Category Archives: Equities

All individual equity markets

The Strongest Technical Signal for Google | 31st October, 2017

In keeping with the KISS principle, this trend line is very simple. I call it “Google’s Forever Trend Line”.

GOOG 2017
Click chart to enlarge.

This trend line has very strong technical significance. It is very long held and has been tested multiple times. It does have a reasonably steep slope, but because the entire history of Google price remains above this line a breach of the line would still offer a very strong bearish signal.

We should assume the upwards trend remains intact while price remains above the line. Each time price comes close to the forever trend line, and remains above it, then a low risk high reward entry opportunity to join the upwards trend is offered.

Published @ 01:51 a.m. EST.

GDX Elliott Wave Technical Analysis – 19th October, 2017

Three Elliott wave counts are presented below in the order in which they were developed, not in the order of probability:

FIRST WAVE COUNT

MONTHLY CHART

GDX Monthly 2017
Click chart to enlarge.

DAILY CHART

GDX Daily 2017
Click chart to enlarge.

SECOND WAVE COUNT

MONTHLY CHART

GDX Monthly 2017
Click chart to enlarge.

DAILY CHART

GDX Daily 2017
Click chart to enlarge.

THIRD WAVE COUNT

MONTHLY CHART

GDX Monthly 2017
Click chart to enlarge.

DAILY CHART

GDX Daily 2017
Click chart to enlarge.

For most recent movement, this wave count has the best fit in terms of Elliott wave structure. It does look like a barrier triangle has recently finished, which may be cycle wave b.

If the triangle is correctly labelled, then this tells us two things, because it cannot be a second nor fourth wave and so may only be a B wave:

1. The breakout from this multi month consolidation should be upwards.

2. After an upwards wave to last one to several years, GDX should then turn downwards for wave C.

Published @ 02:20 a.m. EST.

GOLD Elliott Wave Technical Analysis – 13th April, 2017

Upwards movement continues and price has remained within the upper half of the channel on the hourly chart, which was expected at this stage.

Trading advice is given to members to manage long positions towards the end of this week.

Continue reading GOLD Elliott Wave Technical Analysis – 13th April, 2017

GOLD Elliott Wave Technical Analysis – 5th April, 2017

Upwards movement was expected. Price moved lower, but has rebounded strongly after the session closed. Downwards movement remained above the invalidation point on the hourly chart.

Continue reading GOLD Elliott Wave Technical Analysis – 5th April, 2017

The Trading Room – 8th February, 2017

Introduction:

The Trading Room is a new idea that I want to test and develop over the next few months.

I find myself spending a lot of time writing and publishing analysis of Gold and the S&P500 (over at Elliott Wave Stock Market) when those markets are quiet and range bound and offer no good trading opportunities. This focus on inactive markets takes focus away from markets that are trending and do offer good trading opportunities.

What if the focus was on finding good trading opportunities over a range of markets rather than daily analysis of specific markets? What if the Trading Room can be the platform for publishing these good trading opportunities?

Therefore, this Trading Room approach will look over a range of markets to identify any possible trading set ups which may unfold now or over the next few days, and the focus will be on trading set ups and not on teaching and learning Elliott wave.

Analysis will be brief and to the point.

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.

Today’s Trading Room focuses on NZDUSD, EURUSD, USD, and GDX:

EURUSD

TECHNICAL ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

So far upwards movement should be assumed to be a counter trend movement, until proven otherwise. The prior wave down put ADX into extreme and upwards movement from the 3rd of January has brought ADX back down from extreme. There is again room for a trend to develop.

Single divergence with Stochastics on its own is not enough to indicate a high in place. A breach of a support line should be seen before entering short.

Stockcharts do not offer volume data for currencies, so this is analysed below with BarChart data.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

The best fit channel is slightly adjusted to be more conservative than the last published chart for EURUSD. If price can print a full daily candlestick below the lower edge of the yellow channel, that would offer further confidence in a trend change. When that trend line is breached, then it should offer resistance.

Stops may be set a little above the trend line offering a low risk high reward opportunity. Do not set stops too close to the line; allow the market room to move. Sometimes trend lines are overshot and this trend line is not perfect.

On Balance Volume has confidently breached a horizontal support line which offers strong technical significance. A retest of resistance at that line shows it holds. This is a strong bearish signal.

NZDUSD

TECHNICAL ANALYSIS

NZDUSD Chart Daily 2017
Click chart to enlarge.

Classic technical analysis of this pair is very bearish. The long upper wick on this last daily candlestick is bearish. This trend is extreme; it will end sooner rather than later.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

NZDUSD Chart Daily 2017
Click chart to enlarge.

On Balance Volume has no trend line. Any trend line drawn would have too steep a slope to have reasonable technical significance.

If an expanding diagonal is unfolding, then minute iv must be either over now or very close indeed. There is almost no room left for it to move.

I have been analysing NZDUSD (because I’m a Kiwi) for years using Elliott wave and I will note that NZDUSD rarely offers good looking Elliott wave structures. Therefore, I place more weight in classic analysis of this pair than Elliott wave analysis. The Elliott wave analysis is supplementary.

I will wait for the green support line to be fully breached before going short here.

USD INDEX

TECHNICAL ANALYSIS

USD Chart Daily 2017
Click chart to enlarge.

There is not enough bullish indication here to go long yet. Upwards movement on this chart is a clear trend and downwards movement is choppy and overlapping, so downwards movement looks more like a counter trend movement. If that conclusion is correct, then USD should break out upwards.

The larger trend at the monthly chart level remains up and the 200 day moving average still has a positive slope.

ELLIOTT WAVE ANALYSIS

USD Chart Daily 2017
Click chart to enlarge.

Neither Stockcharts nor BarChart have volume data.

The short term yellow resistance line has been breached. However, the long upper wicks on the last two daily candlesticks gives some cause for concern.

Price may be bouncing up from the lower edge of the best fit channel. With another upwards day moving further away from the trend line, a long position may be entered. A stop may be set just below the last low.

GDX

TECHNICAL ANALYSIS

GDX Chart Daily 2017
Click chart to enlarge.

Next resistance is at 26.0.

This chart is provided today mostly for members of Elliott Wave Gold and not because I see a trading set up here, because I don’t. (That doesn’t mean one does not exist, only that I don’t see it today).

Going long here risks entering at the end of the trend. ADX is nearing extreme and price has closed above the upper edge of Bollinger Bands now for the last four sessions.

Going short here is trying to pick a top. Before going short at least two of the following should be seen: a bearish candlestick pattern, a break of support by On Balance Volume, divergence with price from RSI while overbought, price to move below the short term 13 day moving average.

This analysis is published @ 02:59 a.m. EST.

EEM – iShares Emerging Markets Technical and Elliott Wave Analysis – 2nd February, 2017

In response to a member’s request here is an analysis of EEM.

This market may not have sufficient volume for a reliable Elliott wave analysis. For that reason classic technical analysis is presented first and should be given more weight. The Elliott wave analysis may only be used as a rough guideline.

TECHNICAL ANALYSIS

WEEKLY CHART

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

Volume is declining as price is moving higher. This is a cause for concern at least for the short to mid term. Volume should increase for price to keep rising sustainably.

However, it is noted for the indices that in the last few years price has been rising on overall declining volume and this has been sustained for years. That may happen here with EEM.

On Balance Volume is at resistance. A break above the purple line would be a strong bullish signal.

RSI is not extreme and exhibits no divergence with price to indicate weakness.

ADX is increasing, indicating this market is trending. The trend is up. The trend is not extreme. There is plenty of room for this trend to continue.

Horizontal lines are added where price has previously found support and resistance. These lines above may offer resistance and price may consolidate there.

DAILY CHART

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

The last rise to the last high on the 25th of January came with a decline in volume. A following fall in price for three days has found support at the sloping blue line.

There is a trend and it is upwards. The short term Fibonacci 13 day average is above the mid term Fibonacci 55 day average, and both are above the long term 200 day average. All have a positive slope.

ADX indicates a trend and it is not extreme at the daily chart level. There is room for this upwards trend to continue.

RSI has reached overbought though. Looking back over the last four years for this market, it does not remain overbought for long. Price can continue upwards while RSI exhibits divergence and this can persist for up to about a month before price turns. RSI suggests that this trend may become extreme and end within about a month. A larger consolidation or a trend change may occur then.

ATR is declining as price moves higher. This indicates some weakness. Each day bulls are able to push price up by a smaller and smaller amount.

Stochastics is overbought, but this oscillator may remain extreme for reasonable periods of time during a trending market. It does not yet exhibit divergence with price.

ELLIOTT WAVE ANALYSIS

MAIN WAVE COUNT

MONTHLY CHART

EEM Monthly 2017
Click chart to enlarge.

The large wave down labelled super cycle wave (a) looks like a three. This is labelled as a zigzag. There is no Fibonacci ratio between cycle waves a and c within it.

If super cycle wave (a) is a three, then the larger structure may be a flat correction. Within a flat correction, super cycle wave (b) must retrace a minimum 0.9 length of super cycle wave (a).

The normal range for super cycle wave (b) within a flat is from 1 to 1.38 times the length of super cycle wave (a). This means super cycle wave (b) may make a new high above 55.83.

Super cycle wave (b) must subdivide as a corrective structure. It looks like it may be a zigzag.

DAILY CHART

EEM Daily 2017
Click chart to enlarge.

The structure of cycle wave c may have begun with two overlapping first and second waves.

If a base channel is drawn about primary waves 1 and 2 (not shown), then intermediate wave (2) breaches the lower edge. This market does not behave perfectly according to base channels because they should provide support or resistance for lower degree second waves.

Within intermediate wave (3), no second wave correction may move beyond the start of its first wave below 33.94.

ALTERNATE WAVE COUNT

MONTHLY CHART

EEM Monthly 2017
Click chart to enlarge.

What if the large downwards wave labelled super cycle wave (a) was not a zigzag? The only other possible structure would be an impulse.

This does not have as clear a look as the main wave count, and for that reason only it is an alternate. However, this market may not have sufficient volume for typical looking Elliott wave structures. Its threes may look like fives and vice versa. Both possibilities should be considered.

If super cycle wave (a) is a five, then super cycle wave (b) may not move beyond its start above 55.83.

Super cycle wave (b) would be very likely to end at least slightly above 50.83, so that cycle wave c is not truncated.

In the short and mid term, both wave counts expect that a zigzag is unfolding upwards for super cycle wave (b).

Both classic analysis and Elliott wave analysis expect more upwards movement for this market.

This analysis is published @ 01:34 p.m. EST.

GDX Elliott Wave Technical Analysis – 14th November, 2016

Today for GDX I have Elliott wave charts, classic weekly and daily technical analysis charts, and a brief summary.

Continue reading GDX Elliott Wave Technical Analysis – 14th November, 2016

GDX Elliott Wave Technical Analysis – 7th October, 2016

Last GDX analysis on 31st of August expected the downwards trend to be interrupted by a bounce.

Price moved sideways for about four weeks, which fits expectations, and is now moving strongly lower.

Continue reading GDX Elliott Wave Technical Analysis – 7th October, 2016

GDX Elliott Wave Technical Analysis – 31st August, 2016

Last GDX technical analysis was very bearish.

Price has continued lower.

Continue reading GDX Elliott Wave Technical Analysis – 31st August, 2016

GDX Elliott Wave Technical Analysis – 26th August, 2016

Last analysis expected upwards movement towards a target at 36.21.

Price did move higher but fell 4.42 short of the target.

Summary: Classic technical analysis is very bearish today for GDX. A downwards trend is in place. This strongly favours the alternate monthly and alternate daily wave counts. A new low below 26.17 would indicate a much deeper correction should continue for a B wave, likely to end below 14.339. A new high above 31.79 would indicate an impulse upwards is continuing, target 35.15 and limit 36.34.

New updates to this analysis are in bold.

Although the wave counts are labelled “main” and “alternate”, the alternates are favoured. This is the order in which they were developed and not the order in which they are more likely.

MONTHLY ELLIOTT WAVE COUNT

GDX monthly 2016
Click chart to enlarge.

The whole wave down for cycle wave a subdivides well as a five wave impulse. However, GDX does not have adequate volume to produce typical looking Elliott wave structures. As always, this wave count comes with the strong caveat that this market is not sufficient in volume for a reliable Elliott wave analysis. It is a rough guide only. The direction expected from the Elliott wave count should be fairly reliable, but targets and invalidation points may not be.

Ratios within cycle wave a are: there is no Fibonacci ratio between primary waves 1 and 3, and primary wave 5 is 0.33 short of 0.236 the length of primary wave 3.

Ratios within primary wave 3 are: intermediate wave (3) is 3.48 short of 1.618 the length of intermediate wave (1), and intermediate wave (5) has no Fibonacci ratio to intermediate waves (3) or (1).

Ratios within intermediate wave (3) are: minor wave 3 has no Fibonacci ratio to minor wave 1, and minor wave 5 is just 0.02 longer than equality in length with minor wave 1.

Ratios within minor wave 3 are: minute wave iii is 0.38 longer than equality in length with minute wave i, and minute wave v has no Fibonacci ratio to either of minute waves i or iii.

Within primary wave 5, there are no adequate Fibonacci ratios between intermediate waves (1), (3) and (5).

The black channel is a best fit; this movement does not fit into an Elliott channel. The channel is breached very clearly and price has made a major new swing high above 17.04. A trend change was confirmed in February.

If analysis of downwards movement is correct that cycle wave a has subdivided as a five wave structure, then this tells us two things:

1. The bear market for GDX must be incomplete because a five may not be a corrective structure, so this must only be wave A.

2. Cycle wave b may not make a new high above the start of cycle wave a at 66.98.

Cycle wave b may be any one of 23 possible corrective structures. It may be a swift sharp zigzag, or it may be a sideways structure such as a flat, combination or triangle. It should last one to several years. It is possible that it is over. An alternate at the end of this analysis looks at this possibility.

The first movement up for cycle wave b must be a clear five wave structure for a trend of this magnitude. It looks like this completed at the Magee trend line where price found resistance and rebounded down. This line is now breached, providing further strong confidence that GDX is in a bull market for a longer term.

DAILY ELLIOTT WAVE COUNT

GDX daily 2016
Click chart to enlarge.

If primary wave A is subdividing as a five and is incomplete, then intermediate wave (4) must end here.

Intermediate wave (3) is shorter than intermediate wave (1). This limits intermediate wave (5) to no longer than equality in length with intermediate wave (3), so that the core Elliott wave rule stating a third wave may not be the shortest is met. This limit is at 36.34.

At 35.15 intermediate wave (5) would reach 0.618 the length of intermediate wave (1).

A new high above 31.79 would invalidate both alternates and provide strong confirmation of this first wave count.

ALTERNATE DAILY ELLIOTT WAVE COUNT

GDX daily 2016
Click chart to enlarge.

It is possible to see a 5-3-5 upwards complete. This may be a zigzag for primary wave A if cycle wave b is unfolding as a flat correction, or a zigzag labelled primary wave W if cycle wave b is unfolding as a double zigzag.

If cycle wave b is a flat correction, then within it primary wave B must retrace a minimum 0.9 length of primary wave A. This minimum requirement for a flat correction would be met at 14.339.

If cycle wave b is a double zigzag, then there is no minimum requirement for primary wave X within it; primary wave X needs to subdivide as a corrective structure. X waves within double zigzags are normally relatively brief and shallow.

A new low below 26.17 would invalidate the main wave count and provide some confirmation of this alternate.

ALTERNATE MONTHLY ELLIOTT WAVE COUNT

GDX monthly 2016
Click chart to enlarge.

It is possible that cycle wave b is now a complete zigzag. It may have ended just short of the 0.618 Fibonacci ratio and looks like a clear three wave structure on the monthly chart.

If cycle wave a is a five and cycle wave b is a three, then cycle wave c downwards must subdivide as a five. Within cycle wave c, no second wave correction may move beyond the start of its first wave above 31.79.

In trying to calculate a target for cycle wave c the 0.382 Fibonacci ratio yields a truncation and the 0.618 Fibonacci ratio yields a negative value. Cycle wave c may not exhibit a Fibonacci ratio to cycle wave a.

Cycle wave c would be very likely to make at least a slight new low below the end of cycle wave a at 12.40 to avoid a truncation.

TECHNICAL ANALYSIS

WEEKLY

GDX weekly 2016
Click chart to enlarge.

Price may find some support here about 25.10. However, price has moved strongly lower for the last two weeks to make an important new low below 27.45, and it has done so on increasing volume. Volume is supporting downwards movement. It is likely that price will continue lower.

The next strong area of support is about 21.75.

Overall, volume is declining as price has been moving higher since January. The rise in price is not supported well by volume. This favours a bearish outlook mid term for GDX.

ATR has been strong and increasing. Now it is levelling off, so some decline would be expected.

ADX is very extreme, well above 35, and is now declining. ADX is indicating the trend is most likely exhausted here for GDX but a trend change has not yet been indicated.

On Balance Volume is tightly constrained between the yellow support line and the purple resistance line. A breakout by OBV may indicate the next direction for price, short to mid term.

RSI is returning from overbought after exhibiting double negative divergence with price at the last high.

Overall, this analysis is very bearish for GDX at this time.

DAILY

GDX daily 2016
Click chart to enlarge.

It looks like GDX has had a trend change: It has made an important new low, volume offers some support to downwards movement, and ADX indicates a downwards trend.

ATR is now increasing again after some decline.

With ATR and ADX in agreement, it should be assumed that GDX is in a downwards trend at this time.

On Balance Volume is finding some support at the purple line. This is assisting to bounce up price. How price and OBV behave after this bounce will be indicative. If OBV breaks below the purple line it would be offering a strong bearish signal.

With price right at the lower edge of the Bollinger Bands today, this may also assist to bounce up price. During a trend GDX can remain at an extreme of its Bollinger Bands for several days running though.

RSI is not yet extreme. There is room for price to fall. A low may not be expected until RSI is extreme and then exhibits divergence with price.

Stochastics is extreme, but this oscillator may remain extreme for reasonable periods of time during a trending market. It does not yet exhibit any divergence with price to indicate weakness.

This analysis is published @ 01:38 a.m. EST.