All major indexes pushed to new highs confirming larger moves up from the August 26th lows. The S&P hit a high at 1775, retracing to the 1757 in zigzag fashion to finish Wednesday near the low at 1763. The moves up can be counted as tops now that they have finished off fifth waves at primary degree. Even though waves completed the moves up from the Oct 2011 low at Minor degree, they are very proportional and leave me to believe that there is more to come to the upside. If so, then the S&P will encounter very stiff Fibonacci resistance in the zone between 1821 and 1850. Keep in mind, as mentioned, that there are alternate counts that top at current levels and that although most of the indexes made new highs today, the Dow Jones Transportation average made it’s high on Monday Oct 28th and is heading down in a very nice impulsive manner on the hourly chart. The S&P 600 Small Cap Index has just finished an ending diagonal on the hourly and is also heading down now in a very nice impulse.
The dollar index also has been performing strongly this week so far with the index hitting a low at 7900 just shy of the 100 equalization of a zigzag move down from the 94.75 July 9th high. Even the alternate count five down of a flat has completed minimum targets, although, keep in mind that there is still room to move down. The 79.00 bottom is also shy of the 50% Fibonacci retracement of the move up from the May 2nd 72.70 low. And even though it fell through the Feb 29, Sept 14th 2012, and Feb 1st 2013 trend line, the index moved back up above it and closed there today Wednesday 30th.
The US 10 year has been moving sideways this week, although it did move up a bit today to the 2.55 before it settled down to close at 2.53. The move down from the Oct 16th B wave can be counted as a complete impulse with a truncated fifth. This would make the C 61.8% of wave A. Additionally, the 2.47 corrective low is just one basis point from the previous fourth wave at minuette degree—minimum targets have been reached and the move up from the 1.43 is very impulsive in structure and Fibonacci percentages on the five minute. All the majors confirm the risk to the downside so far. If the buck keeps moving up and equities head south from here we could see the yield head on up for its minute fifth wave.
Gold failed to make a high, but the metal was due for a good correction anyhow. It topped at 1361 on Oct 28th at Fuchsia minuette degree and has since been correcting with minimum target at 1329 previous fourth wave at black subminuette. From there the metal should move up in a wave three of five of a larger corrective move up before heading back down again. Fernando Luna, Elliott Wave Analyst, FX Traders EDGE