Category Archives: Public Analysis

Trading Room – 21st February, 2017

Today’s Trading Room looks at NGas, EURUSD, USDJPY and EURGBP.

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

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

NGas

TECHNICAL ANALYSIS

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

Natural Gas continues lower as the last analysis expected. Today’s strong volume spike may be a selling climax. In the short term, it may be followed by a small consolidation before price may continue lower.

For the very short term, if price breaks above the steeply sloping rose trend line, then look out for a deeper correction. Expect price to fall to next support at 2.55 while price remains below that line.

This trend is not yet extreme and there is no divergence yet between price and RSI to indicate weakness.

ELLIOTT WAVE ANALYSIS

MAIN WAVE COUNT – WEEKLY CHART

NGas Chart Weekly 2017
Click chart to enlarge.

This wave count expects Natural Gas is in a new bear market to last one to several years.

MAIN WAVE COUNT – DAILY CHART

NGas Chart Daily 2017
Click chart to enlarge.

If a deeper correction does develop here after the selling climax, then it may be a primary degree fourth wave that may last a Fibonacci 13 or 21 days. First, the rose trend line on the TA chart above must be breached to indicate primary 3 is over. So far it is less than 1.618 the length of primary wave 1, so it is likely to continue further.

ALTERNATE WAVE COUNT – WEEKLY CHART

NGas Chart Weekly 2017
Click chart to enlarge.

Downwards movement from the last high may be primary wave B coming to an end as a very common expanded flat correction.

ALTERNATE WAVE COUNT – DAILY CHART

NGas Chart Daily 2017
Click chart to enlarge.

Minor wave 3 has only just broken below the lower edge of the base channel. This is how a third wave should behave. The selling climax of the 21st of February may be followed by a brief shallow correction before price continues lower to complete minor wave 3. Minor wave 4 may not move into minor wave 1 price territory.

Both Elliott wave counts expect Natural Gas to continue lower from here at least to make a new low below 2.549. That has not happened yet.

USDJPY

TECHNICAL ANALYSIS

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

I have published this pair often in Trading Room. That is because I consider it to be a good opportunity at this time. The idea of Trading Room is to look for markets that are trending and find entry points to join the trend in order to have a wider range of opportunities to profit from.

This is my favourite trade set up: a breach of a trend line followed by a back test of support or resistance. USDJPY has done this with the blue trend line.

The risk with this set up is that the trend line is too steep and not often tested, so price may break back below it. The risk does not at this stage look to be high, but it must be acknowledged.

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

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This market is behaving as expected so far.

EURUSD

TECHNICAL ANALYSIS

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

Last analysis of this pair expected a bounce to unfold after the candlestick of the 15th of February showed a bullish long lower wick. This was followed by a strong upwards day, and now a strong downwards day.

This is not correctly a bearish reversal pattern; the red candlestick for the 17th of February does not engulf the green candlestick for the 16th of February. However, it is still a strong downwards day and is bearish. Price may now be finding some resistance at the Fibonacci 13 day moving average and the mid line of Bollinger Bands.

ELLIOTT WAVE ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

On Balance Volume remains bearish. A purple resistance line is added. The last test is another small bearish signal.

EURGBP

TECHNICAL ANALYSIS

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

This pair is presented in response to a member’s request. While the Elliott wave count is bearish, this classic analysis is not so much.

The last two upwards trends reached extreme. Since the high on the 16th of January downwards movement has brought ADX down from extreme. There is again room for a trend to develop.

This market currently looks range bound. Resistance is about 0.8650 and support is about 0.8450. The bottom line is a breakout would be required before any confidence may be had that this market is trending.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURGBP Chart Monthly 2017
Click chart to enlarge.

The large downwards wave labelled Super Cycle wave (II) will not fit as a five wave structure. It will only fit as a three. This may be the end of the bear market.

The upwards wave labelled cycle wave I looks like a very good five wave impulse. It should be expected to reasonably be followed by a three wave down movement for a second wave correction, which is most likely to end close to the 0.618 Fibonacci ratio.

DAILY CHART

EURGBP Chart Daily 2017
Click chart to enlarge.

C has not yet moved beyond the end of A to avoid a truncation. The target has a good probability.

While classic analysis is not very bearish, this Elliott wave count is.

Use the lilac line for resistance.

Volume analysis:

The strong volume for the last session of the 21st of February supports this wave count. The fall in price is supported by volume here as a third wave should be.

On Balance Volume is giving no signal, either bullish or bearish.

DISCLAIMER

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.

This analysis is published @ 12:10 a.m. EST on 22nd February, 2017.

The Trading Room – 17th February, 2017

Today’s Trading Room looks at USDJPY, EURUSD and Copper.

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

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

USDJPY

TECHNICAL ANALYSIS

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

A pullback within the new upwards trend may offer an opportunity to join the trend when it is done. However, this is still very early stages; ADX does not yet indicate a new upwards trend. This is a lagging indicator; it is based upon a 14 day average.

Price may find support here at the blue trend line.

Caution: the last three daily candlesticks give a reversal signal, an Evening Doji Star pattern. This indicates a change from up to either down or sideways.

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This market is behaving as expected so far. Elliott wave targets may be used as profit targets.

HOURLY CHART

USDJPY Chart Daily 2017
Click chart to enlarge.

At this stage, expect a 0.618 retracement of the prior upwards wave.

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

EURUSD

TECHNICAL ANALYSIS

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

Overall, this chart looks bearish. When markets trend downwards, corrections offer an opportunity to join the trend. In this case, the long lower wick and green candlestick today are slightly bullish. A bounce may be unfolding within a downwards trend here.

ELLIOTT WAVE ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

A deeper bounce may find resistance at the lower edge of the best fit yellow channel. On Balance Volume remains bearish.

HOURLY CHART

EURUSD Chart Daily 2017
Click chart to enlarge.

Price has breached a support line, but this line is very steep and does not offer good technical significance. Price may yet move higher to the 0.618 Fibonacci ratio before turning. Watch this closely over the next 24 hours. If price begins to move down and away strongly, then the next wave down may be underway.

Copper

TECHNICAL ANALYSIS

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

Price is finding support about the short term Fibonacci 13 day moving average. If a full daily candlestick can print below this average, it would offer a little confidence in a trend change.

Upwards movement shows weakness: divergence with RSI, flat to declining ATR, and contracted Bollinger Bands.

However, there is as yet no indication nor confirmation of a trend change from up to down. Watch On Balance Volume closely over the next few days; a breakout there may indicate the next direction for price.

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

If the triangle labelled primary wave X is correct, then this upwards movement may not be a developing impulse, so it must be corrective. Triangles may not be a sole corrective structure within a second wave.

This upwards movement fits as a completed double zigzag. This may be a large counter trend movement within a bigger downwards trend.

If price prints a full daily candlestick below the lilac support line, then the next wave down may have begun.

MONTHLY CHART

USDJPY Chart Daily 2017
Click chart to enlarge.

Watch the green resistance line (copied over to the daily chart, both on a semi-log scale). If price prints at least one full daily (and preferably weekly) candlestick above that trend line, then expect more upwards movement. If that happens, then my Elliott wave count above would be wrong.

DISCLAIMER

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.

This analysis is published @ 03:46 a.m. EST.

The Trading Room – 15th February, 2017

Today’s Trading Room looks at Natural Gas and USDJPY.

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

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

Natural Gas – NGAS

TECHNICAL ANALYSIS

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

In the mid term, there is a new downwards trend for Gas. Use the Magee trend line for resistance.

In the short term, price may bounce up here from the 200 day moving average. The slight decline in volume for the last two days, along with small range days, looks like bears are temporarily exhausted. Expect a bounce as fairly likely.

This chart looks very bearish.

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

ELLIOTT WAVE ANALYSIS

WEEKLY CHART

NGAS Chart Weekly 2017
Click chart to enlarge.

The trend channel about cycle wave b has been breached now at the weekly and daily chart level. This may offer some confidence in a trend change.

DAILY CHART

NGAS Chart Daily 2017
Click chart to enlarge.

Cycle wave b may be complete. A cycle wave c down may be in the early stages. This wave should last one to several years if the wave count is correct. The lower edge of the channel about cycle wave b is now breached by two daily candlesticks.

Look for bounces to find resistance at the Magee trend line.

I do have an alternate wave count, but it too is bearish at this time. Publication of it would add nothing to the analysis. If any member wants it, then please email me and I’ll send it to you.

USDJPY

TECHNICAL ANALYSIS

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

Price has moved upwards, as expected, since last publication of analysis of this pair. There is now a full daily candlestick above the blue line, which previously provided resistance and may now provide support.

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

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This market is behaving as expected so far. Elliott wave targets may be used as profit targets.

DISCLAIMER

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.

This analysis is published @ 12:35 a.m. EST.

The Trading Room – 13th February, 2017

Today’s Trading Room looks at USDJPY, USD Index, NZDUSD, EURUSD and US Oil (by popular demand).

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

USDJPY

TECHNICAL ANALYSIS

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

For the long term, assume the trend remains up until proven otherwise. The long term 200 day moving average still has a positive slope, and the short and mid term averages are still above it.

For the mid term, price has seen a relatively deep pullback. The question will be: Is this over and will the upwards trend resume?

Price is at support just above 111 (horizontal support and resistance lines are drawn after looking back 3 years). Resistance is just above 114 and next about 116.

There is some bullish divergence with RSI, but RSI did not reach oversold for this pullback.

The risk here is that the pullback may move lower and RSI may develop double divergence with price before price turns up.

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

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This wave count has excellent alternation and Fibonacci ratios. There are also some close Fibonacci durations for waves.

If intermediate wave (4) moves lower, it should find strong support at the lower edge of the best fit channel. Double zigzags are reasonably common structures. Triple zigzags (labelled W-X-Y-X-Z) are very rare. If intermediate (4) is correctly labelled as a double zigzag, then the probability that it is over here is very high.

VOLUME ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

Volume increased during the middle portion of the pullback, and now at the last low volume declined as price fell; the market fell of its own weight. This points to a tired trend. Price certainly could move lower here, but the probability of a low in place has slightly increased.

On Balance Volume is at support. If it breaks below the yellow line, that would be a bearish signal.

USD INDEX

TECHNICAL ANALYSIS

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

Price has moved upwards since last analysis of this market.

The long term trend should be assumed to remain upwards until proven otherwise. This downwards movement should be assumed to be a pullback within a larger upwards trend.

Looking back at price behaviour in the last upwards wave from the left of this chart: price starts out slowly with choppy movement, generally trending, and it is not until the middle of the movement that Bollinger Bands widen and ATR shows a good increase. Then the trend quickly became extreme, yet price continued upwards while ADX steadily declined from about 45. So trends for this market can remain very extreme for long periods of time.

The current situation looks similar to that back in September 2016: ATR is declining as price moves up, Bollinger Bands are contracting, ADX is low and below both directional lines, and RSI is neutral. In the current day, Stochastics is also returning from oversold and exhibits single bullish divergence at last lows.

It is looking like USD index may be in the very early stages of the next wave upwards.

Unfortunately, neither BarChart nor Stockcharts provide volume data for the USD Index, so no volume analysis can be done.

ELLIOTT WAVE ANALYSIS

USD Chart Daily 2017
Click chart to enlarge.

The structure of intermediate wave (3) and of primary wave 5 is incomplete. Price has found support and bounced up off the best fit channel. The short term yellow resistance line is breached. It is looking increasingly likely that USD index is beginning the next wave up.

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

NZDUSD

TECHNICAL ANALYSIS

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

Since last analysis of this pair, which was very bearish, price has fallen and closed below the short term Fibonacci 13 day moving average. The long, red daily candlesticks look bearish, and the longer upper wicks on the first two are bearish.

RSI is now neutral and Stochastics is returning from overbought. There is room for this wave down to continue.

ADX was extreme. It has a long way down to go before it would again indicate a trend.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

NZDUSD Chart Daily 2017
Click chart to enlarge.

The green support line has been fully breached.

The structure here is seen as a leading expanding diagonal. The fifth wave of minute wave v must be longer than minute wave iii to meet the rule regarding wave lengths for expanding diagonals. This gives the minimum target calculation.

A trend line is drawn about On Balance Volume, which has been tested at least three times before and is long held. It is now breached and OBV is coming up for a back test of resistance. If this line holds, it would be strengthened and more confidence would be had that price has turned.

The three red daily candlesticks in last week saw increasing volume. This supports downwards movement and adds confidence in a trend change here.

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

EURUSD

TECHNICAL ANALYSIS

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

Support and resistance lines are added this week. Look for support next at 1.055.

This pair is not as clearly bearish as NZDUSD, but it does look like they may be turning downwards together. Look out for Bollinger Bands to widen as volatility returns to this market.

Stochastics is returning from overbought after exhibiting divergence there. If it reaches oversold while price reaches support, then this market will be carefully analysed for any weakness in downwards movement.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

On Balance Volume remains bearish. A back test of resistance for both yellow trend lines has happened and OBV has turned down from both giving bearish signals.

The best fit channel has been breached. A one day throw back occurred right after the breach, but price may still curve up and around for a longer back test of resistance. That is the risk here to short positions.

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

US Oil

TECHNICAL ANALYSIS

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

US Oil entered a consolidation back in December 2016. Since then price has been fluctuating with typically choppy movement from resistance to support and back again. Resistance is about 54.15 to 54.35 and support is about 52.15 to as low as 50.70. During this long consolidation, it is now two upwards days that have strongest volume suggesting an upwards breakout is more likely than downwards.

On Balance Volume has last week given a strong bullish signal.

Prepare for an upwards breakout. This may happen this week.

A classic analysis target would expect price to travel at least the distance of the widest part of the consolidation after a breakout. That would expect a movement of about 4.53.

ELLIOTT WAVE ANALYSIS

USOil Chart Daily 2017
Click chart to enlarge.

The Elliott wave analysis is overall very bearish for US Oil. This is an alternate wave count that is published here because it aligns with the classic technical analysis today.

This wave count expects essentially that any upwards breakout may be false and short lived.

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

DISCLAIMER

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.

This analysis is published @ 06:27 p.m. EST on 12th February, 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.

US OIL Elliott Wave Technical Analysis – 31st January, 2017

Price has moved sideways for the week. A new Elliott wave count fits sideways movement.

Summary: A new high above 55.24 would indicate an upwards breakout, and the target would be 55.60. A new low below 50.91 would indicate a downwards breakout, and the target would be 28.61 minimum, possibly 25.59.

New updates to this analysis are in bold.

MONTHLY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Monthly 2016
Click chart to enlarge.

Within the bear market, cycle wave b is seen as ending in May 2011. Thereafter, a five wave structure downwards for cycle wave c begins.

Primary wave 1 is a short impulse lasting five months. Primary wave 2 is a very deep 0.94 zigzag lasting 22 months. Primary wave 3 is a complete impulse with no Fibonacci ratio to primary wave 1. It lasted 30 months.

Primary wave 4 is likely to exhibit alternation with primary wave 2. Primary wave 4 is most likely to be a flat, combination or triangle. Within all of these types of structures, the first movement subdivides as a three. The least likely structure for primary wave 4 is a zigzag.

Primary wave 4 is likely to end within the price territory of the fourth wave of one lesser degree; intermediate wave (4) has its range from 42.03 to 62.58.

Primary wave 4 may end if price comes up to touch the upper edge of the maroon channel. The upper edge of this channel has been pushed up to sit on the end of intermediate wave (2) within primary wave 3.

Primary wave 4 is most likely to be shallow to exhibit alternation in depth with primary wave 2. So far it has passed the 0.382 Fibonacci ratio at 45.52. It may now continue to move mostly sideways in a large range.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

At this stage, primary wave 4 has completed intermediate wave (A) only. Intermediate wave (B) is incomplete.

WEEKLY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Daily 2016
Click chart to enlarge.

The whole structure of primary wave 4 is seen here in more detail.

The first wave labelled intermediate wave (A) is seen as a double zigzag, which is classified as a three.

Intermediate wave (B) is also a three. This means primary wave 4 is most likely unfolding as a flat correction if my analysis of intermediate wave (A) is correct. Flats are very common structures.

Intermediate wave (B) began with a zigzag downwards. This indicates it too is unfolding most likely as a flat correction.

Within intermediate wave (B), the zigzag upwards for minor wave B is a 1.29 correction of minor wave A. This indicates intermediate wave (B) may be unfolding as an expanded flat, the most common type.

The normal range for intermediate wave (B) within a flat correction for primary wave 4 is from 1 to 1.38 the length of intermediate wave (A) giving a range from 26.06 to 16.33.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

Within the larger expanded flat correction of primary wave 4, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 28.61 or below.

DAILY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Daily 2016
Click chart to enlarge.

Minor wave B is seen in this main wave count as a complete single zigzag. The upwards wave labelled minute wave a is seen as a five wave impulse.

Minor wave C downwards should have begun. Within minor wave C, minute wave ii may not move beyond the start of minute wave i above 55.24.

Minor wave C downwards must subdivide as a five wave structure.

So far, minute wave i may be complete and minute wave ii may be an incomplete expanded flat correction. Within minute wave ii, minuette wave (c) must be a five wave structure that so far looks to be unfolding as an ending contracting diagonal that’s incomplete. The classic pattern equivalent is a rising wedge.

Contracting diagonals almost always end with a small overshoot of the 1-3 trend line. If this is seen, then expect an end to upwards movement as very likely.

Minuette wave (c) is very likely to make a slight new high above the end of minuette wave (a) at 54.32 to avoid a truncation and a very rare running flat.

A new low below 50.91 would invalidate the alternate wave count below and provide some confidence in this main wave count.

ALTERNATE DAILY ELLIOTT WAVE COUNT

US Oil Elliott Wave Chart Daily 2016
Click chart to enlarge.

Minor wave B is seen as an incomplete double zigzag. The first wave up labelled minute wave w is seen as a zigzag. This is the main difference between the two wave counts.

Minute wave y must subdivide as a zigzag. Sideways movement over the last few weeks may be a triangle within it for minuette wave (b).

Minuette wave (c) would be very likely to make at least a slight new high above the end of minuette wave (a) at 54.50 to avoid a truncation.

The normal range for minor wave B within the larger flat correction of intermediate wave (B) is from 1 to 1.38 the length of minor wave A, giving a range from 51.67 to 56.41. The target calculated for minuette wave (c) to end would see price end within this range.

In the short term, within minuette wave (c), the correction for subminuette wave ii may not move beyond the start of subminuette wave i below 50.91.

TECHNICAL ANALYSIS

DAILY CHART

US Oil Chart Daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price continues to move sideways with declining volume. Price is bound by resistance about 54.50 and support about 50.35. During this sideways consolidation, it is an upwards day which has strongest volume suggesting an upwards breakout is more likely than downwards. This supports the new alternate Elliott wave count.

ADX is flat and below 15 indicating the market is not currently trending; it is consolidating. The +DX and -DX lines are whipsawing about each other. There is no clear trend.

ATR is overall flat in agreement with ADX that Oil is consolidating.

On Balance Volume is bound by resistance and support. No breakout yet has occurred to indicate the next direction for price. OBV has come down to touch the yellow support line today. This may assist to halt the fall in price here. This supports the alternate Elliott wave count.

RSI is hovering about neutral. There is plenty of room for price to rise or fall.

Stochastics is returning from oversold.

A range bound approach to this market may now expect price to move higher and only end an upward swing when price finds resistance and Stochastics reaches overbought at the same time.

Bollinger Bands are tightly contracted. Volatility will return to this market. The longer Bollinger Bands remain contracted the more explosive the next movement may be.

This week’s classic technical analysis slightly supports the alternate Elliott wave count over the main Elliott wave count. The situation is still mostly unclear for Oil this week.

This analysis is published @ 01:47 a.m. EST.

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

Continue reading US OIL Elliott Wave Technical Analysis – 31st January, 2017