US Equity Market Rolling Over?

It appears as though the S&P 500 may have finally completed the first of many (yet to come) impulses lower. The trend line shown is the last bastion of support which is why I believe that we will get a modest rally from here which should not take out the September 13th highs. Although this impulse lower appears as a leading diagonal, which it probably is, when viewed from the DJIA it appears as a normal impulse wave.

This chart offers a very simplistic view of why I believe the top is in. As far as I know, I am the only one who has been tracking this long term channel forming in the DJIA. The price action in the S&P 500 has not reached the upper boundary of the channel; however, aside from traders I believe the Dow Jones is more widely followed and therefore has more relevance.

Potential S&P 500 Peak

There exists some possibility that the market topped earlier today as a ending diagonal within an ending diagonal. I had expected this move to continue to roughly 1450 under this count but with the large daily reversal candle potentially signal immediate weakness I decided to share this chart.

EURGBP Bottom in place?

EURGBP appears to be creating a double bottom with it's mid-2010 low. I believe this level will serve as a launching point for a move which should exceed .908. This presents an excellent risk-reward ratio for this trade. If this chart is correct, it may make more sense to short GBPUSD instead of this pair as I expect EURUSD to remain weak for over the next few years.

EURUSD - Heading higher?

The EURUSD's current set-up either a fairly medium term bullish or imminently long term bearish. The line in the sand between these two outcomes is the low of Wave B Blue. I still believe that the Euro has further to run toward the upside as it tends to top after the stock market at significant turns, but it could certainly head in either direction. If it does breakdown, it would project a measured move to at least 1.25. Either case offers significant trading potential.

AUDUSD Critical Juncture

AUDUSD remains at a decision point. It can either breakdown to new lows or begin a final impulse higher. This secondary support must not be breached significantly in order for this count to remain valid. Either way this breaks, I expect to see large moves.

GBPJPY D Wave Complete

There appears to be at least one three wave move lower in the GBPJPY before higher levels are seen. Usually a third test of a significant level of resistance gives way. However in this case, as Wave C Green did not register new lows, it is likely that the current thrust will not make new highs yet. With the invalidation point nearby, a short from current levels seems justified.

AUDUSD to rally past 1.085

AUDUSD appears set to rally higher in a final impulse in order to complete the larger degree correction from .9386. I would expect this to complete as a double top between 1.095 and 1.105 in order to create the relationships Wave 5 Green = 61.8% of Wave 3 Green and Wave C Red = Wave A Red, respectively. A more significant break below the trendline drawn (which connects the origins of Wave A Red and Wave C Red) would make this wave count extremely unlikely.

GBPJPY decline ahead?

GBPJPY appears to have completed either a Wave 3 Green impulse or a Wave C Green correction. In either case, the short term view appears to indicate lower prices. If prices breach the Wave 1/A high, it is likely that new lows will be made eventually.

GBPJPY Head and Shoulders topping pattern

The British Pound versus the Yen has created a significant Head and shoulders patter over the last few trading days and appears to be set to begin a fresh impulse to new lows. As the recent decline has penetrated the top of Wave A Green, it is unlikely that we are experiencing a Wave 4 Green Pullback. However, where we are in the larger time frame is still unclear to me.

AUDUSD impulsive decline on 1 minute charts

This displays a five wave decline in the AUDUSD, which has a very high correlation to the S&P 500. I believe that this is the very forefront of a much larger move lower in virtually every asset over the coming months. The most notable exceptions will likely be the US dollar and treasuries in a flight to liquidity.

NZDUSD potentially topping?

The NZDUSD may be forming an ending diagonal which has created new highs and also touched a key resistance line for this Wave 2 Red higher. In addition, Wave 5 Blue is 127.3% the length of Wave 1 Blue although not shown.

Decade long S&P 500 channel resistance looming at 1382

It appears that the S&P 500 may see a major top very soon upon reaching the secondary resistance of this decade long channel. This secondary  resistance previously acted as the tops of both shoulders from the 2007 Head and Shoulder's topping pattern.

USDSEK Dual Support Convergence

USDSEK appears set to rally strongly given that it is sitting on significant monthly trendline support. If trendline support does not hold this count is not invalidated unless 6.30 is breached.

AUDUSD Detailed look at Wave 4 Red

The AUDUSD appears to be completing a Wave 4 Red. Waves A and C Green are almost at equality. Additionally, Wave 2 Red (shown in prior post) and Wave 4 Red have reached equality. The previous post has more info about where Wave 5 Red and more importantly, the next move, should lead.

AUDUSD long opportunity to set up amazing short entry

It seems we may be ready for one last thrust higher in the AUDUSD above the recent 1.084 barrier, but below the all time high of 1.108. This should present an incredible risk reward opportunity to enter into short positions. The resulting impulse should end around a conservative estimate of 2,500 pips lower.

Possible 5 waves lower in S&P 500

I usually don't post my short term wave counts. However if this labeling is correct, we may have already seen the very first leg down of a much larger decline in Wave 3 or Wave C. The point is to remain very cautious until the market provides more clarity.

S&P 500 corrective rally appears complete

With today's latest jobs report, the S&P 500 has completed it's minimum pattern for a Wave 5 Black to complete Wave 2 Green. This does not mean that this is the top, but it may be. Prices need to hold below the May 6th high for this count to remain valid. The main point is to remain very cautious as the downside risks are far larger than the upside left.

NASDAQ: Nearing top of decade long correction

The Nasdaq has recently achieved a C equals A target of 1 to 1. Given that prices have recently broken above last year's top in the index, many technical analysts are calling this a breakout. I tend to believe this setup is a trap for Wave C Green to surprise with a very rapid decline. Wave C Green cannot equal 61.8% of Wave A Green as it would result in a negative price. Therefore, I am expecting a similar decline in percentage terms. The 2000 to 2002 decline resulted in a 83.5% decline. If this decline is of the same magnitude, the index would fall to roughly 413 over the coming years.

USDCAD Daily and Weekly Wave Counts

The USDCAD appears set to rally in a fifth wave higher. The breakout from this triangle projects a thrust to roughly the 1.11 level in a fifth wave. This setup offers an amazing risk to reward ratio trade with the invalidation point just below at 1.0050.

However when looking at the weekly chart it appears that the upcoming fifth wave will break significant trendline resistance. The last time this occurred (in 2008), prices fell back to the former resistance trendline before exploding higher in an extremely powerful 3rd Wave. I believe a similar situation will present itself relatively soon. Ultimately, prices need to return to 1.3000+ in order to complete this Red Wave C.

EURNZD - Possibly concluding 3 year impluse

The EURNZD appears to be terminating an impulse which began three years ago nearly 10,000 pips higher. The spike on this weeks bar could potentially be the end, however the subdivisions of the current Wave 5 Blue are not readily apparent. A 15 minute view displays an obvious impulse higher. It is possible this merely the beginning of a Wave 4 Black of this Wave 5 Blue. In either case the short term momentum is higher. Therefore, I will attempt to enter into long positions at 1.6100 and 1.6035, with a stop loss at 1.5920.

NZDUSD Wave 2 higher potentially complete

The New Zealand Dollar vs. the US$ appears to have completed a three wave correction higher off its November lows. This is likely a completed Wave 2 Green higher or perhaps only a three-wave correction in a Wave A Blue higher. In either case however, prices should move lower in the short term. Currently, Wave A Blue and Wave C Blue are roughly equal, and prices are just barely above channel resistance. As the subdivisions of Wave C Blue are labeled, Wave 2 Green cannot terminate above .8045.

EURUSD Trending Higher?

It appears that the EURUSD has completed five waves lower to complete a leading diagonal. This is the last leg of that diagonal. As long as prices do not significantly violate the trendline which has now become support, the EURUSD should shortly continue higher in a multi-month rally.