EURUSD--Thursday Evening, March 26, 2009
Exponentially multiplying European rabbits target 1.39.
Eventually.
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March 26, 2009
S&P 500-Thursday Afternoon, March 26, 2009
Update on this post from the start of the present rally on March 10. So far nothing has happened to change the pattern shown in the charts from that post.
Here is an updated chart with the same Fibonacci pattern projected onto it.
- An alpha-betabase projecting downward. Alpha low last October 28th. Beta high on November 4th.
- This would project an initial downward delta 1.618 extension around 745. A low at 741 was hit on November 21st and the market then rallied.
- The rally ran out of steam at the 0.328 level of the original base pattern on January 6th. The high on that day was 943.9. (The 0.382 level was projected at 945.6)
- First support came at the intermediate 1.272 level (around 801.2). There was a low around 804 on January 20th and a subsequent weak rally up toward the 0.786 internal Fibonacci level.
- This rally failed, after 2 attempts to break through the 0.786 level, and on February 23rd the market flirted with the 1.618 delta level touched in November. There was a brief bounce at that level but by the end of the month the market was in full bear mode again.
- With an excess of negative sentiment (the question no longer seeming to be if Western Civilization was going to come to an end, but exactly on what day it was to occur) the market found a kind of wobbly support at the 2.058 intermediate Fibonacci level.
- The current rally began there. It broke swiftly through the next upward level at 1.618, found a little resistance at the 1.272 level at the end of last week, and presently is headed back to the original alpha level of the base which began this pattern.
If it breaks through that level convincingly, it might be that this pattern will no longer have any predictive value (as far as finding levels of support and resistance--for which it has served since last October / November very well).
But if the rally begins to lose energy as it approaches that level, we could see ourselves making our way to the original delta 2.618 target. That is to say a significant bottom around 582.
March 25, 2009
EURUSD--Wednesday Morning, March 25, 2009
The corrective movement in EURUSD since impulsive top last Thursday (March 19).
- A--3 waves down with a low 200 pips below the high. The third wave--(c) of A--ends 1.618 times the (a) wave. This occurs near the end of the London morning session on Friday, March 20.
- B--A 3 wave irregular countermove. (It exhibits a sort of deformed impulsive character. If the (a) of B is seen as an alpha wave and the (b) of B as a beta wave, then the base they form--a very irregular base--presents a delta 1.618 extension right around the level where the (c) of B ends.
- C--The final move is extended in time, taking a little more time than the first 2 waves added together. The (a) of C ends 1.272 times below the complete A 3 wave pattern. The (b) of C is approximately the length of the entire A wave pattern and runs out of steam about 61.8% into the initial A wave area. The (c) of C ends 1.618 times below the complete A 3 wave pattern.
March 23, 2009
EURUSD--Monday, March 23, 2009
Looking for patterns in the rally in EURUSD. . .
It began, it seems, with a 3 wave pattern, which could be seen as corrective.
Shown in more detail on a 2 hour chart from Friday, March 13.
- (A) Beginning with the low at 1.2454 at the Asian open on Tuesday, March 3, the first A wave was itself a 3 wave pattern which completed during the New York morning on Friday, March 6.
- (B) Another 3 wave pattern (down) ended a counter move during the New York morning the following Monday, March 9.
- (C)The next C wave up began to show more of an impulsive character than the first A wave. It began in earnest in the Asian and European sessions on Tuesday, March 10. And in fact it preceded and was a precursor of the US equity rally which began that day. The first interior wave of the C wave, or (a) of C, actually ended right before the US equity opening, and there was a sharp downward (b) of C which gave up most of the overnight gains. The following (c) of C was extended in time and also exhibted a mildly impulsive character. The (c) of C wave ending on Friday, March 13, was not followed by any significant downmove. Indeed, it could be said that during this C wave sentiment shifted, as the idea that this EURUSD rally might be more than simply a corrective move in an ongoing downturn began to be more and more entertained.
The C wave reached a level approximately 1.618 times above the A wave.
It also had an alpha-beta base, followed by a 3 step move to approximately the 2.618 extended delta target.
With the change in sentiment which had begun during its later stages, the 3 wave pattern noted above was followed by 2 impulsive patterns as the rally took on life.
The first began on Monday, March 16, when in the New York morning the 1.30 level was broken. This was the alpha wave. Over the next 24 hours the market drifted down in a gentle 3 wave pattern, reaching a low on Tuesday morning. This was the beta wave. From this base came the explosive pattern played out the next day with the Fed announcement. The pattern topped out that evening at the 4.236 delta extension level.
After a slight pullback, another smaller impulsive pattern played out, this time reaching the 6.854 (phi to the 4th power) Fibonacci extension. This pattern can best be seen on a 15 minute chart.
The 2 impulsive patterns put together creat a classic 5 wave Elliott pattern.
A 0.486 retracement (or approximately 50%) of this 5 wave pattern would take us to 1.3298. Or roughly 1.33. It is interesting to compare this level to the chart of the first larger impulsive pattern. In the strong move up on the Wednesday afternoon of the Fed annoucement the market drove right through the 2.618 delta extension target, completing itself at the 4.236 level. Often when this happens I have found that subsequent corrective moves gravitate to that level which was, in a sense, ignored on the way up. This 2.618 level would be more or less the same as a 50% correction of the entire 5 wave pattern (0.486). Thus it would not be surprising if we saw a corrective move in the EURUSD to the 1.33 level, or a little below.
March 16, 2009
S&P 500--Monday Afternoon, March 16, 2009
Going back to this post uploaded just before the rally started last Tuesday... We saw support around the 2.058 fibonacci level and an inside day on Monday following a severely negative (from a sentiment and price level) Friday.
Still expect an eventual resumption of the downtrend, with a low around 580. Will resistance come in around 801?
Looking at it on an hourly chart.
Possibility of market gravitating around the 1.618 (745) level, the low in January and late February, right before the last thrust down.
GBPUSD--Monday, March 16, 2009
One quick hourly chart, showing an impulsive pattern from a base formed on Thursday. Notice how the 1.618 level was resistance on Friday and support today. If pattern holds, next target would be 1.4280.
EURUSD--Monday, March 16, 2009
Some quick charts to try to get some perspective.
First a weekly chart showing an impulsive downward move from a base built last September. An alpha-beta base between 1.38978 and 1.4865 projected a delta 2.618 target of 1.2282. In the last week of October the eurusd bottomed around 1.2328.
This can be seen as one completed pattern going back to the summer 2008 high above 1.60.
Following this was a 3 wave corrective move upwards, with the last wave very extended, ending in December. This was greatly influenced by traders trying to push eurgbp up towards parity under thin year end conditions. When that eurgbp run failed, the eurusd rally did as well.
There then followed another impulsive move down from an alpha-beta base built in early January between 1.3310 and 1.3798. This projected a delta 2.618 low around 1.2520. The low on February 18th was 1.2512.
Which brings us to the question, what has been happening since that February 18th low?
One possibility is a three wave correction, with a slightly irregular Y (or B) wave.
If Z had equaled X, the current rally would have faded out around 1.2930. That obviously did not happen. Instead it has (so far today) topped out at approximately 1.272 times the distance of the original X wave (around 1.3060).
Yet it is unlikely that the rally in eurusd will come to an end as long as the current equity rally continues. Both are risk acceptance trades. So if this pattern is at all valid, it would not be out of the question to propose a target for this current rally around 1.3225. This would make the Z wave 1.618 times the size of the X wave.
March 15, 2009
USDJPY--Sunday, March 15, 2009
A few charts, all leaning toward the general point of view that we have been in a broadly sideways corrective move in USDJPY since February 27, even with the higher high on March 5th (which should be seen as an irregular Y or B wave). The low last Thursday, March 12th, was almost exactly 1.618 times lower than the first wave down ( less than 10 pips off).
And the low at the 1.618 level on Thursday was very spikey, bringing in immediate and very vigorous buying.
March 12, 2009
GBPUSD--Thursday, March 12, 2009
In a mirror image (yet on shorter time span) of the USDJPY chart posted this morning, have we seen the end of an irregular upward mid-course correction in an ongoing GBPUSD down move?
Is this pattern still operative? Target below 1.32?
USDJPY--Thursday, March 12, 2009
The would posit an intermediate impulsive high at the 98.71 top on February 26, with the subsequent higher high at 99.67 the end of the second (irregular) wave of the corrective move ongoing since that time. Using this pattern a third wave could be projected to end at 95.71, 1.618 times the distance of the first wave. Low today was 95,65, six pips from that projection. Bounce is rumored to have begun with nice bids from a Swiss bank. Move upwards from this point of inflection has been steady since that time.
March 10, 2009
S&P 500--Tuesday Morning, March 10, 2009
Could the bear market rally long awaited and frequently despaired of be about to begin? Even Marc Faber is calling for it now. THe downturn--despite all the negative chatter--paused around a fibonacci level yesterday (2.058--or aprroximately 674). And for those who care about such things, it was an inside day.
Even if we do get the rally, this pattern, if valid, would project a completion at a lower level (2.618), which would correspond to roughly 580 on S&P.
March 9, 2009
GBPUSD--Monday, March 9, 2009
After a little trial and error ( or less politely, flailing around), I have (perhaps) found an impulsive pattern for the current downturn in cable.
Looking at the low on February 18th at 1.4092 and the subsequent high on February 23rd as the alpha-beta base, that would posit a 1.618 delta target at 1.3741. We have had a bounce off that level this morning.
A 4 hour chart:
Seen in closer detail on a 1 hour chart:
This rally off the 1.618 target should probably be seen as an opportunity to add shorts. If the pattern is valid, it would project a new low significantly beneath the January low (1.35).
The delta 2.618 target: 1.3173.
March 4, 2009
One Way Present Situation Is Not Like 1929
And that is simply that when you look at indices broader than the Dow Jones 30--that is to say, when you look closer to reality--stocks have been in a bear market since 2000. The high in November 2007 can be seen as the end of a bear market rally--a "B" wave in Elliott Wave parlance. This is not particularly bullish or bearish for current situation. But still . . . a difference is a difference.
Meanwhile this week we have broken a long term trend line constructed from the 1982 and 1990 lows in the S&P 500.
USDJPY--Wednesday, March 4, 2009
Same pattern followed last week in USDJPY remains valid (see here, here, here, here and here). Former fibonacci 2.618 target at approximately 96.80, once passed, became impressive support following the pullback from last Thursday's high. That high came at the minor fibonacci level (3.33) between major targets at 2.618 and 4.236.
This morning we have gone decisively through last Thursday's high. Next stop 101.20?
March 2, 2009
USDJPY--Monday, March 2, 2009
Support at former upside 2.618 target holds for now.
4.236 target, presuming resumption of uptrend, remains around 101.20 yen:
March 1, 2009
EURUSD--Sunday Evening, March 1, 2009 (2)
Interesting short term support so far turning up on a fibonacci basis, making a three wave pattern down since the high last Monday near 1.30.
Look at it two ways:
(1) After a much lower open this evening, a bounce at approximately 1.272 level below the original wave down.
(2) If that bounce holds, the two down waves will be approximately equal.
EURUSD--Sunday Evening, March 1, 2009
First, the short term pattern I explored last week first here and then here was obviously wrong. A dud. No go.
That brings us back to the last valid longer term pattern which posited a low at the 2.618 delta extension around 1.2520. Actual low was a less than 10 pips below that.
Subsequent action saw a three wave pattern that came up near the 1.618 level, that is, a little less than a 38.2% retracement of the impulsive move off the base pattern.
Just now the eurusd has opened sharply down.(Currently around 1.2615.)
Which leads to speculation on an extension of the previous down pattern. The next target would be the 4.236 extension in a new impulsive move down. That would bring the pair to just above 1.17.
A possibility which bears watching.