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Elliott Wave Analysis of ASA (Gold & Silver Stocks) by Sid from ElliottWavePredictions.com

 Gold, Individual Stocks, Miners, Silver  Comments Off on Elliott Wave Analysis of ASA (Gold & Silver Stocks) by Sid from ElliottWavePredictions.com
Jul 022015
 

Elliott Wave Analysis of ASA (Gold & Silver Stocks) by Sid from ElliottWavePredictions.com.  Click on the charts to enlarge.

From Yahoo Finance:  “ASA Gold and Precious Metals Limited is ASA a self management investment trust. The firm invests in the public equity markets across the globe. It primarily invests in stocks of companies engaged in the exploration, mining or processing of gold, silver, platinum, diamonds, or other precious minerals. ASA Gold and Precious Metals Limited was founded in 1958 and is based in San Mateo, California.”

ASA weekly 7-2-15

For decades, professional money managers have used ASA as a proxy for the entire precious metals sector.  From an Elliott Wave perspective, ASA (as well as a large number of precious metals stocks and ETF’s for that matter) appears to be in the very late stages of completing a large expanded flat structure that commenced in March 2008.  Expanded flats are ABC structures that subdivide 3-3-5.

Wave A’s of expanded flats must internally subdivide as a “three”, and the downward movement from March through October 2008 appears to easily meet that requirement.  Wave B’s of expanded flats are also “threes”, and most often retrace wave A by 123.6% to 138.2%.  In this case, primary wave B (burgundy) retraced wave A by factor of 1.236.  It also subdivided as an ABC structure.  Textbook.

Primary degree wave C (burgundy) of the expanded flat has been underway since December 2010, and needs to complete five intermediate (black) waves down.  Wave C’s of expanded flats internally subdivide as a “five”, and end beyond the extreme of wave A.  Downward movement since December 2010 in ASA easily counts as a five-wave non-overlapping impulse, and has already moved below its October 2008 low of $10.34, so the overall scope and shape of the expanded flat on a weekly chart (above) has appeared complete since December 2014.

ASA daily 7-2-15

However, as we zoom in on the most recent price action on a daily chart (above), despite the  appearance (at the time) of a completed black wave five on December 16, 2014, followed by five waves up into January 20, 2015, ASA made a new low yesterday.  So what’s going on?

In my opinion, the five waves up into January was wave C of an expanded flat for blue wave four.  Then, starting at the January 20 high, blue wave five in ASA is likely carving out a contracting ending diagonal.  Internal subdivisions since the end of blue wave 4 have been somewhat ambiguous, which fits well with the diagonal interpretation, as each leg of a diagonal is typically a corrective ABC.  Because Hurst cycle analysis is expecting that a 20-week cycle trough is a bit overdue, and based on the Fibonacci targets shown on the chart, it appears that ASA is bottoming in pink wave 3 of the contracting ending diagonal now, with pink wave 4 due next, likely moving price up into late August.  Then, if this interpretation is correct, there will be a final pink wave 5 to the downside, ending in about September/October 2015.  $8.94 is a solid target for the end of the diagonal later this year, as that is where blue wave five will be .618 times the net traveled of blue waves one through three.

In contracting ending diagonals, wave three must be shorter than wave one was, so if ASA is putting in its pink wave three bottom about now, price cannot move below $9.03.  Then, wave four (pink) cannot be longer than wave two pink was, followed by a wave five that is shorter than wave three was.  It should be noted that wave fives’s of ending diagonals can also truncate.  Each (pink) leg of the diagonal should subdivide internally as a green abc zigzag.

Please join me for my Weekly “Counts” Webinar, where I go over all of my Elliott Wave counts and associated Fibonacci price targets for many of the world’s major stocks markets, commodities, currencies, and bonds.  Hurst cycle analysis is considered on almost all items.  A link to the recording of the webinar is emailed to all “Counts” webinar subscribers immediately afterwards, whether they were able to attend “live” or not.  Alternatively, my EWP ScreenShots service shows multi-timeframe analysis of the SPX, DAX, Gold, Oil, TLT, US$ (DX), & EUR/USD currency pair twice each week.  All “Counts” webinar subscribers receive EWP ScreenShots as a free bonus.  Many traders and investors have found my analysis quite profitable over the years.

Sid Norris
http://ElliottWavePredictions.com

Elliott Wave Analysis of the Dow Jones Industrial Average (DJIA) by Sid from ElliottWavePredictions.com

 Dow Jones Industrial Average  Comments Off on Elliott Wave Analysis of the Dow Jones Industrial Average (DJIA) by Sid from ElliottWavePredictions.com
Jun 192015
 

Elliott Wave Analysis of the Dow Jones Industrial Average (DJIA) by Sid from ElliottWavePredictions.com.  Click on the charts to enlarge.

From 1966 through 1974, the Dow Jones Industrial Average carved out a cycle-degree fourth wave expanding triangle (shown on the quarterly chart below).  In expanding triangles, each lettered wave makes a new extreme. Wave B ends beyond the start of the triangle, wave C ends beyond the extreme of wave A, wave D makes a new extreme beyond wave B, and finally, wave E ends beyond C.  Each leg of the triangle must therefore be more aggressive than the last.  When the wave E (burgundy/primary degree) occurred from 1973 through 1974, the DJIA lost 46.59%, from peak to trough.  That triangle lasted eight years.

DJIA quarterly 6-19-15

My main wave count is that the DJIA has been in that same expanding triangle pattern (fractal) since the year 2000.  But this fourth wave triangle is at supercycle degree, one degree larger than the cycle degree triangle back in the 70’s.  We are 15 years into the pattern now, and wave E has yet to commence.

On the monthly chart (below), I’m showing my main count only for the Dow Jones Industrial Average since the mid-90’s.  Four of the five legs of a triangle must be an ABC zigzag.  One leg of the triangle gets to be something else, like a double zigzag or five wave impulse or diagonal.  The wave A (teal/cycle degree) of the triangle (starting in January 2000) was quite rough, and I believe counts best as an ABC zigzag, where waves A and C within it were contracting diagonals.  I believe that the following leg from October 2002 through October 2007 counts best as a double zigzag.  That leg is therefore the one wave of the triangle that gets to be something other that a standard ABC zigzag.  Downward movement from the October 2007 through March 2009 counts nicely as an ABC zigzag, with wave C of the pattern being quite destructive.

That brings us to wave D of the triangle, underway since March 2009.  Since the 2002-2007 bull was a double zigzag, the rise from 2009 must be standard single zigzag, and so far, that’s exactly what it appears to be.  Zigzags generally move entirely within a “base channel”, as shown on the monthly chart in burgundy.  As you can see, since early 2014, on a semi-log chart, price has been unable to stay within that base channel, but has continued to grind a bit higher in recent months anyway.  Very importantly, the Dow appears to be rolling over now though, in association with reaching a major Fibonacci price target of 18,151.63, where wave C (burgundy) of the zigzag reached 1.618 times the length of wave A.  Since reaching that target in February, the DJIA has not been able to close above it on a monthly basis.  Also worth noting is that Wave C’s of zigzags are rarely longer than 1.618 times wave A.

DJIA monthly 6-19-15

On the weekly chart below, I’m showing both the main count, as described so far in this post, and an alternate, which expects that supercycle wave 4 lasted only nine years and ended in 2009.  If that alternate is correct, we will see a 5-wave impulse up from the March 2009 low, with waves 1, 2 and 3 of that impulse pretty much finished.  As you can see, in both the main and alternate counts, a significant correction is likely to commence soon, and that correction is likely to move down into the next 4.5-year cycle trough, currently due in March 2016.  If that downward movement into the March 2016 4.5-year cycle trough is a five-wave affair, the main count is likely correct.  If it is a three-wave something, or is impossible to count as a legitimate five-wave impulse or diagonal, the alternate count would be more likely.

DJIA weekly 6-19-15

Moving on to the daily chart below, it is interesting to note that the Dow Jones Industrial Average has, since October 9, 2013, spent only 18 trading days (Sept 19 – Oct 15, 2014) outside the confines of minor (blue) or intermediate (black)-degree ending contracting diagonal!!  Price action inside contracting diagonals is overlapping and sloppy, but still trending, albeit quite gradually. Once diagonals are finished, they are typically deeply and quickly retraced.

I think the most important aspects to note from the daily chart are

  1. The downward movement from May 19 through June 15 2014 is choppy, overlapping, and corrective, and cannot be counted as a five-wave anything.
  2. The large 40-week cycle trough is still in front of us, centered now in late July.
  3. The last cycle crest expected before downward movement into the coming 40-week cycle trough is centered on June 23, although we may have already seen the top tick associated with that 40-day cycle crest.
  4. If downward price action into the July 40-week cycle trough moves below 17,285.90, we’ve likely already seen the teal (cycle degree) wave D top within the multi-decade expanding triangle described earlier.  That’s because wave four of a contracting ending diagonal cannot be longer than wave two was.  However, that seems unlikely to occur, because of the choppy overlapping movement down from the May 19 high so far.
  5. Once price is finished moving down into about late July, there is a last coordinated nest of large cycle crests still due in September/October.  Many of the stock indices I track are expecting a similar roadmap, although some, like the Industrials and Financials appear to need a final high in Sept-Oct, whereas others, like the Russell 2000 appear to be putting in their final large-degree pattern tops here in June, and are unlikely to make new highs later in the year.
  6. Once the September/October crests are “in”, there should be a strong bearish blast down into the March 2016 4.5-year cycle trough. The internal wave structure of that move will be quite important, as described earlier.

DJIA daily 6-19-15

Finally, as the 240-minute chart shows (below), a legitimate 5-wave down structure from the May 19 high simply did not occur.  While yesterdays high may have been the top of pink wave X, and price has already started into the downward movement associated with the July 40-week cycle trough, we may see a slight bit more upward movement on Monday/Tuesday to 18,244 (where green C will equal green A times 1.382) before 3-4 weeks of downward movement ensues.

DJIA 240m 6-19-15

Please join me for my Weekly “Counts” Webinar, where I go over all of my Elliott Wave counts and associated Fibonacci price targets for many of the world’s major stocks markets, commodities, currencies, and bonds.  Hurst cycle analysis is considered on almost all items.  A link to the recording of the webinar is emailed to all “Counts” webinar subscribers immediately afterwards, whether they were able to attend “live” or not.  Alternatively, my EWP ScreenShots service shows multi-timeframe analysis of the SPX, DAX, Gold, Oil, TLT, US$ (DX), & EUR/USD currency pair twice each week.  All “Counts” webinar subscribers receive EWP ScreenShots as a free bonus.  Many traders and investors have found my analysis quite profitable over the years.

Sid Norris
http://ElliottWavePredictions.com

Technical Analysis is Suggesting that the Russell 2000 is Very Near a Significant Top

 Russell 2000  Comments Off on Technical Analysis is Suggesting that the Russell 2000 is Very Near a Significant Top
Jun 122015
 

Technical Analysis is Suggesting that the Russell 2000 Index (RUT) is Very Near a Significant Top.  Combined Elliott Wave and Hurst Cycle Analysis of the Russell 2000 Index (RUT) by Sid from ElliottWavePredictions.com.  Click on the charts to enlarge.

When examining the Russell 2000 index since 1998 on a monthly (semi-log) chart (shown below), a large, overlapping, expanding structure is apparent.  One interpretation of that upward movement is that an expanding ending diagonal has been underway in the Russell since 1998.  In an expanding ending diagonal, each numbered wave (12345) must count internally as an ABC (5-3-5) zigzag.  As you can see, all of the internal wave structures since 1998 count nicely as zigzags.  Also, wave 3 must be longer than 1, 4 longer than 2, and 5 longer than 3.  All of those requirements have been met.  Note how wave 5 of the diagonal has slightly overthrown the trend-line extending from the extremes of waves 1 and 3 of the diagonal.  This suggests that the bull market in small caps is quite mature.

RUT monthly 6-12-15

Moving on to the weekly chart (below), the burgundy (Primary degree) ABC up from the March 2009 low is shown.  In recent weeks, the Russell 2000 (ETF equivalent: IWM) reached an important Fibonacci price target at 1254.43, where burgundy (Primary degree) wave C equaled burgundy wave A times 1.618.  This is typically about as long as a wave C can be in relationship to wave A in a zigzag.  So once again, this supports the idea that the bull market in the Russell appears to be nearing an end.  Since hitting that large degree Fibonacci target on March 18, the Russell has had a very difficult time staying even slightly above it.  Also notice that a large MACD weekly divergence is already “in”.

RUT weekly 6-12-15

Then, as the daily chart shows (below), up from the October 15 low, I’m expecting a black wave 5 to complete the bull market.  Within black wave 5, there needs to be five blue (minor degree) waves.  So far, I am counting blue waves 1, 2, 3 and 4 complete.  Importantly, the very weak and hesitant wave 3 (blue) was shorter than wave 1 blue was.  This means that wave 5 blue must not be longer than wave 3 blue was. This gives us a maximum top in the Russell of 1355.12.  The only black (intermediate degree) Fibonacci price target below that level is at 1286.66, where wave 5 black will equal wave 1 black, and also where wave 5 black will equal the net traveled of waves 1 through 3 black.

Notice the 40-week cycle trough due now in about early August.  Quite soon, price should be drawn strongly down into that fairly large cycle trough.  As of today, an organic Hurst cycle analysis performed by Sentient Trader software indicates that the only small-degree Hurst cycle yet to crest before price falls into the impending 40-week cycle trough is the 40-day cycle crest, currently due between June 22 and June 30.

Russell 2000 daily 6-12-15

Finally, a look at the 240-minute chart (below) indicates that upward movement from the end of blue wave 4 (on May 6) is choppy and overlapping.  I am therefore counting the upward movement from May 6 as an ending expanding diagonal, likely incomplete.  Waves 1, 2, 3 and 4 pink within the diagonal appear to be finished, so only pink (minute degree) wave 5 is needed to complete upward movement.  While the top may have occurred yesterday, if an ending expanding diagonal is underway from the May 6 low, and waves 1,2,3 and 4 pink are “in”, wave 5 pink must reach at least 1276.15, and it hasn’t done that  yet.   Any movement below 1218.37 would strongly suggest that a significant top is “in” on the Russell, in my opinion.

RUT 240m 6-12-15

By the way, have you seen my latest educational video?  Its a FREE 6-minute video example of how I combine Hurst Cycle Analysis with Elliott Wave Analysis.

As always, there are other important wave counts that may suggest alternative outcomes, especially when considering developments in items like the XLF, Dow Jones Transports, Utilities, Real Estate, Regional Banking, Biotech, the Mining Sector, Energy and more.  My weekly “Counts” webinar really presents the entire picture, and that picture morphs a little from week to week.  Want to stay on top of these markets?  It takes persistent commitment.

Don’t have time for a 2.5 hour webinar?  Try my EWP ScreenShots service, which includes multi-timeframe (weekly, daily, 240-minute, & 60-minute) analysis of SPX, DAX, TLT (bonds), Gold, Oil, the US Dollar Index, and the EUR/USD currency pair twice per week, (on Sundays and Wednesdays).  You can subscribe one week at a time, if you like.

Long or short, there’s money to made in these markets, as many of my paid subscribers can attest.

Sid Norris – ElliottWavePredictions.com

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