ELLIOTT WAVE ANALYSIS - Latest Market Commentary
23rd July 2016 - Quarterly earnings continue to roll across the news screens – GM raised its full-year forecast after a strong Q2 result, GE beating estimates with strong results from American Air, American Express, Blackstone,### Morgan Stanley, Goldman Sachs and PayPal. Amongst the underperformers were Starbucks, Dunkin’ Brands, Intel, Skechers’ and American Airlines. The overall impression has been that most corporates have performed well and this is being translated into overall gains for the S&P 500 during the last week. Despite the upbeat results, the index remains below critical resistance at 2184.42+/-. This number is derived from labelling the post-Brexit upswing from 1991.68 as a three wave zig zag pattern, itself part of a larger expanding flat correction. The golden-ratio 0.618 is used to define the completion of the zig zag advance but confirmation will only be given on evidence of a reversal-signature. That would mean a sudden… Read full summary in our latest report!
23rd July 2016 - Sterling/British Pound took centre stage towards the end of last week as the U.K.’s new Chancellor of the Exchequer Philip Hammond said that his ministry was prepared to ‘reset’ fiscal policy if need as a direct result of the Brexit vote. This was followed by a rather devastating July PMI which measures services and manufacturing. ###The index fell to its lowest level in seven years, declining by the fastest pace on record from 52.3 to 47.4. Stlg/US$ traded lower from 1.3291 to 1.3081 heightening the risk of a downside continuation towards 1.2692+/- during the coming week. But one positive for the currency is the fact that it has already begun to recover against other cross-currencies like Euro/Stlg and Stlg/DKK. This should place certain limits to the Pound’s decline against the US$ dollar. The US$ dollar index is heading towards upside targets as wave ‘d’ of its multi-year triangle pattern whilst the Euro/US$ heads towards equivalent lows at 1.0705+/-. The US$/Yen has reacted lower from last week’s high of 107.49 but additional gains will be needed to develop the advance from 99.01 into a five wave impulse pattern. Downside risk is increasing whilst the S&P 500 index remains below critical resistance at 2184.42+/-. Read full summary in our latest report!
Bonds (Interest Rates)
23rd July 2016 - Long dated yields were higher at the beginning of last week as stock markets continued their advance to record highs in synchronisation. But a noticeable rejection occurred from the US10yr yield high of 1.621% that triggers an ongoing### retracement decline during the next week. Next week’s Bank of Japan rate policy meeting is expected to announce a new economic stimulus package although in a BBC radio interview recorded a month ago, Governor Kuroda dismissed the idea of ‘helicopter money’ being issued into the monetary system, stating clearly that there was ‘no need and no possibility’ of such action in the future… Read full summary in our latest report!
23rd July 2016 - In an interview with CNBC, Goldman Sachs’ commodity analyst has raised targets for gold to $1300.00 dollars. With prices already trading to $1375.00 earlier this month, what does this tell us? Only that the investment ###bank has been perennial bears and are now chasing the market higher. Their timing couldn’t be worse as the short-term picture confirms a five wave impulse pattern in the decline to last week’s low at 1310.90. This indicates gold will continue lower for the next several weeks. Silver has found a double-bottom support… Read full summary in our latest report!