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U.S. Dollar And Stocks: “Market Psychology and Wave Structure”

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Jul 11 2010

Hello Traders!

The stock market was higher in the past week and pushed the U.S. dollar index down towards the 84.00 support region. The overall price action however, was very slow on forex, even when the Wall Street session saw a bounce for more than 3% on Wednesday, the most since May 11th 2010.

The Eur/Usd moved higher from 1.2555 Sunday open to 1.2722 weekly highs, but on a very thin volume and slow price action. The reason for a slow, upward price action could be a falling trend line from 1.5140 region (December 3rd, 2010), which in fact reacted as a huge resistance on Friday during the European session when the Eur/Usd fell from 1.2722 highs towards the 1.2600 region. The weekly close on the pair was around 1.2640, 80 pips below the trend line resistance, and that could be a bearish signal for the start of the coming week (Monday, Tuesday), as traders were unable to push the pair above the trend-line.

Eur/Usd daily chart:



Dollar, however, will strengthen only if stock market finds sellers. But for the mid-term, that could be a problem, especially because of the S&P 500 wave structure. From an Elliott Wave Perspective a bearish run on S&P 500 from 1.2220 top is not over yet, no doubt, but the question is how to count a decline?! Well, we are monitoring two wave counts and important price points that will confirm the correct count. Anyway, what we know, and what is the most important, is that a recent bounce from 1010 region is only a correction, a short covering rally from an oversold bounce. But where this correction will end?! It may trade up even to 1140-60 region, IF YOU COUNT A DECLINE FROM 1220 TOP AS A LEADING DIAGONAL, as shown on the chart below.

S&P500 daily chart:



So, if 1140-60 region is reached while the 1010 support holds, then optimism will come back into the market, and investors will move from Short into Long positions and they will be sure that a decline from 12220 was only a correction and that new highs are now approaching. But at that time it will be too late to buy the market!! Market will reverse and will fall like a stone, because when something is fully expected, the opposite reaction is seen!! Like the past week per example; a lot of traders and investors, were expecting a huge move lower after the 1040 was broken, but market made an opposite move, it bounced higher and took out traders that were looking for a huge Short move and also those who were positioned Long with stops down there!!

If you are an Elliott Wave trader, then you exactly know what I am talking about. The Elliott Wave Theory is a detailed description of how groups of people behave. It reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific and measurable patterns. Elliott Wave Theory gives you an ability to predict the Long-term and Short-term market moves with some very simple rules and guidelines.

Our team provides technical analyzes for the financial markets based on Elliott Wave Principle. Members of our service receive weekly and daily wave counts that are updated during the weekend, 4 hour wave counts posted every day before the European session gets underway, plus the intra-day wave counts (such as 1 hour or lower time frame) which are posted and updated during the European and U.S. trading sessions. If you do not want to miss a trading opportunity, or if you don’t have time to analyze the charts everyday and monitor the intra-day wave counts…we are here for you!! Check out Our Elliott Wave Service now.


Aud/Usd Bulls

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Jul 20 2010

Aud/Usd moved lower as expected over the past few days, after an impulsive upward move found the top 0.8870 region. A decline from there is corrective, a blue wave (B) in our case, which could already found the final bottom at 0.8631 region. If that is the case, then new highs are next; break through 0.8870 should be seen.

Aud/Usd 4h chart:



WHAT WE DO?

We are providing technical analyzes for the financial markets and how they behave based on the Elliott Wave Principle. What is the Elliott Wave Principle?

You don’t have time to analyze the charts everyday and monitor the intra-day wave counts? We do it for you!

We analyze Eur/Usd, Gbp/Usd, Aud/Usd, Usd/Cad, Usd/Chf, Usd/Jpy, Oil, Gold, S/P Futures and Dollar Index. Learn more about the service

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Gold "Upward Correction To Come"

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Jul 21 2010

Gold reached new lows over the past trading days as expected, after the upward corrective wave 4) found the top at 1218 region. Wave 5) already broke through the 1185 wave 3) lows, which means that a while five wave move of decline from 1265 top can complete very soon!! Traders must realize, that always when five waves are shown, a correction will be seen, which means that temporary bottom on gold could be extremely near. New short positions are not recommended in this zone!!

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Gold 4h chart:



WHAT WE DO?

We are providing technical analyzes for the financial markets and how they behave based on the Elliott Wave Principle. What is the Elliott Wave Principle?

You don’t have time to analyze the charts everyday and monitor the intra-day wave counts? We do it for you!

We analyze Eur/Usd, Gbp/Usd, Aud/Usd, Usd/Cad, Usd/Chf, Usd/Jpy, Oil, Gold, S/P Futures and Dollar Index. Learn more about the service

Follow our updates on TWITTER or FACEBOOK



Eur/Usd

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Elliott Wave Service
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Jul 23 2010

Eur/Usd found a temporary bottom yesterday around 1.2731 as the equity and commodity market moved higher. The prices bounced from the black support line connected from 1.2148 region, which definitely needs to be taken out, before bears are confirmed. At the moment it is unclear, if this recent small decline from 1.3030 top is only a correction, blue wave (4) maybe, or is this already the first leg of some larger decline, red wave 1) maybe?! Traders that are bearish should pay attention on 1.3031 top which must hold.

Eur/Usd 4h chart:



Usd/Jpy "Correction Completed" ?

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Jul 26 2010

An upward correction is shown on Usd/Jpy, which moved higher recently, just above the 87.56 region from where a turning point is expected. An upward corrective structure seems to be a double zig-zag pattern, labeled as (w)-(x)-(y). If that is the case, then prices should turn into a lower black wave 5 soon, with moves towards the 86.30 lows, while the pair trades below 88.37 wave 1 region. Bears to come!

Usd/Jpy 4h chart:



Oil "Correction Unfolding"

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Jul 27 2010

An upward correction on oil, shown from 67 low is still underway, and may reach the 83.00 region, before top of a corrective wave II is seen. An upward bounce is a double zig-zag pattern, with wave (C) of (Y) in process. Once wave II is finished, a huge and powerful turning point will be seen!! Prices must not expected 87.00 top from May 3rd.

Oil daily chart:


S&P 500 "Corrective Uptrend"

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Jul 27 2010

The S&P moved above the 1100 region on Friday, and even higher yesterday with moves towards the 1114 region. The price action suggests that a red wave 3) of blue (C) is now in process, which is trading close to 161.8% and 261.8% Fibonacci extension levels, from where we may see some down-side pressure, into a corrective red wave 4). Overall, bulls remain in play as long as the prices trade above the 1088 wave 1) top.

S&P 1h chart:




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