Wednesday, June 3, 2015

06.03.2015 EURUSD short term count / intermediate term outlook

Sorry for not presenting a chart. I am away from my trading desk


let us look at the movements:

starting from the last high at 1.14x this high could mark

a) the end of an ABC-flat (up) which is a wave 4

b) the end of an ABC-flat (up), which is only part of a bigger correction

c) the 1.04x low marked the intermediate end of a bigger move down.

Now we are in an overlaping move up, which can be a leading diagonal. In this Leading diagonal we may be now in wave 5 up.

The 1.14x high was the end of the wave 3 The movement down from the 1.14x top looks most likely like an ABC-move. There are some Elliotticans out with counting this as an impulse. It seems one can do this, but it does not look right for me.

When counting ABC, then C is a bit short of 100% of A Now let us look at the move up: We had this overlapping movement from the 0819 low to the 1006 high. When we take this and put a fib-expansion on it, then the next peak at 1194 was pretty much 161.8% of this first overlapping wave. The following retracement lead to a 38.2% decline of the previous wave up. Would fit nicely with a 4th wave within an impulse. So most likely for now we are now in the wave 5 of an impulse up from the 0819 low. It may terminate around 1300-1310

What can we make out of this information:

down from the 14x top is most likely 2 waves (ABC) up from 0819 so far looks like impulse.

So let us look again on the 3 possible outcomes presented in the first rows:

a) the end of an ABC-flat (up) which is a wave 4

this seems to be invalidated, unless the wave 5 down develops now as ending diagonal (3-3-3-3-3) since we have now two waves down, it would need now 2 waves up (ABC or ABC-x-ABC) this would lead to a deep retracing wave 2 of 5 (in this case we could be now in ABC-x-A with B and C to come)

b) the end of an ABC-flat (up), which is only part of a bigger correction basically like above. The scenario would be, that the first 2 waves down were A, now 2 waves up for B, and then impulsive down for wave C (ABC-flat) In this case we should see a retracement of at least to 1372, and max. 1714. I would go with the 1372 The following impulse down should bring us towards 1,09 to 1.07 area

c) the 1.04x low marked the intermediate end of a bigger move down. Now we are in an overlapping move up, which can be a leading diagonal. In this Leading diagonal we may be now in wave 5 up. The 1.14x high was the end of the wave 3
In this case we would make a new high above 1.14x, probably 1714 to 2115

Keep in mind: the wave 2 after a leading diagonal retraces very deep. Normally around 80-85% of wave 1. That should bring us back also into the 1.08-1.06 area.

The problem with this count is: it would have 2 Leading diagonals: one as wave 1 of 1, the other as wave 1 of 5 Leading diagonals are rare. 2 Leading diagonals in one impulse nearly impossible. When I remember right, Prechter does expect leading diagonals only in wave 1, not in wave 5

The other problem with this count: it would look against some fundamentals, with the US about to hike rates. And this count would deliver much higher targets for the next 12 months or so.

So from a probability point of view I would go with variant A (the ending diagonal scenario) or B

Saturday, May 16, 2015

05.16.2015 EURUSD short term count


05.09.2015 EURUSD short term count // main count

So far, price managed to build one more swing up than expected, and forced us to take a new close look at the whole wave red C structure again.

 Here is the result. Keep in mind: some Elliotticans have thewaves black 4, black 5, green 4 in the middle of the waves as a triangle. Personally, I do not like that, because the wave black 5 of green 3 is on small TF clearly impulsive.

But anyway: the result for both counts is the same.

From an sentiment point of view we have kind of a mixed bag.

On the one side, when looking at retail trader positions in the various outlets of retail broker, which can be seen here, one can notice, that the retail crowd is very short, still.When one would have followed their positioning closely the last week, one would have noticed kind of manic-depressive behaviour. They switched someday's their positions from very short to long and back to very short in one day. May be a sign of indecision. Most retail short positions are now significantly under water, and the pain mounts up.

On the other side we have the sentiment surveys as the Sentiment Index or the AnimusX sentiment, where one does not primarily at traders positions, but rather ask them for their sentiment.

And this surveys do show quite another picture.

Sentiment Index for EURO is at around 80% bulls and only 9% bulls for DXY (data from Thursday)

AnimusX survey also show us record like bullishness for the EURUSD.

So the question for me is: why are the retail crowd still short, when their sentiment is so bullish?

Well, maybe it is "hope springs eternal", and they are hanging onto their losing positions in the hope to get them at least near BE again. So when price will drop from this levels, they will cover their shorts very soon, and go long. Then they might be trapped again, when price keeps on going lower many hundreds of pips.

Well, finally let us look at the actual COT data. Keep in mind, they are published Fridays, but the data is from Tuesdays (so it is old data).

The important COT Index does show, that the COMMS and large SPECS positions moved in a way, that their COT Index turned to neutral. Again: this is old data, and price of EU climbed over the course of last week. So the COT index for the COMMSmay now be near 0 and for the large SPECS around 100.

The COT Index for the small SPECS keeps on sitting at 100 for some time now.

So we may reach a point, where it may be opportune to think about short positions again. But be careful: COT Data alone are a very poor tool for timing.

Let us take a last look at the net-positions of the players:

 We can clearly see a reduction in the net-positions of the players. But remember, that the pure net-positions are a poorly tool in reading the COT-Data.

Most important tool is the COT index data.

Will be interesting to see next Fridays data (which are then Data from Tuesday).

Tuesday, May 12, 2015

05.12.2015 EURGBP short term count


04.18.2015 EURGBP short term count

So far price did like what was estimated.

Price reversed at A = C. Now stalling at the lower channel of the upsloping corrective channel.

Question is: was this allof the wave green 4, or only the wave A of it?The corresponding wave 2 was fairly complex, took quite a bit of time, and retraced deeply.

So from a view of alternation, this wave 4 would be already satisfied with a simple ABC-flat as we have seen here.

A break below the old low @ 7014 will open the door for further movement down.

Saturday, May 9, 2015

05.09.2015 EURUSD short term count // main count


04.18.2015 EURUSD short term count

So far we got what we were looking for. Although the wave C impulse up in its wave 1 looked very overlaping. it now can be counted as wave 1 leading diagonal.

The question now is:

Has this impulse up finished the wave blue 4, or is it only the leg Aof this wave 4?

If only a leg A, one would mainly expect now a wave B down, which should retrace between roughly 90-138% of wave A (remember: wave A in this case would be a zigzag, so the whole wave 4 should evolve as ABC-flat).

In case wave 4 is already finished, expect a movement towards 1.046 to 0.86. I will get more specific on the way down.

Aso we can not rule out a scenario, where we are now in a months long lasting sideways pattern, maybe wxyxz or in a triangle. In case of a triangle, we are now in the wave B down.

Structure of the move down will guide us the way in the next few days/weeks.

Regarding Sentiment data:

Have only the sentiment index  from Thursday and that is 69% EURO bulls.

Also have the fresh Anumus X sentiment:

But besides this data, which is obtained by asking the traders for their opinion, the picture is completely different by looking at their positions.

Most broker outlets show, that the short positions are around 60% now. Oanda, Saxo and FXCM show, that the short positions got a bit reduced over the course of the last week, but not really meaningful.

Interpretation for me is, that the retail crowd is bullish now, but was caught on the wrong side of the table with their short positions in the last weeks.

I think they are hoping for somewhat deeper prices to get out eventually at or near BE. Then go long to reflect their bullish stance.

We have to closely watch behaviour and mood, when we drop further towards the lows. If mood snaps back to outright bearish, it may then time to go long again.

Trade carefully, Infinitus

Saturday, April 18, 2015

04.18.2015 XAUUSD short term count


03.07.2015 Gold long term count 

Short term I propose now the following count:

In commodities, especially Gold, the most momentum is often in the wave 5. Also wave 5 is most of the time the extended wave.

Under this premise, we should expect Gold to fall far more.

So the low @ 1131 may have only been the subwave 1 of a longer lasting impulsive wave. So now we might be in wave black 3 down. In this wave 3 we may have just finished the subwave 2 up. But be cautious: right now the move down is not convincingly impulsive. So we also should be prepared for a move higher towards the 61.8% retracement of wave light green 1, which is around  1246.