ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
23rd September 2021 - It’s been a while since we’ve seen stock markets behave bullishly in the face of Federal Reserve tapering and it announcing earlier-than-expected interest rate rises but that’s what’s happened### following Wednesday evening’s central bank policy statement. Ordinarily, stocks would have declined as expectations shift towards earlier, higher interest rates but all that has been pushed aside as China Evergrande Group announced it paid a coupon payment on its Shenzhen-traded 5.8% September 2025 bond although more dollar-based interest rate payments fall due over the next several days. Meanwhile, those three wave declines in the S&P, Dow and Nasdaq from this month’s highs into Monday’s lows have be isolated by sharp rallies into today’s highs. Corrective upside levels have been exceeded, but secondary ... Read full summary in our latest report!
Currencies (FX)
23rd September 2021 - The Federal Reserve’s policy shift towards a November tapering whilst allowing for an earlier schedule for interest rate rises next year sent the US$ dollar index initially higher yesterday to### 93.52. But it failed to break above the August high of 93.72 which was necessary n confirming a secondary high ending wave (b) within its declining zig zag – wave (c) is now set to continue lower over the next several weeks towards 91.28+/-. Does a declining dollar mean stock markets will continue this week’s rallies to higher-highs? We don’t know unequivocally if that will happen unless secondary ... Read full summary in our latest report!
Bonds (Interest Rates)
23rd September 2021 - The Federal Reserve announced it would soon begin reducing/tapering its monthly bond purchases whilst signalling interest rate increases may follow earlier than expected. Nine of eighteen### committee members said borrowing costs will need to rise in 2022. The central bank sees inflation running this year at 4.2%, more than double its target rate, and is positioning itself to act against it which can only mean raising short-term rates next year. Expectations for economic growth were lowered to 5.9% per cent from the 7.0% projected in June. US10yr yields pushed strongly higher but they’ll have... Read full summary in our latest report!
Commodities
23rd September 2021 - Precious metals don’t like interest rates rises as can be seen following Wednesday’s Federal Reserve statement that said bond-buying will diminish soon, maybe November whilst short-term ###interest rates would be hiked earlier-than-expected, starting next year basis accelerating inflationary pressures. Gold has now extended its 2nd wave corrective downswing that began earlier this month from 1834.21 from a single into a double zig zag pattern – but this is still a correction that must end above last month’s low of 1692.87 before resuming higher. What does that tell us about other asset classes? The US$ dollar index is expected to decline from current levels during the next month so maybe emphasis shifts away from interest rates and back to that. Silver is set to resume a five wave declining sequence from September’s high of 24.92 targeting modest lower-lows towards max. 21.61+/-. That attempt would … Read full summary in our latest report!
