Equities Drop, Dollar Waiting ECB and Non Farms?

The S&P, Dow and the NAS are breaking down as expected and heading towards fourth wave targets before bouncing up to complete wave structures at intermediate degree. The intermediate targets complete primary expanding flat structures at heavy Fibonacci convergence resistance. The S&P has completed a five wave move from its Nov 29th 1813 high hitting a low at 1779 before moving up today in a late afternoon rally closing at 1792. The move up appears to be an A wave of a B zigzag move down which should complete around the 1747 prior forth at subminuette degree. The Dow also has moved down in five waves so far in what should turn out to be the first leg of a zigzag which started at the Nov 29 16177 high. Downside targets are 15660 and 15424. Likewise the NAS has completed the first leg of a corrective move down from its Nov 29th 4070 high. The Index, however, moved down in a choppy complex move so far hitting a low at 4004 and bouncing to close at 4038. Bear in mind that there are Alternate counts that complete intermediate wave structures now and the indexes could be heading down for a primary bearish move which could last years. Sentiment indicators are at extreme top levels. However, I am sticking to upside targets until I see five wave moves at minuette on all the indexes.

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The Dollar index has been in a tight range since its Nov 8th 81.48 high and is now trading at 80.46. The buck seems to be in a complex correction and could push down to the 80.39 before moving up in a third wave move which could carry the Dollar to the 84.29 before getting a 4th wave pull back. I am looking for the buck to confirm its third waved move by making a break and a close on the daily above the Sept 6th to Nov 21st trend line resistance. A break below the 80.50 could carry it to the aforementioned 80.38. The Greenback closed mix today Wednesday 4th losing to the the Yen, Franc and the Euro. It was up slightly against the Pound and closed strong against the Commodity bloc with the Aussie taking the worst of it. The Euro closed at 1.3589 short of the Nov 29th 1.3621 high. The pound trading in a tighter range closed at 1.6390 shy of its 1.6384 high. The Yen was due for a third wave correction which it got with the help of a weak Nikkei which lost 2% last night. USD/JPY hit a high at 103.44 and has pulled back in a fourth wave and is now trading at 102. and change. All the Yen crosses were weak today.


The 10 Year Yield made a near term high at 2.85. Wave structure has been choppy as of late and the Yield could very well be carving out a B wave of a triangle forth wave. However minimum 4th wave targets have been met at 2.47 and the 10 year should be heading up now in a third at minuette degree to complete its minute fifth wave.


Both Gold and Silver rallied today and should be correcting in second waves. The metals are due for a good size correction and are yet to break below their June 28th lows. Silver hit a low of 18.90 and then rallied a whole buck before settling to trade at 19.60 Wednesday evening. Five wave structures are complete and the metal should carve out a second wave of a third wave at larger degree. Gold, as well, has finished a five wave move and should be in its second wave of a third at larger degree. Keep in mind that the metals could be in larger B or forth wave corrections which if so are still not complete and could carry the metals significantly higher. However, a move down below the June 28th lows will confirm the more bearish counts labeled below.

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