ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
8th April 2020 - The quarterly earnings season begins next week with Q1 numbers expected to be -20% lower than the previous quarter although some economists are more optimistic saying the U.S. economy ###was still on an upward trajectory before the coronavirus pandemic hit industry and commerce. But that hasn’t stopped many from predicting the direst of outlooks for the remainder of this year. Bond fund PIMCO said Wednesday that U.S. GDP growth would contract by 30% per cent in the second quarter and 5% per cent overall for 2020. This echoes similar declines from mainstream economists. Several market analysts are also downbeat in their assessments going forward - Société Générale said investor hopes are based solely on monetary and fiscal stimulus which is misplaced – Goldman Sachs says more potential downside for the S&P 500 of around -25% per cent - J.P. Morgan warned investors of a vicious spiral which is typical of recessions – safe to say that sentiment is still very bearish. This seems to be the case in Goldman Sachs’ latest poll to 1,800 client responses where 50% believe the lows have not yet been set and 75% believe equites remain in a bear market. From an Elliott Wave perspective, medium-term buy signals were already triggered on March 23rd, the very day the major... Read full summary in our latest report!
Currencies (FX)
8th April 2020 - The US$ dollar’s daily composite cycle (see fig #33 – recent Part IV video/report update) showed two peaks in February and July with an intervening but modest decline in-between. The cycle projection### then declines rapidly right through the rest of this year and into next. This delay is one reason why the dollar index seems reluctant to accelerate lower even though its designated an intermediate degree 3rd wave – its being held up by short-term cycles within the very bearish 7.8-year medium-term cycle downtrend. But it shouldn’t be long before the dollar begins to decline rapidly – it’s simply being held up by safe-haven buying as the coronavirus pandemic rolls on. But the markets are sensing a peak in infection rates, and if anxieties begin to fade, so will the demand for dollars. The US$ dollar index tested key resistance Monday at 100.93 and has since turned lower – that’s isolated the March rally from 98.27 into a corrective zig zag pattern which affirms its downtrend credentials. Similarly, the Euro/US$ has found support earlier this week at 1.0768 turning higher since... Read full summary in our latest report!
Bonds (Interest Rates)
8th April 2020 - Eurozone finance ministers were meeting again to decide on a coordinated economic package of support for the 27-menber countries where some hard-pressed delegates most affected by the#### coronavirus pandemic have requested a common debt issuance to back businesses impacted by the outbreak. But discussions broke down Wednesday but are expected to continue Thursday for the €500bn deal. Meanwhile, German finance ministers announced plans to roll-out a €355bn aid package specifically designed to support national businesses – this helped to push long-dated yields sharply... Read full summary in our latest report!
Commodities
8th April 2020 - Gold broke above last week’s high of 1643.86 Monday which has converted a three wave sequence from March’s low of 1451.45 from a three wave corrective sequence into a terminal five wave sequence. ###A five wave sequence approaching completion will inevitably open the way for a downswing to begin, resulting in declines over the next couple of weeks. But the preceding five wave uptrend ensures this will be a counter-trend correction within the larger, dominant uptrend. This offers some inevitability that gold will break above March’s high of 1702.92 at some later date and by doing so, will head towards next upside targets of 1840.00+/-. At some stage soon, rising inflationary pressures will take hold in a repeat event from the 1970’s, rising faster than interest rates – that would certainly be bullish. Silver’s uptrend from last month’s low of 11.64 is being confirmed by its five wave advance into Tuesday’s high of 15.45. This completes the 1st wave within a medium-term impulse uptrend where targets are towards 22.53+/- over the next couple of years. But before further... Read full summary in our latest report!
