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Crude Oil Trading Impulsively Lower; Next targets at 86.80 and 86.00


July 31 2012

Oil fell into a third leg of decline as expected, but with very sharp price action. We know that fast and strongest moves occur in wave three situation of an impulse, which will be confirmed by a base channel break like in our case (circled zone). As such, we are very confident that oil prices are now headed even lower, definitely below July 25 swing. Ideally wave (iii) will slow down at 86.80 and cause a temporary bounce into wave (iv), before another sell-off. Short-term invalidation level is at 89.20 as wave (iv) must not trade into a territory of a wave (iv).

EURUSD: Temporary Recovery Underway; 1.24/1.25


July 27 2012

EURUSD recovered sharply yesterday through the falling resistance line, connected from early July. This break and more importantly daily close above that line suggests that EURUSD has reached a temporary bottom and that larger recovery, minimum in three waves, is underway. Why in three waves!? Becasue in Elliott Wave theory corrections are subdivided always by at least three legs. In fact, current rally from the lows is clearly impulsive, which represents either wave 1 or A, but in both cases we will be looking higher, towards 1.2400 and 1.2500 in coming days while 1.2040 low is in place.Traders will be looking for long opportunities after wave 2/B pull-back.

AUDUSD Trade Review


July 21 2012

Thats detailed video analysis of AUDUSD trades that we took in this past week, and reasons why. Explanations may help you to understand some Elliott Wave trade set-ups that may help you to identify your own trading opportunities.

GBPUSD: Correction Finished; Now Up To 1.58


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July 16 2012

Cable was trading lower early last week, when pair touched channel support and then sharply reversed to the upside. This usually occurs in a corrective-contra-trend price action. In fact, a decline since mid-June is clearly in three waves and now bounce from 1.5389 also looks impulsive so looking for higher levels at this stage makes sense. With this being said, further strenght in this market is expected, with a break through falling trend-line that will cause acceleration to 1.5800 in coming days.

S&P500 Corrective Rally Is Set For 1370/80 Test


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July 03 2012

S&P500 closed sharply higher on Friday, very close to previous swing high. This type of a rally at the end of the week usually puts more strenght in play for the next week, which means more upside in our case, to 1370 area. As such, we are now tracking A-triangle B-C pattern which is still corrective movement. So larger picture is still pointing lower but not just yet.

USDJPY Very Bearish; Now Headed To 78.60 While Below 80.60


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June 27 2012

USDJPY is still very weak since Sunday when market turned sharply bearish from 80.60; when traded very close to wave (C)=(A) levels. Well notice that prices now already formed an overlap with 79.29 highlighted in our past updates which suggest that wave (C) of E is finished and that bear market is now taking a control. Ideally now wave 2) pull-back is underway which should complete in the next two 24-48hours, probably around 79.80-80.00 resistance. Generally speaking rend-line break should occur when bears will accelerate towards 77.60.

Wave Count Test


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June 26 2012

Hello traders. A time ago I received an interesting count from a friend Goncalo Moreira. So I decided to share this with my readers as well. I received many different counts and ideas from readers, and below you will find my view and interpretation and how I would act if this situation would occur in a real-market.

Before I label the waves, I always try to focus on some obvious and simple things:
  • Lets count the structure from the “lowest point to highest point” just in numbers. You will come out with 13. Well, that’s subdivision of a correction/contra trend move like in a zig-zag pattern (5-3-5)
  • Then look at the next most obvious thing-, such as most complex choppy overlapping waves in tight ranges- That’s probably corrective wave then. I believe its wave B placed in the middle of the whole structure.
  • Then at the top of that chart you will see two overlapping waves, which means volume is decreasing, bullish momentum is losing strength, so we suspect market is topping. In fact, that move, at the end has a shape of an ending diagonal pattern. Well if you know EW then you know that an ending diagonal occurs when the preceding move has gone too far too fast. They are found at the termination points of larger patterns, indicating exhaustion of the larger movement. These are reversal patterns.

So if we now put all together, I believe this is a corrective rally called a zig-zag which appears complete, so bears should take control as shown on the picture below. But that is just analysis, well from trading perspective thats a different story! In trading we need to more open-minded (alternations) and be very, very, very patient before pulling a trigger. With this being said, I want that my bias and forecast is confirmed by price before I buy or sell the market. So that, I want to see two things: First impulsive fall from a top that will lock highs in, and second, overlap with wave A to invalidate any bullish wave count possibilities. Only then I would short this market against the top. If I wait on those evidences of confirmation then I may avoid a losing trade, just in case if I am wrong and if market goes straight up. If my analysis was correct, then I will probably miss some potential profit before I  jump into the market. But I have no problem with that. You cannot catch a tick high and a tick low in the market-that would be a gambling then. Have a good day! Grega

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