Elliott wave Analysis of financial markets

afarghaly9

Trader
Jun 10, 2014
2
0
12
This is going to be an interesting post. From an Elliott wave perspective I have two counts. One terribly bearish and one slightly bullish in all cases there is one key level that we all need to look at in order to determine if the bearish count is the one that will take place. Now I am bearish on the NZD against many currency pairs against the EUR and CHF and the GBP. There is little reason to believe the the NZDUSD will be any different, In any case let me present the bearish count first.



This is my preferred count! I believe that the rally since the year 2000 low was a zigzag and we are currently initiating an impulsive decline that would typically take us bellow the 09 and 00 lows. Despite the probabilities on of being at a top for the wave (2) I will not place any short trades until the alternate bullish count is invalidated and that point is 0.8040, if we break that low labelled on the chart then this will certainly be the operative count and the NZDUSD will flat out collapse! Again I WOULD NOT get too excited about it unless we break the 0.8040 low, so trader be on the look out for that. now lets discuss the alternate bullish count.



This is my alternate count, as I said earlier a break of the 0.8040 will invalidate this count and the bearish count will be the only count left. The count above suggests that we are in wave 5 of the impulse that started in 2009 if that is the case further highs are to be expected and the rally from the wave (4)green low after the triangle is just wave 1 of 5 and the declines seen on the upcoming 4 hour chart is wave 2, now lets take a look at that 4 hour chart I was talking about.



Steve Nison recommends using candlestick analysis in combination with the Bollinger bands and ADX, He states if you get a candlestick reversal pattern while price is at a Bollinger band while the ADX is flat or declining then you have a high probability set up. This is exactly what occurred in this 4 hour chart prices made it to the upper band and formed an evening star while the ADX was flat. This, according to Nison is a high probability short set up. Now lets look at this market from a classical charting pattern perspective.



As you guys can see on this weekly chart we have a common chart pattern at the top of this chart. Its called a symmetrical triangle, now it is typically a continuation pattern. We did break the upper boundary which ideally would mean that the uptrend has resumed after breaking out of a bullish triangle the upper boundary becomes support but in this case prices dropped back into the triangle's range which is a bad sign. Again I turn terribly bearish on this market as we decline bellow 0.8040 until then I am flat.

Regards,
Ahmed Farghaly