Forum Replies Created
-
Posts
-
KOSPI: to my eye Korea’s KOSPI looks like an extremely dangerous market. It has completed an ABC decline from 2600 to 2000, and is now possibly tracing out a B wave sideways consolidation.
Dollar: everyone expected the dollar to be weak and ‘risk off’ assets to perform well after the weekend shenanigans at G20 and Korea. Surprisingly the opposite happened with the DXY showing a strong surge in the dollar and the Korean market weak. The Euro was also weak.
Looking at the DXY chart, the dollar has bounced strongly to retest the broken trendline. Of course it might falter here, but every man and his dog was waiting for that retest so it might be ‘too obvious’. It wouldn’t surprise me to see the dollar a little stronger to burn the shorts, or perhaps trade sideways to create uncertainty and confusion.
DOW: looking at the Dow I see the possibility of this being a flat 4th wave. The minute-by-minute chart shows possibly an A,B with wave C to come. C can be equal to A or 1.618*A. Most likely to be equal to A. The two different routes shown on this chart.
Careful. Progress on trade agreements might also mean that the Fed will have less reason to cut interest rates. The futures price action today looks bullish (and might be) but can also just be part of the sideways action expected for wave iv (which can be an expanded flat, triangle or just a simple ABC).
DOW: nothing to add – sideways to slightly down action expected for the next week or two, forming a 4th wave and allowing the oscillators to decline as a set up for a pop into the 27500/27650 area in July with divergence.
GBPEUR: the Pound continues to decline against the Euro although it is nearing my target area of 1.10/1.107 and divergence is appearing in the RSI and MACD.
If it does hit my target area, that will likely be only Wave 1 of a much larger five wave decline that targets parity 1:1 or even lower in the 0.96 area.
Too late to sell GBP at the moment, best to wait for the target area and a relief wave 2 rally perhaps back to around 1.13.
GBP looks very weak against most currencies.
DXY: the Dollar Index appears to have completed some sort of ABC decline and now appears to be faltering. Quite possible that it will try to backtest the broken 200MA and trendline from below. Might need a couple weeks to do so before the next downside move begins.
Dow: no change to my earlier chart. Appears to be trying to form a 4th wave. Might trade sideways to down for a week or two aiming for the target box and allowing RSI and MACD to roll over.
DOW: the Dow popped up into the middle of the target zone and then reversed. Quite likely that this marks the top of wave iii (of five). If so, the Dow should now decline into the 0.618 area around 26430/26520. It might/should fiddle around for a couple of weeks forming this 4th wave before then gently rising into the 27500/27650 target top area.
EURUSD: as might be expected with the DXY downwards break, EURUSD has also broken upwards from its own descending wedge.
I have EURUSD as a completed five wave decline followed by an expanded flat. In this flat we’ve just completed wave ‘b’ which was 1.382 * ‘a’. If so, EURUSD should now rise in wave ‘c’ of that flat into a target area of 1.16 – 1.19.
DXY: the Dollar Index finally broke down through the 200 MA and the critical rising trendline. Should fall further into the target box. Might happen quite quickly, or take weeks/months. At some point it should rise to test the 200MA/trendline from below to ‘check the trapdoor is closed’.
Korea KOSPI: the KOSPI is trying to rally in response to the US markets but remains 17% below it’s peak. Like the divergence in DJT, this is another warning that ‘something is not right’ with world markets.
I have been expecting that KOSPI will try for a flat or triangle B wave here, ranging between roughly 2000 and 2250. But interestingly the last drop stopped at exactly the 38.2 area from a C=A target at 1650, so this might be a very bearish chart.
Let’s see what happens to KOSPI between now and July 31st. The signs are negative and *might* be pointing to a sharp correction in US markets after the targets are met at Dow 27500/27650 in late July.
