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Dow Futures (YM_F) Elliott Wave View: Reacting Higher From Blue box

Dow Futures ticker symbol: YM_F short-term Elliott wave view suggests that the rally from 6/28/2018 low cycle to 25572 high on 7/27/2018 peak ended Minor wave 1. The internals of that rally higher took place as an impulse structure with sub-division of 5 waves structure in each leg higher. Down from there, the index corrected the 6/28/2018 cycle in 3 swings pullback & ended Minor wave 2 at 25086 low.

The internals of that pullback unfolded as Elliott wave Zigzag correction with the sub-division of 5-3-5 structure in Minute wave ((a)), ((b)), ((c)). Down from 7/27 peak, the decline to 25264 low ended Minute wave ((a)) in 5 waves structure. From there, the rally to 25486 high ended Minute wave ((b)) and the subsequent move lower to 25086 low ended Minute wave ((c)) of 2 in 5 waves structure. Minor wave 2 ended within the 25174 – 25100 area, which is 100%-123.6% Fibonacci extension of ((a))-((b)), as indicated by the blue box.

Up from 25086, the index is reacting higher in 3 swings so far and longs from blue box area should be risk-free (stop loss at break even) already. The right side tag, combined with the blue box, help to identify the right trading strategy. Near-term, as far as dips remain above 25086 low, the right side of the market remains to the upside. Expect the Index to resume the next extension higher in Minor wave 3, but a break above 25572 high remains to be seen for final confirmation and to avoid double correction lower in Minor wave 2 pullback. We don’t like selling it.

YM_F 1 Hour Elliott Wave Chart
 

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GBPUSD Elliott Wave Analysis: Right Side Calling Lower

GBPUSD short-term Elliott Wave analysis suggests that the decline from 7/09/2018 peak (1.3361) is unfolding as Elliott wave zigzag when Minor wave A ended in 5 waves structure at 1.2956 low. Up from there, the bounce to 1.3214 high ended Minor wave B. The internals of that bounce unfolded as a Double three structure where Minute wave ((w)) ended at $1.3157. Minute wave ((x)) ended at 1.3070 low. And Minute wave ((y)) of B ended at 1.3214 high.

Down from there, Minor wave C remains in progress in another 5 waves. The internals of wave C is unfolding as an impulse & decline to 1.3081 ended Minute wave ((i)) in 5 waves. Up from there, the bounce to 1.3173 high ended Minute wave ((ii)) in 3 waves. Afterwards, pair declined lower in another 5 waves structure with lesser degree cycles showing sub-division of 5 waves structure. And ended Minute wave ((iii)) at 1.2918 low. Above from there, Minute wave ((iv)) is proposed complete at 1.2974 high. At this stage, a break below 1.2919 low remains to be seen for final confirmation and to avoid double correction in Minute wave ((iv)).

Near-term, while bounces fail below 1.2974 high and more importantly the pivot from 1.3214 high stays intact, expect pair to resume lower in Minute wave ((v)) before ending Minor wave C. The minimum extension area for Minute wave ((v)) i.e inverse 1.236%-161.8% Fibonacci extension area of Minute wave ((iv)) comes at 1.2906 – 1.2884. In case of further extension, Minute wave ((v))=((i)) target area can reach 1.2842 – 1.2810 before ending the zigzag structure & a bounce could then take place. We don’t like buying the pair as the right side tag is calling the pair lower.

GBPUSD 1 Hour Elliott Wave Chart
 

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OIL Elliott Wave Analysis: Extending to the Downside

Oil ticker symbol: CL_F short-term Elliott wave analysis suggests that the bounce to $70.44 high ended intermediate wave (2). The internals of that bounce took place as Elliott wave double correction where Minor wave W ended in 3 swings at $69.92. From there, the pullback to $68.26 completed the Minor wave X in 3 swings. Then a bounce higher to $70.44 high ended Minor wave Y in another 3 swings & also completed Intermediate wave (2).

Down from there, the decline is taking place as Elliott wave impulse within intermediate wave (3) lower with the sub-division of 5 waves structure in Minor wave 1, 3 & 5. The initial decline from $70.44 high to $66.92 low ended Minor wave 1 of (3). The lesser degree cycles within that decline also unfolded in 5 waves structure & ended Minute wave ((i)) at $69.91. Minute wave ((ii)) ended at $70.22, Minute wave ((iii)) ended at $67.31 low, Minute wave ((iv)) bounce ended at $68.15 and Minute wave ((v)) of 1 ended at $66.92 low. Above from there, the bounce to $69.92 high ended Minor wave 2.

The internals of Minor wave 2 unfolded in 3 swings as Elliott wave zigzag correction where Minute wave ((a)) ended in 5 waves at $69.36. Minute wave ((b)) ended at $67.87 low and the bounce to $69.92 high ended Minute wave ((c)) of 2. Down from there, Minor wave 3 remain in progress in another 5 waves and as far as bounces fail below $69.92 high and more importantly the pivot from $70.44 high stays intact instrument is expected to see more downside. We don’t like buying it as the right side tag is lower.

OIL 1 Hour Elliott Wave Chart
 

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DAX Elliott Wave Analysis: Bounce Can be Temporary

DAX short-term Elliott wave analysis suggests that the rally to 12882.05 high ended Minor wave X bounce. The internals of that bounce unfolded as Elliott wave double three structure where Minute wave ((w)) ended at 12640.87. Minute wave ((x)) ended at 12468.68 and Minute wave ((y)) of X ended at 12882.05 high. Down from there, the decline is showing the overlapping price action suggesting that the decline in Minor wave Y is taking place as 3 wave corrective sequence i.e either ((w)),((x)),((y)) or ((w)),((x)),((y)),((x)),((z)) structure in Minute degree.

The initial decline from 12882.05 high is unfolding as Elliott wave zigzag correction in Minute wave ((w)) lower. Where minutte wave (a) ended in 5 waves structure at 12494 low. Up from there, the bounce to 12740.12 high ended Minutte wave (b) bounce in 3 swings. Decline from there is taking place in another 5 waves structure & reached the 12338.65-12245.56 100%-123.6% Fibonacci extension area of (a)-(b) to end Minutte wave (c) of ((w)). And soon, the index is expected to do a Minute wave ((x)) bounce in 3, 7 or 11 swings against 12882.05 high before further decline in Minute wave ((y)) of Y is seen. We don’t like selling it.

DAX 1 Hour Elliott Wave Chart
 

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GBPUSD Elliott Wave View: Calling For More Downside

GBPUSD short-term Elliott wave view suggests that the rally to 1.3215 high ended Minor wave 2 bounce. Down from there, Minor wave 3 is taking place as impulse structure with lesser degree cycles are showing sub-division of 5 waves structure lower in it’s each leg lower i.e Minute wave ((i)), ((iii)) & ((v)). While the sub-division in Minute wave ((ii)) & ((iv)) unfolded in 3 wave corrective sequence.

Down from 1.3215 high, the initial decline to 1.3081 low ended Minute wave ((i)) in 5 waves. Up from there, the bounce to 1.3172 high ended Minute wave ((ii)) in 3 swings as Elliott wave zigzag. Below from there, the decline to 1.2722 low unfolded in 5 waves & ended Minute wave ((iii)). Above from there, the bounce to 1.2826 high ended Minute wave ((iv)) in 3 swings as zigzag. Near-term focus remain towards 1.2695-1.2654 inverse 123.6%-161.8% of Minute wave ((iv)) to end Minute wave ((v)) of 3. Afterwards, the pair is expected to do a Minor wave 4 bounce in 3, 7 or 11 swings before further downside is seen. In case of further extension in Minute wave ((v)) of 3, pair can see 61.8%-76.4% Fibonacci extension area of Minute ((i))+((iii)) at 1.2521-1.2448 area as well before bounce in Minor wave 4 takes place. We don’t like buying it and prefer more downside against 1.3215 high in the first degree.

GBPUSD 1 Hour Elliott Wave Chart
 

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AUDUSD Elliott Wave View: More Downside Is Expected

AUDUSD short-term Elliott wave view suggests that the bounce to 0.7455 high ended intermediate wave (B). Down from there, the pair has broken to new lows confirming the intermediate wave (C) lower. The internals of the decline is unfolding as impulse where Minor wave 1, 3 & 5 are expected to unfold in 5 waves structure. While Minor wave 2 & 4 can be can be any 3 wave corrective pattern i.e either double, triple three etc.

Down from 0.7455 high, Minor wave 1 is proposed complete at 0.7201 low. The internals of that decline showing sub-division of 5 waves structure in lesser degree cycles. Where Minute wave ((i)) ended in 5 waves structure at 0.7431. The Minute wave ((ii)) bounce ended at 0.7445. Then Minute wave ((iii)) ended at 0.7249 low in lesser degree 5 waves structure. Up from there, the bounce to 0.7299 high ended Minute wave ((iv)). Below from there, the decline to 0.7201 low ended Minute wave ((v)) in lesser degree 5 waves structure and also completed Minor wave 1 of (C). Above from there, the pair is doing a Minor wave 2 recovery & expected to fail in 3, 7 or 11 swings as far as a pivot at 0.7455 high stays intact for further downside. We don’t like buying the pair & prefer more downside against 0.7455 high.

AUDUSD 1 Hour Elliott Wave Chart
 

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Dow Futures Elliott Wave View: Pullback Should Find Support

Short-term Elliott Wave view on YM_F (Dow Futures) suggests that the pullback to 24956 low ended Minor wave 4. Up from there, Index is rallying within Minor wave 5 to end a 5 waves up from 4/2/2018 low. Minute wave ((i)) of 5 is currently in progress with internal subdivision as an impulse structure, This suggests lesser degree cycles in the direction of trend should unfold in 5 waves structure, i.e Minutte wave (i), (iii) & (v). On the other hand, the sub-division of lesser degree cycles against the trend should unfold in 3 waves corrective sequence, i.e. Minutte wave (ii) & (iv).

Up from 24956, Minutte wave (i) ended at 25326, Minutte wave (ii) ended at 25243, Minutte wave (iii) ended at 25657, Minutte wave (iv) ended at 25506, and Minutte wave (v) remains in progress towards 25828 – 26016. The move higher should also complete Minute wave ((ii)). Index should then pullback in Minute wave ((ii)) to correct cycle from 8/15/2018 low before the rally resumes. We don’t like selling the proposed pullback and expect dips to find support in 3, 7, or 11 swing as far as pivot at 24956 low stays intact.

Dow Futures 1 Hour Elliott Wave Chart
 

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Can ROKU Stock price surpass $100? ElliottWave Forecast Analysis

ROKU (NASDAQ:ROKU) a streaming TV platform surged last Thursday more than 20% after the company reported better-than-expected second-quarter results.

The company currently has 22 million active users but still can’t compete with the giant Netflix (NASDAQ:NFLX) having 130 million subscriber. However, ROKU is taking serious steps to expand and not limit the product to Roku devices. It already made the move to put The Roku Channel on all internet-enabled devices.



Since its IPO, the stock price tripled and investors are looking forward for more gains. So let take a look at the daily technical Elliott Wave structure:

ROKU did an impulsive 5 waves advance from 2017 low, followed by a 3 waves pullback that found buyers at equal legs area $32.81 – $28.14 before resuming the rally higher. The stock did manage to make new all time highs so consequently it opened a new bullish sequence to the upside calling for a minimum target at $71.99. However, if we are looking for ROKU to start an impulsive move higher then it should be looking for the 3rd wave to reach / exceed the 1.618 fib ext area coming at $98 area.

ROKU Elliott Wave Daily Chart 8.13.2018


Recap
ROKU stock is showing 2 impulsive structure from 2017 and 2018 lows, therefore as long as pullbacks remain supported above $29 low then it will be looking for a continuation higher with a potential of a break above $100 at a later stage.
 

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AT&T Elliott Wave View: Rallying as Impulse with Nest

AT&T (ticker symbol T) Short-term Elliott Wave view suggests that the pullback to $31.76 ended Minor wave 2. The stock is rallying from there within Minor wave 3 as an impulse structure with a nest. Up from $31.76, the rally to $33.58 ended Minute wave ((i)) of 3. The subdivision of Minute wave ((i)) is also unfolding as an impulse structure. Minutte wave (i) of ((i)) ended at $32.53, pullback to $32.13 ended Minutte wave (ii) of ((i). Minutte wave (iii) of ((i)) ended at $33.26 while Minute wave (iv) of ((i)) completed at $33.11. The last push higher to $33.58 ended Minutte wave (v) of ((i)) and completed cycle from 8/3/2018 low ($31.76). The stock is currently pulling back in Minute wave ((ii)) to correct cycle from 8/3/2018 low before the rally resumes. We don’t like selling the proposed pullback and expect dips to find buyers in 3, 7, or 11 swing as far as pivot at 8/3/2018 low ($31.76) remains intact in the first degree.

AT&T 1 Hour Elliott Wave Chart
 

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NASDAQ Elliott Wave Analysis: Nesting Higher As Impulse


NASDAQ ticker symbol: $NQ_F short-term Elliott wave analysis suggests that the rally from 7/30 low ($7167.75) to $7505.25 high ended Intermediate wave (1). The internals of lesser degree cycles within Intermediate wave (1) unfolded as 5 waves impulse structure. Down from there, the correction against that cycle in Intermediate wave (2) pullback is proposed complete at $7316.5 low. The subdivision of Intermediate wave (2) unfolded as double three structure. Where Minor wave W ended at $7378.25. The rally to $7479 high ended Minor wave X. And the decline to $7316.45 low ended Minor wave Y of (2).

Above from there, the NASDAQ has already made a new all-time high confirming the next extension higher in Intermediate wave (3) higher has started. The internals of the rally higher is unfolding as 5 waves impulse structure. Where Minute wave ((i)) ended in 5 waves at $7433.5 high. Then the pullback to $7352 low ended Minute wave ((ii)) pullback as a Flat structure. Up from there, the index is nesting higher in Minute wave ((iii)) with lesser degree cycles showing 5 wave advance. Near-term, as far as a pivot from $7316.45 low remains intact index is expected to see more upside. We don’t like selling it and expect buyers to appear in 3, 7 or 11 swings against $7316.45 low in the first degree.

NASDAQ 1 Hour Elliott Wave Chart
 

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S&P500 Mini Futures: Extending Higher As Impulse

S&P500 Mini Futures ticker symbol: $ES_F short-term Elliott wave view suggests that the decline to $2803.34 low ended Minor wave 4 pullback. The internals of that pullback unfolded as Elliott wave zigzag correction. The lesser degree Minute wave ((a)) ended in 5 waves at $2820.5 low. Then the bounce to $2843.50 high ended Minute wave ((b)) bounce as a Flat correction. Down from there, the index completed the Minute wave ((c)) in another 5 waves at $2803.34 low.

Up from there, the rally higher is taking place as impulse structure with lesser degree cycles showing sub-division of 5 waves structure in each leg higher. It’s also important to note here that index is already into new all-time highs & both the sequence & right side tags are calling index for more upside. Above from $2803.34 low, the minute wave ((i)) ended in lesser degree 5 waves structure at $2874 high. The pullback to $2846.25 low ended Minute wave ((ii)). A rally from there unfolding in another 5 waves structure within Minute wave ((iii)) with lesser degree cycles in Minutte wave (i), (iii) & (v) expected to unfold in 5 waves structure. We don’t like selling the index and expect buyers to appear in 3, 7 or 11 swings against $2803.34 low in the first degree.

S&P500 Mini Futures 1 Hour Elliott Wave Chart
 

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NZDUSD Elliott Wave Analysis: Double Correction Taking Place

NZDUSD short-term elliott wave analysis suggests that the decline to 0.6543 low ended Minor wave 1. The internals of that decline unfolded as impulse structure with lesser degree Minute wave ((i)), ((iii)) & ((v)) unfolded in 5 waves structure. Above from there, Minor wave 2 bounce is taking place as double correction higher with lesser degree cycles showing sub-division of 3 wave structure its each leg higher.

Up from 0.6543 low, the rally to 0.6719 high ended Minute wave ((w)) of 2. The internals of that rally also unfolded as double three structure where Minutte degree wave (w) ended at 0.6639. Minutte wave (x) pullback ended at 0.6609 & Minutte (y) of ((w)) ended at 0.6719 high. From there, the pullback to 0.6616 low ended Minute wave ((x)) of 2 as a Flat structure. Near-term, as far as dips remain above there, expect pair to resume the next leg higher in Minute wave ((y)) of 2 looking for 0.6795-0.6835, which is the 100%-123.6% Fibonacci extension area of Minute wave ((w))-((x)) to end Minor wave 2 bounce. We don’t like buying the pair.

NZDUSD 1 Hour Elliott Wave Chart
 

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Disney DIS Bullish Sequence Looking For New All Time Highs

In the recent 3 years, Walt Disney stock price (NYSE: DIS) hovered between $120 and $90 without any real trending momentum. Last year, we looked for a potential break to new all time highs in Disney based on few scenarios which seems to be still playing out.

Taking a look at the weekly chart, we can consider the 3 years as a consolidation period of time after a strong 6 years of rally. Therefore, we expect the stock to do a breakout to the upside following this bullish flag type of structure.

Disney DIS Weekly Breakout Chart
DIS-Breakout20180828113843.png


In Elliottwave Forecast, we use the swing sequence count along side other tools to define the current trend and cycles allowing us to remain on the right side. Counting the swings for Disney since 2016 low, we can see that it’s showing an incomplete 5 swings bullish sequence and looking to extend higher toward $126 – $133 as a daily target as long as pullbacks remain above $96.2 low.

Disney DIS Swings Sequence
Disney-DIS-Swings-Sequence.png


Now, as we have bullish sequence for DIS suggesting a move higher to new all time highs, then we can use the Elliott Wave Theory structures to define the current move.

Usually this type of consolidation happens during a bullish triangle in the 4th wave of an impulsive structure suggesting that the next leg higher could be a final acceleration before a cycle ends followed by another 3 waves pullback. In the case of Disney, the next target for a wave V would take it higher toward $130 – $144 area which would be achieved with a clear 5 wave move to the upside.

Disney DIS Triangle wave IV Chart
DIS-Weekly-Triangle20180828113409.png


However, looking at the current structure since 2016 low, DIS could be doing a 5 waves ending diagonal as well with the same target around $130 area suggestion more time before reaching the final target to end that cycle.

Disney DIS Diagonal wave V Chart
DIS-Weekly-Diagonal20180828113408.png


RECAP
Disney DIS Showing a bullish sequence since 2016 low looking to trade higher and break 2015 peak toward $130 as a minimum target before another correction takes place.
 

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EURJPY Elliott Wave View: Ended 5 Waves Advance

EURJPY short-term Elliott wave view suggests that the decline to 124.87 low ended intermediate wave (2) pullback of a leading diagonal structure from 5/29/2018 cycle. Above from there, the rally higher is taking place as Elliott wave zigzag structure within intermediate wave (3) of a diagonal. In a zigzag ABC structure, lesser degree cycles should show sub-division of 5-3-5 structure i.e Minor wave A unfolds in 5 waves either impulse or a leading diagonal, Minor wave B unfolds in 3 swings corrective structure. Whereas Minor wave C unfolds in another 5 waves structure either impulse or Ending diagonal structure.

In EURJPY’s case, the rally higher from 124.87 low unfolded as 5 waves impulse structure in Minor wave A. Up from 124.87 the rally higher to 126.49 high ended Minute wave ((i)) in 5 waves structure. Down from there the pullback to 125.55 low ended Minute wave ((ii)) pullback. A rally higher from there to 130.275 high ended Minute wave ((iii)) with another lesser degree 5 waves structure. Below from there, a pullback to 129.55 low ended Minute wave ((iv)). Finally, a rally to 130.86 high ended Minute wave ((v)) & also completed Minor wave A. Currently Minor wave B pullback remains in progress in 3, 7 or 11 swings to correct the cycle from 124.87 low before the rally resumes, provided the pivot at 124.87 low stays intact. We don’t like selling it.

EURJPY 1 Hour Elliott Wave Chart
 

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The BEL20 Index Long Term Bullish Trend and Cycles

Firstly, the BEL20 Index has trended higher with other world indices since the benchmark was established. The index remained in a long term bullish trend cycle into the May 2007 highs. From there it made a sharp correction lower that lasted until March 2009 similar to other world indices. That is where the index corrected the whole long term bullish cycle from the all time lows. At this point is where this bullish trend, cycle and swing analysis begins. The analysis continues below the monthly chart.

BEL20 Monthly Chart



Secondly, I will mention again as before, the 2009 lows corrected the whole longer term cycle higher from inception in the benchmark index. The bounce from the March 2009 lows into the January 2018 highs was a clear five swing impulse. The pullback lower from that high is strong enough to suggest it is correcting the whole cycle up from the March 2009 lows. This is determined by reading the RSI and other momentum indicators. The analysis and conclusion continues below the daily chart.

BEL20 Daily Chart



Thirdly in conclusion. Previously mentioned earlier, the pullback from the January 2018 high to the October 2018 low was strong enough to suggest it is correcting the cycle up from the March 2009 lows. The daily chart above shows this decline with the cycles and swings numbered. At this October 2018 low point, the index appears to have potentially completed a seven swing corrective sequence. This pullback Fibonacci extension area shown on the chart is measured by the following. Take the Fibonacci extension tool on a charting platform and use January 23rd as point one. Go down from there to the third swing low of July 2nd as point two. From there make the point three at the July 27th high which gives the Fibonacci extension target area for the 7th swing that was reached.

This double three correction is a typical and common Elliott Wave corrective structure. Previously mentioned earlier, this is correcting the cycle from the 2009 low. It's possible the index only sees a bounce that would fail to achieve new highs above the January 2018 highs. If so, it could see another corrective pullback similar in time and price of the one that appears ended at the October 2018 lows before resuming the uptrend. At this point in time the preferred view is while pullbacks remain above the October 26th lows it can resume the longer term bullish trend.

Kind regards & good luck trading.

Lewis Jones of the ElliottWave-Forecast.com Team
 

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Short Term Elliott Wave View on EURUSD suggests that pair is currently in Primary wave ((2)) rally to correct cycle from Sept 24 high (1.1815) before the decline resumes. Internal of Primary wave ((2)) is unfolding as a Flat Elliott Wave structure where Intermediate wave (A) ended at 1.15 and Intermediate wave (B) ended at 1.1214. A Flat is a 3-3-5 Elliott Wave structure, thus we should expect Intermediate wave ( C ) to be unfolding as 5 waves.

Intermediate wave ( C ) rally higher is taking the form of a 5 waves impulse Elliott Wave structure. Minor wave 1 of ( C ) ended at 1.135 and Minor wave 2 of ( C ) ended at 1.127. Near term, expect the pair to end Minor wave 3 of ( C ) soon, then it should pullback in Minor wave 4 of ( C ) before doing another leg higher in Minor wave 5. The move in Minor wave 5 should also end Intermediate wave ( C ) with projected target at 1.148 - 1.154.

More important than the target area however is the momentum divergence. Minor wave 5 should show momentum divergence with Minor wave 3 before pair ends the 5 waves move. As far as momentum does not show any divergence, we can assume that EURUSD still remains to be in Minor wave 3. As far as pivot at Sept 24 high (1.1815) remains intact, pair is expected to resume lower or at least pullback in 3 waves once the 5 waves move is over. We don’t like buying the pair.

EURUSD 1 Hour Elliott Wave Chart
 

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China Stock Market Preparing New Elliott Wave Bullish Cycle

The trade war between USA & China had led to a global fear around the stock market and causing a mid-term “bear market” in China which lost 30% since the start of 2018. The latest plan is that the two leaders US President Donald Trump and Xi Jinping would meet for dinner on December 1 immediately after the G20 meeting in the Argentine capital Buenos Aires.

Trump says US the market.around effect important is ‘doing extremely well’ with China but deal not done yet. Therefore the next meeting could be critical for this ongoing war trade talk and its result will have

main-qimg-af664cc8b0debf839f2670e99fc0a741




At ElliottWave Forecast, we believe the market is ruled by technical aspect and the news is an after-fact event to drive the market into the pre-determined direction. Therefore, understanding the Nature of the Market is key for traders to stay in the right side and follow a clear path which have nothing to do with Fundamentals or events.

For our technical explanation, we’ll be using the largest China ETF “iShares China Large-Cap ETF FXI” which tracks an index of the 50 largest and most liquid Chinese stocks traded on the Hong Kong Stock Exchange.

China Large-Cap ETF FXI Monthly Chart

main-qimg-0ce8955e354ba41450684a81507f796f




Since 2008 low, we can count 5 swings sequence (Red Color) to the upside until the recent 2018 peak which isn’t an Elliott Wave count but a representation of the sequence. In this case, FXI has an incomplete bullish sequence and ideally it will be heading higher in the 7th swings toward equal legs area $61.46 — $69.38. There, the ETF can be ending a larger 3 swings (Blue color) followed by 3 waves pullback.swing after ending the 6th

After clarifying the bigger picture for FXI, we can switch to the daily time frame to understand the current structure:

main-qimg-edee4c38b92c77fe61f8d1fc5fb2a795




From January 2018 peak, FXI declined in a 3 waves Zigzag structure and reached the extreme blue box area $38.8 — $35.76 which is a High-frequency area where the markets are likely to end cycles and make a turn. Up from there, the ETF is looking to resume the rally higher in an impulsive 5 waves structure or at least it will bounce in 3 waves to correct 2018 decline.

Consequently, China’s stock market will rally and drive the rest of global market with it in the coming few weeks based on the Monthly bullish sequence and the current daily structure. So deal or no deal between USA & China the result will be the same in favor of the Bulls.
 

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Facebook Ends Cycle from IPO. What’s Next For The Social Networking Giant
Even today with the explosion of advancements in quantitative analysis utilizing the most sophisticated algorithms and artificial intelligence available the debate rages on between whether a technical-based trading methodology is superior to a fundamental-based trading methodology and vice versa. That debate is examined below via analysis of individual financial instruments such as Facebook (FB).

The price of Facebook’s stock has pretty much been on bullish rip higher ever since the IPO of 2012 reaching an all-time high over this past July at 218.62. However, the company has been mired in unflattering publicity that the fundamentalists claim has taken the wind out FB’s sails. The first chink in the armor of FB came during US General Elections of 2016 when a Russian company named Internet Research Agency start buying Facebook digital ads to allegedly spread propagandist messages about various politically hotspots that included religion and immigration. This event brought the company into the biggest crises of its short history. I have to say it’s definitely a unique event to see an American company as the tool of a foreign plot to influence a major democratic election. Even so, the stock pushed higher. However, on this very day we read about a seemingly endless series of “events” which are said to have caused the company stock to decline nearly $100/share with its most recent print of 126.85.


Facebook has billions of members and was perhaps the greatest information dissemination tool ever created. Far from its stocks perch of July 2018 FB hasn’t been able to control the narrative and the fundamentalist claim this has caused the stock price to plummet. The company tensions are playing out in the mass media with corporate leadership denials, tension, finger-pointing and even testimonies in front of Congress. After some 150 million Americans were exposed to the disinformation campaign of the Russian internet troll farm, Internet Research Agency crisis, FB wasn’t quick to come clean. Now Facebook is in crises mode trying to turn sentiment to not only the American public but to the entire world. The latest event happened last week when the news came out that the company hired Definers Public Affairs to downplay public statements and deflect public scrutiny onto rival tech companies. FB has since ended the relationship this week. It seems like one issue after the other.


The events described above can definitely be part of the landscape of fundamental reasons that we now see such a decline in Facebook’s stock price. We haven’t even mentioned anything financially related. It’s simply how the masses currently “feel” about Facebook. I want to shift gears now and talk for about what we see are the technical reasons for the decline. This social network company held the initial public offering May 18, 2012. Since then we can see an advance in 5 waves from that day. The Elliott Wave Theory states that after a 5 wave advance then the instrument of analysis should regress in 3 waves lower. That sequence of 5 waves higher and 3 waves back lower is where we are now with regards to FB. The following chart shows the Elliott Wave Theory pattern of progression and regression for reference.

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The Following chart show Facebook price action and showing the 5 waves advance and now 3 waves back.

Facebook Long-term Elliott Wave View
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The Blue Box highlighted in the chart above encompasses a range from 135.22–101.72 and it is the area in which the 3 wave regression lower can be ending. We use these extreme areas to look for inflection points in terms of price reaction or to reverse a prior trend. In the case of FB it is in the area to look for a bottom. From the current price lows, we should see a bounce higher and also now is the time to expect the Fundamental analysis to align with the aforementioned brief primer on the technical. Something will happen to justify the coming bounce in terms of an “event”, “news”, or some other fundamental based “feeling”. In our view the Market’s nature advances in either 5 or 3 waves, but when it corrects it is always in 3, 7, or 11 waves. The question now is this decline all we will see? Or, is this the beginning of a deeper pullback and we will now only experience a 3 wave bounce higher that ultimately reverses in extension of another precipitous decline into the $80.00–60.00 area?

As we always say, nobody knows exactly what the future will bring. While it is evident that the possibility of huge decline is viable, knowing The Market Nature is the ultimate key. Buying FB within this box can be an unique opportunity that one should at least can expect a tradable bounce higher. If the bounce fails then there will be an even a greater opportunity lower. The reality is that the fundamental reason for lower price action is getting crowded and one-sided. The technicals are telling us that the company is about to stabilize and a solution to the current crises is on the horizon. Let’s see what happens!
 

Elliottwave-Forecast

Master Trader
Feb 17, 2017
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XLY — Don’t Count the American Consumer Out Yet
The U.S. Consumer Measured Via the XLY

“The U.S. economy is the global economic driver. And within the U.S. economy, the U.S. consumer is the global driver.” James P. Gorman

We’re Entering In Negative Territory for 2018
The stock market (measured via the S&P 500 and Dow Jones Industrial Average) has officially erased all of its 2018 gains. I can see from the headlines like the one pictured below from The Drudge Report that there’s certainly starting to be a bit of panic in the air.

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The Parts of the Machine Matter
One of the beneficiaries of this year’s market rise was the Consumer Discretionary Sector ETF, XLY as it still remains above its 2018 low near 98 with a price currently near 101. The main reason for XLY’s rise was due to Amazon’s 23.15% weighting in the ETF and the fact that even with the recent downturn in AMZN it is still well above its 2018 low. You can see below that AMZN dwarfs its nearest XLY weighted fellow component, HD (10.6%), by over 2 to 1. Behind HD nothing comes close in terms of comparable influence upon XLY.

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What are We Expecting for XLY Going Into the Holiday Shopping Season?
XLY has just now confirmed that the ETF is headed lower along side AMZN. You can see in the chart below that the most recent proposed wave count suggest that this bearish price action is merely a correction. The larger trend is indeed bullish. But, in the meantime, there exists the similarity with AMZN that traders can expect more tradable downside in the near term.

The Wave Count for XLY
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The cycle from XLY’s 2009 low (15.72) remains in progress as an impulse structure, where Super Cycle degree wave ( I ) ended in 5 waves at 80.61 while Super Cycle degree wave ( II ) ended as a Flat at 67.07 on 2/11/2016 low.

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Currently, it has ended the cycle from the 2/11/2016 low in Super Cycle degree wave ( III ) at the 118.26 high. Coming down from there XLY is remains correcting the aforementioned cycle in a Super Cycle degree wave (IV) pullback as a double three structure consisting of Cycle degree waves w — x — y. In the near term while the 112.15 Cycle degree x wave high of 11/08/2018 holds expect lower prices to target the extreme equal leg and extension area of 95–84.

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James

EWF Analytical Team
 

Elliottwave-Forecast

Master Trader
Feb 17, 2017
2,426
9
84
www.elliottwave-forecast.com
Tesla ticker symbol: $TSLA short-term Elliott wave view suggests that Minor wave 3 ended at $349.20 high. Down from there, a pullback to $328.50 low ended Minor wave 4. The internals of that pullback unfolded as a Flat correction. Minute wave ((a)) of 4 ended at $330.14 low in lesser degree Flat correction. Above from there a bounce to $357.58 high ended Minute wave ((b)) of 4 as zigzag structure. Minute wave ((c)) of 4 ended in lesser degree 5 waves at $328.50 low.

Up from there, a rally to $366.61 high ended Minor wave 5 in lesser degree 5 waves structure. The move higher also completed Intermediate wave (C) of a Flat correction coming from 9/07/2018 low within primary wave ((D)) of a triangle structure. Down from there, primary wave ((E)) of a bullish triangle structure remains in progress in 7 or 11 swings against 10/10/2018 low (247.29) before a thrust higher is seen.

Down from 366.61, Minor wave A ended at 333.55 low and Minor wave B ended at 354 high. Minor wave C remains in progress towards 320.71-300.13 100%-123.6% Fibonacci extension area of Minor A-B to end intermediate wave (W). Afterwards, the stock is expected to bounce in intermediate wave (X) before a final push lower in intermediate wave (Y) of ((E)) is seen & stock breaks higher. We don't like selling it.

Tesla 1 Hour Elliott Wave Chart