ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
18th January 2020 - U.S. stock markets continue to push higher despite mixed corporate earnings results from the investment banks. Thursday/Friday’s advance was certainly helped by the signing-off of the U.S./China phase-one trade deal – Asian markets were more modestly higher. In Europe, the major indices are ###lagging behind the U.S.’s gains in a sign of bearish divergence. Wednesday’s report noted that CNN’s Fear & Greed index had tipped above 90% per cent and Friday’s latest sentiment from AAII showed bulls gaining 8.8 points to 41.8% whist bears dropped by 2.4 points to 27.5%. That’s not so extreme as CNN’s index, but high enough to trigger a correction, sometime soon – the question is when? October’s five wave impulse uptrend in the benchmark S&P 500 has already traded… Read full summary in our latest report!
Currencies (FX)
18th January 2020 - Friday’s latest U.S. Housing Starts came through much stronger than consensus forecasts of 1.373m units at 1.608m which proved to be a new 13-year high, suggesting the housing market recovery was back on track amid low mortgage rates. This has followed mixed results in manufacturing but there### was a feel-good factor after last Wednesday’s signing of the U.S./China phase-one trade agreement that was missing before. The US$ dollar was at a crossroad earlier in the week, but the index’s break above key nearby resistance at 97.58 to 97.65 has lifted the fog, confirming upside continuity over the next few weeks targeting levels towards 98.95+/- in order to complete a corrective expanding flat pattern that began lifting the dollar higher from October/November’s lows. Equally, the Euro/US$...Read full summary in our latest report!
Bonds (Interest Rates)
18th January 2020 - The US10yr yield remains just below last November’s high of 1.965 which ended September’s corrective zig zag. It’s been taking time to accelerate lower as the 5th wave within the five wave impulse downtrend that began from the Oct.’18 high of 3.262 but then it’s entitled to. Perhaps it’s waiting for a### corrective downturn in the stock market, so that price-synchronisation is maintained. If so, it may not have to wait too long. Stock indices are only 1.2% away from beginning that correction. It’s uncertain what the trigger would be because there’s growing bullish sentiment for the economy now that the U.S./China phase-one trade deal has been signed. But 2018’s downtrend is almost certainly incomplete. Yields rose marginally Friday after the U.S. announced plans to issue a new 20-year bond… Read full summary in our latest report!
Commodities
18th January 2020 - Gold is approaching short-term upside targets of 1566.65+/- to complete a counter-trend rally that began earlier this month from 1540.00. It could have already ended into Friday’s high of 1561.50 although to do that, it would end a running flat pattern instead. The US$ dollar broke above short-term### resistance Friday which puts it on course to trade higher over the next few weeks, but the only other headwind that could suddenly trigger gold sharply lower would be if investors being unwinding the huge long-positioning that has accumulated over the last year. Friday’s latest COT net speculative long-positioning figure is at 319.2k, down fractionally from 322.3k but still at 10-year highs. So what could trigger long-liquidation? Perhaps growing confidence in the economy, the stock market following the removal of doubt associated with the ongoing trade spat between the U.S. and China, especially after last week’s signing of the phase-one trade agreement. Any downturn could be big because the larger picture defines the decline from January’s high of 1611.37 as beginning a proportional correction to the Aug.’18 advance from 1160.24. Silver’s corresponding short-term…Read full summary in our latest report!
