ELLIOTT WAVE ANALYSIS - Latest Market Commentary

Stock Indices
15th February 2025 - Next week’s trading activity around stock indices will almost certainly determine if more immediate declines get underway, or if they’ll be delayed with a key break to the upside, prolonging August’s advance by another +6% per cent, maybe +12% per cent### in European indices which are currently outperforming their U.S. counterparts. December’s resistant highs are being challenged into Friday’s closing levels, although they can still turn downward early next week which would confirm a larger correction has begun. Equally, any break higher will almost certainly encourage asset managers to increase exposure, although that has a narrowing shopping list with only specific equities playing a part – in the event prices break higher, expect a diluting participation – the obvious underplay is the small-cap Russell 2000 which is still trading quite a bit below last November’s high and even then, that high was only able to match the old Nov.’21 high – this is a key determining signal that bearish divergence is evident within the macro advance. Europe’s indices are having their chance of shining in the sun with outperformance over the last month – in today’s report, we show how the Xetra Dax has even outperformed the Eurostoxx 50 since early 2024 although that trend is already 90% per cent completed. When that outperformance ends, it’ll signal a peak – but for now, there’s still upside potential for another month or so. Read full summary in our latest report!

Currencies (FX)
13th February 2025 - Today’s U.S. monthly CPI inflation data came through above expectations of 0.3% at 0.5% per cent with the headline annualised rate ticking higher to 3.0% whilst the core rate was 0.4% and 3.3% per cent. Stock markets ###slid lower, the US$ dollar index rallied, albeit briefly from 107.86 to 108.52 whilst the US10yr yield ran higher from 4.518 to 4.659 – stock indices later recovered almost all of the losses whilst the dollar sank back to 107.62. Nothing has changed within the larger picture that shows the dollar beginning a new five wave impulse decline from January’s high of 110.17. The Euro/US$ pulled a little lower following today’s U.S. CPI data to 1.0317 but later recovered, confirming its existing uptrend that began from January’s low. A similar short-term dip for Stlg/US$ today to 1.2377 but recovering later to 1.2485 confirms its existing uptrend with a short-term caveat for a corrective dip – US$/Yen has suddenly sprung higher from last week’s low of 150.93 to ... Read full summary in our latest report!

Bonds (Interest Rates)
13th February 2025 - Federal Reserve Chair Jerome Powell’s first day of testimonies began where he reiterated the central bank’s commitment to bringing inflation down and signalled that policymakers aren’t in a### rush to push interest rates lower. In remarks before the Senate Banking Committee, Powell called the economy ‘strong overall’ with a ‘solid’ labour market and inflation that is easing but still above the Fed’s 2% goal. With those conditions prevailing, he said the Fed doesn’t need to move quickly to ease monetary policy. In today’s testimony to the House Financial Services Committee, he noted that today’s hot CPI data is confirming the Fed’s delay in postponing more rate cuts. Today’s update for the US10yr yield returns to an earlier wave count that depicts upside progress of around 50bps in a reattempt back to cycle... Read full summary in our latest report!

Commodities
15th February 2025 - Gold traded up to 2943.20 during Tuesday’s session having overreached upside targets just below – but its zig zag upswing from November’s low of 2536.70 remains intact and with price-rejection since, trading to 2865.14, it’s heightened the probability### that prices have ended their run higher for the time being with declines now underway towards 2391.50+/- during the next few months. Silver attracted significant speculative buying this week as gold’s advance to record highs caught the attention of investors, seeing silver’s underperformance as an opportunity to bridge the gap in relative values. The gold/silver ratio narrowed from 91.85 down to 87.74 reflecting silver’s outperformance but it later today, traded back higher to close at 89.59 again underperforming during silver’s sharp downturn from today’s high of 33.47 to close at 32.18. This week’s Energy Information Administration (EIA) petroleum status report showed another inventory ... Read full summary in our latest report!