Equities Up and The Buck Down on Good NFP

The S&P, Dow and the NAS finished the week correcting impulsive like structure to the down side. The S&P falling off of its Nov 28th 1813 high hit the 1779 low in five waves on Wednesday and then corrected in a zigzag with the C completing at the 1805.62 127.2% of A which also happens to be right on the 78.6% of the move down from its Nov 28 high. From there, the index pulled back 4 points and moved back up and settled 1805.34 on Friday’s close. The Dow also moved down in five waves from the Nov 28th 16175 high in five waves and corrected and in similar zigzag with its C completing at the 161.8 of A, just shy of the 61.8 retracement of the move down from Nov 28 high. The NAS has also made a move down from its Nov 29 high at 4069.70. Only the moved down is a bit choppier and corrective like completing at the 4005. From there the index moved up and actually just barely made a new high at 4069.86. The NAS then moved down off its new high to the 4042 and retraced most of it to finally settle at 4062 on Friday’s close. The index has room for one more push up to complete a fifth that finishes off structures at intermediate degree. Transportation’s move down from its Dec 2nd high is also in five waves, although it looks like it has only just carved out an AB of a zigzag correction.

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With the good fundamentals out of the States and market expectations of a taper, it could just be the trigger that sends stocks into a intermediate or even primary bear market. Above are the alternate immediate bearish counts that I have been mentioning.

The Dollar index moved down to the 50% retracement of the five wave move up from the Oct 25 low 78.98 low. So far the move down from the Nov 8th 81.57 high is in three waves with a triangle B wave. The index could either move up from here or make one last final push down to the 80 handle before moving up. The EUR/USD and the Swiss Franc performed really well this week against the buck and the pound. The Euro moved up above 61.8 of the move down from the Oct 25 high. It settled at the 1.3670 shy of the 78.6% which is strong Fibonacci convergence resistance. From there the pair should head down in a third wave. The Pound was slightly up for the day and down for the week against the Buck. It closed Friday at 1.6342. The Pound’s price action down from its Dec 1st high has been unconvincing impulsively and appears to be a correction which could push it up for one more high. There is plenty of room for it to go without invalidating the minor degree triangle it is in now. The USD/JPY retraced to the 101 and bounced off of it today to rally to the 102.95 falling short of the 103.39 3rd wave high. The Commodity Dollars all moved up on the buck this week in corrective moves. Structurally they still look weak and should head back down against the buck early next week.

The 10 year note spiked up to 2.93 today and it seems to be pushing higher now to complete a fifth which should take it well past past 3.0%. From there the yield could pull back below the 2.5 before heading up in an accelerated third wave.

Gold and silver have been trading sideways for a week now. They are due for a correction having completed five wave structures. Gold closed up in the middle of its trading range today at 1229. Silver was up also on the day closing at 19.52. The corrections have retraced back to their 2nd and 4th wave trend lines; however, are shallow and could retrace up a bit more—silver to the 20.29 and gold to the 12.57 previous 4th waves. Sentiment on both the metals has been really low and the news has been talking the metals down. This and along with them just completing fifth wave moves spooks me from being short any one of them. Keep in mind that the metals could still be carving out bigger retracements minor degree. They could even be in wave B of minor degree triangles. A break below 1179 on gold and 17.90 on silver will confirm the downward bias.

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