ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
4th May 2024 - If it’s volatility you wanted, then this week’s events didn’t disappoint! Wednesday’s Federal Reserve policy statements were interpreted by the market as dovish raising expectations the central bank will cut rates at some stage later this year – the benchmark S&P 500 and Nasdaq 100 were ###completing Monday’s sell-off before the FOMC but rallied sharply afterwards only to see those steep gains eroded into Thursday’s slight break to a lower-low – but then another upside recovery began which extended today after the latest monthly non-farm-payroll data came through lower than expected, fuelling rate cut anticipation. This latest advance has extended corrective a-b-c zig zag patterns from April’s lows into double zig zags which by every measure, remain incomplete into tonight’s close. It looks like further rises earlier next week ahead of completion. Whilst declines from the early-April highs only declined into a three wave sequence ahead of this current upside rally, they’re coming off important, measurable highs which depicts peaks for this year. Those three wave declines are fractal 1-2-1’s which explains the overlapping double zig zag 2nd wave rally that’s unfolded from the low of two week’s ago. It may be no coincidence the US$ dollar index is showing signs of completing December’s counter-trend rally whilst US10yr yields are also completing…Read full summary in our latest report!
Currencies (FX)
4th May 2024 - The US$ dollar index traded lower following Wednesday’s FOMC meeting although levels were still within parameters that allowed one final push higher towards 106.69+/- before finishing minor wave ii. two’s correction from December’s low of 100.62. But today’s U.S. non-farm-payroll data came### through unexpectedly lower than consensus forecasts of 243k at only 175k, declining the dollar beyond support that now heightens the probability April’s high at 106.51 already ended minor wave ii. two’s correction that began from December’s low of 100.62. There were comparable, inverse advances for the Euro/US$ which also suggests December’s 2nd wave correction ended last month at 1.0601 with new uptrends in their early stage of development. Stlg/US$ has most likely bottomed as minor wave ii. two at the previous week’s low of 1.2299 – US$/Yen was earlier this week confirmed as completing its 1st wave uptrend from December’s low of 140.25 at 160.19 with a deep 2nd wave sell-off underway – US$/CAD was already confirmed last week as completing December’s 2nd wave rally at 1.3848 with a new 3rd wave…Read full summary in our latest report!
Bonds (Interest Rates)
2nd May 2024 - The U.S. Federal Reserve held interest rates steady at 5.25-5.50% and signalled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation### readings that could delay its plans, maintaining higher-rates-for-longer. Fed Chair Jerome Powell said that after starting 2024 with three months of faster-than-expected price increases, it ‘will take longer than previously expected’ for policymakers to become comfortable that inflation will resume the decline towards 2.0%. The US10yr yield is still expected to push a little higher, towards 4.770+/- before completing December’s counter-trend rally as minor wave b. although an imminent high is so close that it could have already completed. Huge downside targets over the next months towards 3.580+/- for minor wave c. European Central Bank (ECB) policymaker Pablo Hernandez de Cos said the ECB should begin cutting interest rates in June if inflation continues its gradual decline as expected. Inflation has fallen quickly over the past year but the outlook further out remains clouded by rising energy ...Read full summary in our latest report!
Commodities
4th May 2024 - Gold is tantalisingly close to downside targets of 2266.75+/- having already traded down to 2278.98 today, that it’s a negligible difference in the downside completion of minor wave iv. four’s a-b-c zig zag pattern that began from April’s high of 2430.77. With the US$ dollar index confirming### it has completed December’s corrective 2nd wave rally into the previous week’s high of 106.51, a new dollar 3rd wave downtrend is most likely the activation fuel that drives gold sharply higher over the coming months. Silver traded down into minimum downside targets of 26.00+/- during Thursday’s session following brief rallies in the aftermath of Wednesday’s Federal Reserve announcement that sent prices to 26.97 before yesterday’s downside test to 26.00. This is the perfect place for the downside completion of minor wave iv. four’s a-b-c zig zag pattern that began from the early-April high of 29.80. Crude oil has continued lower over the last couple of days – a lessening of middle-east hostilities has caused…Read full summary in our latest report!
