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Aug 122015
 

The video clip below contains highlights from my Weekly “Counts” webinar from three days ago (August 9, 2015).  Included are portions of my analysis of the Dow Jones Industrial average, GDX, and the US Dollar Index.  ALL of the calls in this video were contrarian against the so-called “consensus trades”, like long dollar, and short gold and the miners.  Maybe that’s why they worked so well.  (-:

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 provides updated 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://elliottwavepre.wpengine.com

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 Norris
http://elliottwavepre.wpengine.com

Elliott Wave Analysis of Caterpillar Inc. (CAT) by Sid from ElliottWavePredictions.com

 Copper, Dow Jones Industrial Average, Individual Stocks, US Dollar Index  Comments Off on Elliott Wave Analysis of Caterpillar Inc. (CAT) by Sid from ElliottWavePredictions.com
Mar 282015
 

Elliott Wave Analysis of Caterpillar Inc. (CAT) by Sid from ElliottWavePredictions.com.  Click on the charts twice to enlarge.

This continues my series on individual Dow 30 components.

CAT monthly 3-27-15

In my main count of the Dow Jones Industrial Average, 1978 marked the end of a cycle (teal) degree wave 4, but in CAT, the sideways movement from the 1970’s continued all the way through to 1984.  From that 1984 low, (shown on the monthly chart above), its easy to see 5 waves up into 2007.  I’ve labeled that rise from 1984-2007 in Caterpillar as cycle (teal) wave 5, and therefore the end of supercycle (olive) wave 3.

CAT weekly 3-27-15

Then, as shown on the weekly chart above, CAT carved out an expanded flat from July 2007 through March 2009.  I’ve labeled the March 2009 low as Cycle (teal) degree wave A.  That labeling was supported by the fact that the following rise into May 2011 stopped going up at just slightly beyond a 1.382 relationship with wave A (teal), a very common relationship between wave B and wave A within an expanded flat.  And until there eventually was a slight new high in February 2012, it appeared very likely that cycle (teal) wave B had ended in May 2011.  That slight new high in 2012 was a big deal though, because it indicated that cycle (teal) wave B was still underway.  Also, because the pattern from the 2009 low into the 2012 all-time high does not constitute a completed Elliott Wave pattern, it appears likely that cycle (teal) wave B remains incomplete to this day.

The slight new high in Feb 2012 also indicated that while the drop from May 2011 through October 2011 appeared at first to form as a 5-wave impulse, that simply cannot be the case.  So I’ve labeled the drop May through October 2011 drop as an intermediate (black) wave A in the form of an blue ABC zigzag.  (It also could have been labeled as blue WXYXZ.)  That was followed by over 3 years of complex sideways movement that I’ve labeled an intermediate (black) wave B triangle, ending in November 2014.  The strong downward movement in CAT since November 2014 appears to be a terminal thrust from that triangle.  That downward movement should finish as a 5-wave impulse, and appears to be incomplete, although downward momentum is currently waning.

CAT daily 3-28-15

As shown on the daily chart above, downward movement from the November 21, 2014 high is interesting because it may have a wave 3 (blue) inside of it that is shorter than blue wave 1 was.  Wave 3 of a five-wave impulse cannot be the shortest of waves 1, 3, and 5, so this may be indicating that wave 5 must be shorter that wave 3 was.  If my blue wave 3 label is placed correctly, blue wave 5 cannot end below 69.69.  Also, notice the possible bullish divergence already showing on the daily MACD.  Downward momentum has definitely been slowing since late January.

So why would Caterpillar stock bottom soon, and rally to new all-time highs over the next few quarters?  Compare the correlation between CAT stock and the price of copper in recent years by comparing the weekly copper chart (below) with the weekly CAT chart shown earlier in this post:

Copper weekly 3-28-15

Both CAT and Copper carved out expanded flats into their late 2008/early 2009 lows, and then rallied to large (primary-degree) tops in the first half of 2011.  Subsequent downward movement in both has been corrective.  It also appears that copper put in an important 18-month Hurst cycle low in late January.  Also note that the rise from late 2008 in copper through early 2011 was in 5-waves.  5-wave upward impulses during that exact period also appeared in several other highly correlated items, including AUD/USD, Hang Seng, Kospi, and Platinum.  That 5-waves up was followed in all those items by a multi-year partial retracement, dropping into very recent 18-month cycle troughs in all, suggesting that many commodities and commodity related items (like CAT stock) may very well be set for a push back into all-time highs over the next several quarters.

If that is to occur, “king dollar” may very well be finished going up, and inflation may be in the every early stages of rearing its head, as the following long-term Elliott Wave interpretation of the US Dollar Index (DX) suggests.  Especially significant (and outlined in red on the chart) is the 3-waves down from the 2001 high into the 2008 low.  Generational trends don’t end with 3-wave moves into a major low, unless it is the 5th wave of an ending diagonal.  If a down-slanting contracting ending diagonal started at the 1985 all-time high in the US Dollar Index, the 2008 low can only have been the end of wave 3 within that diagonal.  Wave 5 to the downside may have started last week.

US$ DX monthly 3-28-15

What does all of this suggest for the US stocks market moving forward?  How about Gold and Silver?  The German DAX?  Oil?  Currencies?  Bonds??  What can or will the FED do about all of this?

Please join me for my weekly “Counts” webinar, where I go over all of my multi-time frame, main and alternate Elliot Wave counts and associated Fibonacci price targets for many of the world’s major stock markets, commodities, currencies, and bonds.  Hurst cycle analysis is considered on almost all items.  A recording of the webinar is automatically made available to all subscribers immediately afterwards, whether in attendance “live” or not.  Also, all “Counts” webinar subscribers receive my EWP Screenshots (muti-timeframe screenshots of SPX, DAX, Gold, Oil, Bonds (TLT), the US$ (DX) and the EUR/USD currency pair) on Sundays, and again on Wednesdays that week.

Sid
http://elliottwavepre.wpengine.com
http://ElevenquarterStocks.com

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