Yearly Archives: 2017

BTCUSD Elliott Wave Analysis – 11th May, 2017

Bitcoin has recently seen strong upwards movement along with increasing news coverage. A blowoff top may again be approaching. Will this herald just another interruption to Bitcoin’s upwards trend? Or could it be the end of this meteoric rise and the beginning of a larger fall?

All charts are on a semi-log scale.

FORTNIGHTLY CHART

Bitcoin 2 weekly 2017
Click chart to enlarge.

The data for this wave count begins from June 2010.

What looks like a five wave impulse may be completing. With no Fibonacci ratio between cycle waves III and I, it may be more likely that cycle wave V will exhibit a Fibonacci ratio to either of III or I.

This movement does not fit well at all into a channel.

I have taken some time to look at the waves which now in hindsight are obviously complete, particularly the waves within cycle wave III. I have noticed some tendencies of this market:

– Bitcoin behaves like an extreme commodity. Its impulses have a curved look with slower second waves, quick fourth waves, and strong sharp fifth wave extensions. This tendency shows up in bullish and bearish waves.

– Third waves are much longer than first waves, and fifth waves are longer still. Again, this is an extreme version of typical commodity behaviour.

– The middle of its third waves may exhibit Fibonacci ratios within them, but overall it does not regularly exhibit good Fibonacci ratios. This would make target calculation particularly difficult.

– Candlestick reversal patterns are common at the end of Bitcoin’s strong fifth waves. These are engulfing patterns or star patterns with very long wicks on the final candlestick.

– Early second wave corrections are extremely deep, close to 0.8 and often deeper than 0.9 the depth of the prior first wave.

WEEKLY CHART

Bitcoin weekly 2017
Click chart to enlarge.

The weekly chart looks at the possible structure of cycle wave V, the final fifth wave.

There are multiple ways to label this upwards movement. This is only one.

DAILY CHART

Bitcoin daily 2017
Click chart to enlarge.

This daily chart looks at the final fifth wave of primary wave 5. Again, there are multiple ways to label this movement and this is only one of them.

What cannot yet be seen is a candlestick reversal pattern at the high.

A target is calculated at two degrees, which is a zone of only 32 bits. While this target looks reasonable, it must be acknowledged that given observed behaviour of this market it may well be too low if it is wrong.

The bigger picture expects that Bitcoin may soon end its meteoric rise and turn to begin a very sharp and deep fall. When cycle wave V ends, it would complete one impulse up. Given this market’s tendency to very deep early second wave corrections, the resulting fall may be as deep as 0.9 of the prior rise.

I will be following this market daily now to pinpoint when may be best to sell Bitcoins.

Thereafter, I will follow the big second wave correction to its completion in order to pinpoint when will be the best time to buy Bitcoins again.

This analysis is published @ 07:16 p.m. EST.

[Note: Analysis is public today for promotional purposes. Member comments and discussion will remain private.]

Continue reading BTCUSD Elliott Wave Analysis – 11th May, 2017

SILVER Elliott Wave Technical Analysis – 10th May, 2017

Last week’s analysis provided a trend channel on the 2 hourly chart and advised to assume the downwards trend remained while price remained within the channel. This is what has happened so far.

Continue reading SILVER Elliott Wave Technical Analysis – 10th May, 2017

Trading Room – 9th May, 2017

Today’s Trading Room looks at US Oil, Copper, CVX and $USB.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

US Oil (WTI Crude – Spot)

TECHNICAL ANALYSIS

US Oil Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Elliott Wave Gold members were advised to enter short for US Oil on the 12th of April, at 53.11. Positions are now very profitable and stops have been moved down to protect profits.

Analysis is now focused on managing short positions and determining when to take profit.

Price has bounced up from support about 43.6. The candlestick at the low is a hammer and this shifts the trend from down to neutral. A reversal pattern reverses from down (or up) to either the opposite direction or neutral but makes no comment on how long the next trend may last.

The hammer is followed by a long legged doji. This indicates a balance between bulls and bears; neither are in charge. This looks like a pause within a larger trend and not necessarily a reversal.

The downwards trend has support from volume. ADX indicates a downwards trend that is not yet extreme. The trend has a healthy increase in range and widening of Bollinger Bands.

When Oil trends, it can do so very strongly. Indicators may remain extreme for long periods of time. Only when RSI has reached oversold for some time and ADX is extreme may this trend end.

In the short term, On Balance Volume is a little bullish. The break above the short purple line is a weak signal because the line is not long held and only tested three times. On Balance Volume may find resistance at the longer purple line and that may help to halt the rise in price here.

To see how extreme RSI and ADX can get when Oil trends look at the strong downwards wave from 13th June, 2014, to the 29th January, 2015.

US Oil Chart Daily 2017
Click chart to enlarge.

This chart looks at several examples during a strong trend in Oil to illustrate the concept of hammer candlestick reversal patterns not necessarily signalling the end of a trend. The biggest retracement was after the first pattern: the following two days retraced 54% of the prior fall. Thereafter, hammers were followed by zero to four days of upwards movement.

The lesson here is do not read too much into this one piece of technical analysis. On its own a hammer will more often be a sign of a pause and not a sign of a major low.

ELLIOTT WAVE ANALYSIS

US Oil Chart Daily 2017
Click chart to enlarge.

This third wave for minuette wave (iii) must move below the end of minuette wave (i) at 47.06, to meet the core Elliott wave rule, and it must move far enough below this point to allow room for a subsequent fourth wave to unfold and remain below first wave price territory.

Minor wave C must subdivide as a five wave impulse. It has begun with two deep and very time consuming second wave corrections for minute wave ii and minuette wave (ii). The upcoming fourth wave corrections for minuette wave (iv) and minute wave iv may be expected to be relatively shallow to meet the guideline of alternation.

A narrow best fit channel is added to recent downwards movement. Price may be beginning to break below the lower edge as momentum increases. Micro wave 4 may not move into micro wave 1 price territory above 48.22. Targets remain the same.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

Copper (Spot)

TECHNICAL ANALYSIS

Copper Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Analysis of Copper is proving very difficult.

Corrections are deep. Overall, since the high on the 13th of February Copper has made a series of lower lows and lower highs.

Volume is stronger for downwards days, supporting the downwards movement in price.

ADX indicates Copper may be in the early stages of a downwards trend. The trend has not yet begun to show an increase in volatility but has begun possibly to show some small increase in range.

Price is whipsawing from support to resistance and back again in conjunction with Stochastics moving from oversold to overbought. Currently, with Stochastics in oversold territory, it seems reasonable for price to be expected to move higher here to find resistance now about 2.55. If price closes above 2.55, then next resistance would be about 2.700.

TREND LINE

Copper Chart Monthly 2017
Click chart to enlarge.

Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The last two complete monthly candlesticks both have long lower wicks, which is bullish.

ELLIOTT WAVE ANALYSIS

Copper Chart Daily 2017
Click chart to enlarge.

Leading diagonals in first wave positions are normally followed by very deep corrections, often reasonably deeper than the 0.618 Fibonacci ratio. Given this tendency and the brevity of the correction labelled minute wave a within minor wave 2, it looks most likely that minor wave 2 shall continue for longer and be deeper.

Minor wave 2 may not move beyond the start of minor wave 1 above 2.823.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

CVX – Chevron Corp

TECHNICAL ANALYSIS – WEEKLY

CVX Chart Weekly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

The larger trend may still be up and should be assumed to remain so while price is above 95.64.

However, the current smaller movement looks to be down and has more support from volume.

A break below the long term purple line by On Balance Volume would be a bearish signal.

TECHNICAL ANALYSIS – DAILY

CVX Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

CVX has been in a downwards trend since December 2016. This may be a large pullback within a bull market as seen on the weekly chart. Short and mid term averages have a negative slope. The long term 200 day average still has a slight positive slope.

Within the downwards trend are periods of consolidation. Currently, a small consolidation is unfolding and the strongest day is a downwards day, so expect a downwards breakout as more likely than upwards here.

Overall, this chart is neutral to slightly bearish.

This analysis of Chevron is included in Trading Room today as a result of a member’s request and not necessarily because it offers a good trading opportunity. It may offer an opportunity to short but only for more experienced and nimble members; this trend is not strong.

$USB – 30 YEAR US TREASURY BONDS

TECHNICAL ANALYSIS – MONTHLY

USB Chart Montly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

This chart looks at 20 years of data.

Bond price has remained bullish for this time. Pullbacks find final support at the 10 year moving average (dark blue). Some pullbacks fall short, finding support about the 5 year moving average (purple).

For this market to be confirmed as having switched from bull to bear, the major swing low in December 2013 should be exceeded by a new low below 127.30. Assume the bull market remains intact while price remains above 127.30.

Often at lows Stochastics exhibits divergence with price.

There is room here for price to fall further. However, with Stochastics turning up here it is also possible that the fall in price is over. The weekly chart may shed more light.

TECHNICAL ANALYSIS – WEEKLY

USB Chart Weekly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Since early July 2016, Bonds have been in a pullback within the context of a larger bull market.

Strong bullish divergence between the last two swing lows for price and RSI and Stochastics indicates downwards movement has weakened. A low may be in place.

ADX does not indicate a change from down to up nor does it indicate a trend at this time.

This analysis suffers from a lack of volume data.

At this time, it looks reasonable to assume this may be a good buying opportunity for longer term investors. Always have an exit strategy for long term investments that includes at what point the investment would be exited if price falls. Do not invest funds which you cannot afford to lose.

TRADING ROOM SUMMARY TABLES

OPEN POSITIONS

Trading Room Open Positions 2017
Click table to enlarge.

CLOSED POSITIONS

Trading Room Closed Positions March 2017
Click table to enlarge.

This table ends April.

RECOMMENDATIONS

[Content protected for Elliott Wave Gold members only. To subscribe click here.]

 

DISCLAIMER

To learn what the Trading Room is about see first Trading Room analysis here.

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

Trading advice will be updated throughout the week for Elliott Wave Gold members only in this comments section.

This analysis is published @ 02:18 a.m. EST.

[Note: Member comments and discussion will remain private.]

Continue reading Trading Room – 9th May, 2017

SILVER Elliott Wave Technical Analysis – 5th May, 2017

Last week’s analysis expected it was fairly likely price may continue to fall at least slightly below 16.82. This is what has happened.

Summary: Assume the trend remains the same until proven otherwise. Draw a channel about downwards movement on an hourly chart to contain it all. Only when that channel is breached expect the downwards wave is over.

New updates to this analysis are in bold.

Last monthly chart is here.

ELLIOTT WAVE COUNT

MONTHLY CHART

Silver weekly 2017
Click chart to enlarge.

A very large zigzag may be unfolding downwards for Super Cycle wave (a).

The first wave down within a zigzag must subdivide as a five. Cycle wave a will fit as a five wave impulse.

Cycle wave b may be any corrective structure. It may not move beyond the start of cycle wave a above 49.752.

The two weekly charts below look at two different structures for cycle wave b.

FIRST WEEKLY CHART

Silver weekly 2017
Click chart to enlarge.

Cycle wave b may be completing as a double combination: zigzag – X – flat. The second structure, a flat correction for primary wave Y, may be underway.

Within a flat correction, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 15.938. The common range for intermediate wave (B) is from 1 to 1.38 the length of intermediate wave (A).

Intermediate wave (B) may make a new price extreme beyond the start of intermediate wave (A), as in an expanded flat, which are very common structures.

The bigger picture for cycle wave b would expect primary wave Y to end about the same level as primary wave W about 21.062. The purpose of combinations is to take up time and move price sideways. To achieve this purpose the second structure in the double normally ends about the same level as the first.

The maximum number of corrective structures is three within combinations (and double zigzags). This maximum applies to sub-waves W, Y and Z. Within these structures, they may only be labelled as simple A-B-C corrections (or A-B-C-D-E in the case of triangles). They may not themselves be labeled multiples as that would increase the number of corrections within the structure beyond three and violate the rule.

X waves are joining structures and they are not counted in the maximum total of three (otherwise the maximum would be five). X waves may be any corrective structure, including multiples.

FIRST DAILY CHART

Silver daily 2017
Click chart to enlarge.

Intermediate wave (B) may be unfolding as a zigzag. Within Intermediate wave (B), minor wave A looks like an impulse. Minor wave B may not move beyond its start above 18.641.

Now that price has broken below the cyan support line this line may offer resistance. It may force minor wave B to be shallow.

If price breaks back above this line, then it may offer some support again.

SECOND WEEKLY CHART

Silver daily 2017
Click chart to enlarge.

It is also possible that cycle wave b may be completing as a triangle. Only because combinations are more common than triangles is this a second wave count.

Within a triangle, only one of the sub-waves may be a more complicated multiple. Primary wave B subdivides as a double zigzag. Primary waves C, D and E may only be single threes.

Within a contracting or barrier triangle, primary wave C may not move beyond the end of primary wave A above 21.062.

Within a contracting triangle, primary wave D (nor any part of primary wave C) may not move beyond the end of primary wave B below 15.638.

Within a barrier triangle, primary wave D should end about the same point as primary wave B. As long as the B-D trend line remains essentially flat the triangle will remain valid. In practice, this means that primary wave D may move slightly below the end of primary wave B (this is the only Elliott wave rule which is not black and white).

The final wave of primary wave E may not move beyond the end of primary wave C. It would most likely fall short of the A-C trend line.

This second wave count expects a large consolidation to continue for months.

SECOND DAILY CHART

Silver daily 2017
Click chart to enlarge.

Primary wave C may be an incomplete zigzag.

A new high above 18.641 would at this stage invalidate the first wave count and provide some confirmation of this second wave count.

A new low reasonably below 15.638 would see this second wave count invalidated and the first wave count increase in probability.

2 HOURLY CHART

Silver 2 hourly 2017
Click chart to enlarge.

This channel contains almost all downwards movement. The upper edge is the important point. If price breaks above this, then assume the downwards wave is over and a new upwards wave has begun.

This is the simplest and safest approach to this market at this time.

TECHNICAL ANALYSIS

WEEKLY CHART

Silver Chart Weekly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Unless Friday’s session closes with very strong volume, this week may see a decline in volume for another downwards week. This would complete a Three Black Crows candlestick pattern, the opposite of Three White Soldiers. Coming after some increase, this would be a reversal pattern.

There is room for price to continue to fall here. RSI is not yet oversold.

DAILY CHART

Silver Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Volume is bearish. On Balance Volume is very bearish.

ATR is slightly bearish. Bollinger Bands are bearish.

If RSI exhibits divergence with price at lows, then it would be a strong warning of a low in place, at least temporarily.

RSI can remain extreme for long periods of time during a strong bearish trend for Silver (look back at September 2014 for evidence of this statement). While RSI moving well into oversold is a warning, it does not mean that price has to bounce here.

The best evidence of an end to this downwards trend would be a strong candlestick reversal pattern (such as a Bullish Engulfing pattern) or a strong breach of a channel, which may be drawn on an hourly chart about this fall.

This analysis is published @ 04:16 a.m. EST.

[Note: Analysis is public today for promotional purposes. Member comments and discussion will remain private.]

Continue reading SILVER Elliott Wave Technical Analysis – 5th May, 2017

GOLD Elliott Wave Technical Analysis – 2nd May, 2017

Price moved slightly lower, which was not what the main wave count expected, but it was allowed for. No confirmation of a trend change has yet been seen.

Continue reading GOLD Elliott Wave Technical Analysis – 2nd May, 2017