NZDUSD Wave 2 bounce still underway

NZDUSD appear to have completed Wave B Black and should above the top of Wave A Black in a wave C Black. The next wave down should be violent, so be cautious.

AUDUSD potential for bounce?

With current prices at the trendline which has supported AUDUSD higher during its rally from the 2008 lows and just above horizontal resistance from the top of Wave A Green, I believe there is significant potential for a correction higher in the AUDUSD, allowing better shorting opportunities. However, if prices take out the support at .9700, I would expect a much sharper move to the downside to unfold.

GBPJPY completing multidecade decline?





Looks bullish to me, but there may be more room to spike lower. Be careful.



S&P 500 to begin Wave 4 up?

The S&P 500 looks set to open much lower than yesterday's close and rally in a correction perhaps the rest of the day. This may be a optimal time to close some dollar long positions in order to resell at a higher price.

 

Here is my current standing in CNBC's Million Dollar Portfolio challenge. All of my trades in this portfolio are based on the research I have posted to this blog.

GBPUSD to bounce in Wave 2?

GBPUSD appears ready for a bounce higher. I'm rather unsure how far this should rise as I still expect dollar strength to be dominant. It might be worth while trading the British Pound against a weaker currency such as the Euro. Otherwise, not a bad hedge to lock in gains in dollar long positions.

*Update - May be a better buy against the Yen as the GBPJPY is only around 20 pips from it's 2008 low. May be a long term double bottom...

USDJPY finishing decade long impulse wave?

USDJPY appears to be very close to completing its impulse lower. I believe that we may be forming a double bottom with the low from the Japan Earthquake. Usually I would expect further movement lower as wave 5 seems too small compared to Wave 1 Blue and 3 Blue of Wave 4 Green. However, according to FXJunction.com more than double the number of traders are shorting the pair vs long the pair and this has been true for a several weeks now. The masses (especially novice traders like FXJunction tracks) tend to lose money trading forex. I prefer to bet against their consensus opinions. However there still a possibility that we may see a massive spike lower before prices head back up, similar to the Japan Earthquake spike, so caution is definitely warranted.

S&P 500 Hunt Volatility Funnel & Elliott Wave Count

The past month and a half has seen a massive compression of volatility in a series of higher lows and lower highs. Once H3 (1221) or L3 (1187) is broken, a significant movement in the direction of the break should be unleashed as large numbers of stops are triggered.

Here is the my interpretation of the Elliott Wave Count of the same time span. It implies that we are almost in Wave 3 Blue of 5 Green. Given how the equity indexes have been driving the currency markets lately, this implies further appreciation of the dollar. When the next move occurs, make sure you are on the right side of the trend.

 

 

Hewlitt Packard to make new highs?

I focus on the currency market 99% of the time, but in preparation for CNBC's Million Dollar Portfolio Challenge (which began today), I examined the Elliott Wave Pattern all of the DJIA component stocks to see if any deviated from the DJIA's wave count. I only found 2 of the 30 components have significant bullish potential, Hewlitt-Packard and Wal-Mart.

 Of these, Hewlitt-Packard seems like a much better bet. With Wave 4 Green only 2 dollars above its invalidation point (the top of Wave 1 Green), the risk to reward is extremely high as HPQ should climb to new all time highs. Also note that Wave A Blue and Wave C Blue have a  C equals 1.618 times the length of  A relationship.

USDCAD to break above parity?

USDCAD appears ready to move much higher in a powerful Wave 3 Red which should see prices rise to minimum of 1.0725.