ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
17th October 2018 - A scan across the S&P 500, Dow Jones and Nasdaq 100 indices reveals only three wave sequences within declines from recent highs, so far. Dimensionally, the third sequence### in the S&P and Dow ‘expands’ the price action relative to the first which is characteristic of 3rd wave activity within a developing five wave impulse. It’s necessary for a five wave pattern to develop from these September/October highs to corroborate the larger bearish picture which defines wave [c] within an expanding flat pattern unfolding lower from last January’s peaks. The Nasdaq’s same three price-swing decline is different though – each of the two declining sequences has... Read full summary in our latest report!
Currencies (FX)
17th October 2018 - Wednesday’s FOMC ‘minutes’ showed the Fed’s committee members were unanimous in agreeing its decision to hike rates by another ¼ point. The US$ dollar index strengthened after### the announcement to 95.65 but from an Elliott Wave perspective, this was already factored into the equation because last week’s decline from 96.15 had just completed an intra-hourly five wave impulse downswing into Tuesday’s low of 94.79, allowing a corrective rally to begin. Wednesday’s closing level at 95.65 is approaching completion at the fib. 61.8% resistance – we expect the dollar to turn down around this area to continue August’s zig zag decline targeting levels towards 92.90+/-. Only a break above 96.15 would cause a revision and this is seen as a smaller probability. The Euro/US$ also completed an intra-hourly five wave impulse pattern within the advance from last week’s low of 1.1432 to Tuesday’s high of 1.1621. A three wave correction is also approaching downside completion at 1.1500+/-. Next upside targets ...
Bonds (Interest Rates)
17th October 2018 - The Federal Reserve FOMC ‘minutes’ were released Wednesday afternoon/evening highlighting a unanimous verdict for the latest 0.25% interest rate hike which was not really unexpected. ###But more interesting was the fact that the minutes appeared to show less discussion around the prospects that a recession could be lurking around the corner. Don’t forget, that was more evident in the notes just a few months ago with a noted mood-change from Jerome Powell in later speeches. The Chairman has been very upbeat on the economy since, but perhaps they’re not so confident if the stock market takes another dive. The US10yr yield flipped slightly higher after the announcement... Read full summary in our latest report!
Commodities
17th October 2018 - Gold has just traded into the fib. 38.2% retracement level of its preceding 3rd wave decline from April’s high at 1233.56 but this is unlikely to end August’s corrective 4th wave upswing.### As a 5-3-5 zig zag, wave ‘c’ has yet to unfold into a required five wave subdivision although we expect this completion by next week, latest end-month. August’s advance is timed to the US$ dollar index’s equivalent zig zag decline from 96.98. When it began the zig zag, wave ‘a’ was comparable to gold’s high for wave ‘a’ at 1214.57 but so far, wave ‘c’ declines are still a long way off. What does that mean for gold – could it stretch much higher than current upside targets for 1242.75? That’s possible, but basis ‘normal’ conditions, the proportionality within the zig zag upswing suggests a maximum area towards 1249.00+/-. Looking further ahead, downside... Read full summary in our latest report!
