Tag Archives: technical analysis

Drawing Bear Market Trend lines | 27th June, 2017

One of my favourite Technical Analysis texts is the classic “Technical Analysis of Stock Trends” by Magee. In this book Magee describes how to draw trend lines for bull and bear markets.

Gold Daily 2016
Click chart to enlarge.

To draw a trend line in a bear market draw the line from the high to the first major swing high within the bear market. Extend the line outwards. Assume the bear market remains intact while price remains below the line. When upwards movement breaks above the trend line, it is an indication of a potential trend change from bear to bull.

My definition of a breach is a full candlestick above and not touching the trend line.

This technique works on all time frames.

This chart is on a monthly time frame and indicates that Gold may remain in the larger bear market, which began on September 2011.

This analysis is published @ 03:02 a.m. EST on 28th June, 2017.

Drawing Trend Lines? Simple is Best | 27th June, 2017

One of my favourite Technical Analysis texts is the classic “Technical Analysis of Stock Trends” by Magee. In this book Magee describes how to draw trend lines for bull and bear markets.

Gold Daily 2016
Click chart to enlarge.

To draw a trend line in a bull market find the first two major swing lows, then draw a line across them. Extend the line out to the right. Assume the bull market remains intact while price remains above the line. When the line is properly breached, it is an indicator of a potential trend change from bull to bear.

This technique works on all time frames.

Gold began a series of higher highs and higher lows on the daily chart after the low in December 2016. Within this upwards trend, the first two swing lows are taken as the 27th of January and the 10th of March. This trend line has now been tested eight times, with downwards movement for the last session of the 26th of June being the eighth test.

How Gold behaves at this trend line in the next few days will be a strong indicator. Does the bull run continue or is it over?

This analysis is published @ 03:43 a.m. EST.

On Balance Volume (Beyond Volume Basics) | 23rd June, 2017

Volume alone is not always a clear indicator. It is necessary to add another volume indicator, like On Balance Volume, to add depth to volume analysis and improve accuracy.

Gold Daily 2016
Click chart to enlarge.

On Balance Volume can be used in two ways.

1. When On Balance Volume creates a range draw trend lines across its highs and lows. A breakout by On Balance Volume can sometimes precede a breakout from price, so On Balance Volume can be a leading indicator. Other times On Balance Volume may break out with or after price, it can then be a confirming indicator. Used this way On Balance Volume works very well.

2. Divergence between price and On Balance Volume can be used to indicate weakness and an impending trend change. This divergence can persist for some time prior to a trend change, so it is not useful in picking highs or lows.

Trend lines are drawn on On Balance Volume in the chart above. Resistance is in purple, support in yellow. A long term line is added in pink.

Bullish signals are noted in green arrows on price:

1. Halfway through an upwards trend On Balance Volume breaks above resistance which was prior support. This adds some confirmation to the trend. Traders may have more confidence in long positions.

2. A long term trend line which previously provided support, then resistance, is breached. This adds confidence in the upwards trend continuing.

3. A long term trend line is touched after some time. The bounce up and away is bullish.

4. A breach of resistance is a bullish signal. This illustrates that this technique does not always work. Price continued higher for only one more day before a major reversal.

Bearish signals are noted in red arrows on price:

1. A breach of support is a bearish signal, which should confirm the downwards trend. But a low is found the next day. Again, this technique works more often than it fails, but it can fail.

2. A break of a long term support line halfway through a downwards trend offers confidence in short positions.

3. Another break below a support line offers confidence in the downward trend.

In addition to breaches of trend lines, tests of support and resistance also offer signals.

Using On Balance Volume in conjunction with volume bars adds considerable depth to analysis.

This analysis is published @ 03:41 a.m. EST.

Volume Basics | 21st June, 2017

The activity of buyers is required for price to rise sustainably. This is indicated by increasing volume on upwards days.

The opposite isn’t necessarily true for a falling market. Price can fall due to an absence of buyers, just as it can with increasing activity of sellers. Rising volume with falling price is good to see as it supports the trend, but it is not necessary.

Does Gold’s price and volume conform to this basic principal of technical analysis?

Gold Daily 2016
Click chart to enlarge.

1. This first rise in price is close to textbook perfect. The trend is well supported by volume. Volume does not increase in a straight line each day; some days are lighter than the prior day, but overall there is an increase.

2. This next rise is not so clear, but there is still overall an increase in volume as price rises. Volume is lighter than the prior stronger trend though, so the deep pullback that followed should not have been entirely unexpected.

3. As price falls initially volume declines and then shows some steady increase. The fall in price has support from increasing selling activity.

4 & 5. As price rises volume is not clearly rising. Sometimes the market can drift higher on light volume, so this type of rise is suspicious. The following deep decline again should not have been entirely unexpected.

6 & 7. As price falls volume declines. The market is falling of its own weight.

8. At the end of the fall volume begins to increase.

9. The start of the next rise has some support from volume by day 5. This shows an increase. However, the fifth day volume spike may also be a blow off top signalling an end to the rise temporarily. Blow off tops are not usually the very end; they usually signal a period of consolidation before the trend has a final rise.

The area between 9 and 10 is very unclear, with choppy overlapping price action generally trending higher and mostly flat volume.

10 & 11. As price falls volume declines. The market is mostly falling of its own weight.

When volume clearly supports a trend, then more confidence may be had in it. When volume does not support a trend, it is suspicious. Lack of support from volume will not tell when price will change direction, but it can warn that price may likely change direction and not just consolidate.

This analysis is published @ 03:51 a.m. EST.

Market Correlations – Statements and Assumptions | 20th June, 2017

Occasionally, members and visitors to this website make a statement along the lines of “market X is doing this, so how come you think Gold is going to go up / down?”.

Such statements are based upon unacknowledged assumptions that the markets have a correlation. The problem with assumptions is they can be wrong. So is there a simple mathematical technique to determine if two sets of data are correlated, either positively or negatively?

Gold Daily 2016
Click chart to enlarge.

Yes, there is: by looking at the correlation co-efficient range between two sets of data.

Correlation co-efficient ranges from -1 to +1. A perfect positive correlation will have a correlation co-efficient of +1. A perfect negative correlation will have a correlation co-efficient of -1.

Two sets of data which have a positive correlation will have a correlation co-efficient between +0.5 to +1. Two sets of data which have a negative correlation will have a correlation co-efficient between -0.5 to -1.

Any two sets of data which have a correlation co-efficient between +0.5 and -0.5 are not correlated.

Any two sets of data which have a correlation co-efficient that spends any time between +0.5 and -0.5 does not have a correlation which is reliable. This area of unreliability is shaded in the chart above for several markets which are often assumed to have a correlation to Gold price.

GDX, US Bonds, US Crude Oil, the US dollar index and even Silver do not have a reliable correlation with Gold price. All of these markets have correlation co-efficients which spend time in the shaded areas.

Even if these markets do sometimes exhibit a correlation with Gold, the point is that because this is not always true that when it is so it cannot be assumed to continue. The math shows that it does not.

To base an analysis of Gold on an assumption that another market is moving in a particular direction, and therefore Gold must move in a particular direction, is to base the analysis on assumptions and not data. Such assumptions are unreliable, and why you will not find them in my analyses.

To base an analysis of Gold on actual data and math is more likely to lead to accurate predictions and profitable trading. This does not mean the analysis will always be right, but it does mean the analysis will be based on facts and not assumptions.

This analysis is published @ 04:13 a.m. EST.

What Is Gold’s Next Move After US FED Interest Rate Decision on 14th June, 2017?

Technical analysis chart of Gold with Volume and On Balance Volume indicators, and support and resistance lines, may give guidance as to the direction Gold may take after FED Interest rate decision.

Gold Daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

The recent fall in price over the last three days does not have support from volume and this suggests a bounce should be expected here or very soon. Additionally, there is strong, bullish support for Gold’s price at about 1,260. These support the idea of upwards movement after the FED Interest rate decision.

However, the latest and now most important signal comes from On Balance Volume breaking below support. This is bearish.

Given that a technical analysis approach would expect Gold to move mostly in the direction of least resistance and away from greatest support, the expectation is for Gold to breakout upwards. But because of On Balance Volume’s bearish signal, any upside movement is expected to be relatively short lived.

Also, On Balance Volume supports my current Elliott wave count.

This analysis is published @ 03:30 a.m. EST.

Trading Room – 16th May, 2017

A big thank you to everyone for your comments and feedback and support. However, due to various circumstances this will be the last Trading Room post.

I will continue to watch several markets and will continue to post extra analysis, charts and trading recommendations for members in the comments section of the Gold analysis, where you will also find my Gold updates and a wealth of information and trading tips from other members.

CLOSED POSITIONS

Trading Room Closed Positions March 2017
Click table to enlarge.

This analysis is published @ 04:20 a.m. EST.

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

Continue reading Trading Room – 16th 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

Trading Room – 23rd April, 2017

Today’s Trading Room looks at Copper and US Oil.

Only a recommendation on Gold is given for Elliott Wave Gold members.

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.

Copper (Spot)

TECHNICAL ANALYSIS

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

On the 12th of April Copper had a classic downwards breakout from a consolidation zone, which was supported by volume.

A resistance line is added this week in green. Price might find some resistance at this line, but at this stage the line does not offer good technical significance because it is steep and not long held.

Looking back over the last 2 years, horizontal support and resistance lines are added. Price may find some resistance here about 2.55.

The long lower wick on the candlestick for the 20th of April is bullish. Now the relatively long upper wick on the 21st of April is a little bearish. This upwards movement looks like another small bounce and this view is supported by declining volume.

On Balance Volume is again bearish, turning down from the purple line.

There is a downwards trend which is not extreme.

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 doji candlestick for February puts the trend from up to neutral.

ELLIOTT WAVE ANALYSIS

Copper Chart Daily 2017
Click chart to enlarge.

The blue channel continues to show about where price may find resistance and support. If this Elliott wave count is correct, then Copper should break through support at the lower edge of the channel and then increase in downwards momentum.

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

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 comfortably profitable and stops have been moved down to protect profits.

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

Downwards movement has some support from volume. ADX is bearish. ATR increasing supports the trend. On Balance Volume is very bearish.

With RSI and Stochastics not yet oversold, there is room for price to fall further.

US Oil can close outside the extreme range of Bollinger Bands for several days in row when it has a strong trend. With a close two days in a row below the lower edge of Bollinger Bands, this is not a concern.

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. An upcoming correction for subminuette wave ii may breach the channel. At this stage, with the power of a third wave pulling to the downside, subminuette wave ii may be expected to be relatively brief and shallow.

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

TRADING ROOM SUMMARY TABLES

OPEN POSITIONS

Trading Room Open Positions 2017
Click table to enlarge.

Trading advice for gold given to Elliott Wave Gold members will be included in Trading Room summary tables. However, so that it remains private for Elliott Wave Gold members only, it will not be included in Trading Room posts.

CLOSED POSITIONS

Trading Room Closed Positions March 2017
Click table to enlarge.

Each month a new “closed positions” table will begin. To see all closed positions for March 2017 see the last Trading Room post for March here.

RECOMMENDATIONS

[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.

The technical problem with comments encountered last week has now been fixed. Members should log into the website then click on the title of this post to see comments.

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

This analysis is published @ 10:00 p.m. EST.

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

Continue reading Trading Room – 23rd April, 2017

Trading Room – 17th April, 2017

Today’s Trading Room looks at Copper, US Oil and GBPUSD.

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.

Copper (Spot)

TECHNICAL ANALYSIS

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

Members were advised to enter short on the 10th of April. Stops were initially set just above 2.700 and are now moved down to breakeven to eliminate risk.

On the 12th of April Copper had a classic downwards breakout from a consolidation zone, supported by volume. Now price is turning up to test resistance at prior support, about 2.590. The downwards session for the 12th of April has strong volume. The last upwards session for the 13th of April has lighter volume. Volume is bearish.

The long upper wick on the candlestick for the 13th of April is bearish.

On Balance Volume is bearish. RSI is not extreme, so there is plenty of room for price to fall. ADX is still below 15 and does not yet indicate a new trend. Bollinger Band expansion indicates volatility returning after the consolidation; with price moving lower as Bollinger Bands expand, this is bearish.

ATR may be expected to begin to increase after a period of a small range.

Stochastics is not yet oversold. This may remain extreme for long periods of time during a trending market. Only when it has been extreme for some time and then exhibits divergence with price while extreme should it be read as a strong warning sign of an impending trend change. That is not the case yet.

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 doji candlestick for February puts the trend from up to neutral.

ELLIOTT WAVE ANALYSIS

Copper Chart Daily 2017
Click chart to enlarge.

The upper edge of the blue channel has still provided resistance, with a strong overshoot for the 30th of March. Copper may in the early stages of a third wave at three degrees now and this should see an increase in downwards momentum.

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

US Oil (WTI Crude – Spot)

TECHNICAL ANALYSIS

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

The red daily candlestick of the 12th of April completes a Bearish Engulfing Candlestick pattern. This is the most reliable of candlestick reversal patterns when it comes after an upwards trend. It doesn’t always work (it didn’t work on the 3rd of April), but it works more often than not. It is supported by volume. The last upwards day for the 13th of April did not have support from volume. This is also bearish.

Overall, this chart is more bullish than bearish.

Members were advised that I entered short Oil on the 12th of April. At this stage, this position is now positive.

ELLIOTT WAVE ANALYSIS

US Oil Chart Daily 2017
Click chart to enlarge.

The basis for entering short was price breaking below the lower edge of the small gold channel that contains the upwards wave labelled minuette wave (ii).

Now price may be beginning to move down and away.

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

GBPUSD

TECHNICAL ANALYSIS

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

The prior pennant pattern is no longer correct.

The last daily candlestick for the 13th of April is bearish and has support from volume.

ATR and Bollinger Bands show there is something wrong with this upwards trend due to a lack of range and volatility. This trend is relatively weak at this stage.

VOLUME ANALYSIS

GBPUSD Chart Daily 2017
Click chart to enlarge.

The bearish signal given in last analysis for On Balance Volume was negated. The support line is redrawn. On Balance Volume is constrained, giving no signal today.

ELLIOTT WAVE ANALYSIS

GBPUSD Chart Monthly 2017
Click chart to enlarge.

Cycle wave c needs to complete as a five wave structure. The final fifth wave is incomplete and may only have just begun. The target expects to see the most likely Fibonacci ratio between primary waves 5 and 1.

GBPUSD Chart Daily 2017
Click chart to enlarge.

Primary wave 4 fits perfectly as a regular contracting triangle, offering perfect alternation with the zigzag of primary wave 2. Primary wave 2 lasted 2 months and primary wave 4 lasted 6 months. Triangles are usually longer lasting structures than zigzags, so this disproportion is not only acceptable but should be expected. This wave count has the right look.

The breakout from the triangle should be down.

Minor wave 2 moved higher and fits perfectly as an expanded flat correction. These are very common structures. The choice to try another short position here is based heavily on the three wave structure of minute wave b; with a three down following minor wave 1, only an expanded flat following an impulse will fit. The trend should therefore be down if this Elliott wave analysis is correct.

Minor wave 2 may not move beyond the start of minor wave 1 above 1.26157.

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

TRADING ROOM SUMMARY TABLES

OPEN POSITIONS

Trading Room Open Positions 2017
Click table to enlarge.

Trading advice for gold given to Elliott Wave Gold members will be included in Trading Room summary tables. However, so that it remains private for Elliott Wave Gold members only, it will not be included in Trading Room posts.

CLOSED POSITIONS

Trading Room Closed Positions March 2017
Click table to enlarge.

Each month a new “closed positions” table will begin. To see all closed positions for March 2017 see the last Trading Room post for March here.

RECOMMENDATIONS

[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.

Members will be updated with trading advice over the next week here in comments for Trading Room. Comments are therefore private, for members only.

This analysis is published @ 03:39 a.m. EST.

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

Continue reading Trading Room – 17th April, 2017