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Three Charts Suggesting a Top in US Equities and in Junk Bonds, and the Resumption of a Huge Move Up in the US Dollar (by Sid from ElliottWavePredictions.com). Click on the charts twice to enlarge.
The attached charts show that US equities and Junk bonds are both at trendline resistance after possibly complete terminal patterns, and the British Pound appears to have entered intermediate (black) wave 3 of a downward thrust from a 4-year long triangle vs. the US dollar.
Elliott Wave Analysis of the GBP/USD Currency Pair by Sid from ElliottWavePredictions.com. Click on the charts twice to enlarge.
Since my last free post about the British Pound on January 10, when the pair was at 1.6166 and I suggested that a very sizeable move to the downside was imminent, Cable has moved southward by over 1300 pips.
More recently, since the March 12 low, the pair has been in an upward correction. It appears that GBP/USD may be in the final stages of finishing an upward 5-3-5 zigzag, with wave C pink likely in the final stages of finishing an ending diagonal. If this interpretation is correct, Cable will rally to challenge the upper diagonal trendline extending from the extremes of waves 1 and 3 green. Ending diagonals can truncate, but typically will “throw-over” that line slightly. Since the diagonal is contracting, wave 5 green cannot be longer than wave 3 green was, leaving a maximum for wave 5 green at 1.52447.
Despite the brevity of the proposed correction, considering the longer term count that the Pound is in a thrust out of a 4-year-long triangle, this could mark the end of wave 2 blue, and the resumption of an even more aggressive section of the proposed 3700+ pip crash, the wave 3 of 3.
Sid
http://ElliottWavePredictions.com
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Quick Elliott Wave Update on the GBP/USD Currency Pair by Sid from ElliottWavePredictions.com. Click on the charts twice to enlarge.
Since my last post regarding the British Pound, it appears we’ve seen 5 waves down, and a 50% retracement. This is a textbook short setup, with the objective to catch what is expected to be a very sizeable move to the downside in this pair.
Sid
Elliott Wave Analysis of the GBP/USD Currency Pair by Sid from ElliottWavePredictions.com. Click on the chart twice to enlarge.
Before chasing today’s huge move in equities to the upside, one might want to consider the pattern in the British Pound. The triangle that started in January 2009 has managed to last almost 48 full months now, but is still clearly discernible on the weekly chart. The movement up from the black wave D low in January 2012 is choppy, overlapping, and clearly corrective. The pair has already plummeted 115 pips from today’s high, creating a huge bearish pin-candle. Today could easily mark the end (finally) of the triangle, and the expected terminal thrust to the downside is a whopping 3691 pips, based on Elliott’s triangle measuring technique. This would equate to prodigious US Dollar strength (when compared to other major currencies) for most of 2013 . . . not exactly a bullish sign for US equities.
Sid
http://ElliottWavePredictions.com
P.S. A note to all EWP ScreenShots enrollees this week: Due to the markets being closed yesterday, I will be posting this week’s mid-week ScreenShots tomorrow (Thursday).