Elliott Wave Analysis by EWF

[Elliottwave-Forecast]

CL_F Elliott Wave View: Mature Cycle

Short term Elliott Wave view in Crude Oil (CL_F) suggests that cycle from 3/22 low (47.01) is unfolding as a double three Elliott wave structure where Minute wave ((w)) ended at 50.85 and Minute wave ((x)) ended at 49.88. Minute wave ((y)) is in progress and the internal is unfolding also as a double three Elliott wave structure where Minutte wave (w) ended at 52.94 and Minutte wave (x) pullback ended at 51.49. Cycle from 3/22 low is mature but near term, while pullbacks stay above 51.49, Crude has scope to extend higher to 53.71 – 54.61 area to complete Minor wave 1 and end cycle from 3/22 low, then Crude Oil should pullback in Minor wave 2 to correct cycle from 3/22 low before the rally resumes. We don’t like selling the pullback and expect buyers to appear once Minor wave 2 pullback is complete in 3, 7, or 11 swing for an extension higher.

CL_F 1 Hour Elliott Wave Chart 04/12/2017

 

[Elliottwave-Forecast]

AUDCAD Elliott waves calling the decline

In this Technical blog we are going to take a quick look at the past 1 hour Elliott Wave performance of AUDCAD cycle from March 20 peak (1.0332). We are going to explain the structure from that peak below.

AUDCAD 3/29 1 Hour NY Updated Chart



The cycle from January 06 low has ended in the pair at March 20 peak (1.0332). The structure from the peak looks to be overlapping, hence suggesting it’s corrective structure from the peak. First leg lower ended i.e. Minor wave W at (1.0169) & Minor wave X was expected to end in 3 swings between 50-764% Fibonacci retracement area (1.0246-1.0291) followed by extension lower.

AUDCAD March 30 1 Hour NY Updated Chart



The pair found the seller’s as expected from blue box area 50-764% Fibonacci retracement area (1.0246-1.0291) & ended Minor wave X at (1.0255). While below there & most importantly as far as pivot from (1.0332) peak stayed intact, pair was expected to turn lower again initially towards 1.0176-1.0137 to see a 3 wave bounce in Minutte wave (x) against (1.0255) peak before continuation lower.

AUDCAD 1 Hour April 2, Weekend Updated Chart



The pair got the the bounce from above mentioned area & failed below the 1.0255 peak as expected. Note that, we adjusted the degree of labels but the pair keep rejecting in bounces & continues to slide lower towards 1.0126-1.0110 area lower to see a 6th swing bounce from 1.0332 peak in Minutte wave (x).

AUDCAD 1 Hour April 3, NY Updated Chart



The pair got the 3 swings bounce as expected from mentioned blue box area 1.0126-1.0110 in Minutte wave (x) & found sellers in between 1.0184-1.0212 area. Afterwards pair resumed the decline lower & while below 1.0255 peak pair should be looking for 1 more push lower towards 1.0074-1.0032 area to end 7 swings double three from 1.0332 peak before pair starts the 3 waves back.

 

[Elliottwave-Forecast]

AUDJPY swings sequence calling the decline

Hello fellow traders. In this technical blog we’re going to take a quick look at the past Elliott Wave charts of AUDJPY . We’re going to explain the structure and see how we forecasted the path.

The chart below is AUDJPY 4 hour chart from 04.04.217. Our analysis suggests that cycle from the 02/16 peak (88.16) is having incomplete structure. As we’re having 9 swings down from the mentioned peak, we’re calling for more downside while pivot at 85.78 peak stays intact. We should ideally get another low in 11th swing in order to complete the structure.



Now let’s take a look at the short term structure.

AUDJPY Elliott Wave 1 Hour Chart 04.05.2017

The pair is bearish against the 85.78 peak. Seems like it’s doing X red recovery as double ((a))((b))((c)) ZIGZAG elliott wave structure. We expect it to complete at 84.34-84.52 area, where sellers will appear. Once X red recovery completes, further decline should follow ideally toward new lows.



AUDJPY Elliott Wave 1 Hour Chart 04.06.2017

Eventually, the price has reached our blue box and completed proposed X red correction at the 84.42 high. The pair found sellers there and made the new low as expected. Now , it’s showing 5 swings, incomplete structure from the 85.78 peak. Consequently, the pair is still bearish against 84.42 peak,suggesting more downside. Short term bounce (b) blue is completed at 83.92 most likely.

 

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Gold Elliott Wave View: Ending Impulse

Short term Elliott Wave view in Gold (XAUUSD) suggests that cycle from 4/10 low (1246.92) is unfolding as an impulse Elliott wave structure where Minutte wave ((i)) ended at 1257.2, Minutte wave (ii) ended at 1250.8, Minute wave (iii) ended at 1279.75, Minute wave (iv) ended at 1271.69 and Minute wave (v) of (a) is in progress towards 1291.99 – 1296.84 area before cycle from 4/10 ends and the yellow metal see a correction in Minutte wave (b). We don’t like selling the proposed pullback and expect buyers to appear again once Minutte wave (b) is over in 3, 7, or 11 swings provided that pivot at 4/10 low (1246.92) remains intact.

Gold 1 hour Elliott Wave Chart 04/13/2017

 

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Gold rallied after Elliott Wave Flat Correction

Gold ( GC_F ) has been rallying since forming a low on 3/10 (1196). Rally from there is still incomplete and needs some more upside, so we were keep looking for buying any intraday dip in the yellow metal for continuation higher. Below is the Elliott wave 1 hour weekend updated chart from April 8, where Minute wave ((w)) ended at 1260.9 & Minute wave ((x)) pullback ended in 3 swings at 1239.4 area. Up from there Minutte wave (w) higher ended in 3 swings at 1270.6 area, below from there the metal was showing the flat correction in Minutte degree wave (x) from 4/07 peak for the correction of near term cycle from 3/31 low (1239.4). Which was expected to end the 5 waves from the peak in Sub Minutte wave c lower in between 50-764% Fibonacci retracement area ( 1254.43-1246.54) before the rally resume in the metal or for a 3 wave bounce at least to allow our member’s to create a risk free position.

Gold 1 Hour Elliott Wave Chart 4.8.2017



The yellow metal found buyer’s as expected from the blue box area ( 1254.43-1246.54) after forming a low on 3/10 (1246.9). Metal has now broken above the previous wave (w) peak (1270.6) thus suggesting the next leg higher has started already. The rally from (1246.9) low could be unfolding as 5 waves impulsive waves in Minutte wave (a) higher, where it could have ended the Minutte wave (iv) at the 23.6% Fibonacci retracement (1271.6) from which it managed to bounce higher to resume the move to the upside looking to reach the minimum target of Minutte wave (v) at the inverse 1.236 – 1.618 Fibonacci extension of Minutte wave (iv) that comes at 1281.6-1284.6 area. The next opportunity in the metal will comes after ending the 5 waves from 1246.6 low, then metal should see a 3 wave pullback in Minutte wave (b) to correct that cycle before doing another 5 waves higher in Minutte wave (c) of a Zigzag structure ( unless it turns out to be a flat correction from 4/07 peak and corrects 3/31 cycle).

Gold 1 Hour NY Updated Chart 4/12/2017



Note: we have adjusted the degree of labels on last 1 Hour Chart but that will not affect the view in the metal

 

[Elliottwave-Forecast]

Gold Elliott Wave View: Pullback starting

Short term Elliott Wave view in Gold (XAUUSD) suggests that cycle from 4/10 low (1246.92) is unfolded as an impulse Elliott wave structure where Minutte wave ((i)) ended at 1257.2, Minutte wave (ii) ended at 1250.8, Minutte wave (iii) ended at 1279.75, Minutte wave (iv) ended at 1271.69 and Minutte wave (v) of (a) could be done at yesterday’s peak 1288.42 in Minutte wave (b), although another push higher in Minutte wave (v) of (a) towards 0.618-0.764% fibonacci extension area of Minutte (i)+(iii) 1291.84-1296.48, can’t be ruled out yet before ending the 4/10 cycle. However while below the 1288.42 metal could have started the Minutte wave (b) pullback to correct the cycle from 4/10 lows. We don’t like selling the proposed pullback and expect buyers to appear again in Minutte wave (b) in sequence of 3, 7, or 11 swings provided that pivot at 4/10 low (1246.92) remains intact.

Gold 1 Hour Elliott Wave Chart 04/14/2017

 

[Elliottwave-Forecast]

CADJPY Technical Analysis April 13/2017

CADJPY has been moving lower since December 2016. Price is entering an area where the pair can possibly bounce and reverse higher. There are a couple bullish patterns that seem to be forming and traders need to wait and see if CADJPY will find a bottom and terminate the bearish cycle that it is currently in.

Daily Chart Bullish Patterns : On the CADJPY Daily chart two visible bullish patterns can be seen (Blue, Red). The blue bullish pattern triggers a BUY at the point D BC 0.50% Fib. retracement level. Price has still yet to touch this level and will need another move lower to trigger. The red falling wedge bullish pattern has still yet to break above the top of the wedge/diagonal. A break above the red pattern wedge can signal that CADJPY has possibly bottomed and is ready to start a new cycle higher.



If looking to buy CADJPY traders should be patient and wait for price to make a move lower to the possible bounce zone (light blue box) and towards the BC 0.50% Fib. retracement level at 81.84. Waiting for price to hit the BC 0.50% Fib. retracement will offer a better risk/reward trade setup. Another scenario is traders can wait for price to break above the red wedge pattern. At this current moment above 84.18 confirms the breakout higher. Blue bullish pattern is invalidated if price moves below point B of the pattern.

 

[Elliottwave-Forecast]

EURNZD Double Three Elliott Wave Structure

EURNZD rally this week failed as pair found sellers in 1.5355 – 1.5399 area and made new lows below 1.5149 low. With the new low seen today, pair is now showing 5 swings sequence down from 3/24 (1.5485) peak. 5 swings means the sequence is incomplete and pair is in need of another swing lower to complete 7 swings sequence or a double three Elliott wave structure down from 3/24 (1.5485) peak. Decline from 1.5485 to 1.5149 was corrective and hence labeled as ((w)). Bounce to 1.5357 was also corrective and hence labeled wave ((x)). As initial decline from 1.5485 – 1.5149 was corrective, that means decline from 1.5357 should also be in a corrective sequence.

Pair made a new low below 1.5149 and reached 0.618 – 0.764 Fibonacci extension area of ((w))-((x)), this is the typical area for 5th swing to end in a 7 swings sequence. Therefore, from this area, we can see a bounce in the pair to correct the decline from 1.5357 high and then it should turn lower again again. It remains to be seen how big the bounce would be but it should unfold in 3, 7 or 11 swings and 50 – 61.8 Fibonacci retracement area lies between 1.5236 – 1.5265. As far as 1.5357 high remains intact, we expect the bounce to fail and pair to continue lower towards 1.5020 – 1.4940 area to complete a double three (7 swings) Elliott wave structure down from 1.5485 peak. Afterwards, pair should bounce again to correct the decline from 1.5485 peak or at least from 1.5357 high.

EURNZD Elliott Wave Analysis

 

[Elliottwave-Forecast]

KBW Bank Index Extended Correction

KBW Bank Index is an economic index consisting of the stocks of 24 banking companies delivering a direct exposure to the banking sector and offering a targeted view to a unique corner of the U.S. financial sector. The top holdings Banks of the index are among the biggest financial institutes in the world and most of them will report earning during this week ( Citigroup, JPMorgan Chase, Wells Fargo, Bank of America). These companies have a big influence on the financial sector that can be measured by the ETF (XLF), which was up 30% from last year until last month, we mentioned in our previous financial article that XLF was reaching an inflection area which provided the expected pullback.
How this move is affecting the Banking sector ? Let’s find out by using the Elliott Wave Theory to analyze BKX.

KBW Bank Index Elliott Wave View
BKX made 5 swings bullish sequence from 2009 low which is different from the 5 impulsive waves used in Elliott Wave Theory. The advance is a part of the double three structure that KBW Bank Index is doing and after reaching the 61.8 – 76.4 fib ext area it started the 6th swing pullback against 2016 low. The retrace in wave ((X)) would ideally reach the 50%-61.8% Fibonacci retracement around 78.11 – 72.94 area before BKX can resume it’s move to the upside. However market isn’t perfect and we can’t determine how the pullback will unfold exactly so even a small 3 waves pullback can be enough to end it there.



To determine the potential pullback area, we take a look at the daily chart as the Index ended the 2016 cycle at 03/01/2017 peak from which it’s started a Zigzag structure. So BKX can still extend lower toward equal legs area 81.84 – 79.10 from which it can resume higher or bounce in 3 waves at least.



If the bounce is not strong enough and the Index fails to break above 99.84 peak, then it will have the possibility of doing the double three correction lower toward the 61.8%-76.4% area and retesting the 2009 trend-line before it can be able to resume it’s uptrend.



Recap
KBW Bank Index longer term technical structure remain bullish while it’s holding above 2016 low 55.99. But we need further data before we can determine if the index will be able to rally for new highs after this current shallow daily correction or it needs more time to consolidate. This decline will affect the whole Financial sector and its stocks can be fading the so called Trump rally so you need to be careful about holding a bank stock during this pullback.

 

[Elliottwave-Forecast]

Nikkei swings sequence calling the decline

Hello fellow traders. In this technical blog we’re going to take a quick look at the past Elliott Wave charts of Nikkei. We’re going to explain the structure and see how we forecasted the path.

Let’s start by taking a look at Nikkei 4 hour chart from 04.05.217. As we can see on the chart below, first leg from the 03/02 peak has ended as 5 waves structure. It’s labeld as A red. On the 04/04 date we got break below A red and new short term low suggested that it’s not part of the same cycle anymore. Because of that , we labelled wave B red is done at 19316 high and as far as the price stays below that level, we should be in wave C red targeting 18589-17917 area. As the first leg has 5 waves structure, leg C red should be also in 5 waves.



Now let’s take a look at the short term structure.

Nikkei Elliott Wave 1 Hour Chart 04/05 2017
Nikkei is bearish against the 19316 peak. Current view suggests the index is doing wave ((ii)) recovery which is unfolding as double three elliott wave structure. We expect it to make another leg up in wave (y) of ((ii)) toward 19034-19100 area. At that zone sellers will be waiting for further decline toward proposed taget area: 18589-17917



Eventually, the price has reached proposed blue box at 19034-19100, complete short term recovery, make decline toward new lows and reached the target at 18589-17917 . However there’s no any sign yet that cycle from the 03/02 peak is done yet.

 

[Elliottwave-Forecast]

EURAUD Technical Analysis April 17/2017

On April 11/2017 bears pushed EURAUD lower and it seems lower prices are yet to come in the following trading sessions. At the current moment, bias remains bearish and traders should look for any possible selling opportunities.

1 Hour Chart Bearish Pattern: Bearish pattern is visible on short term analysis but traders need to be patient and wait for price to retrace higher towards the BC 0.50% Fib. retracement level and wait for the point D (blue pattern) to enter the possible reversal zone (blue box) to trigger sells. We do not recommend buying the pair to the proposed selling zone but rather advise to wait for price to enter the possible reversal zone and look for selling opportunities. There is also support/resistance levels near the BC 0.50% Fib. level so we should expect a reaction/reversal in price action in this area. Only time will tell what EURAUD will do but for now bias remains bearish.



If looking to sell EURAUD traders should wait for price to move above the BC 0.50% and watch for price to stall in the possible reversal zone (blue box) for any selling opportunities. Waiting for price to move above the BC 0.50% Fib. retracement level will offer a better risk/reward trade setup. A break above the point B high will invalidate the bearish pattern. If the pair moves lower from the possible reversal zone traders should place targets below the AB 2.24% level.

Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade.

 

[Elliottwave-Forecast]

Gold Elliott Wave View: Pullback completed

Short term Elliott Wave view in Gold (XAUUSD) suggests that cycle from 4/10 low (1246.92) is unfolded as an impulse Elliott wave structure where Minutte wave ((i)) ended at 1257.2, Minutte wave (ii) ended at 1250.8, Minutte wave (iii) ended at 1279.75, Minutte wave (iv) ended at 1271.69 and Minutte wave (v) of (a) ended at yesterday’s peak 1295.6. Below from there metal has started the Minutte wave (b) pullback to correct 4/10 (1246.9) cycle and that could be done already in 3 swings at earlier low 1281, where Sub minutte wave a ended at 1285.6 and Sub minutte wave b ended at 1292.6. However metal needs to break 1295.6 peak first for final confirmation of next leg higher started, If it fails to rally from here then Double correction from the peak within the Minutte wave (b) pullback can’t be ruled out yet before the rally resume, where we would like to be buyer’s again. Now as far as trading above earlier low 1281 and more importantly as far as pivot from 4/10 low remains intact metal has scope to resume the upside. We don’t like selling the metal into the pullbacks & favors the upside in metal as far as pivot from 4/10 low remains intact.

Gold 1 Hour Elliott Wave Chart 04/18/2017

 

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Gold Elliott Wave View: pullback ending

Short term Elliott Wave view in Gold (XAUUSD) suggests that cycle from 4/10 low (1246.92) is unfolded as an impulse Elliott wave structure where Minutte wave ((i)) ended at 1257.2, Minutte wave (ii) ended at 1250.8, Minutte wave (iii) ended at 1279.75, Minutte wave (iv) ended at 1271.69 and Minutte wave (v) of (a) ended at 1295.6 peak. Below from there metal could have finished correcting the 4/10 cycle (1246) in Minutte wave (b) pullback as 11 swings Triple three structure within the blue box area at yesterday’s low 1278.68 & should be risk free already, while above from there and as far as pivot from 1246 low remains intact metal has scope to resume the rally in Minutte wave (c). However metal still needs to see a clear break of 1295.6 peak first for final confirmation for next leg higher, above from 1278.68 low Minutte wave (i) ended at 1292.12 peak and Minutte wave (ii) is remains in progress & expected to end above 1278.68 low for continuation higher. If it manages to break 1278.68 low from here then metal could see 1275.38-1271.33 area next as double correction before resuming higher again. We don’t like selling the metal and favors keep buying dips in 3, 7 or 11 swings as far as pivot from 4/10 low remains intact.

Gold 1 Hour Elliott Wave Chart 04/19/2017

 

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INDU Elliott Wave View: More downside

Short term Elliott Wave view in INDU ( Dow) suggest that instrument is showing 5 swings sequence from 3/03 peak (21018) favoring more downside. From 3/03 peak INDU is following a Double three Elliott wave Structure , where Minor wave W ended at 20579 low and Minor wave X ended at 20887 peak. Index has since broken below the 20412 low, suggesting the next leg lower in Minor wave Y has started already. The Internal Subdivision of Minor wave Y is also unfolding as Double three Elliott wave structure where Minute wave ((w)) ended at 20453 and Minute wave ((x)) ended at 20645 peak. Below from there, index is following another double three Elliott wave structure in Minute wave ((y)) lower, where Minutte wave (w) is expected to end in between 20378-20315 area then should see a bounce in Minutte wave (x) before further downside is seen. Near term, while bounces stays below 20645 peak and more importantly below 20887 peak index has scope to extend lower 1 more leg lower at least. we don’t like selling the index.

Dow 1 hour Elliott Wave Chart 04/20/2017

 

[Elliottwave-Forecast]

INDU Elliott Wave View: Further downside

Short term Elliott Wave view in INDU ( Dow) suggest that instrument is showing 5 swings sequence from 3/03 peak (21018) favoring more downside. From 3/03 peak INDU is following a Double three Elliott wave Structure , where Minor wave W ended at 20579 low and Minor wave X ended at 20887 peak. Index has since broken below the 20412 low, suggesting the next leg lower in Minor wave Y has started already. The Internal Subdivision of Minor wave Y is also unfolding as Double three Elliott wave structure where Minute wave ((w)) ended at 20453 and Minute wave ((x)) bounce turns out to be a flat correction . Where the Minutte wave (a) ended at 20644 peak and Minutte wave (b) at 20379 low, above from there index could have ended the 5 waves in Minutte wave (c) of a flat within blue box area at yesterday’s peak 20629, while near term bounces fails below there & more importantly as far as pivot from 20888 peak Minute wave X connector’s peak stays intact index has scope to resume lower 1 more leg at least. we don’t like selling the index.

INDU 1 Hour Elliott Wave Chart 04/21/2017

 

[Elliottwave-Forecast]

USDCAD Elliott Wave View: Ending 5 wave Impulse

Short term Elliott wave view in USDCAD suggest that the cycle from 4/13 low (1.3218) is unfolding as an impulsive Elliott wave structure . This 5 wave move could be wave ((a )) of an Elliott wave zigzag structure structure or wave ((c )) of FLAT correction. In either case, after 5 wave move ends, pair should pull back in 3 waves at least as the Elliott Wave Theory suggests. Minutte wave (i) ended at 1.3337 peak, Minutte wave (ii) ended at 1.3261, Minutte wave (iii) ended at 1.3498, Minutte wave (iv) pullback ended at 1.3455 low and above from there Minutte wave (v) of ((a)) already reached the minimum extension area between 1.3509-1.3527 which is the inverse 1.236-1.618% Fibonacci extension area of proposed wave (iv) dip. This means cycle is now mature and can end at any moment resulting in a 3 wave pull back at minimum. The pull back is shown to be wave ((b)) and should correct the cycle from 4/13 low in 3, 7 or 11 swings. If the decline turns out to be stronger than expected and breaks the pivot at 1.3218 low, that would suggest 5 wave move up from 1.3218 low was a B wave FLAT from 3/21 (1.3261) low and pair could then see 1.3252 – 1.3187 area before bouncing again. Although Minutte wave (v) of ((a)) has reached the minimum extension area, another high towards (v) = (i) target @ 1.3571 can’t be ruled out to end wave ((a)) cycle from 4/13 low. In either case, cycle from 4/13 (1.3218) low is mature and should result in a pull back soon.

USDCAD 1 Hour Elliott Wave Chart 04/21/2017

 

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USDCAD Elliott Wave View: Ending an impulse

Short term Elliott Wave view in USDCAD suggest the decline to 1.322 ended Intermediate wave (X). Up from there, the pair is showing 5 waves impulse structure where Minutte wave (i) ended at 1.3338, Minutte wave (ii) ended at 1.3258, Minutte wave (iii) ended at 1.3525, and Minutte wave (iv) ended at 1.3406. Near term focus is on 1.3596 – 1.364 area to complete Minutte wave (v) and also Minute wave ((a)). The next push higher towards above target should end the cycle from 4/13 low, after which the pair should pullback in Minute wave ((b)) in 3, 7, or 11 swing to correct cycle from 4/13 low before turning higher again. We don’t like selling the proposed pullback and expect buyers to appear again once Minute wave ((b)) pullback is complete in 3, 7, or 11 swing provided that pivot at 1.322 low remains intact.

USDCAD 1 hour Elliott Wave Chart 04/25/2017

 

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Walmart Stock Extending Higher

Walmart (NYSE: WMT) is the world’s largest company by revenue as well as the largest private employer in the world with 2.3 million employees. It’s an American multinational retailing corporation that operates as a chain of hypermarkets, discount department stores, and grocery stores. Despite being the biggest physical retailer in the world, Wal-Mart is still trailing back in e-commerce business as there is increased competition from online retailers in particular Amazon (NASDAQ: AMZN) which continues to gain market share as the world is merging to online shopping.

Warren Buffet reduced his shares in Wal-Mart, which he held since 2005, by roughly 90% last quarter. He indicated that the retail sector now looks too challenging and fewer people are choosing to go to physical stores, so Walmart’s competitive advantages in scale & distribution may not be as valuable as they once were.

Walmart’s stock is only up +9% this year compared to Amazon +19% rally which already made new all time high while WMT is still far from breaking its 2015 peak. However , last week it managed to break above 2016 peak so let’s the consequence for this technical move as the giant corporation already acquired a number of e-commerce companies, which means it’s looking seriously to move into the online retail world and investors seems to be liking the new changes.

Walmart Elliott Wave View:
Walmart stock dropped 37% from 01/13/2015 peak at $90.8 before finding ground later that year. So from 2015 low, WMT could either has started a new cycle to the upside as the weekly trend remain bullish or the stock is only bouncing to correct that cycle before doing the double three correction from $90.8. Either way, the recent break above 2016 peak opened a new short term extension to the upside as WMT is now showing 5 swing bullish sequence from November 2015 low. So unless the move truncates or it’s a part of an irregular correction, then the stock has a new target that can take it toward $84 area before a larger pullback is seen.



WMT established a low early this year at $65.25, from which it started a 7 swings structure move looking for a first target at equal legs area $76.62 – $78.61. From there the stock should pullback in 3 waves at least in red wave X before resuming the move higher while holding above January 2017 low.



The stock doesn’t need a large pullback and could keep extending higher forming a diagonal with the current leg as wave ((iii)). The surprise would happen if the current leg higher is wave B of a Flat structure in wave (X) which means there will be a sharp 5 waves decline after ending the current leg higher. But we don’t call Flats against the main trend which remain bullish until the move happens.

Recap:
Walmart may not look as a good long term investment as it used to be but the technical bullish sequence is suggesting that WMT price will see more gains during the rest of 2017 as short term investors still believe in the company. So while this year’s low is holding, corrective pullbacks will remain supported by the bulls.

 

[Elliottwave-Forecast]

USDCAD Elliott Wave View: More Upside

Short term Elliott Wave view in USDCAD suggest the decline to 1.322 ended Intermediate wave (X). Revised view suggests that the rally from there is unfolding as a double three Elliott Wave structure where Minute wave ((w)) ended at 1.3525 and Minute wave ((x)) ended at 1.3406. Minute wave ((w)) is subdivided as a Flat Elliott wave structure where Minutte wave (a) ended at 1.3338 and Minutte wave (b) ended at 1.3258. Near term, pair is within Minutte wave (x) pullback to correct the cycle from 4/24 low in 3, 7, or 11 swing before the rally resumes. We don’t like selling the proposed pullback and expect buyers to appear once wave (x) pullback is complete in 3, 7, or 11 swing as far as pivot at 1.3406 stays intact.

USDCAD 1 hour Elliott Wave Chart 04/26/2017

 

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Elliott Wave Theory: Is Elliott’s Theory enough?

Elliott wave Theory: Is Elliott’s Theory a system in itself?

As many traders know, The Elliott wave Theory is a form of technical analysis that finance traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors. Elliott’s Theory was developed by Ralph Nelson Elliott and published in 1938 in the book The Wave Principle. The Theory states that collective investor psychology, or crowd psychology, moves between optimism and pessimism in natural sequences. These mood swings create patterns evidenced in the price movements of markets at every degree of trend or time scale.

In Elliott’s Theory, market prices alternate between an impulsive, or motive phase, and a corrective phase on all time scales of trend, as the illustration shows. Impulses are always subdivided into a set of 5 lower-degree waves, alternating again between motive and corrective character, so that waves 1, 3, and 5 are impulses, and waves 2 and 4 are smaller retraces of waves 1 and 3. Corrective waves subdivide into 3 smaller-degree waves starting with a five-wave counter-trend impulse, a retrace, and another impulse. Motive waves always move with the trend, while corrective waves move against it.

We do understand the idea and we practice the idea every single day, we do over 4000 charts every month and we have seen that even when the Patterns happen because of the nature of the Market which comes with 2 sides, the bulls and bears which by definition is a fight between both of them. Reality is that most wavers practice the Theory looking for the 5 waves and 3 waves back and 90 % of the time they end up been wrong. We are not saying that Elliott’s Theory cannot be used, but by nature the Theory is great after the fact and not enough to forecast the future. As Humans, we tend to live in a state of denial and taking the easier road always come by nature. I started Elliottwave–Forecast in 2005 and did the analysis on the basis of Elliott Wave Theory. I was always looking for 5 waves and trading those waves 4’s and 5’s like everyone else does. With passage of time, I started opening my mind and understanding that the Theory is a way of communication instead of a way of forecasting. In simple words, the theory always is right after the fact but when market is moving and structures are developing, there is always more than one possible path and sometimes quite a few paths are there and none of them would break the rules of Elliott wave theory. That let me to believe that if Elliottwave-Forecast will stick around, it can’t be based only in Elliott’s Theory and other tools were needed. My Background comes from Engineering and consequently my mind is educated to see the patterns and think outside the box, I cannot be a blind follower, I need to think by myself, otherwise I won’t be me and lose my identity.

As time passed by, I started noticing something in the market, it was contrarian to what the Theory states. Theory states that that trend always comes in 5 but I noticed that trends can come in 5 waves and also in 3 waves. I also noticed the market following a code either by nature or through Human manipulation. As I said before, by nature I need to think outside the box and consequently, can’t follow blindly a Theory developed in the absence of Banks, Investment Houses and when the communication between humans was not even 5% of what it is today. There were no computers and consequently, no way Elliott’s Theory will work today, like it did in 1930’s. Today, we believe that: the Market follow patterns, but trend is not always in 5 waves, it can have an impulse sequence (5-9-13) or a corrective sequence (3-7-11). Traders need to have an open mind, otherwise will be showing only the charts or making money when the 5 waves happen which percentage wise are not that high specially when it comes to the Forex market. We believe in the Idea of cycles, sequences, time cycles, distribution, correlations and Elliott wave Patterns. We think a combination of tools makes up a forecast and not the Elliott Wave Theory or Market Psychology alone.

Few tips

1. The Market trends in 5 waves and also trends in 3 waves.
2. Elliott’s Theory needs to be part of a system, it’s not a system in itself.
3. Trade areas when both bulls and bears are in agreement.
4. Always looks for combinations of time frames.
5. Follow the cycles in time and price, sequences and distribution.
6. Understand that the MARKET is created and manipulated by someone using a code.
7. Think outside the box.

A great example is the $SPX, looking at the Monthly chart, the instrument peaked either in 2000 or in 2007. If you are practicing Elliott’s Theory like in 1930’s, you will see 5 waves from 2007 which will make your mind completely bearish and when the 5 waves ended in 2009, you would be calling for a recovery in 3 waves and then another 5 waves lower to the 300-200 areas. Truth is nothing denies that looking at the 5 waves down and also practicing the 1930’s Elliott Wave Theory. Reality is something else and needs to be seen with other tools and an open mind. The 2007 peak was a marginal new high above 2000 peak, also using a momentum indicator, it can be observed that momentum at 2007 peak is less than the momentum at 2000 peak which together with the 5 waves fast decline makes the case for a text book FLAT. As a new thinking with the Theory, we know that after 5 waves lower, a bounce will happen at least in 3 waves and before we start calling a huge crash in SPX and the World coming to an end, we want to see how the bounce develops and look for answers using market correlation. We are living in the present times, think differently and outside the box.









In early 2009, nothing denied the ABC Elliott wave structure in SPX from 2007 peak except for the momentum divergence at the peak. We use divergence differently than most because the divergence doesn’t always mean weakness, depending on the sequence sometimes it means incomplete sequence and more strength to come. As I said before, forecasting needs to be based off a system and not a single tool. Following the SPX, when the bounce started unfolding, we were looking for 3 waves higher because as per Elliott wave Theory hedging both sides agrees in the bounce until the moment when something within the system will called the next move. The SPX recovered and did 3 waves until 4.2010 and then dropped again, so far everything played out as planned and both scenarios were still valid until then. Then it rallied again from 7.2010 low and took the peak at 4.2010 and the moment it did that, sequence turned bullish calling for new high towards 2300 area. The bears lost that day and the ABC from 2007 was invalidated and from that day onwards, FLAT was the primary wave count. Primary reason for this was the moment 4.2010 peak was taken, 100% extension from 2009 low came above 2007 peak. Of course, Elliott wave Theory like 1930, did not deny the ABC until the 2007 peak was taken, but reality is that based on our out of the box thinking and not following the Theory like in 1930, we knew the SPX was bullish and will trade 2300 and even to 3000. To conclude, Elliott Wave Theory is not enough and trading only based in 5 waves and 3 waves back is a thing of the past, the past is past and future is ahead which requires thinking outside the box. We become better every day, we developed computers, Planes, Electricity thinking outside the box and the box is the Elliott wave Theory like was develop in 1930.