ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
22nd June 2019 - The benchmark S&P 500 and the Dow Jones (DJIA) have both broken above the early-May highs, isolating the preceding May-June downswing as a corrective zig zag pattern. Ordinarily, this would confirm a new 3rd wave uptrend in progress, but that doesn’t correlate to the pattern development in several Emerging Market, Asian indices ###and a good few commodities too. The MSCI EM index is set to resume 2018’s corrective zig zag downswing from the 1278.53 high resulting in a break below last October’s low of 929.90 over the next few months. The very same pattern is unfolding in the Hang Seng and the iShares China Large-Cap index. The Shanghai Composite is also bearish. Japan’s Nikkei began a zig zag downswing from May’s high with wave ‘b’ approaching upside levels but missing wave ‘c’ declines. And then there’s Copper – 2018’s corrective double zig zag remains incomplete and looking across to Crude/Brent oil, those two are engaged in primary degree zig zag downswings… Read full summary in our latest report!
Currencies (FX)
22nd June 2019 - The US$ dollar index continued last week’s declines through Friday’s session ending just off the lows at 96.21. This was entirely expected basis the five wave declining diagonal pattern that is still unfolding from the April (orthodox) high of 98.33 – downside targets remain towards 95.46+/- which is the idealised area at which the larger expanding ###flat pattern ends March’s correction. Although the dollar is currently being driven lower by heightened expectations of a Federal Reserve interest rate cut in July’s meeting, Elliott Wave analysis simply interprets this as expectant thinking rather than reality. Yes, the Federal Reserve could cut rates -0.25% per cent but the dollar may have already finished its decline by then. A short-term upside rally is expected this coming week before further declines later. One other currency pair is already indicating it’s ended its corrective downswing… Read full summary in our latest report!
Bonds (Interest Rates)
22nd June 2019 - The dollar was sold off heavily last week as the market began to price-in an interest rate cut at the Federal Reserve’s next meeting in July. Interestingly, the US10yr yield held above Thursday’s low of 1.971% and even traded higher Friday to 2.068 even though currency traders were still selling the dollar. This suggests some short-term bullish### divergence – the US$ dollar index is attempting to complete a 3rd wave decline towards 95.80+/- and seems in a hurry to do so, this coming week which would then open the way for a deep 4th wave upswing, following treasury yields higher as they also develop into a minor degree 4th wave rally targeting levels towards 2.184+/- prior to resuming its downtrend. This correction which began… Read full summary in our latest report!
Commodities
22nd June 2019 - Gold burst higher in overnight trading as the markets awakened to the fact that President Trump was close to ordering a military retaliatory strike against Iran for shooting down its drone over the Gulf Straits. Prices traded up to 1408.30 before declining rapidly in the minutes that followed, into an intra-hourly five wave pattern ###to 1383.20. This is confirming gold’s intermediate 3rd wave advance from 1180.80 has completed with a 4th wave retracement downswing already underway targeting levels towards 1372.50+/- and perhaps to 1351.00+/-. A subsequent 5th wave is currently projected towards 1426.20+/- but it could do more depending on the depth of the current 4th wave retracement. Interestingly, silver has already fulfilled its minimum upside objective for ending its counter-trend rally that began from the late-May low of 14.29 into Friday’s high of 15.56. This is labelled as ending a 2nd wave within a much larger, declining five wave diagonal pattern that began from last February’s high of 16.22. Turing bearish now is quite a leap of faith especially since the US$ dollar index hasn’t yet traded to downside targets of 95.46+/-. But silver’s rally from 14.29 to 15.56 contains a triangle within the zig zag which asserts its pattern credibility. There is one major currency pair that is showing a… Read full summary in our latest report!
