ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
5th June 2020 - Global stock markets were already trading at post-coronavirus highs this time last week when U.S. President Trump delivered his announcement that his administration would take punitive### steps to punish China over its implementation of new security laws for Hong Kong. But markets shrugged this off and sighed relief as trading resumed last Monday, with continued gains through this last week. Overhead resistance levels were initially exceeded, then stretched higher but the gains across large and small-cap indices, gains in Europe too were not matched by an underperforming Nasdaq 100. That’s a little strange because the Nasdaq has led the recovery higher over the last couple of months - but it becomes clear what’s happened - sector rotation. In recent sentiment surveys, 68% per cent of fund managers have seen March’s advances as simply counter-trend rallies – they’ve been mostly sidelined, up until this week when fear of missing out has triggered buying in underperforming sectors, financial, industrials and consumer discretionary stocks. That’s helped the S&P 500 and the Dow Jones (DJIA) to catch up whilst the Nasdaq 100 has tended to lose … Read full summary in our latest report!
Currencies (FX)
5th June 2020 - The US$ dollar index broke below key support levels over the last week which is confirming the next stage of the dollar’s 7.8-year cycle downtrend has begun to accelerate. The March high of ###102.99 was already labelled as ending a 2-year, 2nd wave correction but there was still a lingering possibility of a shorter-term rally before the next declines were to accelerate – but basis last week’s declines, that short-term rally is no longer possible. The best the dollar can hope for is a counter-trend rally towards 97.99+/- before resuming lower. Looking much further ahead, downside targets to complete a five wave impulse pattern from March’s high are measured towards 91.15+/- although this may take several months to get there … Read full summary in our latest report!
Bonds (Interest Rates)
5th June 2020 - The US10yr yield broke overhead resistance levels late last week confirming the next stage of its new multi-year uptrend is already underway. The risk-on sentiment pulled in a lot of money### into stocks last week, a little late because sentiment has been so bearish prior to this, but optimism is returning. The US10yr yield advance is causing the dollar yield curve to steepen dramatically as the Federal Reserve maintain low interest rates at the short-end. And that steepening is likely to continue basis last week’s ten-year yield uptrend. There’s formidable resistance at the post-coronavirus high traded last March around 1.269% and measuring shorter-term price development, nearby targets are smack into this area, at 1.247+/-. But overall, we expect rising inflationary pressures, rising yields to continue even as there still exists … Read full summary in our latest report!
Commodities
5th June 2020 - Gold traded lower late last week as fund managers chased stock markets higher in a binge of risk-on strategies. Prices declined to 1670.49 but this wasn’t quite enough to confirm a### major high has already ended the entire five wave impulse uptrend that began gold’s primary wave 3 advance from the Aug.’18 low of 1160.24. It held above support of 1643.86 which means gold could still stage one additional but final advance to a modest higher-high, towards 1840.00+/-. But its chances of extending higher are rapidly deteriorating. The more industrial precious metals, Platinum and Silver have both ended five wave impulse uptrends that began from the March lows and are already beginning counter-trend declines which are expected to be deep and lasting the next few months. The next move in stock markets will determine if gold, platinum and silver will rally a little higher, or simply continuing downside acceleration. Crude oil traded ... Read full summary in our latest report!
