EURUSD continues downtrend

Nothing much has changed since our last update on EURUSD. Trend remains down and the pair as seen in our 4hour chart remains supressed under the middle pitchfork resistance. The pair has tried to bounce back up, but it was rejected at the pitchfork resistance just below 1,23. A break above 1,2250 could push the pair higher towards 1,24. If the pair continues to stay below the pitchfork resistance, it could give a final push to a new low towards 1,20 where the psychological support lies.  A break below 1,2160 will confirm that 1,2250 is the stop level for bears.

S&P to test June lows

 Recent weeks have seen S&P trade within the 1300-1380 range. QE3 is something that could help the markets push towards higher levels and maybe new highs, but how sustainable this rise will be I don't know and I don't feel very comfortable with. My view is that QE3 will become a reality but the more the FED can delay it, the more they will take advantage of the time they have. Elections will surely play a major part in taking such a decision and as to where the market is heading. Back into technicals, my weekly chart prepares me for the worst to come. The 5 waves down from march are a sign of an impeding bigger decline. Adding to that, the similarities in the weekly chart and previous large declines, makes me expect a test of the June lows is soon to come. This decline could push prices further down towards 1200. This could be the trigger for QE3 but that is just a thought.

Taking a closer look in the 60m chart of S&P, I have 2 highly possible wave counts under consideration. The first count is depicted with red letters and assumes that 5 waves down have completed from the high at the 1375 area. A 3 wave upward pull back towards 1340-50 is expected to top and end lesser degree wave 2. Invalidation of this count would be the break above 1375 price level.

Another wave count depicted in the chart is with yellow letters and is more bearish than the first. The 3rd wave is on its way and a couple of 1-2 waves have been formed. So this could unfold as an extended wave to break 1310 support and test June lows. We will have to wait and see the way the market unfolds in the coming sessions. 

Concluding, bears have the upper hand as long as the prices stay below 1375 and will get stronger if 1310 is broken. Bulls have slim chances of survival, since no clear and complete impulsive 5 wave upward move has completed from June lows. The overlapping structure of the waves implies correction. When the correction will end (it might have already ended at 1375) the downward trend will resume to new lows ( lower than June lows).

Thank you for taking the time to read my post.

Gold in tight range will make big move soon

Gold continues to move inside a tight trading range as mentioned in previous posts. Gold will soon break its support at 1525$ or its resistance at 1640$. Whatever happens a big move will follow. Its best not to pick sides right now, but place stop orders at the extremes of the trading range. If 1525$ is broken, then my target will be below 1400$ at least. If gold breaks above resistnace, it can go towards 1750-1800$ if not towards new highs.Whatever side of the market you choose, place a stop order to protect your money because the expected move will be big.

DJI and S&P elliott wave counts

Intraday analysis in S&P and DJIA shows that market has topped and is testing important support levels. S&P in the 60m chart can be counted as a complete 5 wave formation from 1374,81 to 1346,65 low. That could very well be wave 1 and now we are in wave 3 down. There is also an alternative count relative to how we choose to view the movement from 1346,65 to 1361,54. If this is part of a 4th wave, then the 5th wave ended yesterday and we should expect an upward correction. We prefer the first count because it matches our wave count in DJIA.

DJIA as seen in the 60m chart, has most probably finished 5 waves down and its upward correction. Yesterdays new low may signal the start of a new downward 3rd wave. DJIA has important support levels at 12400-450 that if broken will support bearish scenario. S&P has important support at 1310-05 that should hold if bulls want to regain the upper hand.

Thank you for taking the time to read my thoughts.

No sign of support in EUR/USD

 EUR/USD continues its downward trend making small pauses on the way. We believe that 1,20 will be visited very soon as any upward move looks corrective and weak. On the 4 hour chart the pair has broken the middle pitchfork support and back tested it in the previous 2 sessions. The decline has an impulsive structure that supports our bearish view that was noted again from 1,26 levels.

Taking a closer look at the intraday chart, it's much clearer that the trend is down with some upward corrective bounces along the way. 1,2220 lows are going to be tested. In order for a larger upward move to happen, the pair must move above 1,2340. Concluding, the trend remains down with targets at the area of 1,20-21. Bears should cover above 1,2350.