ELLIOTT WAVE ANALYSIS - Latest Market Commentary
Stock Indices
25th April 2024 - U.S. quarterly earnings have dominated equity trading this week as counter-trend rallies have dug deep into this month’s stock index declines that traded down into last Friday’s lows. Tesla ###reported after the close Tuesday and whilst net income took a significant hit, plunging 55% to $1.13 billion, its announcement that it will release more affordable versions of its cars sent shares 12% higher. It wasn’t the case tonight for Meta though – the stock price plunged -16% per cent in after-hours trading after the company issued a light forecast, which overshadowed better-than-expected first-quarter results. Alphabet/Google and Microsoft report figures Thursday. Meanwhile, upside rallies in the major indices look completed from last Friday’s lows into today’s highs. Elliott Wave patterns are somewhat ambiguous and there’s no pattern uniformity in the S%P 500, Dow Jones or those indices traded in Europe – this irregularity allows some further upside gains although our base-case remains more immediately bearish. April’s peaks are fast being left behind – the next downswing will add credibility to much larger declines forecast over the coming months. Read full summary in our latest report!
Currencies (FX)
25th April 2024 - Tuesday’s U.S. Composite PMI came through weaker-than-expected at 50.9 with both manufacturing and services components lower too. This raised expectations the Federal Reserve may not need### to be too hawkish should an economic downtrend emerge that would result in hastening rate cuts later this year. The US$ dollar index consequently pulled a little lower but into a corrective pattern from the current high of 106.51 although December’s counter-trend zig zag is fast approaching upside completion towards 106.69+/-. Despite the sharp influx of dollar buyers over the last month, based upon the Fed delaying interest rate cuts, the dollar is approaching a critical juncture, an imminent corrective high. A sharp and sustained downtrend is set to resume very soon. The Euro/US$’s corrective downswing from December’s high of 1.1142 isn’t quite finished, targeting 1.0528+/- ahead of beginning a new multi-month uptrend – Stlg/US$ has traded into downside targets of 1.2330+/- to a low of 1.2299 which is enough to complete December’s expanding flat correction – US$/Yen is heading towards upside targets of 157.85+/- which is expected to mark the high for this year – Bank of Japan intervention not too far off now – AUD/US$ requires one final decline towards 0.6348+/- before completing December’s counter-trend zig zag decline ahead of resuming the larger degree uptrend. Read full summary in our latest report!
Bonds (Interest Rates)
25th April 2024 - Bond markets have been re-assessing the Federal Reserve’s next move on interest rates. Traders’ base-line expectation is for one or two rate cuts of 25bps basis points each this year, ###down from six or seven in January. Former US Treasury secretary Larry Summers said last week that basis recent inflation data, the Fed’s next rate move could instead be higher, not lower. Richard Clarida, former vice-chairman of the Federal Reserve, now at Pimco said ‘at some point, if the data continues to disappoint, then I think the Fed will have to start re-engaging on hikes’. Prudential’s co-chief investment officer Greg Peters said ‘I think it’s completely appropriate to factor [a rate increase] in’. Benson Durham, head of global policy and asset allocation at Piper Sandler, said his analysis suggests an almost 25% per cent chance of a move higher in rates over the next 12 months, while a PGIM analysis of options data from Barclays indicates a 29% per cent probability of such an increase over the same timeframe. Bundesbank President Joachim Nagel said Eurozone inflation could still... Read full summary in our latest report!
Commodities
25th April 2024 - Last week’s report provided some answers as to why gold bullion had outperformed gold mining stocks since both bottomed last February. Focus centered around speculators on China’s Shanghai Futures ###Exchange (SHFE) – today’s Financial Times newspaper has captured more information – they say that trading firm Zhongcai Futures has amassed a bullish position in SHFE gold futures equating to about 50 tonnes of gold, worth nearly $4bn and equivalent to more than 2% per cent of the Chinese central bank’s reserves of bullion. Zhongcai, founded three decades ago by Bian Ximing is foremost among a group of Chinese firms whose large bets have been linked to gold’s rapid rise. Both gold and silver remain in downside progress as minor wave iv. four corrections although fast approaching downside targets. Earlier this week, there were reports that hostilities between Israel and Iran had quietened down with either side unwilling to aggravate the already tense retaliatory situation between the two countries. That sent Crude oil prices sharply lower from Friday’s spike-high of...Read full summary in our latest report!
