Mercury

I assume you were addressing the question to me @davidbrister, if you want a quicker response you should tag the person you are addressing, I look at the Forum infrequently as I am not a day trader. In term of a pull back, I see 3 possible areas if resistance (3 red lines) with a retest of my weekly channel line the most likely but price action will reveal this in due course. If Oil takes a bearish move temporarily then CAD might take a similarly bearish hit (i.e. USDCAD rallies) or alternatively USD rallies a bit before plunging. A break below the recent low, with USD going Bearish (see DX) would be the alternative Short signal for me, regardless of Oil movements. The main reason FX pairs are moving at present is that the USD is weakening (check my DX thread). This is a cyclical factor, regardless of news (which I don't follow, all to easy to say why something has happened but post hoc rationalisation is often wrong - Post Hoc, Ergo Propter Hoc!). I prefer to focus on price action and eliminate other noise, this is simply my methodology, news following seems to work for others - ya pays yer money the takes yer choice... Markets move in waves - fact; USD has been on a rally for some time and is simply due a counter trend move. This is about sentiment. If you look at the COT data you will see that a number of the key FX pairs were heavily bullish USD around about where the turn happened (EURUSD neg 112k and USDJPY neg 101k in particular). It is often the case that when the speculators (non commercials in COT terminology) are too extended one way or another the market turns.

Another leg up then and two 1 hour chart retests of my Weekly Triangle resistance line (see weekly chart). On the 1 hour chart I have a valid EWT count up to the second retest, which is being sharply rejected in this hour. A ST lower low would be nice and a break of the Daily channel line conclusive. There is good NMD on both the hourly and daily with Stochastic and RSI both over bought and breaking below. Are we about to see that EURGBP swing I have been tracking?

So the Dow did rally as I thought (see previous post) but it was not yet the end of the bearish move I was looking for as there was to be another leg down, as we now know, that ended with a small Gap last Sunday, which precipitated a sharp rally off the Fib 38% support zone (off the ATH). The rally was strong last week but what next? Markets move in waves so perhaps we can anticipate a retrace bearish move? But what about the medium term beyond that? Well for me it is shrouded in too many scenarios just now, therefore very uncertain as follows: The Dow could turn immanently and drop hard; Put in an A-B-C retrace, with that immanent turn being the A; Close that Gap above and either turn before the early May top; Or turn just after but still not post a fresh ATH; Or post a fresh ATH to join SP500 and Nasdaq. For me other markets offer stronger clearer set ups so I'm waiting for the fog to clear on stocks but will track all of the above scenarios in the meantime. Interestingly the Dax offers some more clarity, albeit the same outline scenarios as above on the Dow do exist. (see below my Dow chart for more on the Dax) Dax road map may hold insight for the rest of the stock indices If we take a look at the long term Dax Monthly chart a series of 1-5 up and A-B-C down moves are clear since the 80s. The most recent 1-5 bull phase was driven by the Central Banks interventions post the credit crunch, unprecedented QE and ZIRP/NIRP, which the Bulls seem to be anticipating will be restarted as a result of 1 poor US NFP reading (and this is supposed to be a strong economy..??). All the signals point to this bull market having ended in Jan 2018 on the Dax, but in this crazy market one couldn't 100% rule out another higher high, yet. At present though I think we have seen the top on the Dax and are now already in a long term Bear market that is simply retracing just now prior to a major drop. I am projecting a drop in 1-5 form (a motive wave) but even if it is in a large A-B-C, setting up another massive Bull, it will drop a long way. Zooming in a bit on the Monthly I can see a potential Head & Shoulders that may have concluded in May (or could have another leg up). Either way the neckline is coincident with the long term channel line and a break of both of these lines, in an around the Fib 23% is an important moment for the Bear scenarios. Looking at the Weekly chart there is a shorter term H&S possibility and the more recent price action is perhaps more aligned to a wave A-B (pink) that would project to a higher wave 2 (purple) retrace rally end, around about the Fib 76/78% off the Jan 2018 high. However on the Daily chart, and this is where the Dax gets interesting as a signal for other stock indices, the Dax has a strong channel formation, which was broken and is currently being retested. If the wave 2 (purple has already been posted then I would expect the channel line resistance to hold. It may get retested a bit later to complete a short term A-B-C to set up a big drop (scenario 1). If the line is broken though it sets up a new wave 2 (purple) turning point as mentioned above, which would pleasingly also close the current unclosed gap (scenario 2). On the 4 hourly chart you can see the potential wave A (blue) test of the channel line in close up. A possible small rally to the test point at the beginning of this coming week is likely. The form of the rally is 1-5, so an A-B-C Bearish retrace is the most likely next phase. There is NMD and Stochastic/RSI are over bought. I will not trade stocks until things clarify, FX and Oil is much more certain in terms of possible scenarios and trading set ups, but which road map scenario is followed on stocks in the coming weeks is critical to eliminating scenarios down to a few strong candidates. If either scenario 1 or 2 comes to pass we can expect a fair degree of whipsaw action, which is very dangerous to trade (unless you are a day trader and/or scalper, which I am not) so caution is required. At this point I would not be betting on a fresh ATH on the Dax, although we may see one on the US Large Caps while the European and Japanese markets retrace. For me it is important to track several related stock indices to get a better gauge of likely turning point than to just focus on 1. Let's see what the next few weeks bring in terms of clarity, meanwhile I am trading elsewhere.

Consolidating the view of the various USD pair into DX I see a clear confirmation of the Bearish phase I have been tracking. From the initial short term (1 hour chart) channel breakout (1-2 turn with NMD) to the down side the market has fallen is a nice 1-5 wave form to put in a quick 1-2 retrace that almost carried to the Fib 50% in a pin bar spike and drop. Another quick retrace to retest the Weekly chart Channel line with a failure and fast drop through support, now resistance. On the larger time frames you can see the Weekly channel breakout with a close below and NMD. At this point I anticipate a fast move down to complete a wave A and the the A-B-C that will be the mirror of EURUSD. Might get a short term retest of the recent support break (now resistance zone) and if we do that could be a good point to get short/long depending on the pair you are looking to trade.

This pair is confirmed in a Bearish medium term phase for me with a classic narrowing channel breakout and retest offering me a perfect Short signal. Subsequent price action carried on down quite fast breaking a Daily Triangle and now Weekly channel support line. A small 1-2 offered another Short opportunity, which I would have taken had I not be focused elsewhere. I expect this pair to move down in a fairly fast wave C now (watch out for a retrace flag at halfway). I will be holding my existing shorts and not adding but only because I see greater potential profits elsewhere.

Slow progress on this one so far but still heading up. EURGBP is still going up too and until this pair turns we are unlikely to see GBPUSD hammering up but when it does turn then I do expect GBP to go hard in a wave C to about the 13,700-14,000 level. Unlike EURUSD, which should conform to an A-B-C form retrace the A-B looks to be already done on GBP and a wave C is a much stronger move in general. The only thing I might expect to see is a strong Pennant or Flag at halfway, that would most likely coincide with EURUSD wave B. Very similarly to EURUSD I took Longs off the short term channel breakout and failed retest and again on Monday and Thursday last on failed resistance breakout retests. As this market offers more potential than other options I will be focusing my attention here to exploit the possible 1000+ points on offer in anticipated wave C.

Referencing the posts above at the end of May, "the trend is your friend, until the bend in the end". Swing traders (and longer term traders - I am both) seek to identify the wave changes both at the end of major trends and intra trend retraces. In this thread I have been showcasing just such an attempt (being an intra trend swing). It often takes many goes to catch it and requires a methodology that minimises both initial exposure and recognises a reversal fast to keep the cost of these attempts low (even to make some profits). The key is to lose small but ensure you catch the big move and both stay in and pyramid the hell out of it. I had a number of signals that suggested a turn may be once again on and posted on this at the end of May and the beginning of the week just gone. I managed to get Long around 30/31 May and go again last Monday and Thursday (see my hourly chart for specific trade points). My Longs are now all stop protected at break even. The thing I was really waiting for was a confirmed breakout of the Weekly Triangle. This is a trigger for me that the retrace rally I have been tracking for many months now is on. There have been a few fakeouts along the way but this one feels like the real thing (famous last words?). On the Weekly chart you can see a clear break and close above the trend line. The wave 1 (blue) turn occurred on strong PMD and 2 weekly chart pin bar retest failures (3 in total). This was all strongly Bullish to me and my 1 hour chart showed a deep 1-2 retrace to Brown 2 at the Fib 88% and turn with PMD and a rounded bottom form followed by a short term ice line breakout (this is where I took my Longs). On the Daily chart the weekly trend line breakout was followed by a hard retest fail with a long spike through the line and return back to close above. This will have cleared out those with stops too close (training or otherwise) and the resulting pin bar is a very strong bullish signal, coming as it does on that failed retest with a strong rally away. That was Thursday and then Friday added to the Bullish sentiment with another strong bullish candle. Overall I see this as a confirmed breakout and while I cannot rule out another turn and test of the weekly trend line the odds are favourable for a sustained rally (or bearish move on USD to be precise). A retrace tends to move in an A-B-C wave form so I am expecting to see this leading to a wave 2 termination, probably around 12,000 but lets see how price action progresses on that. After this I expect that big drop I reference in the title will be on. It is important to watch the price action on this as a wave B drop could take out lots of training stops, or worse cause losses for those too bullish. Trading a retrace requires a different approach to trend following, it is pure swing trading territory. The long term trend remains Bearish for me and while I am swing trading this retrace I am really focused on getting Short at the appropriate juncture to ride a long term wave down to the conclusion (again see prior posts on this thread for my views on where this could end up.

Pleasingly, Brent is playing ball in terms of my projected road map. This often doesn't happen on cue (well why would it?), being more a case of trial and error until it does trigger. However in this case I am holding Short for the long term and looking to Pyramid so not trying to catch the rally, therefore I don't care so much where and when it happens so long as it does. It is more about tracking the price action to ensure it is conforming to my long term set up, thus gaining confidence to both hold existing Short positions (all now stop protected at Break Even anyway so zero risk), and more crucially to add at the right moment. For me trading (long term trading) is not just about catching a good move but managing the positions in flight until the trend changes or my scenario is no longer valid, based on price action. Thereby I can maximise what I extract in profit from a good trend (crucial for the way I trade). I prefer to actively manage a trend rather that use trailing stops, which can, in my experience, stop you out of a good long term trend too soon (fine if you want to swing but I do not swing a long term motive wave). My long term prognosis for Oil remains that this market is heading South and in a big way. If I am right about this the I want to stay in for the long haul. The trick to doing this is to spot the relief rallies and protect or cash in near positions while holding earlier ones with stops well away from the potential retrace (rally in this case) tops. The anatomy of motive waves (or trends) is quite recognisable in structure and repeats this stricture fairly consistently. It is harder of course to spot the moves as they evolve in flight. So to recap on my road map (see the beginning of this thread for details), I believe the market to be in a final wave 5 of a long term Bear market. The big wave 3 is done and obvious on the Weekly/monthly chart. I believe the rally off the Dec 2015 low ($27.40) to be a wave 4 retrace (or counter trend rally) and therefore the current bearish phase is the final wave, which will carry below the Dec 2015 level. The turn and drop of the Wave 4 end (Oct 18) was a strong move consistent with a wave 1 and I am on record as expecting a strong counter trend rally once this completed, which we got to just short of the Fib 62% zone. A small 1-2 set up the current move down (a wave 3). There is an alternative scenario (as always), which is that the big move down to Dec 2015 was a very large counter trend bear (A-B-C) that is now over and the subsequent rally is a big wave 1 of a massive bull market that would carry back towards the previous all time highs. This is not a scenario I find credible at this point. However if this is correct then the current move will be counter trend (A-B-C) and the current bearish phase is a wave C, which would not carry beyond the 2015 low. Either way we can expect the Bear move to continue for some time and to go some considerable distance. All things being equal, if this retrace scenario is correct then I would expect it to carry at least to the 3800-4000 level (this is based on basic A-C equivalence in EWT theory), so I will be watching the progression closely to see if the move looks like turning in this zone. Otherwise I will stick with my lead scenario. Assuming my lead scenario is the correct one then I would expect the current move to be a wave 3 of a 1-5 that should end with a large and possible reasonably lengthy (in terms of time) flag or pennant. This current wave 3 should also show a smaller flag to mark the halfway point and this is what I think we may be seeing right now. I think it will close the gap I have noted before turning to resume its Bearish course. If it is a Pennant it will in all likelihood conform to an A-B-C form. Flags and Pennants are periods of consolidation and are often comprised or a lot of whipsaw price action so I will be waiting for this to resolve and show itself clearly before being tempted back in. If all of this is right then I would expect the wave 3 to carry down to the $45-47 area before we see another significant retrace, but that is all in the future, let's focus on spotting the rally turn to get Short with low exposure first. So that is a lot to take in but in summary I think the market will rally to about $65, chance of $66, price action will tell the tale. I am hoping to see a pennant or flag formation that will give me a breakout sell signal. This will set up a move that may carry to the $45-47 area before another, much larger consolidation, the breakout of which would see a new lower low (i.e. lower than the Dec 2015 - $27.4 area). The alternative scenario would see an earlier (larger) consolidation that signals a termination around about the $38-40 zone leading to a very strong Bull phase. The key to this for me is not so much to fixate on these levels, they are guides only, but the form of the price action to identify signals and assess the Elliot waves in flight. I will be looking to add to my shorts once I see a suitable retrace end and turn, if I somehow miss this I am holding several strong Shorts further up so quids in on those and I will wait for the next one.

So we did see a fresh higher high on the current rally but I remain unsure of this rally so long as it remains under the key resistance levels around that 1360 area. It is possible the last retrace is simply a pennant (albeit a big one) in a wave 1 rally that could terminate around key resistance and plummet back to close that gap. A clear breakout of the 1360 area is what I need to go all in Bull on Gold (or I should say resume).

Gold has arrived at an important juncture for me but before that looking at that I looked back at the long term charts to remind myself of the big picture. Unsurprisingly there are 2 scenarios (1 up and 1 down), actually a third which is continued consolidation (sideways) because in the big picture Gold remains in a long term consolidation Triangle, which is narrowing. This is significant as at some point Gold will breakout of this Triangle and that will signal the resolution to which of the 2 scenarios wins out. For my money it is scenario 1, a massive Gold rally in concert with a massive stocks Bear as Gold once again reverts to its historic role as a store of value in uncertain times, and do we ever live in such times..! Note under these conditions Gold can, and almost certainly will, go in the same direction as USD. So I am Bullish gold and given all the bullish chatter of late you might imagine I am happy. Alas I remain unconvinced of this rally and will not be so until there is a break of the previous high, around 1347, which we are very close to. Actually I really want to see a break of the upper resistance (LT Triangle line and potential H&S neckline breakout). The short term offers 2 scenarios as well: the first a break of that prior High and turn at 1347, the second that we are currently seeing a wave B turn back down to a final wave C bearish run of the EWT1-2 retrace and a test of the Fib 50% line (also Weekly chart Fib 23%) before the true rally gets going. I am minded to the latter unless or until I see a break of the 1347 high. Technicals: A-B-C retrace could be completed where I have marked Green A at 1266. A break of the 1347 high would confirm. If not then the retrace is a complex version and the market will turn before or at 1347 and drop in a wave C. The form of the rally is currently in an A-B-C, which is not motive, however a break of the 1347 zone will change this set up. There is an un-closed gap around the Fib 50% level. There is a pin bar and inside bar price action formation at the current market area, showing a potential turn once this is resolved. RSI and Stochastic are over-bought. There is NMD on the 4 hour and 1 hour chart at the pin bar high, although we could yet see another test of the 1347 level before this resolves. Note also that we have seen a reverse Death Cross (some call this a Golden Cross) but I would ideally like to see a cancellation of this and then a final cross to cement a rally. This will only occur if we get a big bearish move now followed by a wave 2 retrace turn into a very strong rally. I am not looking to trade the bearish move, I prefer to wait for the Bull rally triggers and prefer to trade this in Silver rather than Gold, the former having remained more subdued. Add to that the Platinum bearishness and I can't yet see a case for precious metals rally. I think we will see continued stocks bullishness for a while, albeit likely to contain a lot of whipsaw action rather than a rocket, which does not support a massive precious metals rally, yet.

Brent has touched bottom of the support zone and rallied away with a nice pin bar price action o the Daily chart. Not in and of itself a clear indicator but a pin bar is a sign of some Bullish support at that price level. The market has been quite Bearish since the second channel breakout and Bearish chatter has been building to the point one would be forgiven for believing the only ways is down (and I believe it is long term). However markets move in waves (zigzags) and I feel we are due a short rally. On the Technicals front I have the following: an unclosed gap up around the Fib 62% level (see 1 hour chart for close up). Actually there is another gap up at the Fib 76/78% level but normally I would not expect such a strong relief rally in a wave 3 but this is Oil so anything is possible... Stochastic and RSI over sold and momentum trending back up. Bottom of a strong long term support zone Short term PMD (1 Hour chart) Decent EWT count 1-5 down, now looking for an A-B-C retrace. Depending on the price action I will either look to add to my Shorts on a decent pull back and turn down and/or Short a break through of the recent lows. Price action will decide which of these and where. With a strong case for long term Bearish moves I feel fairly secure in Shorting but entry is vital to minimise draw down carry and exposure. FOMO is you enemy here. Longer term I am looking for an break below 5000 to cement the Bear market in and then it is a case of how far will it drop?

One hour chart is shaping up to back up the Bearish move I noted in previous posts. Nice mini rally off the ST support & failed retest of the recent breakout zone. Current move down is strong but there are several ST support zones to punch through before this thing really gets going. I would be expecting a 1-5 form Bearish move followed by a significant retrace on the Daily chart before the meat of any long term Bear takes hold. In my Triad assessment this would coincide with major Bearish phases for EURUSD and GBPUSD, just far worse for EUR. I have posted on my Fundamentals assessment supporting these scenarios previously in other posts but it can be summarised as follows: Big market meltdown - USD rally in flight to safety GBP balance of payments is bad, the UK needs a reset. This will come from Brexit freedoms and a lower pound driving exports but will take a few years, hence GBP down while USD rallies EURO is a basket case, essentially a basket currency with too wide a range of underlying parts (Greece to Germany and everything in between). The middle of the road economies such as Spain and Italy are heading south. There is no unifying central bank with a clear mandate and no government that can impact economic policy across the geography. Countries like Greece need to devalue to reset. There are too many subsidies and too much bureaucracy, fueling crazy situations like Greek government workers retiring on full pensions in their early 50s. Totally unsustainable $%!&fest. Cue meltdown triggered by Brexit perhaps or more likely more chaos on Greece.

Looks like this pair may just have ended a retrace move. It has been a sharp rally in favour of the Euro but at a minimum a short term bearish move is indicated, which could turn into that rout of the Euro I have been tracking. This is a contrarian position of course because naturally everyone thinks Brexit is inherently bad for the UK and therefore bad for GBP. I think neither and my technical analysis says so too, at least in terms of GBP, whatever about the other. The technicals on EURGBP show the following for me: Price has hit the Fib 62% and bounced back down Strong NMD at this turn point Decent 1-5 EWT count on the wave C Current breakout of the Daily chart trend line to the bearish side (not yet closed below) On the 1 hour there is also NMD and a small scale 1-2 retrace prior to the channel line breakout (unconfirmed) My analysis on the other 2 legs of the Triad suggest a strong rally for GBP followed by a stronger bearish move on EUR so this EURGBP move is consistent, which is why I track the Triad. The one watch out is a possible final leg up to test the Weekly chart channel that was broken back in early 2019.

The days break continued and turned out to be a strong one, always good to see this after a turn and break of an ending diagonal as it signals a trend change rather than a retrace. A continuation in the coming days will add to this. I forgot to mention the price gap in the support zone. Falls between the Fib 38% and 50%. In any scenario I would expect this gap to be filled and probably exceeded so perhaps we will not see a pause on this market until 6000 or so? Fib 50% is one of the most common retrace points, Fib 62% the most common one but I think that a break of the price gap support would be a bad omen for the hype Bulls (you know, the people yapping abut Bitcoin reaching $100,000 on the way up...).

Actually there are 2 short term possibilities, the A-B-C I mentioned in my last post and another leg down before a rally. That would make the recent short term rally a 3-4. A completion of the whole 1-5 could trigger a Flag or Pennant relief rally. A carry to the unclosed gap would be ideal.

So looks to me like Bitcoin might have hit a wave 4 top. Very strong wave C of an A-B-C ending in a classic ending diagonal formation (1-5 count within the formation); a Bearish pin bar turn, not far from the Fib 38% off the all time high on NMD with RSI and Stochastic over bough and turning back also. Add to that a breakout of that ending diagonal formation today, in a fair show of Bearish strength and it all adds up to a significant period of Bearishness at a minimum or a full on final drop. Remember this is a purely technical analysis without deep fundamentals knowledge and research that others claim. I have no interest in trading this so no trading bias either. The only bias I have is that I believe crypto to be a mania that will end in a train wreck. Although I do believe the developments in the coding underpinning it will leave to something else arising out of the ashes to complete the journey to a cashless society that Governments have been push for some time now. As is often the case with new technology, the originators and early adopters will not be the ones who benefit. So I present this as an alternative to the hype.

The view from the Daily chart...

DX is fast approaching the bottom of near term support. There are a few additional lines of support below but most significant for me is the Daily Chart channel line. A confirmed break of this opens the Bearish floodgates.

Early days but current price action may be setting up for a further retrace to close the recent price gap around the 6500 mark. I would ideally like to see that and a turn back down to consider adding to my current crop of Shorts.

Looks like EURUSD has just poked its head above the previous high (Brown 1). A break through the associated resistance zone should bring up a test of the Weekly Triangle resistance line and related overhead resistance zone. A break of that should offer a significant rally.

Somewhat similar to USDCAD, GBP has made a Channel breakout and current retest of the breakout zone. Can't declare it as failed yet and we could see another small dip before a rally away, which also probably requires further USD weakness to trigger. Wonder what EURUSD and DX is doing...?

Nice short term drop through a potential ending diagonal (narrowing channel) with a failed retest. Might need a push on from a Bearish USD to stimulate a lower low. There are a few support zonws below to clear before this one cranks the handle.

The case for a USD bearish retrace is growing, though still not a conclusive turn yet. The upper resistance levels (lower for EURUSD) are consistent with a Big picture Flag formation, a breakout of which would signal a rampant Bull market for USD. However before that I am projecting a bearish retrace to set the rally up. The shorter term channels look Bullish (Bearish EURUSD) but if you look at the Monthly Charts you can see that Flag channel, which is thus far not broken. In addition to the signals I have posted on recently (see above and on relevant USD pair threads) recent price actions describes a series of failed tests of this Flag. 3 failed attempts to breakout in fact, which is often a signal of a capitulation and turn (the third attempt is often successful if a breakout is on but the reverse is true of a failure). Shorter term charts have offered some early entry point already but I wont be sure until I see a break out of the Daily narrowing channel on DX (Weekly on EURUSD).

Nice break and failed retest of the short term resistance zone (not forms support). Still some way to go to clear near term resistance that could act to send this pair back down yet again but once again the indicators are aligned to a rally. How far and how long, time will tell.

EURUSD and DX seem to be well on the turn. Is GBPUSD about to join with a channel breakout to the upside? Good EWT count for an A-B-C to wave B turn. Wave C has a nice clean 1-5. PMD at the Wave B turn point near the Fib 88%. Channel is parallel style with good touches and decent prior pivot points (before the last major turn).