ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
22nd January 2021 - The major indices have been diverging for months and to complicate matters, that’s been happening again since forming highs more recently. Attempts at pulling together uniform peaks seems futile when comparing the various U.S. indices### – that also applies to very different patterns in those traded in Europe too. And then there’s Asia – they’ve been in different rhythms since forming peaks 10 months ago! U.S. indices like the Nasdaq 100 have topped out in November whilst the S&P 500 and Dow Jones only this month which mean they have divergent peaks that begin larger counter-trend declines. So far, the S&P 500 and Dow Jones indices have only declined into three wave sequences – the late-session sell-off tonight (Friday) may change a 1-2-1 sequence into a 1-2-3 should prices… Read full summary in our latest report!
Currencies (FX)
22nd January 2021 - The US$ dollar index has traded higher from last week’s low that ended a 4th wave correction into an intra-hourly five wave impulse pattern. This is confirming a 5th wave uptrend has begun, significantly reducing the risk of a break below that recent low of 94.63. This means### the dollar has a clear route higher over the next weeks, targeting original levels towards 98.00+/-. That’s an interesting concept with some traders buying the dollar in a safe-haven punt as stock markets decline – also underpinning dollar strength is the high levels of treasury yields which require one additional advance before ending their corresponding uptrends. The Euro/US$ remains on-track to trade lower over the next weeks … Read full summary in our latest report!
Bonds (Interest Rates)
22nd January 2021 - Inflationary expectations are through the roof as analysts, financial commentators and pundits alike are revving-up fears of an inflation surge over-and-above what’s happened already. This comes ahead of next week’s Federal Reserve meeting where traders are already ###discussing the potential of a first interest rate increase being hinted for the March meeting. Meanwhile, the US10yr yield’s uptrend from December’s low and from last July’s low is fast approaching upside completion. A brief short-term correction began from last week’s high of 1.898 but it can afterwards turn back higher in one final push towards targets of 2.015%. That’ll end the entire cycle degree A-B-C zig zag from the all-time pandemic low, opening the way for a multi-month correction to begin. That’ll almost certainly signal a downturn in inflationary pressures for several months, at exactly…Read full summary in our latest report!
Commodities
22nd January 2021 - Precious metals’ counter-trend rallies are coming to an end having traded higher from December’s lows into a corrective (a)-(b)-(c) zig zags. Both gold and silver have attracted speculative buying on the basis of a re-awakened idea that rising inflationary pressures### are actually bullish tailwinds. That concept has been largely ignored even though the 1970’s provided enough history to draw upon – silver has outperformed gold since December, although its doubtful many remember the story of Nelson Bunker and William Herbert Hunt. But in relative terms to inflation versus interest rates, precious metals are inexpensive. They should get a little less expensive too, over the next month as those short-term rallies end, giving way to one final decline for this year – gold towards 1720.00+/- and silver towards 20.60+/-. Crude oil has hit upside targets of minimum 86.20+/- trading to 87.10. It could still stretch a little higher but overall, the best part of… Read full summary in our latest report!
