ELLIOTT WAVE ANALYSIS - Latest Market Commentary
3rd December 2016 - The attention of traders and investors alike has turned towards Italy’s up-coming referendum vote that gets underway this Sunday. With Prime Minister Matteo Renzi’s government trailing ###the right-wing opposition, the markets are currently warning of another sharp sell-off in the Italian Banking industry should Renzi lose out. He has told the media that a vote to block his plans to streamline the Senate would result in his resignation. What will our major indices look like Monday morning? Activity over the last week offers some pointers – outperforming U.S. indices following Donald Trump’s election result have lost their upside momentum and in most cases, have begun to turn lower from important overhead resistance levels. Read full summary in our latest report!
3rd December 2016 - The US$ dollar eased off from recent highs of 102.05 even though Friday’s Non-Farm Payrolls came through healthily above forecasts at 178,000. Sentiment remains overwhelmingly bullish though as investors launch### themselves into long-dollar positioning following the post-Trump-election win with macroeconomic strategies that benefit from a U.S.-centric outperformance of its peers. Despite this, it was interesting to see how this latest surge in the dollar has taken a pause just above the dual highs of March and December ’15, then decline below these levels as it did over the last few trading days. This is not indicative of inherent strength. Normally, on the third occasion of a break-out of resistance, a more sustained advance takes off. Should the US$ dollar index fall back further during the coming week as we suspect… Read full summary in our latest report!
Bonds (Interest Rates)
3rd December 2016 - The European bond markets have climbed a wall of worry this week as traders prepare for fallout in expectation of Italy’s Prime Minister Matteo Renzi losing his constitutional referendum vote that begins this Sunday. At one point last week, Europe’s safe-haven benchmark, the DE10yr yield### ran higher as if to fool everyone into thinking it was following US treasury yields higher. But the DE05yr Bobl yield offered supportive evidence that this upswing would fade with yields turning lower again to begin a more sustained decline – after all, this year’s yield advance has definitively unfolded into a typical counter-trend pattern, Read full summary in our latest report!
3rd December 2016 - Precious metals have formed a near-term base at last week’s lows which, if nothing else, provides some guarantee (*~!!) of an upside recovery underway. Whether this ends gold’s entire corrective decline from the July high of 1375.27 remains in question. We believe not, with preferential### counts labelling this action as an incomplete double zig zag pattern, (A)-(B)-(C)-(X)-(A)-(B)-(C). Last week’s low at 1161.05 completed wave (A) within the secondary zig zag sequence so this means the current upside rally is simply another corrective sequence, wave (B). Gold’s decline to 1161.05 is already a deep correction when compared to primary wave 1’s preceding advance from the Dec.’15 low so from an unleveraged basis, provides a clear opportunity to begin scale-down buying. After all, this is a much better place to buy when compared to July’s high. Silver’s counter-trend has also traded down to the fib. 61.8% retracement…Read full summary in our latest report!