EUR/USD - I'm still looking for one last rally higher towards 1.2650 or slightly higher before the correction from 1.2040 ends and red wave 5 to down below 1.2040 takes over.
As we have failed to break above the red wave iii top at 1.2590 we have a couple of options here. One is that the red wave iv is developing into a minor triangle and if this is the case we need a couple of squiggles more before we can take of in red wave v. However if we breaks below 1.2465 and more importantly 1.2430 in a impulsive wave we could have seen a fifth failure. Let me be clear here. I'm not calling for the fifth failure as there is no way you can tell in advance that a fifth failure is about to occur. I'm just pointing out the options for now.
USD/JPY - I'm still very very much in doubt was is going on here, but as I have said previously as long as important support at 78.15 protects the downside I will keep my bullish count. But just one tick below 78.15 and my bullish count is out of the door and a decline to below 77.90 and likely even below 77.65 should be expected.
It will take a rally above 78.84 and more importantly above 79.42 to confirm that light green wave iii is under way.
GBP/USD - The correction from 1.5754 ended at 1.5874 just 9 small pips above the correction target I sat on August 28 (see my post here:
http://theelliottwavesufer.blogspot.dk/2012/08/elliott-wave-analysis-of-eurusd-usdjpy_28.html). The reaction from 1.5874 is clearly impulsive in character and we should soon see the next decline towards at least 1.5634 in blue wave iii down.
USD/CAD - It has been some time since I have last spoken about this pair, but we most likely saw an important low on August 20 with the test of 0.9841, which was followed by wave i higher to 0.9948 and then a deep correction down to 0.9842 (almost a 100% retracement of wave i) and I'm now looking for wave iii to take us clearly above 0.9948 towards the 1.0054 - 1.0075 area before a shallow wave iv takes over. But be aware that this wave iii could be much more powerful than I expects and overall we are looking at much higher levels well beyond 1.0657 longer term. So buying a break above 0.9948 with a stop just below 0.9841 offers a very nice risk/rewards opportunity.
EUR/JPY - again failed to break above resistance at 98.82, but it still takes a break below 97.80 to invalidated the bullish count here. So as long as important support at 97.80 holds firm I will be looking for a break above 98.39 and more importantly 98.82 for a rally higher towards 99.59 and maybe even 100.60 in red wave 5.
EUR/NZD - Maroon wave iii did not end at 1.5671 as I said yesterday, but at 1.5706 (just to tiny pips below my 1.5708 target) and now we should be looking for maroon wave iv down to the 1.5545 - 1.5583 area before maroon wave v sets in for a rally towards 1.5764, but remember this is only the first wave three and four in a series of waves three's and four's that we should see over the coming days and ideally takes us up to the 1.5942 - 1.6090 area.
VIX and Dow Jones Industrial Index - Can anyone tell me whats going on here? VIX is up by some 21% while the DJI is down by a mer of 2.5%. Something is clearly wrong here. Which is right?
Looking at the massive divergence that we saw at the 13,330.44 top in the DJI I believe that the VIX is telling us the real story, but we have seen a lot of wired stuff since the March 2009 low and with the Jackson Hole Symposium coming up today most are looking for/ hoping for the announcement of QE3. I do think the the market will be disappointed and the Jackson Hole will be a non event at least that is what the charts tells me, but what do I know....
Gold - Continues to back off from the 1,676.79 high and I expect the top of the correction that began at 1,526.80 to be in place and the next decline towards strong support near 1,521.00 to be under way.
Jackson Hole non event outcome. However if you go that way you know where your stop should be, but nobody will trade up to an event like Jackson Hole without a stop no matter what way their believes go...
Crude Oil - An almost perfect 61.8% retracement of wave 1 at 97.82 and now a break below the wedge support, a formation which normally has about 2/3 validity of playing out. It's clearly time to quit any longs and shift your focus to the downside for a break below 92.60 on the way below 77.29 longer term. Selling Crude Oil here with a stop just above the top at 98.30 will leave you with a 3.55% risk against a reward of 18.6% if we see 77.29 a risk/reward ratio of over 5. You just don't get it much better than that. But if you expect Benanke to announce QE3 today, that is of cause not the way you want to trade. I'm just going with what the charts is telling me....
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