ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
24th October 2020 - The latest U.S. presidential election opinion polls puts Joe Biden ahead of Donald Trump by 64.4% versus 35.6%. Large investors are positioning their portfolios for a Democrat win, buying assets like Invesco’s Solar ETF which has risen about +24% over the last month ###anticipating clean energy policies under a Biden administration would do well for the sector. Hedge funds are talking about rising treasury yields believing a Democrat win would trigger new coronavirus fiscal spending on a sale not seen before. And there’s always uncertainty if the voting results are uncertain or contested which would likely result in even more sustained volatility for all the asset classes, not just equites. If contested, the result may not be clear until Thanksgiving on Nov. 26th – that would certainly send equites lower during the next several weeks which is a realistic possibility from an Elliott Wave perspective. Many U.S. indices… Read full summary in our latest report!
Currencies (FX)
24th October 2020 - The US$ dollar index (DXY) has been in a corrective decline since late-September from 94.74 labelled wave [x] within an advancing double zig zag that originated from the early-September low of 91.74. Downside targets are being approached this coming week, towards ###92.35-18+/- although it’s advisable not to be too quick in preparing for the next [a]-[b]-[c] zig zag advance because equivalent upside targets for commodity currencies like the Aussie $ dollar AUD/US$ are still some way from finishing corresponding upside for wave (X) towards 0.7288+/-. There was a brief period last week when the DXY was declining alongside major stock indices – that was unusual because up until then, these two have been in…Read full summary in our latest report!
Bonds (Interest Rates)
24th October 2020 - Precious metals are a little more sensitive to the US$ dollar’s movements of late, lessening its reliance on risk-on/risk-off mood-swings that has dominated trading since August/September. The direction of interest rates is something to watch too – a lot gold’s bullish### research notes published by the bulge-bracket sell-side since March relied on the fact that short-term interest rates were being held low by the Federal Reserve – good point – but what if long-dated treasury yields pump higher after the Presidential election as Congress passes is second aid package, inducing higher interest rate funding costs? What happens to gold then? Does it collapse lower as the support mechanisms disappear, or will it trend higher again on a weakening dollar? Those two competing fundamentals will have to be augmented into a new narrative if gold is to later resume its longer-term uptrend. For the time being, our Elliott Wave outlook remains bearish with downside targets towards 1722.75+/- although this could change if prices were to break above this month’s high… Read full summary in our latest report!
Commodities
21st October 2020 - The outlook for precious metals is currently a little mixed despite a bearish bias. Gold has three potential wave counts – two depict prices remaining below either this month’s high of 1933.61 or### perhaps from below higher levels of 1967.25+/- but then heading lower as a secondary zig zag pattern targeting 1722.75+/- into year-end – the third allows a more continued push higher over the next couple of months, targeting 2128.50+/-. The difference between the preferential bearish and alternate bullish counts is simply the way primary wave 4 intends to complete its corrective downswing from August’s high of 2072.12 – as a double zig zag pattern or an expanding flat. Meanwhile, silver... Read full summary in our latest report!
