Pages

HARMONIC ELLIOTT WAVE

Monday, October 31, 2011

More Dollar losses to come…


While I had looked for a pullback first on Friday I hadn’t reckoned on it taking ALL day… Whew… what a grind… Bottom line is: the Dollar still has further losses to come and the first few days this week look like being predominantly bearish. Today should provide a lot more information about the final stalling point in this decline depending on how deep the current correction stalls. Deeper gains in the Dollar, however minor, will reduce the final upside target. Direct losses will retain quite a bearish outlook for the first few days of the week.

This deeper pullback versus direct follow-through today is very critical. Direct losses would see a dip, correction and stronger dip before a deeper pullback. Any earlier deeper pullback and extension would imply lower projection targets and then a deeper pullback… Thus, watch how this develops today as it will tell us a lot about the final downside target.

A note on GBPUSD. I have been particularly bullish on this one but last week just didn’t generate the strength I had been looking for. In fact, when relating this to the position within the daily structure it appears to have been forcing itself into a corner. Therefore, there chances of this getting above 1.7042 appear to be waning every day. It does still have further to rally and broadly similar to the Euro but the manner of the rally from 1.5271 just hasn’t been what is needed to avoid losses below that low. Thus, be aware of when this current round of Dollar losses comes to completion.

Finally, USDJPY… dipping again on open today but still above crucial support… I remain bearish overall and actually still feel there is some way to go – but not directly. The move lower from 76.48 has been typically corrective in nature so expect this to recycle higher before it can make a more sustained effort on the downside.

Have a profitable week
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Friday, October 28, 2011

I guess you can call that move an extension lower…


It now seems strange that I was so cautious yesterday. Even U.S. equities were gagging to rally. Well, it came and there does seem much more to come. I am just bit surprised at how deep these losses have developed as the eventual target of this move seems to be around 1.47-48 EURUSD while the eventual final target around 1.5185. That does appear to suggest quite a steep pullback in between. That may not be such a surprise as GBPUSD found it difficult to hitch a lift and display more robust gains. This is a situation to watch with care as while it has broken above 1.6082 the impact of the anticipated (later) deeper pullback in EURUSD needs to be observed in case we revert to a alternative picture for the Pound.

Anyway, that’s a consideration for later. For now we’re due a correction higher in the Dollar. I don’t see it being exceptionally deep. There are a couple of scenarios I’m considering so quite where the pullback stalls today should provide a stronger clue. The other clue comes from the U.S. equities and they’re much in the same boat – potentially a mini follow-through higher today but then a pullback – but that’s expected to be shallow too. That tends to smack of a potential consolidation in Forex and therefore the possibility of a relatively quiet end to the week…

One pair to watch today is USDJPY. It may have found its low yesterday but there is still a mild risk of marginal new lows but I’m more in favor of this moving back to 76.48-60 again before it can make a greater impact on the downside. This clearly has an impact on the cross but having seen yesterday’s rally we are approaching a cloud of resistance and I’m not convinced that it will continue to remain strong.

Have a great weekend
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Thursday, October 27, 2011

We really need Dollar losses to extend now… else suffer a deeper correction


The general messy & chaotic range trading continued yesterday although extended its boundaries with some Dollar gains into the end of European trading. From that point onwards it renewed a more bearish Dollar losses over the North American afternoon. It wasn’t quite how I had envisioned things but in retrospect it does seem to have merely seen a larger recycling that points to the Dollar downside again.

Well, that’s the plan. I’ll feel a lot more comfortable when yesterday’s lows are taken out and assuming this occurs then I’d fancy quite a solid follow-through lower with a mild step up in acceleration. In addition, moves above the 1.4060-1.4100 area would also make a stronger statement of intent. The same is true of GBPUSD that now needs to break above the 1.6082 corrective high to provide a more significant break of the last corrective high on the way down. Once these breaks are seen the Dollar downside becomes a firmer structure. Until that point there still remains the risk of a deeper pullback in this overall Dollar bearish move…

USDJPY also played us around a bit and this now looks like it will recycle back to the 76.60-70 area which is a key retracement and pivot resistance area. Equally, this needs to hold to retain a direct – and probably stronger losses into the end of the year when the 16.5 year cycle should find a major low point.

EURJPY – still messing around and now needs a little more care having seen a reversal higher from a minor new low… This could resurrect another limited rally unless USDJPY sees a more direct fall from favor…

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Wednesday, October 26, 2011

Momentum slowing and risks a pullback from a new low…


It was a bit of a weird day yesterday. The market seemed totally freaked out, not knowing what to do. So they bought and sold – not necessarily in that order – and probably hit the wrong ends of the range. Perhaps the more accurate forecasts came in AUDUSD and EURJPY which are not really known for obeying my subliminal influence. (Editor: takes tongue out of cheek.) However, both now seemed destined to rally although I can’t see these moving too far. AUDUSD should move to new highs in this move but EURJPY seems set to fall short.

Indeed, this general slowing in the Dollar’s decline does seem to indicate a modestly pullback after this next decline so I feel it’s a day to look for buying levels to take advantage of the pullback. USDJPY may already be in this mode having failed to extend losses by very much and actually looks like recycling higher. Overall, though, I still remain bearish on this one for the next intermediate targets below 75.00…

GBPUSD and EURUSD seem to be suffering from tripping over their own feet with limited follow-through and messy pullbacks. I still fancy these two to extend higher later today but we’ll have to see how robust that is – and for that keep watching momentum. It’s still Dollar negative but not really displaying a keenness to accelerate lower.

So overall it’s probably a day to take care and I feel the stronger pictures are being shown in AUDUSD and EURJPY which should be the better bet…

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Tuesday, October 25, 2011

A bit of a pullback first but Dollar losses continue…


There were a few options open yesterday, the final developments providing more information though in some currencies the larger structure still has one or two ambiguities. However, overall the additional Dollar losses were constructive and we should see more developing.

The initial risk today does seem much like yesterday with the Dollar expected to generate a correction higher and possibly modestly deep – back to yesterday’s corrective highs potentially – before the next larger leg lower develops. Momentum still has a nice curving decline that should provide resistance to allow the decline to extend to new lows by tomorrow although in many currency pairs the next anticipated correction appears very brief so the decline could take on an acceleration lower through to Thursday or even Friday.

All straight Dollar pairs appear to be in accordance with each other, as do the U.S. equity indices that also made new highs yesterday. However, they too are due a pullback so the prospect for the Dollar to recycle higher over the European day should allow the indices to open lower.

EURJPY has been as sensible as expected. By that I mean it was all over the place… which was the expectation… However, I am getting the impression that it should end the consolidation today and my preference is for it to rally higher but not reach the 107.67 high. I still feel this has begun a larger correction lower but needs this additional push higher before it reverses lower.

Thus, today should provide some good Dollar peaks which look good for some pretty directional losses over the rest of the week so be aware of the sort of levels which should cap the Dollar and look for bearish set up entries.

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Monday, October 24, 2011

Dollar weakness expected with shallow corrections


Friday saw new Dollar lows against the Yen, Pound and Swiss Franc – even marginally against the Aussie – but try as it might could not surpass the EURUSD 1.3914-36 highs… Looking at the daily charts there’s no real confirmation of a break of Dollar strength but neither are there any strong indications that we’ve seen the Dollar’s lows in this move. Indeed, Friday’s extensions do seem to indicate that the recent bearish momentum remains intact with the short-term charts displaying the potential early foundations of acceleration lower. Overall there’s more suggestion that not only will any immediate corrections should be limited but also a potential acceleration in the Dollar’s weakness.

Perhaps rather surprisingly this seemed to be portrayed best by the rush lower in USDJPY. This break is in line with the 16.5 year cycle low which is due over the next 2-3 months. I was particularly struck by USDJPY finally joining the general Dollar decline as it now correlates through all the majors and AUDUSD in the expectation of a final blow-off before a multi-year reversal. Not only that, but there also seems to be a correlated and fairly imminent acceleration in the Dollar’s decline.

So, the short term appears to provide the most uncertainty in terms of any bullish correction, a possible recycling of corrections. It looks very much as if we need to be prepared to identify bearish set ups…

Have a profitable week
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Friday, October 21, 2011

We should be back to a weaker Dollar again…


The caution shown yesterday appears to have been well placed. I’ve ended up with two broad possibilities: either we see direct resumption of losses or at worst plain continuation of the consolidation. I’m more biased towards the former mainly because GBPUSD appears to have provided greater potential for it to resume its own rally though I can’t 100% rule out a sideways move here also. A break below this week’s Dollar lows would add to the direct loss scenario but even then there are further support levels that need to be breached to signal direct follow-through. I’ll detail those break levels in each section.

What does concern slightly is EURJPY but not really for today. It seems to have settled down somewhat and I tend to favor this moving higher so it does seem to work with a Euro bullish move. However, I don’t want to get too excited about how far this will rally and feel that a larger correction lower will be due before long. Now, whether this comes through EURUSD or USDJPY is a different matter… but maybe one that does need to be addressed early next week.

USDJPY did recover yesterday but not really far enough to make a case for a confirmed move in either direction. With its current propensity to remain in exceptional tight ranges we could be forgiven for ignoring its presence. However, it does look like setting itself up for another modest follow-through that could still come in either direction… It’s one of which to be aware but best left to its own devices for the time being…

Thus, as we approach the weekend, favor the Dollar downside but also with the awareness of what levels actually imply follow-through as when the Dollar does lose out I feel it has some way to go…

Have a great weekend
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Thursday, October 20, 2011

Dollar losses… but not quite as planned…


I actually woke up late last night and decided to have a peek at the markets. All looked good, projections being hit on the dot, all very progressive so I patted myself on the back for doing a good job and went back to sleep. First thing this morning I traveled to the office, (aka walking up the stairs) turned on the PC, booted up the charting and promptly saw chaos. Just about all retracement level that should have held had been broken and left me scratching my head.

So it’s back to the drawing board to try and make sense of the depth of pullbacks. I have to say I still prefer to be bearish. However, the options I see are that either the Dollar has more immediate downside potential than I had originally thought or perhaps we’re going to see marginal new corrective highs before the overall decline continues.

It’s going to mean that the analysis today will be more on the defensive side and given the wave relationships are a bit stretched there’s a certain ambiguity in some areas which is going to cause some potential weakness to support & resistance levels. It is, therefore, a day to make sure that trade set ups are valid & strong before jumping headlong into the midst of the fray while the light is dim and shrouded in mist.

The only consideration I have is that the Dollar really does have to resume losses strongly to generate any decent momentum to carry it on a bearish current.

Good trading
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Wednesday, October 19, 2011

Dollar losses to resume…


Right… time to brush hands off and get back to the trend… The recycling, the simple plain corrections and consolidations appear to be done with and it’s back to think about one direction… and that direction is lower for the Dollar. What’s more, from what I can see the risk is for quite a strong move now so be prepared to hold on to your hat and ride the wave…

Out of interest, I also began looking at the Dollar Index yesterday. Out of a somewhat (expected) surprise guess what? Yup… It completed it’s own recycling and what’s more the outlook is bearish and still looks to have 2-3 months more of a decline to go matching the expectations in the Europeans in particular and also the Aussie. It shouldn’t be a simple straight line though. In fact, it should coincide with how I see the Dollar overall which is a basic decline-correction-decline move.

Now, right now we’re at the initial foundation laying stage and that’s going to make the early follow-through just a little complicated to try and anticipate with any great accuracy. I’ll give some ideas of the type of areas that appear to be front-runners for the stalling points of the first waves but it’ll take until tomorrow/Friday to begin to be able to generate a more solid immediate projection targets. For EURUSD and GBPUSD I have a pretty good idea of where the larger intermediate targets should lie so for the moment it’s best to sell on rallies…

One caveat: while I do feel we’ve probably established a key corrective high in the Dollar, until we have escaped from the last stages there is just a small risk of one more rally… I doubt it given the clear recycling targets in USDCHF and even EURJPY that have been met and should now hold.

Good trading
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Tuesday, October 18, 2011

It looks like we’re still in a holding pattern


Well, the break levels I thought would sort the wheat from the chaff failed miserably as the anticipated follow-through just didn’t materialize. Does that mean the Dollar has given up on the downside? I can’t rule it out completely but I don’t think so... or at least I’d rather wait for key breaks to be seen.

At this point in time the potential recycling I recycling I mentioned yesterday seems to be in development in both GBPUSD and EURJPY… actually in USDCHF also but from a slightly lower expansion than I had allowed for. I can see this lasting through most of today but by either North American trading – or at a stretch into early tomorrow – this should be complete. Therefore, if all goes to plan today the Dollar losses should resume sometime tomorrow. If there is any other risk within a Dollar bearish scenario then it’s extended sideways range trading that could even extend into late tomorrow or Thursday.

Within the recycling scenario I do feel we are due for some rocky times since EURUSD is not within the same situation. This seems to require a deeper correction before following-through as opposed to the others which are at varying points within their own recycling. It does tend to paint the picture of a rather messy day today. (and that does risk the alternative extended sideways consolidation also.)

Therefore, I’d recommend watching the relative development within each currency pair and also with EURJPY. The issue with the latter is more complicated as I can see a potential rally in USDJPY so it could end its recycling at a different time to the others. The cross does seem to need a deepish pullback before the final leg lower but separate judgment will be required in EURJPY compared to the Europeans.

Good trading
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Monday, October 17, 2011

Dollar poised on the edge…


The Dollar lost out on Friday… but will that continue today? Maybe… maybe not… Actually, a more definitive answer is “as long as it breaks below Friday’s low” in particular again the Euro and Pound. The Swissie still has a small amount of leeway. However, broadly those lows were within the boundaries that risk a recycling higher which will merely delay the decline rather than reverse … probably.

Ahhh, the word “probably.” Let me explain that. As I have been told by a couple of sources who observe cycles the upside failure in the Dollar implies a stronger decline. Their cycles are pretty good but with all techniques there are confusions and the key is to make sure that price behaves in accordance with the smaller cycles to confirm the larger. That’s the same as Harmonic Elliott Wave.

Well, just take into account just how far we have retraced the decline seen in these two pairs. The answer is “solid” but not yet enough to really say that we’ve confirmed a total reversal. Still, the shorter cycles do still seem to be behaving so the emphasis is still higher for these two. However, Friday saw EURUSD approach to within spitting distance of the 1.3936 corrective high and it would be far more comforting to break above this high.

Therefore, we should be aware of the risk of a recycling lower over today and maybe into tomorrow and as long as this is limited then the larger Dollar weakness should remain intact. It also goes without saying (but I will) that any break below Friday’s Dollar lows will imply direct resumption of the move lower.

EURJPY is also in the same boat although that has some fairly solid 4-hour & hourly bearish divergences. No key lows have been broken yet but watch for that risk. Again, above Friday’s highs would confirm the next leg higher.

Thus, there’s some short term uncertainty as we start the week but the parameters for breaks seem well defined.

Have a profitable week
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Friday, October 14, 2011

Flip of a coin between continued consolidation or Dollar losses…


The market made a decision yesterday to take a day off from selling the Dollar. It has probably done the minimum required to complete a correction. Today the decision is between repeating yesterday’s price action and resuming the selling.

So which is it to be? It’s probably a flip of the coin to be honest. There is certainly nothing stopping the market continuing down the slippery slope. Perhaps it’s more whether they really want to make the effort before the weekend.

If I have any preference I’d vote for another day like yesterday. I can’t see that the U.S. indices have corrected far enough. To be honest they’re in the same boat in terms of having made the minimum correction but in normal circumstances a deeper pullback would balance out the extremely direct recovery from their lows.

Therefore it may well be a day to take it easy and wait for fuller retracements to develop across the board. Also look for the signals to correlate across the currencies with some solid trade set ups that should then set up the foundation for losses to develop over next week.

Have a great weekend
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Thursday, October 13, 2011

More conclusive…


Pigeons, cats, scramble, chaos… reversal.

Well, that seems to be it then. What shouldn’t have happened appears to have happened… If this is the case then it looks like we shall see Dollar weakness through to the end of the year I’d estimate, maybe just into January. This had been my original expectation that I had reluctantly changed with the depth of the Dollar’s rally. It’s rather early days, but this switch has quite a dramatic impact on the entire landscape and seems to imply a move to above 1.5143 EURUSD and in GBPUSD potentially above 1.7042. Even this tends to have its conflict since the Euro should make this move in two rallies divided by a correction while GBPUSD needs to complete this rally in three rallies divided by two corrections.

However, first things first… there are a few minor conflicts now but overall further Dollar losses are expected but not for too much as a larger correction is due. Each currency will have to work though its own minor structures so there could be a degree of non-correlation today. However, if in doubt favor the Dollar downside is probably the more healthy risk.

Along with this confirmation of Dollar weakness USDJPY has also gone haywire after the long consolidation. It bounced nicely from my 76.32 support … but then never stopped. I suspect we’re due another leg higher though we’re going to need to balance this out with the cross which has similarly broken the bearish structure and has been rallying with equal venom. The cross has a way to go towards just above 109.00 before a deeper pullback. What is needed is to balance out the expected strength in USDJPY and also EURUSD. There are a few possible combinations so it’ll be worth judging the individual currency pairs with the cross.

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Wednesday, October 12, 2011

Inconclusive


It was rather strange going through the analysis this morning. I had expectations of being Dollar bearish and there were some signs but perhaps not enough. EURUSD stalled perfectly in yesterday’s highlight support area. I can even see a constructive rally from that low that tended to support my Dollar bearish expectations. But then I looked at USDCHF… even GBPUSD and AUDUSD but somehow was left unconvinced… It has left me feeling somewhat mixed, possibly even lackluster with the complete lack of any directional bias.

That fine line between bullish & bearish therefore remains, although the impact of stepping too far over onto one side does seem to imply totally opposing implications… The same appears to be the case in U.S. equities – one step too far in either direction will imply new highs and an eventual retest of the 2007 highs… or the opposite, a drop to below the 2009 lows… But perhaps that’s the conundrum of which the market is silently aware…

It will be beneficial to understand that balance and wait for one side or the other to finally makes its move…

Therefore I think this is not a day to force a position but to allow the possibility of the market losing its balance to provide us with the final outcome. If I have any preference it is actually for the Dollar to resume its rally. I say that due to the stronger bearish structure and ratios. However, it’s probably still best to let the market demonstrate its final decision. Either way there’ll be plenty of points on the board to be taken.

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Tuesday, October 11, 2011

Did Friday really screw up the entire daily structure?

Friday was not a day I wish to remember… The weakness in the Dollar certainly ruined my day and at the same time put the cat amongst the pigeons. It has left the daily structures hanging mid way between bullish & bearish scenarios like a piece of rotten meat to be plucked and gnawed by a swarm flies…

It has also left the U.S. indices in the same situation, my final critical support at 1,074.77 in the S&P adding to the tease with a deep correction higher that could easily break key resistances that would begin to raise the bullish flag again. However, quite how that would leave the apparent bearish break lower in the Asian indices also contributes to the overall confusion.

I don’t want to react too quickly at this point. Whichever direction these markets decide to choose the impact would appear, at this early stage, to potentially be quite dramatic. A new low in the Dollar maybe? By that I mean above 1.4940 EUR, above 1.7042 GBP and below 0.7066 CHF? Equally this would suggest a return to the May highs in the U.S. equities. I really don’t want to make that call just yet but I find it hard to see a scenario that would lead to corrections only.

At this point I’d rather see how the next move develops. I do feel that we’re due a correction to the Dollar losses seen and would like to see just where these stall… or not… I can still generate Dollar bullish scenarios also but equally I’d like these to provide some firmer evidence for justifying the upside. I think one issue to watch is the U.S equities that ideally should have been finding highs last Friday. If so then it would appear that we’ll need some sharp Dollar gains to knock the equity markets back on the downside.

There’s a fine line… Be aware of the impact of the alternatives…

Have a profitable week
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Friday, October 7, 2011

The Dollar heads higher today…

Please note that with Monday being Columbus Day holiday in the U.S. the next report will be on Tuesday


Yesterday’s market pretty much reflected the comment I made – “This type of market should carry a government wealth warning…” Not everything went my way, which doesn’t actually surprise me given the comment, but there was sufficient that did go right to suggest we’re just about done with the Dollar correction. Yes, there is risk of some minor new corrective lows today but for the most part all I see is a structure that is more indicative of the upside resuming.

Of course it’s non-farm payroll day so the potential for a catalyst is there. Equally “of course” is the likelihood that we’ll not get much in the way of a constructive foundation to identify entries through trade set-ups… The impact can also be exaggerated by the fact that we have a long weekend in the States and the consequent reluctance to hold on to positions in the game of pass the parcel.

There are solid bearish divergences in EURUSD, AUDUSD, and EURJPY while bullish divergences exist in USDCAD… What is now needed is break of the respective prior swing lows/highs to confirm renewed Dollar strength. As we move into next week we should find the Dollar reaching the targets I have been eying for this move and probably by the week after next we should see a top forming for a more substantial daily correction in the Dollar’s renewed strength…

Have a great long weekend
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Thursday, October 6, 2011

The correction could deepen slightly before Dollar gains


The warning about the risk of consolidation was appropriate yesterday. It was pretty boring actually… However, the way I see this correction developing doesn’t look like one that will last too much longer so by the end of today – at most tomorrow – we should see the Dollar moving higher again. This tends to be echoed by the U.S. indices also that crept higher into the close but are displaying some firm 5-minute bearish divergences. Now it’s a matter of breaking key supports there…

What I do feel is probable is a new Dollar low in this particular correction that seems to be required across several currency pairs but then see the gains develop. One other more possibility is a recycling back to the 1.3260 low in EURUSD but then followed by the move to minor new Dollar lows before reversing.

Therefore, it’s another day to exercise care and don’t get too wedded to a position. This type of market should carry a government “wealth warning…”

USDJPY is as sludgy as ever, not quite managing to convince itself of which way to walk and staggering around much like a drunken salary man in Shimbashi… or come to that, in London, New York, Singapore or Hong Kong… The direction of EURJPY does still seem dependent on EURUSD and the cross itself also seems to need a new high before it can resume losses. During that time it’s possible that the moves in USDJPY can remain in stagger mode…

So… it looks like another day to seek other sources to get your kicks today…

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. & ASIAN INDICES

Wednesday, October 5, 2011

Someone’s been watching my video…


The Dollar made only modest headway yesterday and then got spooked by Bernanke’s tête-à-tête with Congress it seems. Then the S&P stalled micro-points below the critical 1,076 support I outlined in my video introducing Harmonic Elliott Wave. (See: http://www.screencast.com/t/XaJBmoTmasa4.) Actually, it spooked me too as I have turned bearish…

So has the Dollar found a high? Have the U.S. indices found a low? I find that hard to work with right now. The Dollar’s momentum still looks bullish. The U.S. indices’ momentum still looks bearish. The Asian indices have broken lower and while I haven’t made a detailed and thorough analysis of the European indices my impression is bearish there too – but perhaps not as strongly as the implied losses in the States.

Well, perhaps the prudent approach is to be aware of the situation and there may be risk of some consolidation until the market settles, but for the moment I still feel the Dollar has the upper hand and global equity markets the … errr… lower hand.

We need a little more confirmation but I feel the correction in the Dollar is probably seen its extreme. It could just resume the underlying rally but, as I mentioned, be aware of the risk of a consolidation before the Dollar can follow-through.

One last word about USDJPY … strange… I still see EURJPY as bearish so can’t see USDJPY being that strong. I’d prefer bearish but the structure has become exceptionally complex and needs a shake out to generate the next stronger move…

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR ASIAN INDICES

Tuesday, October 4, 2011

The Dollar is looking firmer still …


Dollar up… equities down… the game’s afoot... and there’s quite a way to go…

Everything seems to be coming together now and frankly there’s not too much to get in the way of the Dollar steamroller. A mild correction is due not too far higher but it should be quite a brief stop to pick up more passengers before extending gains. All Europeans are pretty much matched in all this although GBPUSD may well lag the others slightly.

What is less certain is the fate of USDJPY. Just as it looked like deepening its rally it dropped steeply and provided me with my first headache of the day. The inability to hang on to those gains is a concern and may well have settled the larger downside – and that actually looks quite bearish – well, excessively so. Before getting too tied to that bearish outlook we should just confirm the first move. If it is lower, then from what I can see, the outlook is exceptionally bearish and therefore quite a contrast to the Europeans. The risk is for it to remain in its own world and make the decline in steps at first but if I’m right then a drop to below 70 is possible over time.

That opens up the JPY crosses which also look exceptionally vulnerable. Be aware of the risk here. The only alternative is for the Euro to keep pushing lower while USDJPY continues to fuss around current levels but the net effect will just be to make the decline in the crosses slower.

So, from here on for a while the emphasis should be to buy Dollars on pullbacks…

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR ASIAN INDICES

Monday, October 3, 2011

The Dollar is looking firm …


The Dollar ended up looking much stronger than I had been expecting at this stage. It obviously calls into question the underlying structure but not the direction that, in the larger picture, remains bullish. So the next question is whether we shall see follow-through higher directly or is there to be a pullback or even recycling back to last week’s lows.

Indeed, that is a good question… Structurally it’s possible. Will it happen? At this point it can go either way so is very much a 50:50 coin toss. Therefore we’re going to have to observe key break areas and for the most part these are quite well definable. If there is any stronger indication then momentum does appear to favor the upside.

I had considered attempting to identify the outcome through EURJPY. That didn’t get as close to my upside targets as I had expected. At first I thought this may be the clue we need, but in terms of the correction higher it has done just enough in the correction to be considered complete. I’m still not entirely comfortable though as the downside projections do seem rather too much… and that’s in spite of the fact I have been bearish for along time. It would implicate a retest and break of the 88.94 low in October 2000… Well, it’s not impossible… in fact most likely.

So, today’s out look is a bit hazy though I do expect a correction lower from this morning’s highs – or maybe from a little higher – and then we can watch the critical support levels that will identify whether we’ll get a recycling or not…

Have a profitable week
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR ASIAN INDICES