspective, the biggest negative for ending September’s decline into Monday’s low is the fact that its secondary zig zag sequence within the double pattern is disproportionately measured to the first – it’s far too small by comparison. This opens up other alternative routes for price-action to follow. One plausible alternate count relabels ... Read full summary in our latest report!
Currencies (FX)
11th December 2018 - The US$ dollar index is reattempting the November highs of 97.69-97.53 for a third time. Dollar buying is going through ahead of the normal year-end shortage but also because investors are using the currency### as a safe-haven strategy amidst a nervous stock market sell-off. A break above would alter the progress of this year’s corrective advance where a final blow-off advance would be in progress towards 100.54+/- or even slightly higher. Somehow, this seems possible even though it would result in a disproportionate end to 2018’s zig zag upswing from last February’s low. But it would ... Read full summary in our latest report!
Bonds (Interest Rates)
11th December 2018 - There’s no heading back towards the October/November highs for the ten-year treasury yield. The damage has been done, yields are trending lower now. So far, the decline from the ‘orthodox’ US10yr yield### high of 3.251 has only unfolded into a three wave sequence but importantly, the third sequence proportionately larger than the first which means it is developing into a five wave impulse pattern – this would confirm the larger downswing that has begun cycle wave B’s correction. Looking ahead several months, interim downside targets are towards 2.460+/- (currently 2.876) but... Read full summary in our latest report!
Commodities
11th December 2018 - The US$ dollar has attracted tiers of safe-haven buying over the last several days as U.S. stock markets remain in a state of heightened anxiety over fears of a global economic recession. Should the dollar index ###break its October/November high above 97.69, then it would trigger a more direct route towards completing this year’s corrective zig zag upswing that began last February towards minimum 100.54+/-. Given that gold and silver have both been engaged in counter-trend rallies since August/September, a sudden surge higher for the dollar at this precise juncture would almost certainly pull prices lower as their final sequence of declines for 2018. Gold would... Read full summary in our latest report!
