You are here: Home

Elliott Wave Analysis of the EUR/USD Currency Pair by Sid from ElliottWavePredictions.com

 EUR/USD  Comments Off on Elliott Wave Analysis of the EUR/USD Currency Pair by Sid from ElliottWavePredictions.com
May 192015
 

Elliott Wave Analysis of the EUR/USD Currency Pair by Sid from ElliottWavePredictions.com.  Click on the charts to enlarge.

There appears to be quite a debate going on these days about whether the Euro is finished going down or not.  In my opinion, a combination of Elliott Wave and Hurst cycle analysis suggests that the March low is, in fact, a major bottom in the Euro.  Here’s why . .

EURUSD weekly 5-19-15

As shown in the weekly chart above, the triangle that started in the EUR/USD currency pair back in October of 2008 lasted over five years, finally ending in May 2014.  Triangles are followed by terminal thrusts.  So far the downward thrust has carved out three waves down.  Many are still expecting a 5th wave, but I don’t think that’s going to happen for several reasons:

  • The initial drop from the July 2008 all-time high through October 2008 was a “three” (in the form of a zigzag).   This is why I’ve labeled the October 2008 low as a primary (burgundy) degree wave W.  If that interpretation is correct, the multi-year triangle that followed was an X-wave triangle, and the downward terminal thrust out of that triangle was a burgundy wave Y.  Y waves are “threes”, not “fives”.
  • Utilizing R. N. Elliott’s triangle measurement technique, the measured target for the end of the thrust from the multi-year triangle in the Euro was 1.04470.  ( I was able to finalize that target back in July 2014, when the Euro broke down out of the blue trend channel).  In March of this year, the Euro started a substantial reversal at just 15 pips shy of that target.  The thrust target has essentially already been reached.
  • Hurst cycle analysis is considering the March low a 4.5-year cycle trough.  This suggests that a multi-year uptrend in the Euro has already commenced.
  • Thrusts from triangles are generally relentless, typically racing within a narrow channel, or in parabolic fashion until abruptly ending.   The 1005 pip bounce since the March 13 low in the Euro simply does not fit well within an expectation for a downside thrust continuation from the May 2014 top.

EURUSD daily 5-19-15

Moving on to the daily chart (above), examination of the internal wave structure within Burgundy wave Y shows the completed black ABC zigzag structure.  Within both black wave A and black C, there was blue 3-5 MACD divergence.  Also, the final capitulation into the March 13 low was a terminal thrust from a blue wave 4 triangle.  Importantly, wave C black was slightly shorter than 1.382 times the length of wave A black, once again suggesting that the entire drop from May 8 2014 through March 13 2015 was an ABC, and not a 123.  (Wave 3’s are typically 1.618 times the length of wave 1’s, or longer).

EURUSD 240m 5-19-15

Finally, upon examination of the 240-minute chart (above) , if a major trend change has occurred, we would expect a 5-wave structure to the upside to support the idea.  So far, we’ve seen a blue wave 1 in the form of a contracting leading diagonal followed a characteristically deep blue wave 2.  Then, wave 3 blue ended within just 8 pips of being 1.618 times the length of wave 1, a very typical relationship of wave 3 to wave 1.  Now, it appears that blue wave 4 is underway, if not already finished.  Wave 4’s most often retrace wave 3’s by a Fibonacci .382 relationship, so a good target for the end of blue wave 4 is 1.11052, which is only 53 pips above blue 4 invalidation at 1.10519.  Wave 4 appears so far to have completed a pink ABC corrective structure to the downside, with wave C only slightly longer than wave A was.  It is also possible that blue wave 4 will carve out a longer lasting triangle, as long as the pair stays above blue 4 invalidation (1.10519).

If the Euro continues lower than blue 4 invalidation, the April low of 1.05203 would then become invalidation, as my alternate count would become the main.  That alternate would expect that a nested bullish 1-2-1-2 is underway starting from the March low.

Sid

Elliott Wave Analysis of the iShares NASDAQ Biotechnology ETF (IBB) by Sid from ElliottWavePredictions.com

 Biotech Sector, ETF's  Comments Off on Elliott Wave Analysis of the iShares NASDAQ Biotechnology ETF (IBB) by Sid from ElliottWavePredictions.com
May 132015
 

Elliott Wave Analysis of the iShares NASDAQ Biotechnology ETF (IBB) by Sid from ElliottWavePredictions.com.  Click on the charts twice to enlarge.

IBB weekly 5-13-15

As the weekly chart above clearly shows, the biotech sector has been experiencing a parabolic rise since October 2008.  From that low, I can count 5 clear (black) waves up through the recent March high.  Within that 5-wave impulse, black (intermediate degree) wave 3 was well extended, at 3.62 times the length of wave 1.  It was therefore unlikely that wave 5 would also extend, as only one of the odd numbered waves in a 5-wave impulse is typically “extended”.  After black wave 4 completed in April 2014, the best target for black wave 5 was therefore at 342.46, where wave 5 (black) would reach .618 times the net traveled by waves 1 through 3.  As it turned out, wave 5 (black) pushed a bit beyond that target, reaching .7675 times the net traveled by black waves 1 through 3, in keeping with the character of the final push within a parabolic blow-off top.  Importantly, parabolic rises are almost always followed by crashes.

IBB daily 5-13-15

Moving on to the daily chart (above), within black wave 5, I can count 5 complete (albeit fairly rough) blue waves through the March 20, 2015 high.  I’ve labeled that top as the end of burgundy (primary) wave 3.  Then, quite importantly, the initial downward movement from that high (black wave A) appears to be constructed internally of only 3 waves.  This tells us a number of things.  First, it increases confidence that we’ve only seen a large degree wave 3 top in Biotech, and not a large degree wave 5 top.  Impulsive new downward trends do not start with “three”s, but wave 4’s often do.  Wave 4’s that start with a 3-wave move can form any Elliott Wave corrective structure except a zigzag.  That includes two different kinds of triangles, three kinds of flats, and several different combinations of those structures in the form of a WXY or WXYXZ.

So how do we determine which of those possible patterns is most likely?  Since we are expecting that a burgundy wave 4 has commenced, the first thing we should do is look at the preceding burgundy wave 2.  In this case, burgundy wave 2 (April 2004 through October 2008 – not shown) was a relatively shallow but long-lasting expanded flat.  So, based on the guideline of alternation, we should expect burgundy wave 4 to be a deeper, sharper correction that is something other than an expanded flat.  Since a zigzag is already out of the question, and triangles are typically long-lasting sideways affairs, it seems most likely that burgundy wave 4 will take the form of a deep and sharp WXY or WXYXZ combination correction.  Furthermore, the expectation that burgundy wave 4 will be somewhat crash-like is supported by the fact that the rise into the March high was parabolic in nature.

IBB 240m 5-13-15

Finally, as the 240-minute chart above shows, Hurst cycle analysis is projecting the next 80-day cycle crest between May 21 and June 4.  This is perfectly in keeping with my current expectation that the larger stock market indices will put in an important top during the last week of May, or the first week of June.  In my opinion, shorting the IBB is one of the better trading opportunities available over the next few weeks.  Personally, I plan to use at-the-money put options with expirations late in the year.  I’ll be showing even shorter-term intraday charts of the IBB in my weekly “Counts” webinars over the next few weeks.  The smaller Hurst cycles are likely to morph a bit as we near the top of black wave X, so please join me for the timing updates.  More and more traders, investors, and money managers are finding my weekly “Counts” webinars and EWP ScreenShots extremely helpful.

Sid Norris

A Recent Testimonial from an ElliottWavePredictions.com Subscriber

 LIVE Webinars, Screenshot Offerings, & Educational Movies  Comments Off on A Recent Testimonial from an ElliottWavePredictions.com Subscriber
May 092015
 
I just had to share the following testimonial, received yesterday from one of my Weekly “Counts” Webinar subscribers:
“Sid,

I wanted to thank you for the incredible research and analysis that you provide by giving you a brief history on me and how my account is exploding to the upside since I started following you and attending your webinars.

After the economic meltdown in 2008, I had to pretty much start over. I took a corporate job after many years of self-employment in 2009, and started saving the maximum amount that I could in my new 401K. Then in 2013 I was hired as the Executive Vice President of a top real estate company in California, but they didn’t offer a 401K program. At that time I had to convert my 401K to an Individual IRA which only allows me to save $6500 per calendar year, as I am over the age of 50. As time went along I became increasingly frustrated with the menial returns I was receiving buying and holding “the recommended” diversified portfolio of mutual funds. That’s when I started subscribing to your webinars and screenshots at elliottwavepredictions.com.

On February 6, 2015 I moved my portfolio from Fidelity to E-Trade and decided to look for entry and exit points on stocks, ETF’s and indices based upon your analysis. My strategy was to use 10% of my portfolio to trade options, hold 20% in cash (to add to positions if needed) and buy value stocks that pay dividends with the remaining 70%.

The day I started the E-Trade account (February 6, 2015) my account equity was $37,000.
Today (May 8, 2015) my account equity is $50,200.

I’ve deposited $1500 of additional funds during this time so subtracting that, I’ve managed a gain of $11,700 (that’s 23.3%) in roughly 3 months.

And the best part is, I know now that I don’t need the market to continue to go up to make solid returns. For instance, I’ve made some very nice winning trades recently shorting IBB (the Biotech sector ETF) using put options, as well as trading long IBB using calls. All trades were based on the analysis you show in your weekly webinars.

Following your Elliott Wave analysis and looking for entry end exit windows on securities based on Hurst Cycle analysis has been a game changer for me and my retirement. Thank you for all you do Sid, and keep up the good work!!

Kel N.”

 —
Kel subscribes to my Weekly Counts Webinar, which includes twice-per-week EWP ScreenShots.  Click here to read more testimonials.
Sid