EUR/USD Possibilities

Here are several EUR/USD 4 hour charts showing the possible future movements of the pair. I have listed them in order of most favoured to least favoured. This first one is my current primary count because the move off recent from the low at 1.2153 looks very much like a leading diagonal to me. Also I am bullish on equities in the very short term but bearish in the medium term, which fits well with this count. As you can see it looks to me as if the pair has almost completed a wave ii down and is about to head higher in a wave iii. If this could is correct it is likely that price will turn soon and will test 1.245 on Monday or Tuesday. A break beneath 1.2150 will invalidate. Based on this chart I am going to take a long position at 1.2240 which is the near both the 76.4% Fibonacci level and extension where wave a of ii equals wave c of ii.

Here is a more bullish count for the pair, showing a truncated wave 5 which will be a medium term bottom. If this count is correct we will likely see a sharp surge upwards during Mondays session. I do not favour this count due to my bias towards increasing risk aversion over the coming months. If however this count is correct expect price to test 1.30 at a minimum, but more likely higher. The 38.2% Fibonacci of the entire move down from the top lies at 1.33.

Finally here is my bearish EUR/USD count. I am highly doubtful that this scenario will unravel however it is always important to be aware of both bullish and bearish possibilities. Here wave 5 has begun, and looks like it is going to extend downward. The reason I am dubious of this move is that the fall from the 1.2454 high does not look impulsive at all. However it is possible that is is a choppy leading diagonal and price is going to drop hard through 1.2150 early in the week.

SPX Video Analysis

Roy's latest video analysis of the SPX is out in which he warns bears to be careful as it doesn't look like the market has topped out just yet. I also have been cautious of this being the top as the move down from 1104 does not at all look impulsive. Click the link on the left of the page to view the video.

AUD/USD Could Be Topping

Keep an eye on this Head and Shoulders reversal pattern forming on the AUD/USD. If the neckline at 0.821 breaks price will likely head back down to the 0.8050 support level. 80.50 has been solid resistance twice over the last few weeks, and if it breaks it is likely we will see continuation of the move to the downside. It is possible that an impulsive wave 1 is complete from the high and we are now retracing in a wave 2. A move 0.839 will invalidate this count.

Clear Impulse Down on the USD/CHF

There hasn't been many clear impulsive moves over the last few days as most markets seem to be correcting in a very choppy manner. The USD/CHF is offering one of the only clear impulses I can see in any FX market. I am going attempt to take a short trade from 1.163 with my stop at 1.17. Be warned however that the move from the low I have labeled as 1 or A to the high at 2 or B could also be an impulse so it is possible that price will continue higher after an ABC down. Do not risk more than you can afford to lose. Sometimes it is best to wait for clearer signals if you don't really have any good trade ideas.

EUR/USD Hourly Chart

The inverted H&S target from my previous EUR/USD chart (1.2730) has not yet been hit. I took profit near the top of the B of X after noticing that the wave looked very corrective in nature and further downside was likely. Once 1.25 broke a new H&S pattern emerged as marked on this chart, and as you can see the target was easily reached. I have not taken a long position from near the 78.6% Fib which is also the bottom of a confluence area that the pair has been between for the majority of the last few weeks. I think we will be moving up from current levels very soon. The corrective downward movement of the NZD/USD from the recent high also gives weight to an increasing risk appetite over the next few days (in a C of a flat). Keep your stops at 1.2140.

May 22nd Elliott Wave Analysis Video

Roy the Elliott Wave Practitioner has just released a new video analysis of the SPX. Click on the link to the left to watch it.

EUR/USD Inverse Head and Shoulders Reversal

Some of you may have already spotted this pattern on the EUR/USD hourly, and a similar, inverse pattern on the USDX. The EUR/USD has been holding up well over the past few days and I expect Euro strength to continue as price rebounds from oversold territory. As you can see the pair has completed 5 waves up which is either a 1 or an A, and looks to have completed a correction - labeled as a B or 2. Look to get long with risk just beneath the recent low. The H&S target is 1.2730, or for a more conservative price target the Fibonacci price extension where wave A or 1 = wave 3 or C is at 1.26.
*** Friday US Session Update *** I am taking profit on this trade at 1.2555 because the move from the bottom at 1.2470 looks corrective so we will likely be moving below there before we push higher again if at all.

SPX and DAX Video Analysis

Roy has just released his latest video update of the SPX and the DAX markets. Check it out by clicking the link to the left. Things are looking very bearish for equities as markets move back into a state of risk aversion.

USD/JPY 30 Minute Chart

The initial downside USD/JPY target after the completion of the Ending Diagonal (the point of origin of the ED) at 92.21 has been reached, however the fall did not maintain momentum and price has reversed in what seems to be a corrective manner. I believe the USD will push slightly higher to just over 93.00 before dropping southward once again. As you can see the 93.10 level is the fourth wave extreme of the smaller cycle and also the 61.8% Fib of the impulse down from the top. If this count is invalidated, risk on this trade is fairly limited as all stops for any short positions taken should be placed just near the recent high at 93.60.

SPX Fibonacci Confluence Zone at 1155

The SPX looks to have put in a complete 5 waves down from the high at 1176 and is pulling back sharply in standard wave 2 fashion. There is a very important confluence of Fibonacci levels at the 1155/1158 zone which is the 61.8% retracement of the entire drop from the 1220 top, and the 61.8% of last weeks high. If price retraces this far I think this will be an excellent area to get short. Keep your stops at 1177.

SPX Elliott Wave Video Analysis

Roy, the Elliott Wave Practitioner, has just released a short video analysis of the SPX. Shorting from near current levels offers an excellent opportunity for a long term trade with the possibility of a great risk to reward. Click on the link to left of the screen to see this latest video. I will also be doing a shorter terms SPX analysis later today as I have noticed a very important Fibonacci confluence zone on the 1 hour if we retrace from current levels in a second wave from the top at 1176.

SPX Wave 2 Looks to have Topped

Well my Ending Diagonal scenario didn't play out and now that the parallel channel from the SPX highs has been breached to the downside my bias has changed. So far we have had a clear 5 waves down from the top. This could be a complete impulse and a retracement is about to occur, or it could be a far more bearish 1-2, 1-2 scenario. I tend to favour the latter as I expect this fall the be fast and hard. Look to get short on a pullback, this overstretched market has a long way to fall from here.

SPX Update

Here is my latest SPX chart. It looks fairly obvious to me that the SPX is forming an Ending Diagonal. The moves from the bottom of wave 4 struggle to be defined by any other patterns. In line with this count I expect an increase in risk appetite over the coming session, before a reversal and sharp fall later in the US session. I have sold out of my previous short from 1160 at break even and will look to re-enter again at around 1180. This is a very long term trade and the risk to reward expected on it is excellent. Because I expect equities to top out here and plummet for months a set target cannot yet be defined as yet. Keep risk at 1220 if you can or at least at 1195, just above downward sloping resistance if you want to keep risk tight.

USD/JPY Ending Diagonal 30 Minute Chart

Here is my 30 minute Ending Diagonal count for the USD/JPY pair. The pair may have topped out and completed a large correction at the recent high at 93.64. The series of 3 wave moves from 92.20 fits perfectly with an ED patten, so even if this correction isn't over and we are going to consolidate for longer, it is likely that price will fall to at least the 92.20 level as it is the norm for ED's to retrace to at least the level of their point of origin. I believe we are soon going to see an acceleration to the downside in a push well below the wave 1 low at 88. I have taken a short from 93.50 with a stop just above the high. If you are going to get in on this trade keep your stop at 93.65.

Covering My Short Positions

It is 7.40 a.m. GMT and I have decided to take profit of my EUR/USD, AUD/JPY and SPX trades due to the lack of clarity on smaller time frame counts and some very bullish looking signals in the aforementioned and some other correlative markets. If you have been following my trades and want to keep up to date with my intraday movements I post live update throughout the day via my Twitter account. I will be looking to re-enter all these positions from a higher level and will post updated charts (if previous counts are invalidated or begin to seem improbable) and orders when opportunities occur. Good luck!

SPX 30 Minute Chart Update

Here is an update of my SPX count. The retrace from the low is sufficient in size to assume that is it a larger cycle 1-2 rather than a 3-4 as I previously thought. I am expecting one final push above 1165 to complete this correction from where I will be looking to take a short position on the completion of the wave 5 (v) of C. At present we may be nearing completion of a wave 2 of 5 (v) or we may still be in a wave 4 (iv) of C. I have marked the Fibonacci rations with wave 1 = wave 5 for both possibilities. If we move to below 1130 without first pushing up in a final motive wave this count will be invalidated. Look to get short from around 1180 with a stop at 1210. This is a medium term hold position which offers a great risk to reward. For more info see Roy's latest video on the SPX.

EUR/USD 15 Minute Chart

I believe the EUR/USD has finally started moving lower again and will accelerate to the downside after a small retracement from gap support. This will likely coincide with a drop in the price of equities, and an overall shift towards safety. The move from the top at 1.3095 so far looks impulsive and the Euro has been comparatively weak across the majors which I expect to continue over the coming few days. It does not appear that the news about the situation in Greece has done much to shift overall sentiment toward the Euro. I took a short position from 1.2990 and have my stop just above the high at 1.31. If you are looking to enter the trade wait for a pullback after the gap is closed but beware if equities drop off and the markets move into a state of panic price may slice through support at 1.2750 and 1.2550 hard and fast.

SPX500 Hourly

Here is my hourly SPX chart. I think we are currently reversing in a wave C of 4 and will test above 1140 before turning bearish again. Not much else to say on this one except I am very bearish long term on equities from this point. I will be looking to get short again at around 1150/1160 with my stop at the wave 1 low of 1180.

AUD/USD Daily

My AUD/USD count is similar to my AUD/JPY count in the fact that I think we are about to drop in a wave 5 of 1 down. As long as the USD remains weak against the Yen however, it is a better idea to trade the AUD/JPY than this pair. As you can seen resistance at 94 was too strong for the Aussie to break through and price has fallen off sharply in what looks to be an impulsive third wave. If equities  remain weak expect the AUD/USD to as well.

AUD/JPY Hourly

There were some huge moves away from risk in the recent US session. Price has rebounded quite strongly however I think this move is a sign of things to come, and the push up is just the last of the optimists throwing their money away before the markets come crashing down in a state of panic and fear. I am currently short the AUD/JPY as I believe it is the best barometer of risk being the highest yielding currency pair. Price has rebounded to a level which I believe is a good spot to get short so I will be adding to my position soon. Look to sell at 83 with a stop at 84.

CAD/JPY Daily Update

There don't seem to be many obvious trades for me to discuss at the moment. The sharp drop from the top in many pairs hasn't had the immediate follow through I would expect if this were the beginning of a new panic driven cycle. While I am still bearish on equities and commodities, it is possible there will be one more push higher before a turn. Here is my daily CAD/JPY chart, which points to one last push up before panic and fear retake the markets and prices plummet. If price does continue to fall and 88.458 is breached, than my count is off and it will signal that the top is likely in.

SPX Head and Shoulders Neckline Breach

Looks like we're finally getting some action. There were big moves in several markets overnight, gold has fallen sharply and looks to have topped out for a while at least. Here is a head and shoulders pattern which has formed on the SPX and as you can see the neckline has been breached. I am going to get short on a retest of this line with a minimum target of 1142. Although I will likely hold for much longer than that as this may be the top in this market we have all been waiting for.