Vacation time

I will be Austria on vacation for the next two weeks.

I will not be able to update from there, so take care and trade safely

I will talk to you again in early July

Elliott wave analysis of EUR/USD; USD/JPY; NZD/USD; EUR/NZD; Gold and Natural Gas

 EUR/USD - The the shown count is correct, then EUR/USD should go no higher and soon begin the next powerful decline to below 1.2441 and 1.2286 for a decline towards 1.1991.
A break above 1.2671 will delay the downside for a move closer to the 1.2788 - 1.2824 area before down.
Therefore selling EUR here at 1.2613 with a 1.2675 stop should be a low risk opportunity.

 USD/JPY - Was never able to break above resistance at 79.78, but below support at 79.48, which told us than one more low was needed in a triple correction from 79.78.
The final correction from 79.74 has been slightly bigger than expected, but support near 78.27 should protect the downside for a new powerful rally in wave iii.
The first indication, that wave ii is done and wave iii has taken over will be a break above 79.03, but more importantly is a break above 79.50.

NZD/USD - Here too the correction has extended and by break above 0.7780 the next potential target is 0.7887, where wave 4 will have corrected 50% of wave 3. The extension of wave 4 also means, that wave 5 probably will decline beyond 0.7390 towards 0.7252. But for now we should concentrate on the most likely ending point for wave 4, which is near 0.7887.
At no time can a break above 0.8056 be accepted, as that will leave us with an overlap between wave 4 and 1, which is not allowed under the EWP. 

 EUR/NZD - I have shown a couple of possible count over the last two days, but with the break below Wednesdays low at 1.6033 yesterdays count is invalidated at we are left with the count calling for a decline towards 1.5920 before the first impulsive wave down from 1.6969 will finish.

 Gold - Has reached the ideal target-area for wave ii and should soon begin to decline, but as long as support at 1,609.60 stays firm we could see the last minor rally towards 1,628.80 before down hard in wave iii towards very important support at 1,521.
At no point can a break above 1,640.50 be accepted under this count.

Natural Gas - With a low at 2.16 just a tick above support at 2.15 we have seen a very impressive rally, which is just what we would expect under the preferred wave count. We should soon see resistance at 2.70 broken for a continuation higher towards 3.54 and possibly even 4.40.

Elliott wave analysis of 10Y Spanish yields; EUR/USD; AUD/USD and EUR/NZD

 10Y Spanish yield - The most important development since yesterday is the break above resistance at 6.73 in the 10Y Spanish yield. This break spells trouble for Spain, not that they are not in big trouble already, but the troubles is going to intensify in the coming weeks/months.
The break above 6.73 should raise the risk aversion in the financial markets over summer too.

Technical the break above resistance at 6.73 sets focus at 8.12 as the next target.

 EUR/USD - Blue wave ii should be over at 1.2610 and I will be looking for a break below 1.2513 as first solid indication, that blue wave iii has indeed begun for a decline towards 1.1991.

 AUD/USD - Here too we should be ready to continue the underlying downtrend. A break below minor support at 0.9925 will be first indication that red wave v is under way, while a break below more important support at 0.9817 will confirm that red wave iv is done at 1.0008 and a decline to 0.9449 is ongoing.

EUR/NZD - The rally to 1.6253 has clouded to short term picture and shifted focus towards an alternate count that sees wave 1 as finished at 1.6033. If this count is the right on we should now see wave 2 towards the 1.6421 - 1.6544 area. It is possible that wave 2 will extend a little beyond this area, but the important thing to remember here is, that it will only be a correction and that a new impulsive decline should be seen when this correction is done with.

Gold facing resistance will it hold?

Gold - As blue wave ii has extended it's appropriate to look at the short term picture for the potential upside.

I still view the decline from 1,640.50 down to 1,561.44 as the first minor wave in an impulsive decline that will ultimately take out important support at 1,521.
Blue wave ii that began at 1,562.44 should end in the area between 1,626.05 - 1,629.10 from where we should see blue wave iii down. At no circumstance can a break above 1,640.50 be allowed under this count.

Looking closer at blue wave ii it will have retraced 81.6% of blue wave i at 1,626.05 and at 1,629.10 wave c will equal wave a in length. Finally at 1,628.95 green wave v of blue C will be 0.618 times the length from the beginning of green wave i at 1,561.44 to the top of green wave 3 at 1,617.40. So we will have a cluster of resistance in the area from 1,626.05 - 1,629.10.

A break below 1,607.27 will confirm that blue wave ii is done for a decline in blue wave iii down to important support at 1,521 and likely lower

Is NZD/USD ready for a decline to 0.7390?

NZD/USD - Just a short follow-up to my post from yesterday (see it here:  http://theelliottwavesufer.blogspot.dk/2012/06/nzdusd-ready-for-decline-to-07390.html)
As I said yesterday the ideal resistance was at 0.7780, which we have now surpassed as the high have been 0.7807, which do open for a possibility of a continuation higher towards 0.7840, but any further upside from here will be hard won. The risk is more towards the downside, than the upside from here.

Short term a break below support at 0.7721 will be the first indication that the top is in place, while a break below 0.7667 is needed to confirm the top for a decline towards the ideal wave 5 target at 0.7390, which should end wave A down.

TLT at support. Are we ready to make new highs?

TLT (Barclay's 20+ Treasury bond fund - Has since the bottom at 87.30 in April 2010 been in a impulsive five wave rally. We are now in the final parts of this rally, but the rally is not quite done yet. Looking at the rally from 87.30 we find some interesting relationships between the waves:

Wave 3 became 1.618 times longer than wave 1 at 123.84 (the high was set at 123.87 just 3 small pips above)

Wave 2 wave a deep (correcting 95% of wave 1), but simple zig-zag correction, while wave 4 was a shallow (correcting 38.2% of wave 3) flat correction, alternating as expected due to the EWP.

What can we expect of wave 5? The normal targets for wave 5 will be either the 38.2% or the 61.8% measured length of the beginning of wave 1 to the end of wave 3, which will give us a target at 123.87 or 132.42. As we have broken clearly above 123.87, we should be looking for wave 5 at 132.42.
Could wave 5 extend beyond 132.42? Yes, but it will be a difficult ride higher. However if resistance at 132.42 is broken the extension target for wave 5 will be at 146.28, where wave 5 will be equal to the length of the beginning of wave 1 to the end of wave 3.

Looking at wave 5 internal waves we can count four waves. looking at there internal relations wave ii corrected just shy of 81.6% of wave i. Wave iii became an extended wave, by becoming almost 4.236 times longer than wave i and the ongoing wave iv will ideally correct 38.2% of wave iii down to 122.83, but strong support will be found in the 123.18 - 124.44 area, so you should not be surprised if wave iv only is able to correct to the 124.44 level from where we should shift focus towards the 132.42 target. 

Elliott wave analysis of EUR/USD; USD/JPY; EUR/NZD and 10Y Spanish yields

EUR/USD - I do believe it will be appropriate to change my short term count slightly. The decline from 1.2672 down to 1.2441 only marked minor blue wave i and we should now see minor blue wave ii up towards the 1.2555 - 1.2583 area before minor blue wave iii down to 1.2207 sets in.

 USD/JPY - I'm not especially convinced that the correction from 79.78 is over yet, but if it is we need a break above 79.78 soon to confirm the next move higher towards 81.25. However failure to hold support at 79.48 will tell us, that the correction is still ongoing and that we should see one final decline to ideally just below 79.09 before wave ii is done.

 EUR/NZD - The price-action has not been consistent with wave v already being over at 1.6244. A more likely scenario is, that wave v it self is an extended wave, which will most likely be equal to the distance traveled from the beginning of wave i to the end of wave iii, which will give us an ideal target near 1.5924. The decline will be choppy as we shall see a series of waves three's and four's down to 1.5924. From 1.5924 I will be looking for a correction in wave 2 towards 1.6544 - 1.6569.

The spread between 10Y Spanish bonds ag. 10Y German Bunds - The most important development o/n might be, that the 10Y Spanish bond yield now is testing resistance at 6.73. If this resistance is broken the next target will be near 8.12. A yield above 6% makes the Spanish debt unsustainable and the latest USD 100 bn. bailout of the Spanish banks just makes it even harder on the Spanish Government and Spain can look forward to even more austerities measures.

NZD/USD ready for a decline to 0.7390

NZD/USD - It has been some time since I last visited this cross (see my post from May 17 here: http://theelliottwavesufer.blogspot.dk/2012/05/elliott-wave-and-technical-analysis-on_17.html)

In my last post i said that we had encounter support in the 0.7619 - 0.7652 area, however minor wave iii actually went down to 0.7515 before finding support. Looking at the internal relationships between wave i and wave iii. we can see that wave iii became a little longer than 3.0 times longer than wave i (it's not shown on the chart. However the calculation is as follows: Wave i went down from 0.8318 to 0.8084 =  - 2.34 multiplied with 3 wave iii should travel a distance of -7.02 from the top of wave ii, which was 0.8234 - 0.0702 = 0.7532).
Wave iii was followed by a very shallow retracement of less that 23.6% of wave iii to 0.7675 from where the final minor wave v went down to 0.7453. The decline to 0.7453 was just 26 pips below the point where wave 3 would have been 2 * wave 1 (0.7479). Wave 3 was followed by a correction in wave 4, that have taken us up to 0.7780, which is just 3 small pips below the 38.2% retracement of wave 3 and I now believe will are in the final decline down to 0.7390 in wave 5. At 0.7390 wave 5 will have traveled 38.2% of the distance from the top of wave 1 at 0.8470 to the bottom of wave 3 at 74.53. This will most likely mark the end of wave A down from 0.8470 to 0.7390 and setting the stage for wave B, but time will tell

Elliott wave analysis of EUR/USD; USD/JPY; GBP/USD; EUR/JPY; EUR/NZD; DJI; Gold and Natural Gas

 EUR/USD - I'm looking for a break below 1.2434 to confirm that blue wave 4 ended at 1.2671 and blue 5 down to 1.1991 is under way.

 USD/JPY - Wave ii seems to have ended with a shallow correction from 79.78 down to 79.13 (just a bit more than a 23.6% retracement of the rally from 77.65 to 79.78). As long as resistance at 79.78 isn't broken we could see one last flat correction, which could take us down to 78.97, but a break above 79.78 will argue, that the correction from 79.78 is over and wave iii towards at least 81.27 have begun.

 GBP/USD - Here I'm looking for a break below support at 1.5401 to confirm that the next decline towards 1.5182 is under way. The first part of the down-thrust from the large B-wave triangle is expected to end near 1.5182.

 EUR/JPY - We should soon get confirmation, that wave 5 down to 94.58 is under way. A break below support at 98.53 will confirm that wave 5 down has begun.
Short term we could see a minor rise to the 100.36 - 100.57 area before down.

 EUR/NZD - I still look for an expanded flat correction from 1.6244. Wave b of this expanded flat should not go much lower than 1.6137, which is where wave b will be 1.618 time wave a. When wave b is done we should see wave c take us up towards the 1.6533 - 1.6544 area to end wave 2.

 Dow Jones Industrial Index - The break above 12,611 forced me to adopted an the alternate count. However there once again seems to be two valid counts for the ongoing price-action. They are shown above. The first is that we saw wave c of 2 end yesterday at 12,650 and would be ready to continue the decline from 13,308 towards 10.979 as the next target.
The second alternative is that we have only seen wave a of wave 2 and wave b is ongoing. Wave b should ideally end in the 12,267 - 12,340 area, from where we should see the next rally towards 12,840 before the next decline sets in.
No matte which scenario is the correct one, the final outcome will be the same a new powerful decline. So don't get complacent.

 Gold - My preferred count shows that we have begun wave iii down from 1,607.95. The first minor wave became an expanded leading diagonal. A break below 1,582.49 will confirm that wave iii down have indeed begun for a test of important support at 1,521 and a break below here will be really bad news for the bulls.

Natural Gas - Should be very close to the end of wave 2. However we will need a break above 2.32 to confirm that wave 2 has indeed ended and wave 3 towards at least 3.60 is under way.
Until we sees the break above 2.32 we could see wave 2 testing a little lower towards 2.15 and maybe even 2.10 before up.

Elliott wave analysis of EUR/USD; USD/JPY; AUD/USD; EUR/JPY and EUR/NZD

 EUR/USD - Blue wave 4 needed on last rally to 1.2671, ideally we should now see a break below support at 1.2434 to confirm that wave 4 is done and blue wave 5 down towards 1.1994 is under way.

 USD/JPY - There is a possibility, that minor wave ii is already done a wave iii towards at least 81.23 is under way. A break above resistance at 79.78 will be the first indication that wave iii is under way.

 AUD/USD - Is have been asked how I find the extension target of wave iii at 0.9449. What I do is calculate the length of wave i from 1.0856 to 1.0221 = 6.35 I then multiply 6.35 by 1.618, which gives me a sum of 10.27, which I then subtract from the high of wave ii at 1.0474, which gives me a target of 0.9447 to be precis. Normally I just let my charting system do it for me and the can be a minor difference between the to outcomes, but this is not an exact science, so use the calculation as a possible target. There is also the possibility, that wave iii extends more than 1.618 times wave i as it could extend to 2 times wave i or even further to 2.618; 3.0; 3.618 or 4.236 times wave i. There is no way telling which extension target is the correct one.

We most likely have seen red wave iv end at 1.0008 and should expect a break below 0.9817 as first indication, that red wave v down to 0.9449 have begun.

 EUR/JPY - Wave 4 down most likely ended at 100.88 and we should soon see a break below 98.55 as first indication, that wave 5 down towards the ideal target at 94.58 is under way.

EUR/NZD - We have seen a break below 1.6259 telling us that we are in a expanded flat correction. Ideally we will see wave b end near 1.6225 for a rally in wave c towards the ideal target-area between 1.6533 - 1.6544, from where the next impulsive decline can begin.

Elliott wave analysis of AUD/USD and EUR/NZD

 AUD/USD - I'm still looking for wave iii down to the ideal target at 0.9449. The short term price-action from 0.9732 became more muddy, than first expected, but red wave iv seems to have been an expanded flat correction, which ended at 1.0002 and we should now see red wave v down as an impulsive decline to the 0.9449 target. In the bigger picture that would only end wave iii down from 1.0856.

EUR/NZD - Wave v of 1 most likely ended at 1.6259, but the first part of the correction became an expanding flat correction, which took us down into the ideal target-area between 1.6235 - 1.6250 (the low was 1.6244). If wave a of the correction was an expanded flat I would expect wave b to decline close to the starting point of wave a at 1.6259, before wave c takes us up towards the ideal target-area between 1.6519 - 1.6544.

Elliott wave analysis of EUR/USD; USD/JPY; GBP/USD; EUR/JPY; DJI; SSEC; Gold and Natural Gas

 EUR/USD - Even though I was looking after some kind of flat correction towards 1.2624 I must accept that it looks more like a simple zig-zag correction from 1.2286. The correction from 1.2286 still can turn into a flat correction, but I do think it is wiser to tread the correction from 1.2286 as finished at 1.2625 and that the next impulsive wave down is under way. This impulsive wave should blue wave v down, which will end the blue sequence, but at the same time it will only mark the end to red wave 3 down. The first target for blue wave v is in the 1.2206 - 1.2231 area.

 USD/JPY - I have change the short term count slightly from yesterday so wave i ends at 79.78 and not 79.48. However I will still be looking for a correction down to ideally the 78.43 - 78.73 area as minor wave ii, but remember that the correction could be deeper than that.

 GBP/USD - Here too I expect red wave iv to have ended at 1.5600 and we should now see wave v down towards 1.5182 as the ideal target. That said remember that we are in wave [C] down after a thrust out of the [B] wave triangle and corrections tend to be shallow both the length and time.

 EUR/JPY - Wave 4 has been a sharp Zig-zag correction alternating from the expanded flat correction as wave 2. I'm now looking for the last impulsive wave down in the decline from 111.43 towards 94.58 as the ideal target.

 Dow Jones Industrial Index (Preferred count) - As resistance at 12.611 protects the upside, this count will stay my preferred count. I will now be looking for a powerful decline taking out support at 12,035 for a continuation down towards 10,989 in wave 3 of C. Remember what I'm looking for is a five wave decline in wave C of an expanded flat correction, which began all way back in early May 2011.

 Dow Jones Industrial Index (Alternate count) - If we break back above 12,611, this count becomes the preferred count. After the top at 12,555 yesterday I will be looking for a decline towards 12,250 - 12,300 here followed by a new rally, that will take out resistance at 12,611 for a move closer to the 12,840 area.

 Shanghai Composite - Has begun the next part of the impulsive decline that began at 2,453. This decline should at least take us down to 2,191, but I expect this decline to be more violent and take us further down towards the 2,065 area.

 Gold - Stopped more or less right on the spot and the following decline has been quite violent and will concern the bulls. However capitulation of the bulls will not happen before we break below 1,521. A break below 1,521 will call for a much deeper decline towards the 864 - 1,005 area, with 864 being the ideal target.
For the bulls to regain control, they need support in the 1,544 - 1,551 area to protect the downside for a new challenge of resistance in the 1,640 - 1,677 area. Any break below 1,531 will destroy the possible bullish count of 1,527.

Natural Gas - Resistance at 2.50 protected the upside for one last decline into the expected target-area. That raises the odd for a rebound, but we need to take out 2.50 to confirm that the correction is over and the next impulsive rally towards 4.33 have begun.