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BTCUSD: Elliott Wave and Technical Analysis | Charts – June 17th 2019

Last analysis on the 16th of May expected a relatively brief and shallow fourth wave correction to be followed by possibly explosive upwards movement for a fifth wave.

Summary: For the short to mid term, look out for an explosive upwards movement. When 1-3 weeks of vertical movement are seen with some decline in volume on the last week, then look out for a sharp turn and a deep correction. If bearish divergence between price and RSI persists, then have more confidence in a reversal.

The deep correction to come may be anywhere from about 0.65 to 0.95 of the first wave up (which began at 3,169.53 on 15th December 2018). At its end, it may offer an excellent buying opportunity for Bitcoin.

The data used for this analysis comes from Yahoo Finance BTC-USD.

All charts are on a semi-log scale.

MAIN ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2019
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on December 23, 2017.

What is very clear from this chart is that Bitcoin forms classic bubbles. It has done so now several times and may now be doing so again. This looks like an even larger bubble than the Tulip Mania. So far each bubble has popped and Bitcoin has collapsed, to then thereafter form a new bubble. Each bubble is larger than the one prior; so if another Bitcoin bubble is forming, it may be expected to take price substantially above the all time high.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

The last instance was the rise up to the last all time high for Bitcoin at 19,870.62 on the 17th of December 2017. The drop thereafter may now be considered as highly likely to be complete. If the drop is complete, it was only an 84% drop.

WEEKLY

Bitcoin weekly 2019
Click chart to enlarge.

Super Cycle wave (II) may be a complete zigzag.

Super Cycle wave (III) must move above the end of Super Cycle wave (I) at 19,870.62. It must move far enough above this point to allow room for Super Cycle wave (IV) to unfold and remain above Super Cycle wave (I) price territory.

Super Cycle wave (I) lasted 7.2 years and Super Cycle wave (II) may have been over within just under one year. It would be reasonable to expect Super Cycle wave (III) to last well over 7 years, possibly a Fibonacci 8 or 13 years.

Super Cycle wave (III) must unfold as a simple five wave impulse, and within this impulse there should be two large corrections for cycle waves II and IV. So far cycle wave I may be incomplete. When cycle wave I may be complete, then cycle wave II may offer a good entry to purchase Bitcoin at a very good price. Cycle wave II may correct to about 0.80 to 0.95 of cycle wave I.

DAILY

Bitcoin daily 2019
Click chart to enlarge.

Bitcoin typically forms curved first wave impulses with time consuming and deep second wave corrections, then accelerates through to the end of its third waves, has brief and more shallow fourth wave corrections, and then finishes with explosive fifth waves. This is an extreme behaviour most typically seen in commodities.

This wave count now sees primary waves 3 and 4 complete. There is alternation between a deep 0.83 double zigzag of primary wave 2 and a shallow 0.15 running contracting triangle of primary wave 4. Primary wave 4 is typically more brief than primary wave 2: 44 days to 26 days.

Primary wave 5 may be expected to be explosive. This would be typical behaviour for this market.

Atypically, there is a Fibonacci ratio between primary waves 3 and 1. No Fibonacci ratio between primary wave 5 and either of primary waves 3 or 1 should be expected.

Within primary wave 5, no second wave correction may move beyond its start below 7,533.53.

ALTERNATE WAVE COUNT

WEEKLY

Bitcoin weekly 2019
Click chart to enlarge.

This wave count is identical to the main wave count up to the all time high for Bitcoin. Thereafter, it moves the degree of labelling within Super Cycle wave (II) all down one degree. It is possible that Super Cycle wave (II) may not be complete and may continue lower as a double zigzag. Double zigzags are fairly common Elliott wave corrective structures.

Within the double zigzag, cycle wave x may now be complete. Cycle wave y may begin.

The purpose of a second zigzag in a double is to deepen the correction when the first zigzag does not move price deep enough. To achieve this purpose cycle wave y may be expected to move reasonably below the end of cycle wave w at 3,169.53.

Within multiples, there is no rule stating a limit for X waves. There can be no Elliott wave rule to apply to cycle wave x to determine when this wave count would be invalidated.

DAILY

Bitcoin daily 2019
Click chart to enlarge.

Cycle wave x must subdivide as a corrective structure and would most likely be a zigzag. It will not fit as a triangle, flat or combination, and so it is labelled as a zigzag.

This wave count now has a very serious problem with behaviour which does not fit this market. For cycle wave x to be counted as a zigzag, there is now gross disproportion within primary wave C between minor waves 2 and 4. Minor wave 4 is much more time consuming at 24 sessions to minor wave 2 at only 2 sessions. This market typically exhibits disproportionate fourth and second waves, but with the fourth wave more brief than the second.

This wave count will now be discarded at this time based upon exceptionally low probability. This adds a little confidence to the main wave count and the idea that Bitcoin may be forming a new bubble.

TECHNICAL ANALYSIS

WEEKLY

Bitcoin weekly 2019
Click chart to enlarge.

The following characteristics can be noted at the end of prior major highs for Bitcoin:

The first sharp rise to the week beginning 5th June 2011: near vertical movement for several weeks, a sharp volume spike for a blow off top on the final week, and no candlestick reversal pattern on the weekly chart but an Evening Doji Star on the daily chart. The following correction was 0.94.

The next sharp rise to the week beginning 7th April 2013: near vertical movement for three weeks, a sharp volume spike on the final week that closed red and formed a Bearish Engulfing pattern on the weekly chart, a Bearish Engulfing pattern on the daily chart, ADX remained very extreme for most of the rise, and single week bearish divergence between price and RSI at the end. The following correction was 0.82.

The next sharp rise to the week beginning 24th November 2013: vertical movement for four weeks, a strong rise in volume until the last week (which saw volume fall), a Bearish Engulfing pattern on the weekly chart, an Evening Doji Star on the daily chart (the third candlestick of which had strong support from volume), ADX reached very extreme for many days, and RSI reached extreme overbought and there exhibited single bearish divergence. The following correction was 0.93.

The last sharp rise to the all time high at 19,870.62 on the 17th of December 2018: vertical movement for three weeks, a strong increase in volume up to the last week (which saw a fall in volume), a Bearish Engulfing pattern on the weekly chart that had support from volume; on the daily chart, ADX reached very extreme for a coupe of weeks or so, RSI reached overbought and there exhibited single bearish divergence, and early downwards movement from the high had support from volume. The following correction was 0.84.

Some conclusions may be drawn about how to identify a major high in Bitcoin:

– Look for vertical movement on the weekly chart for at least two weeks, and possibly up to several (although when it is more than three the movement may be interspaced with a small pause).

– Look for either a sharp volume spike for a blow off top, or a strong increase in volume then followed by a single week of lighter volume at the possible high.

– A bearish candlestick reversal pattern has been seen so far at every major high for Bitcoin, so an absence of any candlestick reversal pattern at a potential high should be viewed very suspiciously.

– ADX is of no use as it may remain very extreme for long periods of time.

– RSI may also remain very extreme for long periods of time and may not exhibit any divergence, but it may add a little confidence in the high if it does exhibit bearish divergence in conjunction with other indicators being bearish.

The last vertical rise in price up to the week beginning 26th May 2019 has been interspaced by a brief correction and now price is rising again. Look now for a short 2-3 weeks of vertical rise. If bearish divergence between price and RSI persists, then be alert for a sharp reversal and a large fall in price after the expected vertical rise.

There is a cluster of resistance above about 9,970 to 11,800.

DAILY

Bitcoin daily 2019
Click chart to enlarge.

A support line is drawn for price. While price remains above this line, assume the trend remains upwards.

Bearish divergence between price and RSI is a strong warning that the current rise in price may end sooner rather than later. However, this divergence on its own is not a signal and sometimes can simply disappear.

Published @ 06:54 p.m. EST.


Careful risk management protects your trading account(s).
Follow my two Golden Rules:

1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.


New updates to this analysis are in bold.

USD Index: Elliott Wave and Technical Analysis | Charts – June 12, 2019

Two Elliott wave counts remain. The preferred count is bearish and the alternate is bullish.

Summary: The bearish Elliott wave count expects a new high to 101.13 and then a trend change. The bullish Elliott wave count expects some downwards movement to 93.24 and then a resumption of the upwards trend.

The price point which differentiates the two counts is 88.25. A new low below this point would invalidate the bullish count and provide confidence in the bearish count.

To the upside, only a new high now above 103.82 would invalidate the bearish count and provide confidence in the bullish count.

BEARISH ELLIOTT WAVE ANALYSIS

QUARTERLY CHART

US Dollar Elliott Wave Chart Quarterly 2019
Click chart to enlarge.

The wave count begins at 0.

This wave count assumes that the high labelled 0 ended a five wave impulse up. The Elliott wave structure of five steps forward should be followed by three steps back.

A huge double zigzag may be continuing lower.

MONTHLY CHART

US Dollar Elliott Wave Chart Monthly 2019
Click chart to enlarge.

Downwards movement from the high in January 2017 cannot be a fourth wave correction within an ongoing impulse higher because a new low below 89.62 would be back in first wave price territory.

That indicates the last big wave up may be a completed three, and for that reason this is my slightly preferred wave count.

WEEKLY CHART

US Dollar Elliott Wave Chart Weekly 2019
Click chart to enlarge.

Cycle wave I downwards fits very well as a five wave impulse. This may be reasonably expected to be followed by a three wave structure upwards.

For the USD Index, historically the first second wave correction within a new trend is usually extremely deep, about 0.80 to 0.90 of the first wave it corrects. It would be typical here to see Cycle wave II reach to 0.80 or deeper of cycle wave I.

Cycle wave II may be unfolding as a zigzag, which is the most common type of corrective structure.

Primary wave A may be a completed five wave impulse.

Primary wave B may be a completed running barrier triangle.

Primary wave C must subdivide as a five wave structure, either an impulse or an ending diagonal. An impulse is much more common. It is not possible to see primary wave C complete at the last high, so overall some more upwards movement for this wave count is expected to complete the structure.

Cycle wave II may not move beyond the start of cycle wave I above 103.82.

Draw a channel about cycle wave II as shown. This is Elliott’s technique for a correction. Primary wave C may end either mid way within the channel or about the upper edge.

A target is calculated for primary wave C to end.

DAILY CHART

US Dollar Elliott Wave Chart Daily 2019
Click chart to enlarge.

Primary wave C may be unfolding as an impulse. At this stage, I cannot see a complete structure over at the last high.

Within primary wave C, intermediate wave (2) may be an incomplete expanded flat correction. These are fairly common structures. Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 95.74.

BULLISH ELLIOTT WAVE ANALYSIS

QUARTERLY CHART

US Dollar Elliott Wave Chart Quarterly 2018
Click chart to enlarge.

A single zigzag down to the last major low may still be complete.

A new upwards trend may continue. So far there may be two overlapping first and second waves. Primary wave 2 may not move beyond the start of primary wave 1 below 72.69.

Primary wave 2 should find strong support at the lower edge of the teal base channel if it gets down that low.

MONTHLY CHART

US Dollar Elliott Wave Chart Monthly 2019
Click chart to enlarge.

Primary wave 2 may be a complete zigzag. However, this wave down can also be seen as a five and primary wave 2 may yet continue lower.

WEEKLY CHART

US Dollar Elliott Wave Chart Weekly 2019
Click chart to enlarge.

This bullish wave count sees the last wave down as a completed zigzag. If this is correct, then within primary wave 3, intermediate wave (2) may not move beyond intermediate wave (1) below 88.25.

DAILY CHART

US Dollar Elliott Wave Chart Daily 2019
Click chart to enlarge.

Intermediate wave (2) may be an incomplete expanded flat. The first wave down within it is labelled minor wave A, which is a complete zigzag. Minor wave B may now be complete at 1.44 the length of minor wave A, which is a little beyond the most common range for B waves of flats of 1 to 1.38 times the length of their A waves.

Minor wave C may move below the end of minor wave A at 93.81 to avoid a truncation. A target is calculated for minor wave C to reach the most common Fibonacci ratio to minor wave A within an expanded flat correction.

TECHNICAL ANALYSIS

MONTHLY CHART

US Dollar Chart Monthly 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

The month of June is incomplete and so no conclusion may be drawn from this candlestick.

Declining ATR indicates some weakness in upwards movement.

DAILY CHART

US Dollar Daily 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

The Bearish Engulfing candlestick of the 31st of May is now followed by some downwards movement. There is some strength in this downwards movement with increasing ATR. The safest approach may be to expect it to continue until there is evidence of a reversal. That evidence may come with a bullish candlestick reversal pattern or a new swing high above 97.39.

Published @ 8:45 p.m. EST.


Careful risk management protects your trading account(s).
Follow my two Golden Rules:

1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.


New updates to this analysis are in bold.

BTCUSD: Elliott Wave and Technical Analysis | Charts – May 16, 2019

Last analysis on the 8th of April identified a clear price point at 7,234.83 to differentiate two Elliott wave counts. A new high above 7,234.83 on the 10th of May has switched the balance of probability towards another bubble forming for Bitcoin, which would still be in its relatively early stages.

The focus of this analysis will be on identifying a correction for an entry to purchase Bitcoin at a good price.

Continue reading BTCUSD: Elliott Wave and Technical Analysis | Charts – May 16, 2019

BTCUSD: Elliott Wave and Technical Analysis | Charts – April 8, 2019

Last analysis on the 14th of March expected a downwards breakout from a consolidation, but this is not what has happened. Price broke above identified resistance on the 1st of April with support from volume.

Summary: More upwards movement is expected for the short to mid term. The question is whether this is a counter trend bounce within an ongoing bear market or the beginning of a new bull market.

It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The final target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.

A new high above 7,234.83 would indicate Bitcoin may be forming a new bubble to take price substantially above 19,870.

The data used for this analysis now comes from Yahoo Finance BTC-USD.

Updates to this analysis are in bold.

At this stage, it remains likely the the collapse of Bitcoin is incomplete. The main Elliott wave count outlines a continued collapse.

Now it is also possible that Bitcoin has found a new low and may be forming a new bubble. The alternate Elliott wave count outlines this idea.

MAIN ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2019
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on December 23, 2017.

What is very clear from this chart is that Bitcoin is a classic bubble. This looks like an even larger bubble than the Tulip Mania. The only thing about which I am certain is that this bubble will pop and Bitcoin will collapse.

Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June 2018.

WEEKLY

Bitcoin weekly 2019
Click chart to enlarge.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

The last instance was the rise up to the last all time high for Bitcoin at 19,870.62 on the 17th of December 2017.

If this current drop continues like the first two examples, then a reasonable target may be about $1,390.94 or below.

Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.

It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.

The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability. If this target is wrong, it may not be low enough.

Another frustrating aspect of Bitcoin is it does not fit within Elliott channels. Because it begins movements slowly and ends them quickly, it forms curved waves which breach channels early only to continue to new highs or lows. The channel on prior analysis is removed because it may not show where the current bounce finds resistance.

DAILY

Bitcoin daily 2019
Click chart to enlarge.

Cycle wave c must subdivide as a five wave motive sturucture, most likely an impulse. Within cycle wave c, primary wave 1 may be complete.

Primary wave 2 is now relabelled as an incomplete zigzag. Intermediate wave (B) may be a complete regular contracting triangle. Intermediate wave (C) may be an incomplete impulse.

Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.

ALTERNATE WAVE COUNT

WEEKLY

Bitcoin weekly 2019
Click chart to enlarge.

With an increase in upwards momentum and a breach of the channel containing prior downwards movement, it is time to now more seriously consider this alternate.

It is also again possible that Bitcoin may have found a low and may be in the early stages of a new bull market.

This wave count expects that the crash in price for Bitcoin was only 84% of value from the all time high. While this is possible, it would not follow the more common pattern of Bitcoin to crash over 90% in value. This must still reduce the probability of this wave count.

Within super cycle wave (III), no second wave correction may move beyond the start of its first wave below 3,169.53.

DAILY

Bitcoin daily 2019
Click chart to enlarge.

A new bull market (to form a new bubble) may have begun with a series of overlapping first and second waves.

A third wave now at five degrees may be about to unfold higher.

Typical of commodities, Bitcoin exhibits swift and strong fifth waves. This tendency is especially prevalent for fifth waves to end Bitcoin’s third wave impulses. Any one or more of subminuette wave v, minuette wave (v), minute wave v, minor wave 5, intermediate wave (5) or primary wave 5 may be very swift and strong. Look out for blow off tops ahead, to be relieved by small consolidations.

Within this current impulse, intermediate wave (4) may not move into intermediate wave (1) price territory below 4,221.62.

TECHNICAL ANALYSIS

Bitcoin daily 2019
Click chart to enlarge.

The following can be noted when looking back at Bitcoin’s behaviour during its previous strong falls in price:

The 94% fall in price from June to November 2011 was characterised by:

– Three clearly separate instances of RSI reaching oversold on the daily chart, separated by bounces.

– ADX did not remain very extreme for very long at all on the daily chart.

– On Balance Volume exhibited weak single bullish divergence at the low.

The 93% fall in price from November 2013 to February 2014 was characterised by:

– RSI reached oversold and remained deeply oversold for three weeks; at the low there was only single weak bullish divergence with price.

– ADX remained very extreme for the last seven sessions to the low.

– At the low, On Balance Volume did not exhibit bullish divergence with price; it remained bearish and then exhibited further bearishness after the low as it continued to decline as price began to rise.

For the current fall in price, the current Elliott wave count expects the fall to be larger in terms of duration than the previous two noted here, and at least equivalent in terms of price movement in that a fall of over 90% is expected now.

So far at the lowest low from the all time high Bitcoin has only retraced 84%. While this is deep, its corrections are usually deeper than this.

At major highs, Bitcoin usually exhibits near vertical upwards movement for about two weeks which ends with strong support from volume. Thereafter, major highs are usually indicated by a bearish candlestick reversal pattern on the daily and / or weekly chart. The current upwards movement has not yet exhibited vertical movement for long enough and there is currently no candlestick reversal pattern on either the daily or weekly chart.

At this stage, it would be reasonable to expect Bitcoin to continue to move higher, at least for the short to mid term.

Published @ 09:00 p.m. EST.

BTCUSD: Elliott Wave and Technical Analysis | Charts – March 14, 2019

Last analysis on the 7th of February advised that a sideways consolidation was expected to continue. Price remains range bound.

Summary: For the short term, the consolidation may end soon. The next move for Bitcoin is expected to be very strong with a downwards breakout, ending reasonably below 3,169.53. Only a new high above 7,234.83 would change this view.

It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The final target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.

The data used for this analysis now comes from Yahoo Finance BTC-USD.

Updates to this analysis are in bold.

MAIN ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2019
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on December 23, 2017.

What is very clear from this chart is that Bitcoin is a classic bubble. This looks like an even larger bubble than the Tulip Mania. The only thing about which I am certain is that this bubble will pop and Bitcoin will collapse.

Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June 2018.

WEEKLY

Bitcoin weekly 2019
Click chart to enlarge.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

If this current drop continues like the last two examples, then a reasonable target may be about $1,390.94 or below.

Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.

It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.

The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability. If this target is wrong, it may not be low enough.

An Elliott channel is added to downwards movement. Upwards bounces may find resistance about the upper edge.

DAILY

Bitcoin daily 2019
Click chart to enlarge.

Cycle wave c must subdivide as a five wave motive sturucture, most likely an impulse. Within cycle wave c, primary wave 1 may be complete.

Primary wave 2 may now be a complete double combination: zigzag – X – flat. Primary wave 2 has so far remained within the teal Elliott channel, which is copied over from the weekly chart.

If primary wave 2 continues any higher, then it may not move beyond the start of primary wave 1 above 7,234.83.

A breach of the black Elliott channel by a full daily candlestick below and not touching the lower edge would add confidence to this main wave count. At that stage, the invalidation point may be moved to the end of primary wave 2.

A new low below 3,362.24 would add further confidence to this wave count.

Primary wave 3 should exhibit an increase in downwards momentum.

If the teal Elliott channel is breached by a full daily candlestick above and not touching the trend line, then the alternate wave count below should be seriously considered.

ALTERNATE WAVE COUNT

DAILY

Bitcoin daily 2019
Click chart to enlarge.

It is also again possible that Bitcoin may have found a low and may be in the early stages of a new bull market.

This wave count expects that the crash in price for Bitcoin was only 84% of value from the all time high. While this is possible, it would not follow the more common pattern of Bitcoin to crash over 90% in value. This must reduce the probability of this wave count.

If this wave count is correct, then an increase in upwards momentum would be expected as a third wave at two degrees unfolds.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 3,362.24.

TECHNICAL ANALYSIS

Bitcoin daily 2019
Click chart to enlarge.

The following can be noted when looking back at Bitcoin’s behaviour during its previous strong falls in price:

The 94% fall in price from June to November 2011 was characterised by:

– Three clearly separate instances of RSI reaching oversold on the daily chart, separated by bounces.

– ADX did not remain very extreme for very long at all on the daily chart.

– On Balance Volume exhibited weak single bullish divergence at the low.

The 93% fall in price from November 2013 to February 2014 was characterised by:

– RSI reached oversold and remained deeply oversold for three weeks; at the low there was only single weak bullish divergence with price.

– ADX remained very extreme for the last seven sessions to the low.

– At the low, On Balance Volume did not exhibit bullish divergence with price; it remained bearish and then exhibited further bearishness after the low as it continued to decline as price began to rise.

For the current fall in price, the current Elliott wave count expects the fall to be larger in terms of duration than the previous two noted here, and at least equivalent in terms of price movement in that a fall of over 90% is expected now.

So far at the lowest low from the all time high Bitcoin has only retraced 84%. While this is deep, its corrections are usually deeper than this.

Currently, price is range bound with resistance and support identified.

On Balance Volume is again range bound.

Wait for a classic breakout. An upwards breakout of price requires support from volume for confidence, but a downwards breakout does not.

On Balance Volume broke out before price and exhibits bullish divergence with price. This supports the alternate Elliott wave count.

Published @ 01:42 a.m. EST.

EURUSD: Elliott Wave and Technical Analysis | Charts – March 1, 2019

Last Elliott wave analysis of this pair (22 February 2019) expected some upwards movement. Price has moved upwards, giving confidence to the current Elliott wave count.

Summary: Upwards movement for another two or so months to 1.2046 – 1.20761 is expected.

Changes to this analysis are in bold.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURUSD Monthly 2019
Click chart to enlarge.

The (0) is from where the wave count begins.

A large zigzag can be seen complete at the low in March 2015. This is labelled Super Cycle wave (w).

A low now below this point indicates that the larger structure downwards is incomplete. The Elliott wave structure that fits best here is a double zigzag.

The first zigzag in the double is complete; it is labelled Super Cycle wave (w). The double is now joined by a complete three in the opposite direction, an expanded flat labelled Super Cycle wave (x). Because Super Cycle wave (x) ends just short of the cyan bear market trend line, it looks like it is over there.

Super Cycle wave (y) is most likely now to unfold as a zigzag.

While double zigzags and double combinations are labelled the same, W-X-Y, they are very different structures.

Double zigzags, like single zigzags, normally have a strong counter trend slope. To achieve this their X waves are usually brief and shallow. The second zigzag in the double usually moves reasonably beyond the end of the first zigzag, so that the whole structure has a strong slope.

Double combinations are sideways movements. To achieve a sideways look their X waves are usually deep and can also often be time consuming. The second structure in the double usually ends about the same level as the first, so that the whole structure takes up time and moves price sideways.

Here, Super Cycle wave (x) is relatively shallow. This indicates a double zigzag is most likely unfolding lower.

The bear market trend line may be expected to continue to provide resistance while the bear market for EURUSD remains intact.

The strongest piece of technical analysis on this chart is the cyan trend line. The fact that it was tested and recently held in February 2018 indicates this line has strength. Any strong bounces within the ongoing bear market may be expected to find strong resistance at this trend line.

WEEKLY CHART

EURUSD Weekly 2019
Click chart to enlarge.

Primary wave 1 subdivides as an impulse.

Primary wave 2 may be unfolding as an expanded flat correction. Within primary wave 2, intermediate waves (A) and (B) both subdivide as a zigzags. Intermediate wave (C) should subdivide as a five wave structure.

The most common Fibonacci ratio is used to calculate a target at intermediate degree for intermediate wave (C) to end. This is very close to the 0.618 Fibonacci ratio of primary wave 1.

If primary wave 2 moves above the target or is long lasting enough, it should find strong resistance at the cyan trend line that is copied over from the monthly chart.

DAILY CHART

EURUSD Daily 2019
Click chart to enlarge.

This daily chart focusses on the structure of primary wave 2.

This wave count considers intermediate wave (C) as an incomplete impulse. Within intermediate wave (C), minor wave 2 may be a complete combination with minute W subdividing as a zigzag and minute Y subdividing as an expanded flat. Within minute Y, minuette (b) has subdivided as a zigzag and minuette (c) as an impulse. Upwards movement is expected as minor wave 3 begins.

Elliott wave rules state that the third wave within an impulse must subdivide as an impulse, so minor wave 3 must subdivide as an impulse. Within minor wave 3, minute waves i and ii may be complete with minute wave iii unfolding as an incomplete impulse.

Minor wave 3 breaking out above the adjusted base channel would help confirm that a third wave is underway and thus increase confidence in the current Elliott wave count.

If minute wave ii continues lower, it may not move beyond the start of minute wave i below 1.12340.

WEEKLY TECHNICAL ANALYSIS

EURUSD Daily 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price is currently range bound and swinging from resistance at about 1.155 to support at about 1.130. ADX supports the view that the market is consolidating. A break out above resistance or support is needed to indicate a new trend.

DAILY TECHNICAL ANALYSIS

EURUSD Daily 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

RSI is neutral. There is room for price to rise or fall.

On 16th February 2019, as price broke below support, stochastics entered oversold. Expect upwards movement from here as price swings high to resistance. Stochastics often enters overbought as price nears resistance.

Stochastics is nearing overbought.

Expect some upwards movement as price rises to resistance.

VOLUME ANALYSIS

EURUSD Daily 2019
Click chart to enlarge.

On Balance Volume is range bound and gives no signal for this week.

Volume offers more support for recent upwards days.

Overall, this chart is bullish.

Published @ 02:03 a.m. EST on March 3, 2019.


Careful risk management protects your trading account(s).
Follow Lara’s two Golden Rules:

1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.

EURUSD: Elliott Wave and Technical Analysis | Charts – February 22, 2019

Last Elliott wave analysis of this pair (18 January 2019) expected some upwards movement. Again, price has again mostly moved sideways.

Summary: Upwards movement for another two or so months to 1.2046 – 1.20761 is expected.

Changes to this analysis are in bold.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURUSD Monthly 2019
Click chart to enlarge.

The (0) is from where the wave count begins.

A large zigzag can be seen complete at the low in March 2015. This is labelled Super Cycle wave (w).

A low now below this point indicates that the larger structure downwards is incomplete. The Elliott wave structure that fits best here is a double zigzag.

The first zigzag in the double is complete; it is labelled Super Cycle wave (w). The double is now joined by a complete three in the opposite direction, an expanded flat labelled Super Cycle wave (x). Because Super Cycle wave (x) ends just short of the cyan bear market trend line, it looks like it is over there.

Super Cycle wave (y) is most likely now to unfold as a zigzag.

While double zigzags and double combinations are labelled the same, W-X-Y, they are very different structures.

Double zigzags, like single zigzags, normally have a strong counter trend slope. To achieve this their X waves are usually brief and shallow. The second zigzag in the double usually moves reasonably beyond the end of the first zigzag, so that the whole structure has a strong slope.

Double combinations are sideways movements. To achieve a sideways look their X waves are usually deep and can also often be time consuming. The second structure in the double usually ends about the same level as the first, so that the whole structure takes up time and moves price sideways.

Here, Super Cycle wave (x) is relatively shallow. This indicates a double zigzag is most likely unfolding lower.

The bear market trend line may be expected to continue to provide resistance while the bear market for EURUSD remains intact.

The strongest piece of technical analysis on this chart is the cyan trend line. The fact that it was tested and recently held in February 2018 indicates this line has strength. Any strong bounces within the ongoing bear market may be expected to find strong resistance at this trend line.

WEEKLY CHART

EURUSD Weekly 2019
Click chart to enlarge.

Primary wave 1 subdivides as an impulse.

Primary wave 2 may be unfolding as an expanded flat correction. Within primary wave 2, intermediate waves (A) and (B) both subdivide as a zigzags. Intermediate wave (C) should subdivide as a five wave structure.

The most common Fibonacci ratio is used to calculate a target at intermediate degree for intermediate wave (C) to end. This is very close to the 0.618 Fibonacci ratio of primary wave 1.

If primary wave 2 moves above the target or is long lasting enough, it should find strong resistance at the cyan trend line that is copied over from the monthly chart.

DAILY CHART

EURUSD Daily 2019
Click chart to enlarge.

This daily chart focusses on the structure of primary wave 2.

This wave count considers intermediate wave (C) as an incomplete impulse. Within intermediate wave (C), minor wave 2 may be a combination with minute W subdividing as a zigzag and minute Y subdividing as an expanded flat. Within minute Y, minuette (b) has subdivided as a zigzag and minuette (c) as an impulse. Upwards movement is expected as minor wave 3 begins.

Minor wave 3 breaking out above the adjusted base channel would help confirm that a third wave is underway and thus increase confidence in the current Elliott wave count.

Minor wave (ii), if it moves any lower, may not move beyond the start of minor wave (i) below 1.12168.

WEEKLY TECHNICAL ANALYSIS

EURUSD Daily 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price is currently range bound and swinging from resistance at about 1.155 to support at about 1.130. ADX supports the view that the market is consolidating. A break out above resistance or support is needed to indicate a new trend.

DAILY TECHNICAL ANALYSIS

EURUSD Daily 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

RSI is neutral. There is room for price to rise or fall.

On 16th February 2019, as price broke below support, stochastics entered oversold. Expect upwards movement from here as price swings high to resistance. Stochastics often enters overbought as price nears resistance.

VOLUME ANALYSIS

EURUSD Daily 2019
Click chart to enlarge.

On Balance Volume has broken below support. This is a bearish signal.

Published @ 12:26 a.m. EST on February 25, 2019.


Careful risk management protects your trading account(s).
Follow Lara’s two Golden Rules:

1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.

BTCUSD: Elliott Wave and Technical Analysis | Charts – February 7, 2019

Last analysis on the 14th of December advised that a channel should be used to indicate when downwards movement was over and a sideways consolidation or bounce may have begun. The channel was breached on the 19th of December and price has mostly moved sideways since.

Summary: For the short term, this sideways consolidation may continue and may find a high about 4,722. Thereafter, another strong fall in price is expected.

It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.

The data used for this analysis now comes from Yahoo Finance BTC-USD.

Updates to this analysis are in bold.

MAIN ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2019
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on December 23, 2017.

What is very clear from this chart is that Bitcoin is a classic bubble. This looks like an even larger bubble than the Tulip Mania. The only thing about which I am certain is that this bubble will pop and Bitcoin will collapse.

Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June 2018.

WEEKLY

Bitcoin weekly 2019
Click chart to enlarge.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

If this current drop continues like the last two examples, then a reasonable target may be about $1,390.94 or below.

Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.

It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.

The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability. If this target is wrong, it may not be low enough.

An Elliott channel is added to downwards movement. Upwards bounces may find resistance about the upper edge.

DAILY

Bitcoin daily 2019
Click chart to enlarge.

Cycle wave c must subdivide as a five wave motive sturucture, most likely an impulse. Within cycle wave c, primary wave 1 may be complete.

Primary wave 2 would most likely subdivide as a zigzag. So far, within primary wave 2, intermediate waves (A) and (B) may be complete. Intermediate wave (C) may end about the upper edge of the black Elliott channel drawn about primary wave 2. This may also be where upwards movement may find resistance at the teal channel copied over from the weekly chart.

When primary wave 2 may be complete, then primary wave 3 should exhibit an increase in downwards momentum.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

The following can be noted when looking back at Bitcoin’s behaviour during its previous strong falls in price:

The 94% fall in price from June to November 2011 was characterised by:

– Three clearly separate instances of RSI reaching oversold on the daily chart, separated by bounces.

– ADX did not remain very extreme for very long at all on the daily chart.

– On Balance Volume exhibited weak single bullish divergence at the low.

The 93% fall in price from November 2013 to February 2014 was characterised by:

– RSI reached oversold and remained deeply oversold for three weeks; at the low there was only single weak bullish divergence with price.

– ADX remained very extreme for the last seven sessions to the low.

– At the low, On Balance Volume did not exhibit bullish divergence with price; it remained bearish and then exhibited further bearishness after the low as it continued to decline as price began to rise.

For the current fall in price, the current Elliott wave count expects the fall to be larger in terms of duration than the previous two noted here, and at least equivalent in terms of price movement in that a fall of over 90% is expected now.

So far at the lowest low from the all time high Bitcoin has only retraced 0.84. While this is deep, its corrections are usually deeper than this.

Currently, price is range bound with resistance and support identified by cyan trend lines about 4,300 and 3,170.

On Balance Volume is also range bound. Wait for a classic breakout. An upwards breakout of price requires support from volume for confidence, but a downwards breakout does not. If On Balance Volume breaks out before price, it may signal the direction of a price breakout to follow.

Published @ 11:41 p.m. EST.

EURUSD: Elliott Wave and Technical Analysis | Charts – 18th January 2019

Last Elliott wave analysis of this pair (December 12th, 2018) expected some upwards movement. Price has again mostly moved sideways but with an upwards bias.

Summary: Upwards movement for another two or so months to 1.2046 – 1.20761 is expected.

Changes to this analysis are in bold.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURUSD Monthly 2019
Click chart to enlarge.

The (0) is from where the wave count begins.

A large zigzag can be seen complete at the low in March 2015. This is labelled Super Cycle wave (w).

A low now below this point indicates that the larger structure downwards is incomplete. The Elliott wave structure that fits best here is a double zigzag.

The first zigzag in the double is complete; it is labelled Super Cycle wave (w). The double is now joined by a complete three in the opposite direction, an expanded flat labelled Super Cycle wave (x). Because Super Cycle wave (x) ends just short of the cyan bear market trend line, it looks like it is over there.

Super Cycle wave (y) is most likely now to unfold as a zigzag.

While double zigzags and double combinations are labelled the same, W-X-Y, they are very different structures.

Double zigzags, like single zigzags, normally have a strong counter trend slope. To achieve this their X waves are usually brief and shallow. The second zigzag in the double usually moves reasonably beyond the end of the first zigzag, so that the whole structure has a strong slope.

Double combinations are sideways movements. To achieve a sideways look their X waves are usually deep and can also often be time consuming. The second structure in the double usually ends about the same level as the first, so that the whole structure takes up time and moves price sideways.

Here, Super Cycle wave (x) is relatively shallow. This indicates a double zigzag is most likely unfolding lower.

The bear market trend line may be expected to continue to provide resistance while the bear market for EURUSD remains intact.

The strongest piece of technical analysis on this chart is the cyan trend line. The fact that it was tested and recently held in February 2018 indicates this line has strength. Any strong bounces within the ongoing bear market may be expected to find strong resistance at this trend line.

WEEKLY CHART

EURUSD Weekly 2019
Click chart to enlarge.

Primary wave 1 subdivides as an impulse.

Primary wave 2 may be unfolding as an expanded flat correction. Within primary wave 2, intermediate waves (A) and (B) both subdivide as a zigzags. Intermediate wave (C) should subdivide as a five wave structure.

The most common Fibonacci ratio is used to calculate a target at intermediate degree for intermediate wave (C) to end. This is very close to the 0.618 Fibonacci ratio of primary wave 1.

If primary wave 2 moves above the target or is long lasting enough, it should find strong resistance at the cyan trend line that is copied over from the monthly chart.

MAIN DAILY CHART

EURUSD Daily 2019
Click chart to enlarge.

This daily chart focusses on the structure of primary wave 2.

This wave count considers intermediate wave (C) as an incomplete impulse. Within intermediate wave (C), minor wave 2 may be a combination with minute W subdividing as a zigzag and minute Y subdividing as an expanded flat. Minor wave 3 is incomplete and needs to subdivide as an impulse to meet Elliott Wave rules.

Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1.13093.

ALTERNATE DAILY CHART

EURUSD Daily 2019
Click chart to enlarge.

This alternate wave count considers intermediate wave (C) as an incomplete ending diagonal.

All sub waves within an ending diagonal should subdivide as zigzags. A zigzag for minor wave 1 may be complete at the last high of 1.5695.

Using the Elliott Wave guideline, wave 2 of a diagonal most commonly retraces 0.66 to 0.81 of the preceding wave, a target zone between 1.3367 and 1.2828 may be calculated.

WEEKLY TECHNICAL ANALYSIS

EURUSD Daily 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price is currently range bound and swinging from resistance at about 1.155 to support at about 1.130. ADX supports the view that the market is consolidating. A break out above resistance or support is needed to indicate a new trend.

DAILY TECHNICAL ANALYSIS

EURUSD Daily 2019
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price is falling with declining volume and ATR, which shows weakness in the downwards movement. This supports the main Elliott Wave count.

Expect price to move lower to support. During a consolidating market, support or resistance may be overshot only for price to then turn around and return to within the consolidation zone.

When price reaches support and Stochastics is oversold, then a downwards swing may be complete. Do not expect price to move in a straight line.

VOLUME ANALYSIS

EURUSD Daily 2019
Click chart to enlarge.

Price is falling of its own weight. On Balance Volume has broken below support, which is a bearish signal. This may be a small indication that price will continue to move downwards, which offers some support for the alternative Elliott Wave count.

Published @ 05:21 p.m. EST on January 20, 2019.


Careful risk management protects your trading account(s).
Follow Lara’s two Golden Rules:

1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.

BTCUSD: Elliott Wave and Technical Analysis | Charts – December 14, 2018

Last analysis on the 6th of December expected some sideways movement, which is what has happened.

Summary: Use the channel on the main daily chart. Assume more downwards movement while price remains within the channel. When the channel is breached, then assume a multi-month bounce or consolidation may begin that should remain below 7,234.83.

It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.

The data used for this analysis now comes from Yahoo Finance BTC-USD.

Updates to this analysis are in bold.

Last analysis may be found here.

MAIN ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2018
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on the 23rd of December, 2017.

What is very clear from this chart is that Bitcoin is a classic bubble. This looks like an even larger bubble than the Tulip Mania. The only thing about which I am certain is that this bubble will pop and Bitcoin will collapse.

Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June.

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

If this current drop continues like the last two examples, then a reasonable target may be about $1,390.94 or below.

Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.

It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.

The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

Within cycle wave c, primary wave 1 may be incomplete.

Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.

Unfortunately, Bitcoin rarely exhibits Fibonacci ratios in its actionary waves. Therefore, it is impossible to calculate a target. A best fit trend channel is drawn on the chart. An upwards breach of the channel would indicate that primary wave 1 should be over and then primary wave 2 should be underway.

DAILY ALTERNATIVE

Bitcoin daily 2018
Click chart to enlarge.

Primary wave 2 may be subdividing as an expanded flat. Two targets are calculated at two different wave degrees.

Primary wave 1 lasted 41 sessions. Primary wave 2 may last about two to three months to have reasonable proportion to primary wave 1.

Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.

SECOND ALTERNATE ELLIOTT WAVE COUNT
DAILY

Bitcoin daily 2018
Click chart to enlarge.

By moving the degree of labelling within cycle wave c up one degree, it is possible that the crash for Bitcoin could be over.

This alternate wave count has changed since the last published analysis. It now sees Super Cycle II over at the last low.

This wave count has a very low probability. It does not follow normal behaviour for Bitcoin.

Normal behaviour for an early second wave correction is for Bitcoin to retrace deeper than 90% of the first wave. This wave count expects that Super Cycle wave (II) was only 84%. While this is very deep, it is not as deep as is normal for Bitcoin.

A candlestick reversal pattern at the low of Super Cycle wave (II) would be fairly likely at the weekly chart level which is not the case at this time.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

The following can be noted when looking back at Bitcoin’s behaviour during its previous strong falls in price:

The 94% fall in price from June to November 2011 was characterised by:

– Three clearly separate instances of RSI reaching oversold on the daily chart, separated by bounces.

– ADX did not remain very extreme for very long at all on the daily chart.

– On Balance Volume exhibited weak single bullish divergence at the low.

The 93% fall in price from November 2013 to February 2014 was characterised by:

– RSI reached oversold and remained deeply oversold for three weeks; at the low there was only single weak bullish divergence with price.

– ADX remained very extreme for the last seven sessions to the low.

– At the low, On Balance Volume did not exhibit bullish divergence with price; it remained bearish and then exhibited further bearishness after the low as it continued to decline as price began to rise.

For the current fall in price, the current Elliott wave count expects the fall to be larger in terms of duration than the previous two noted here, and at least equivalent in terms of price movement in that a fall of over 90% is expected now.

So far at the lowest low from the all time high Bitcoin has only retraced 0.84. While this is deep, its corrections are usually deeper than this.

For the short term, expect more downwards movement as likely. This is supported by volume. Downwards days have greater support from volume in recent movement.

Published @ 04:56 a.m. EST.

EURUSD: Elliott Wave and Technical Analysis | Charts – December 12th, 2018

Last Elliott wave analysis of this pair (December 5th, 2018) expected some upwards movement but price has again mostly moved sideways.

Summary: Upwards movement for another two or so months to 1.2046 – 1.20761 is expected.

Changes to this analysis are in bold.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURUSD Monthly 2018
Click chart to enlarge.

The (0) is from where the wave count begins.

A large zigzag can be seen complete at the low in March 2015. This is labelled Super Cycle wave (w).

A low now below this point indicates that the larger structure downwards is incomplete. The Elliott wave structure that fits best here is a double zigzag.

The first zigzag in the double is complete; it is labelled Super Cycle wave (w). The double is now joined by a complete three in the opposite direction, an expanded flat labelled Super Cycle wave (x). Because Super Cycle wave (x) ends just short of the cyan bear market trend line, it looks like it is over there.

Super Cycle wave (y) is most likely now to unfold as a zigzag.

While double zigzags and double combinations are labelled the same, W-X-Y, they are very different structures.

Double zigzags, like single zigzags, normally have a strong counter trend slope. To achieve this their X waves are usually brief and shallow. The second zigzag in the double usually moves reasonably beyond the end of the first zigzag, so that the whole structure has a strong slope.

Double combinations are sideways movements. To achieve a sideways look their X waves are usually deep and can also often be time consuming. The second structure in the double usually ends about the same level as the first, so that the whole structure takes up time and moves price sideways.

Here, Super Cycle wave (x) is relatively shallow. This indicates a double zigzag is most likely unfolding lower.

The bear market trend line may be expected to continue to provide resistance while the bear market for EURUSD remains intact.

The strongest piece of technical analysis on this chart is the cyan trend line. The fact that it was tested and recently held in February 2018 indicates this line has strength. Any strong bounces within the ongoing bear market may be expected to find strong resistance at this trend line.

WEEKLY CHART

EURUSD Weekly 2018
Click chart to enlarge.

Primary wave 1 subdivides as an impulse.

Primary wave 2 may be unfolding as an expanded flat correction. Within primary wave 2, intermediate wave (A) subdivides as a double zigzag and intermediate wave (B) subdivides as a single zigzag. Intermediate wave (C) should subdivide as a five wave structure.

The most common Fibonacci ratio is used to calculate a target at intermediate degree for intermediate wave (C) to end. This is very close to the 0.618 Fibonacci ratio of primary wave 1.

If primary wave 2 moves above the target or is long lasting enough, it should find strong resistance at the cyan trend line that is copied over from the monthly chart.

DAILY CHART

EURUSD Daily 2018
Click chart to enlarge.

This daily chart focusses on the structure of primary wave 2.

Intermediate wave (C) must subdivide as a five wave structure. Within intermediate wave (C), minor wave 1 may be complete.

Minor wave 2 may be a complete zigzag. If it continues further, minor wave 2 may not move beyond the start of minor wave 1 below 1.12168.

Minor wave 3 may only subdivide as an impulse. Within minor wave 3, minute wave i and ii may be complete. Minute wave ii may be complete as an expanded flat. A third wave at two degrees is expected; the third wave should see an increase in momentum

TECHNICAL ANALYSIS

EURUSD Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Currently, price is within a smaller consolidation with resistance about 1.146 and support about 1.128. It is an upwards day during this smaller consolidation that has strongest volume suggesting an upwards breakout may be more likely than downwards.

For the very short term, expect a little more downward movement to support.

VOLUME ANALYSIS

EURUSD Daily 2018
Click chart to enlarge.

Sideways movement since the last low on the 12th November has the strongest volume for an upwards day on the 15th of November. This suggests an upwards breakout is more likely.

On Balance Volume is constrained. Watch it closely as it may give a signal in the next few days.

Published @ 01:05 a.m. EST.


Careful risk management protects your trading account(s).
Follow Lara’s two Golden Rules:

1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.

BTCUSD: Elliott Wave and Technical Analysis | Charts – 6th December, 2018

Last analysis on the 21st of November expected more downwards movement for Bitcoin, which is what has happened.

Summary: At this stage, Bitcoin may either bounce up to about 5,827 or move sideways. The bounce or consolidation may last about two to three months.

It would be safest to assume that the bear market will continue while Bitcoin remains below 7,234.83. The target is about 1,924, but it may be much lower than this; it is possible this bear market may see the end of Bitcoin.

The data used for this analysis now comes from Yahoo Finance BTC-USD.

Updates to this analysis are in bold.

Last analysis may be found here.

MAIN ELLIOTT WAVE COUNT

MONTHLY

Bitcoin Monthly 2018
Click chart to enlarge.

It is possible to see a completed five wave impulse upwards for Bitcoin.

I am unable to find reasonable Fibonacci ratios within this wave count. It appears that Bitcoin may not exhibit Fibonacci ratios very often between its waves, so this makes target calculation impossible. Classic technical analysis was used to identify a high in place on the 23rd of December, 2017.

What is very clear from this chart is that Bitcoin is a classic bubble. This looks like an even larger bubble than the Tulip Mania. The only thing about which I am certain is that this bubble will pop and Bitcoin will collapse.

Confidence that Bitcoin was most likely crashing started since the Forever trend line was breached in June.

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

Bitcoin tends to behave like an extreme commodity: price moves upwards for about 2 – 4 weeks in a near vertical movement at the end of its rises. Following this vertical movement the resulting downwards movement is very deep (in percentage terms) and often very quick.

The next rise begins slowly with basing action over weeks or months, and then as the rise nears its end another vertical movement completes it. Also, there are volume spikes just before or at the end, which is another feature typical of commodity like behaviour.

This has happened now several times. The most notable instances are the rise up to the week ending 24th November, 2013, and the week ending 5th June, 2011. The following sharp drops were 94% and 93% respectively.

If this current drop continues like the last two examples, then a reasonable target may be about $1,390.94 or below.

Super Cycle wave (II) would most likely be a zigzag, but it may also be a flat, combination or triangle; a zigzag would subdivide 5-3-5.

It is possible that cycle waves a and b may be complete within the expected zigzag of Super Cycle wave (II). Cycle wave a will fit as a leading contracting diagonal, and cycle wave b fits well as a running contracting triangle.

The target calculated expects cycle wave c to exhibit a Fibonacci ratio to cycle wave a. Bitcoin rarely exhibits Fibonacci ratios, so this target does not have a good probability.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

Within cycle wave c, primary wave 1 may be complete.

Primary wave 2 would most likely subdivide as a zigzag and may end about the 0.618 Fibonacci ratio of primary wave 1.

Primary wave 1 lasted 41 sessions. Primary wave 2 may last about two to three months to have reasonable proportion to primary wave 1.

Primary wave 2 may not move beyond the start of primary wave 1 above 7,234.83.

ALTERNATE ELLIOTT WAVE COUNT

DAILY

Bitcoin daily 2018
Click chart to enlarge.

By moving the degree of labelling within cycle wave c up one degree, it is possible that the crash for Bitcoin could be over.

This wave count has a very low probability. It does not follow normal behaviour for Bitcoin.

Normal behaviour for an early second wave correction is for Bitcoin to retrace deeper than 90% of the first wave. This wave count expects that Super Cycle wave (II) was only 82%. While this is very deep, it is not as deep as is normal for Bitcoin.

A candlestick reversal pattern at the low of Super Cycle wave (II) would be fairly likely at the weekly chart level and not only the daily chart, which is not the case at this time.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

The following can be noted when looking back at Bitcoin’s behaviour during its previous strong falls in price:

The 94% fall in price from June to November 2011 was characterised by:

– Three clearly separate instances of RSI reaching oversold on the daily chart, separated by bounces.

– ADX did not remain very extreme for very long at all on the daily chart.

– On Balance Volume exhibited weak single bullish divergence at the low.

The 93% fall in price from November 2013 to February 2014 was characterised by:

– RSI reached oversold and remained deeply oversold for three weeks; at the low there was only single weak bullish divergence with price.

– ADX remained very extreme for the last seven sessions to the low.

– At the low, On Balance Volume did not exhibit bullish divergence with price; it remained bearish and then exhibited further bearishness after the low as it continued to decline as price began to rise.

For the current fall in price, the current Elliott wave count expects the fall to be larger in terms of duration than the previous two noted here, and at least equivalent in terms of price movement in that a fall of over 90% is expected now.

So far at the lowest low from the all time high Bitcoin has only retraced 0.82. While this is deep, its corrections are usually deeper than this.

A bounce or consolidation may unfold for the short to mid term. This view is supported by:

1. On the 26th, 27th and 28th of November a Morning Doji Star unfolded.

2. RSI reached deeply oversold and there exhibited bullish divergence with price.

3. The short-term volume profile is bullish.

4. ADX reached very extreme and is now declining.

Support is identified on the chart.

Published @ 02:02 a.m. EST.

EURUSD: Elliott Wave and Technical Analysis | Charts – 5th December, 2018

Last Elliott wave analysis of this pair (August 2018) expected some upwards movement but price has mostly moved sideways.

Summary: Upwards movement for another two or so months to 1.2046 – 1.20761 is expected.

Changes to this analysis are in bold.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURUSD Monthly 2018
Click chart to enlarge.

The (0) is from where the wave count begins.

A large zigzag can be seen complete at the low in March 2015. This is labelled Super Cycle wave (w).

A low now below this point indicates that the larger structure downwards is incomplete. The Elliott wave structure that fits best here is a double zigzag.

The first zigzag in the double is complete; it is labelled Super Cycle wave (w). The double is now joined by a complete three in the opposite direction, an expanded flat labelled Super Cycle wave (x). Because Super Cycle wave (x) ends just short of the cyan bear market trend line, it looks like it is over there.

Super Cycle wave (y) is most likely now to unfold as a zigzag.

While double zigzags and double combinations are labelled the same, W-X-Y, they are very different structures.

Double zigzags, like single zigzags, normally have a strong counter trend slope. To achieve this their X waves are usually brief and shallow. The second zigzag in the double usually moves reasonably beyond the end of the first zigzag, so that the whole structure has a strong slope.

Double combinations are sideways movements. To achieve a sideways look their X waves are usually deep and can also often be time consuming. The second structure in the double usually ends about the same level as the first, so that the whole structure takes up time and moves price sideways.

Here, Super Cycle wave (x) is relatively shallow. This indicates a double zigzag is most likely unfolding lower.

The bear market trend line may be expected to continue to provide resistance while the bear market for EURUSD remains intact.

The strongest piece of technical analysis on this chart is the cyan trend line. The fact that it was tested and recently held in February 2018 indicates this line has strength. Any strong bounces within the ongoing bear market may be expected to find strong resistance at this trend line.

WEEKLY CHART

EURUSD Monthly 2018
Click chart to enlarge.

Primary wave 1 subdivides as an impulse.

Primary wave 2 may be unfolding as an expanded flat correction. Within primary wave 2, intermediate waves (A) and (B) both subdivide as zigzags. Intermediate wave (C) should subdivide as a five wave structure.

The most common Fibonacci ratio is used to calculate a target at intermediate degree for intermediate wave (C) to end. This is very close to the 0.618 Fibonacci ratio of primary wave 1.

If primary wave 2 moves above the target or is long lasting enough, it should find strong resistance at the cyan trend line that is copied over from the monthly chart.

DAILY CHART

EURUSD Daily 2018
Click chart to enlarge.

This daily chart focusses on the structure of primary wave 2.

Intermediate wave (C) must subdivide as a five wave structure. Within intermediate wave (C), minor wave 1 may be complete.

Minor wave 2 may be continuing a little lower as a double zigzag. Minor wave 2 may not move beyond the start of minor wave 1 below 1.12168.

TECHNICAL ANALYSIS

EURUSD Daily 2018
Click chart to enlarge.

Price has made a series of lower lows and lower highs since the 24th of September, the definition of a downwards trend. However, ADX does not indicate a trend for the short term.

The trend has some weakness as indicated by flat ATR.

Currently, price is within a smaller consolidation with resistance about 1.146 and support about 1.128. It is an upwards day during this smaller consolidation that has strongest volume suggesting an upwards breakout may be more likely than downwards.

VOLUME ANALYSIS

EURUSD Daily 2018
Click chart to enlarge.

For the short term, the volume profile is bearish. The long upper wick on the last complete daily candlestick is also bearish. On Balance Volume has breached a short held support line giving a weak bearish signal.

Expect at least a little more downwards movement here.

Published @ 02:52 a.m. EST.


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