Getting back from Singapore where I met some of our wonderful Singapore clients made me even more realize the importance of the Elliott Wave analysis for the Asian traders. In responding to our readers’ requests for the possibility to follow the Elliott Wave Count I decided to publish my Elliott Wave charts in order to make this information accessible to all the MC Community. A notification email will be sent to all members when the Elliott Wave Section has been published.
Here is this the weekly Market Update:
On the weekly chart you can see that the US Market could plunge into a Wave 4 and then make a Wave 5 up. Odds favor a truncated Wave 5 as the market had an extended Wave 3. As you know I think that the US Market has entered a new secular bull market since March 2009 and the bottom of Wave (IV) should be a nice buy opportunity. I trade only with price action as all indicators are lagging but I put the rsi 14 on the Elliott Wave Count as it is helpful to label the count.
For the moment I think that the US Market is due for a rebounce after this down move since July 24 high. On the following chart you can see that both Elliott Wave counts are bearish on the medium term. I will watch if the rebounce will be composed of 3 corrective waves (a black Wave 2 or a Wave B) or 5 impulsive waves (a green Wave (V)). As I am an intermediate term trader I am keeping my short positions for the moment.
On the chart below you can see that both the SPX Index and the Banks Index found support on the red dashed support trendlines. The Russell/SPX ratio chart made a false breakdown and just recovered above the neckline of a Head and Shoulders Pattern which confirms that a rebounce is coming in the US Market.
Once the rebounce has been completed, the Russell could quickly break below the neckline of the Double Top Pattern and the Banks Index below the neckline of the Head and Shoulders Pattern:
Gold broke out of a Falling Wedge Pattern last week and it is important to see some follow through this week. A breakout of the Base Pattern is key to confirm the bull market, $1360 should be the next resistance (upper trendline of the Triangle Base Pattern). Silver found support on the 61.8 Fibonacci retracement level and should take off very soon. Reaching 78.6 retracement is also possible for the locals to run some protective stop orders.
I think that Gold entered a Wave iii up which will be valid once price breaks above 1392.60 (top of Wave i). A Wave iii could send Gold to $1451.40 (Wave iii = Wave i) or $1581.90 (Wave iii = Wave i x 1.618) or even to $1792.20 in case Wave 3 is very extended (Wave iii = Wave i x 2.618). The structure of the up move is key as it is important that the uptrend since December low unfolds in 5 waves (motive waves) instead of 3 waves (corrective waves). A break above $1392.60 level should propulse Gold much higher as it would erase a bearish count for some Elliott Wave Institutions.
GDX broke out of a Descending Wedge Pattern and is still holding above the neckline of the Inverse Head and Shoulders Pattern like the Junior Mining Index (GDXJ). Once GDXJ breaks out of the Falling Wedge Pattern it will also be a bullish sign to confirm the uptrend in Miners.
Copper and Steel have recently made bullish breakouts and I expect Platinum to do the same. For the moment it is still locked in a Triangle Pattern.
I believe that Natgas is entering a new impulse move (Wave 5) which should push prices at much higher levels. On the weekly chart you can also see an alternate bearish count but I favor the bullish black count for the moment.
An update is coming for the Yen and the Nikkei as I think that the sideways movement is coming to an end.
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