Category Archives: Forex

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BTCUSD Elliott Wave and Technical Analysis – 13th August, 2018

Bitcoin has moved sideways since last analysis.

Summary: A clear breach of a support line, which has seen all price action above it until this point, is a strong indication that Bitcoin is bearish. Now that a backtest about the support line is complete, price may be expected to continue to move downwards from this line.

At this time, Bitcoin may be in the early stages of a third wave down at four degrees.

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.

FIRST 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.

Now that the Forever trend line is breached some confidence may be had that Bitcoin may be crashing.

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.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

If Bitcoin is in the early stages of a huge crash, then a five down structure should develop at the weekly chart level. This would still be incomplete.

A third wave down may now be beginning at four degrees. Bitcoin may be still winding up for a spectacular plummet in price. The strongest fall may come towards the end of any one or more of these third waves as Bitcoin exhibits commodity like behaviour. Commodities tend to have their strongest portion of impulses in the fifth waves.

The best fit channel was not perfectly showing where bounces found resistance, so it has been adjusted. This channel has only weak technical significance.

The Forever trend line is not perfectly showing where price found support and has then found resistance for a typical back test. However, it is about where price found support and resistance. The breach and back test are highly significant.

My alternate bullish wave count is now discarded because the Forever trend line is properly breached and now has a successful backtest.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

Volume is declining (at higher time frames); this market is falling mostly of its own weight. However, looking more closely, daily volume is stronger for downwards days than for upwards days.

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. Currently, ADX is not yet extreme and RSI is not yet oversold. There is plenty of room for this downwards trend in Bitcoin to continue.

Published @ 11:11 p.m. EST.

USD Index – Elliott Wave and Technical Analysis – 3rd August, 2018

Last analysis on the 10th of June expected a deep correction for a B wave. Price has mostly moved sideways, and has now formed a fairly well defined consolidation zone. A correction has developed, but at this stage it is not deep.

New updates to this analysis are in bold.

BEARISH ELLIOTT WAVE ANALYSIS

QUARTERLY CHART

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

The wave count begins at 0.

A huge double zigzag may be continuing lower.

MONTHLY CHART

US Dollar Elliott Wave Chart Monthly 2018
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 main wave count.

WEEKLY CHART

US Dollar Elliott Wave Chart Weekly 2018
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.

So far upwards movement has developed a little more since last analysis. This now looks like an almost complete five up.

If cycle wave II is beginning with a five up, then it may be unfolding as a zigzag, which is the most common type of corrective structure.

When primary wave A is a completed five wave impulse, then primary wave B should begin.

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

DAILY CHART

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

So far primary wave A fits very well as an almost complete five wave impulse.

There is excellent alternation between the double flat correction of intermediate wave (2) and the triangle of intermediate wave (4). There is no adequate Fibonacci ratio between intermediate waves (1) and (3).

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

So far primary wave A remains contained within a channel. When price breaks out of the lower edge of the channel, then that may be an indication that primary wave A is complete and primary wave B may then have begun.

While primary wave A looks incomplete, intermediate wave (4) may not move into intermediate wave (1) price territory.

When primary wave A could be complete, then the following correction for primary wave B may not move beyond the start of primary wave A.

Primary wave B may be any one of more than 23 possible corrective structures. It may be choppy and overlapping as a combination, flat or triangle, or it may be a more brief sharp pullback as a zigzag. It may be expected to last anywhere from about 4 to 8 months.

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 2018
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 2018
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 no second wave correction may move beyond its start below 88.25.

TECHNICAL ANALYSIS

MONTHLY CHART

US Dollar Chart Monthly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

DAILY CHART

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

Price is consolidating with resistance in a zone about 95.00 to 95.45 and support in a zone about 93.45 to about 92.85. Unfortunately, neither StockCharts nor BarChart provide volume data for the USD Index. If they did, then the direction of the day with strongest volume would be an indicator of the most likely breakout direction from the consolidation.

Published @ 08:53 p.m. EST on 4th August, 2018.

EURUSD Elliott Wave Technical Analysis – 23rd July, 2018

Last analysis of this pair was in January 2017. In that analysis members of Elliott Wave Gold were given specific trading advice to either open long positions, or wait patiently. January 2017 was the last major low for this pair.

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.

WEEKLY CHART

EURUSD Weekly 2018
Click chart to enlarge.

This weekly chart focuses on the start of Super Cycle wave (y).

A zigzag for Super Cycle wave (y) would subdivide 5-3-5. Cycle wave a would subdivide as a five wave structure at primary degree.

Within cycle wave a, primary wave 1 should last several months. It would most likely be an impulse, and would most likely be incomplete.

Within primary wave 1, intermediate wave (1) looks like an almost complete five wave impulse. So far there are no adequate Fibonacci ratios at minor or minute degree within this wave count.

Within intermediate wave (1), minor wave 4 may be complete, remaining within the blue Elliott channel. If minor wave 4 is not over there and continues sideways or higher, then it may not move into minor wave 1 price territory above 1.21545.

When intermediate wave (1) could be seen as a complete five wave impulse with a new low, then the invalidation point must move up to its start at 1.25556. A larger correction would then be expected for intermediate wave (2), which may not move beyond the start of intermediate wave (1).

DAILY CHART

EURUSD Daily 2018
Click chart to enlarge.

Minor wave 2 was a single zigzag. Minor wave 4 exhibits alternation as an expanded flat. There is reasonable proportion between these two corrections, giving the wave count the right look at higher time frames.

A target is calculated for the end of minor wave 5, which expects it to exhibit the most common Fibonacci ratio to minor wave 1.

Within minor wave 5, no second wave correction may move beyond the start of its first wave above 1.17908. This allows for the possibility that minute wave ii may not be over and may move higher.

The target is expected to be met in one or a very few more weeks.

TECHNICAL ANALYSIS

EURUSD Daily 2018
Click chart to enlarge.

A symmetrical triangle may be unfolding (this is too time consuming to be considered a pennant pattern). Breakouts from symmetrical triangles may be in either direction. During the formation volume is strongest for a downwards day suggesting a downwards breakout may be more likely than upwards.

If price breaks out of the triangle on a day with support from volume, then expect the next trend to continue for about the same distance from the breakout point as the widest part of the triangle, which is 342 pips.

The prior downwards trend reached very extreme. The symmetrical triangle has allowed extreme conditions to be relieved; there is again room for a trend to develop.

Currently, this market is consolidating. Watch the triangle trend lines carefully for a breakout.

VOLUME ANALYSIS

EURUSD Daily 2018
Click chart to enlarge.

Volume and On Balance Volume suggest more support for downwards movement than upwards. The next movement out of the symmetrical triangle looks more likely to be downwards.

This analysis is published @ 10:27 p.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 13th July, 2018

Last analysis presented a scenario that Bitcoin was most likely in the early stages of a collapse while price stayed below 13,031.04. This still remains the case today.

Summary: A clear breach of a support line, which has seen all price action above it until this point, is a strong indication that Bitcoin is bearish. At this time, Bitcoin may be beginning a third wave down at five degrees; if it is, then it should start to exhibit a strong increase in downwards momentum.

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.

FIRST 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 will then be used to identify a high in place.

What is very clear from this chart is that Bitcoin is in 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.

What is uncertain is exactly when it will crash. For that question to be answered Elliott wave analysis may be helpful. Now that the Forever trend line is breached some confidence may be had that Bitcoin may be crashing.

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.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

If Bitcoin is in the early stages of a huge crash, then a five down structure should develop at the daily chart level. This would still be incomplete.

A third wave down may now be beginning at five degrees. Bitcoin may be still winding up for a spectacular plummet in price. The strongest fall may come towards the end of any one or more of these third waves as Bitcoin exhibits commodity like behaviour. Commodities tend to have their strongest portion of impulses in the fifth waves.

While price remains below the upper edge of the best fit channel, expect bounces to find resistance there. On the other side of the channel, the lower edge should be breached by the strength of one of the ends of any one of the third waves which are unfolding.

SECOND ELLIOTT WAVE COUNT

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

It is also still just possible that the rise for Bitcoin is not over. The last blow off top may have only been the end of a third wave, so a still stronger fifth wave may be yet to come.

Primary wave 4 may not move into primary wave 1 price territory below 492.80, but this price point is far away for any usefulness. The Forever trend line is now very clearly breached by three full weekly candlesticks below and not touching it. This may be a relatively early indication that this bullish wave count may be wrong. The probability of it is reduced, so it should be discarded.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

Volume is declining (at higher time frames); this market is falling mostly of its own weight. However, looking more closely, daily volume is stronger for downwards days than for upwards days.

Using ADX as a trend indicator, at this time it indicates a very extreme downwards trend, which can continue further. Bitcoin can sustain very extreme trends for very long periods of time.

Published @ 04:37 a.m. EST.

USD Index – Elliott Wave and Technical Analysis – 10th June, 2018

Last analysis in March expected upwards movement towards 97.97. Price has thus far continued to move higher, up to 95.02.

BEARISH ELLIOTT WAVE ANALYSIS

QUARTERLY CHART

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

A huge double zigzag may be continuing lower.

MONTHLY CHART

US Dollar Elliott Wave Chart Monthly 2018
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 main wave count.

WEEKLY CHART

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

A five down may be complete within the new trend.

A three up now looks complete. This may be primary wave A within a flat correction, or primary wave W within a double zigzag or double combination.

A flat correction would require primary wave B to retrace a minimum 0.9 length of primary wave A at 88.93. Within a flat, primary wave B may make a new extreme beyond the start of primary wave A at 88.25.

A double zigzag would expect a relatively brief and shallow correction for primary wave X.

A double combination would expect a relatively deep and possibly time consuming correction for primary wave X.

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

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 2018
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 2018
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 no second wave correction may move beyond its start below 88.25.

TECHNICAL ANALYSIS

MONTHLY CHART

US Dollar Chart Monthly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

DAILY CHART

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

This analysis is published @ 11:02 p.m. EST.

USD Index Elliott Wave and Technical Analysis – 21st March, 2018

A quick analysis today with a bullish and a bearish Elliott wave count, and classic technical analysis.

BEARISH ELLIOTT WAVE ANALYSIS

QUARTERLY CHART

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

A huge double zigzag may be continuing lower.

MONTHLY CHART

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

This cannot be a fourth wave correction within an ongoing impulse higher because a new low below 89.62 has recently occurred, which 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 main wave count.

WEEKLY CHART

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

A five down may be complete within the new trend. This should be followed by a three up that may correct to about the 0.618 Fibonacci ratio at 97.57.

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

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 2018
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 2018
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 no second wave correction may move beyond its start below 88.25.

TECHNICAL ANALYSIS

MONTHLY CHART

US Dollar Chart Monthly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

DAILY CHART

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

This analysis is published @ 04:56 a.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 15th February, 2018

Two scenarios for Bitcoin and a clear price point which differentiates the two ideas are presented in this analysis.

Summary: While price remains below 13,031.04 and below the Magee bear market trend line, the possibility that Bitcoin is in the early stages of collapse will remain. A new high above 13,031.04 by any amount at any time frame would be a bullish signal for Bitcoin. If that happens, then look out for another exponential rise to substantial new highs, which may only end after a minimum of 2 weeks vertical upwards movement on high volume.

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

FIRST ELLIOTT WAVE COUNT

2 WEEKLY

Bitcoin 2 weekly 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 will then be used to identify a high in place.

What is very clear from this chart is that Bitcoin is in 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.

What is uncertain is exactly when it will crash. For that question to be answered Elliott wave analysis may be helpful, and if the Forever trend line is breached, then reasonable confidence may be had that Bitcoin is crashing.

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.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

If Bitcoin is in the early stages of a huge crash, then a five down structure should develop at the daily chart level. This would be incomplete.

A third wave cannot yet be seen as complete for intermediate wave (3). This wave count sees a series now of three overlapping first and second waves. If this wave count is correct, then Bitcoin may be winding up for a spectacular plummet in price in the next couple of weeks or so.

Minute wave ii may not move beyond the start of minute wave i above 13,031.04.

SECOND ELLIOTT WAVE COUNT

WEEKLY

Bitcoin weekly 2018
Click chart to enlarge.

It is also possible that the rise for Bitcoin is not over. The last blow off top may have only been the end of a third wave, so a still stronger fifth wave may be yet to come.

Primary wave 4 may not move into primary wave 1 price territory below 492.80, but this price point is far away for any usefulness though. The Forever trend line on the 2 weekly chart would see this wave count discarded long before price invalidated it.

DAILY

Bitcoin daily 2018
Click chart to enlarge.

If the last fall in price for Bitcoin is just another relatively short lived pullback, then it must subdivide as an Elliott wave corrective structure. This movement will fit nicely as a double zigzag, which may now be complete.

Because triple zigzags are very rare structures (I have only ever seen 2 or 3 in my now 10 years of daily Elliott wave analysis), it is extremely likely that the correction is complete when a double zigzag is complete.

Within primary wave 5, no second wave correction may make a new low below the start of its first wave below 5,968.36.

A new high above 13,031.04 would see confidence in this wave count. If that happens, then my expectation would be for Bitcoin to see another exponential rise, only ending after a minimum of 2 weeks vertical movement on very high volume.

TECHNICAL ANALYSIS

Bitcoin daily 2018
Click chart to enlarge.

If price breaks above the Magee bear market trend line, then assume Bitcoin would very likely make new highs.

Not all bullish long lower wicks appear at swing lows, but they are a persistent feature at lows.

When a bullish long lower wick is accompanied by a volume spike, then the probability that a swing low is in is very high.

Currently, volume supports downwards movement much more so than upwards. The volume profile is bearish. This supports the first Elliott wave count.

Published @ 05:33 p.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 23rd December, 2017

Has the Bitcoin bubble burst? I look at price and volume, along with trend lines, to answer this question.

Last analysis stated: “Instead of trying to figure out where this bubble may go, I’ll focus on figuring out when it may have popped. A strong bearish candlestick pattern at the weekly chart level and a trend channel or trend line breach will be looked for.”

There is a completed weekly candlestick at the end of today’s session, and it is a strong bearish engulfing candlestick pattern.

But the channel is not yet breached.

Volume supports the idea of a high in place, but the bottom line is that there is substantial risk to any short position while price remains within the channel.

Look now for a bounce to not make a new all time high, which should exhibit weakness in volume. Then look for the channel breach.

Manage risk diligently.

ELLIOTT WAVE CHARTS

2 WEEKLY

Bitcoin 2 weekly 2017
Click chart to enlarge.

WEEKLY

Bitcoin weekly 2017
Click chart to enlarge.

DAILY

Bitcoin daily 2017
Click chart to enlarge.

VOLUME ANALYSIS

Bitcoin volume 2017
Click chart to enlarge. Chart courtesy of Bitcoinity.org.

A huge drop in volume suggests exhaustion.

Published @ 02:22 a.m. EST.

BTCUSD Elliott Wave and Technical Analysis – 13th November, 2017

Last analysis of Bitcoin expected more upwards movement, which is what has happened. Last published Bitcoin analysis is here.

All charts are on a semi-log scale.

FORTNIGHTLY CHART

Bitcoin 2 weekly 2017
Click chart to enlarge.

The data for this wave count begins from June 2010.

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

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

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

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

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

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

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

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

The “forever” trend line should be used to indicate when the top may be in for BitCoin. If this line is breached, the probability of a crash will increase (it will not be certain, only highly likely).

Notice that Bitcoin completed strong blowoff tops at the end of both cycle waves I and III. At the end of cycle wave I, the rise for the last eight weeks was vertical. Again, at the end of cycle wave III, the rise for the last eight weeks was vertical (remember, this is a two weekly chart).

Notice that at this time the current rise is not vertical. Current price action looks more like the early stages of cycle waves I and III than their ends.

If my targets are wrong, they may be woefully inadequate. I would not recommend using these targets for exit points for any Bitcoin purchases.

WEEKLY CHART

Bitcoin weekly 2017
Click chart to enlarge.

Last analysis of Bitcoin expected more upwards movement, which is so far what is happening.

Primary wave 3 may be complete as labelled. Primary wave 5 may turn out to be only even in length with primary wave 3, but it may well be much longer than that. Within cycle wave III (not shown on this chart, see the two weekly chart above), primary wave 5 was just 26.45 short of 4.236 the length of primary wave 3.

Here, if primary wave 5 were to exhibit the same Fibonacci ratio to primary wave 3, the target would be at 23,626. While this target may seem extreme, it is possible.

TECHNICAL ANALYSIS

Bitcoin daily 2017
Click chart to enlarge.

At major highs, Bitcoin often exhibits strong candlestick reversal patterns. That is not the case at the last high.

Single divergence with price and RSI at the last high signalled a likely pullback. The question right now is: is this pullback complete?

At the end of pullbacks, Bitcoin does not always see RSI reach oversold. So that may not be useful in timing an entry. There are usually strong candlestick reversal patterns though, and there is one here. The last two days have long lower wicks and the last daily candlestick is very bullish. It is not correctly an engulfing pattern as the open gaps higher, but the close is well above the close of the prior day, which is very bullish.

The risk here is that the pullback is not yet over. Some patience may be required. A smaller position may be entered here, and most powder kept dry for a larger position should Bitcoin move lower.

Published @ 05:45 p.m. EST.

USD Index Elliott Wave and Technical Analysis – 10th November, 2017

The USD Index continued to move lower as the last Elliott wave analysis expected. The target for a low at primary degree was 94.83. The low was reached 3.01 below the target.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

US Dollar Elliott Wave Chart Monthly 2017
Click chart to enlarge.

A Super Cycle degree impulse looks to be incomplete for Super Cycle wave (I).

Cycle waves I, II and now III look complete within Super Cycle wave (I) impulse. Cycle wave III is just 0.50 longer than 1.618 the length of cycle wave I.

Ratios within cycle wave III are: there is no Fibonacci ratio between primary waves 3 and 1, and primary wave 5 is just 0.5 shorter than equality in length with primary wave 1. Primary wave 3 is the longest extension and has the strongest slope.

Cycle wave II was a deep 0.89 single or double zigzag lasting 26 months. Given the guideline of alternation, cycle wave IV may be expected to be a more shallow sideways correction which would likely be longer lasting. So far it has lasted just ten months.

WEEKLY CHART

US Dollar Elliott Wave Chart Weekly 2017
Click chart to enlarge.

A breach of the maroon Elliott channel provided an indication that cycle wave III was over and cycle wave IV had arrived.

If cycle wave IV is an expanded flat or a running triangle or a combination, then primary wave B or X within it may make a new high above the start of primary wave A or W at 103.82.

Primary wave B or X would most likely be a zigzag, but it may be any corrective structure. It may be a sharp upwards movement or a choppy overlapping time consuming consolidation.

For the short term, while price remains within the narrow yellow channel, assume the trend remains up.

DAILY CHART

US Dollar Elliott Wave Chart Daily 2017
Click chart to enlarge.

This labelling assumes that primary wave B may be a zigzag. But this labelling may need to change as primary wave B may be any one of more than 23 possible corrective structures.

The blue channel is an Elliott channel about the first five up. This may be intermediate wave (A). Assume the trend remains up while price remains within this channel.

Minute wave iv may not move into minute wave i price territory below 93.79.

TECHNICAL ANALYSIS

MONTHLY CHART

US Dollar Elliott Wave Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

ADX is still declining, so it does not yet indicate a trend.

Both the one and two year moving averages are now negatively sloped and price is below both. The one year average may be now crossing below the two year average. This would be a full bore bearish look.

With RSI not oversold and Stochastics exhibiting no divergence with price at lows, there is room for price to fall further.

It is very important to note that at the monthly chart level Gold and the USD Index do not have a reliable negative correlation. At this high time frame, they can spend months not correlated.

Each market should be and will be analysed separately. We cannot expect that analysis of one market showing movement expected in one direction means our analysis of the other market should show it to move in the opposite direction, because the math proves that is not the case often enough. To make this correlation assumption without looking at the math is dangerous to your trading account.

DAILY CHART

US Dollar Elliott Wave Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Give the bearish engulfing candlestick pattern weight, because this suggests the Elliott wave count is wrong for the short term and a reasonable pullback or consolidation may develop about here.

The upwards trend here is extreme. Look out for a turn.

This analysis is published @ 03:00 a.m. EST.

BTCUSD Elliott Wave Analysis – 5th September, 2017

Last published Bitcoin analysis had inadequate targets.

All charts are on a semi-log scale.

FORTNIGHTLY CHART

Bitcoin 2 weekly 2017
Click chart to enlarge.

The data for this wave count begins from June 2010.

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

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

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

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

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

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

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

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

The “forever” trend line should be used to indicate when the top may be in for BitCoin. If this line is breached, the probability of a crash will increase (it will not be certain, only highly likely).

WEEKLY CHART

Bitcoin weekly 2017
Click chart to enlarge.

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

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

It looks like BitCoin may be due for a primary degree correction. Given that its fourth waves tend to be quicker than its counterpart second waves, primary wave 4 may only be a Fibonacci 13 or 21 weeks.

However, it may be longer lasting if it subdivides as a triangle, possibly even up to a Fibonacci 55 weeks.

If this analysis is wrong, it may be in expecting primary wave 4 to reach down to the 0.236 Fibonacci ratio. Primary wave 4 may not be that deep and may end mid way within the channel.

This analysis is published @ 03:33 a.m. EST.

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

Continue reading BTCUSD Elliott Wave Analysis – 5th September, 2017

Elliott Channels on the USD Index | 21st July, 2017

The USD index has been trending lower for six months now. A simple wave count at the monthly chart level may indicate what is most likely to happen next.

Gold Daily 2016
Click chart to enlarge.

The Elliott channel (maroon) about cycle wave III is drawn using the first technique: a trend line is drawn from the end of the first and third waves, then a parallel copy is placed upon the end of the second wave. The fourth wave is normally contained within that channel. The fifth wave ends either mid way or at the upper edge of the channel.

If the fourth wave breaches the channel, then it is redrawn using the second technique: a trend line from the ends of the second to fourth waves, with a parallel copy on the end of the third wave.

For both techniques, after a possible fifth wave makes a new high (or is a complete structure which is occasionally truncated), a subsequent breach of the channel in the opposite direction is an indication that the whole structure is over and the next wave is underway.

The Elliott channel (maroon) about cycle wave III is breached. This indicates that cycle wave III may be over and cycle wave IV may be underway.

To determine how cycle wave IV may unfold the guideline of alternation and an eye for the right look is used.

This analysis is published @ 06:30 a.m. EST.