Category Archives: E-Wave

Looking for Lower Levels Ahead Final Wave Up in USD/CAD

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The May 14th low in the USD/CAD counts best as the bottom of a large degree wave 4. The rally that we have seen that made a local top on August 4th counts as a very clear 3 wave structure so far. This leaves us looking for another high to complete our wave five wave structure off of the May 14th low.

Now while the pattern certainly does suggest that we should see new highs into the later part of the year the overall structure of the pattern ideally should see lower levels before heading higher into the final wave ((v)) up. These lower support levels currently come in at 1.2956 – 1.2770 which is shown on the chart in the form of a blue box, this is our buy zone. As long as we remain over the lower support level of 1.2770 then the probabilities are good that we will see new highs into the 1.3414 level with possible extensions into the 1.3688 level, these are our sell zones. Should we break under the 1.2770 level the count will still remain valid, however the probabilities of seeing follow-through to the upside under this count are reduced. A break under the 1.2563 level would invalidate this count and suggest that we may have made a more complex top on August 4th. This is the level that we would stop out of our trade.


Eye on RSX

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Market Vectors Russia ETF (RSX) is following through on its downside path. However, so far, it hasn’t yet broken its June low of 17.62, so the potential for a move back to 19.03-19.55 in wave c of (ii) remains, which would have me looking to add to the short.

If 17.62 is broken, it appears likely that such move would find support in 17.08-17.27 range, to be followed by wave ii of (iii) up.

Whether through a high bounce or not, I think the odds are good that RSX will complete its downward pattern before expiration.


Originally published on, by Xenia Taoubina.

Rubber Bands

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Well that was an impressive trend down day yesterday and a lot of technical damage down. I am now officially impressed, and while I had been thinking we might put in the retest high just before the holiday weekend, Greece has pulled that forward a few days and in all likelihood both the 2015 high and the retest are now in the review mirror. This would be a good time to pull together a few reference posts to show where I think we are here.

The first post is from Monday 2nd February where I confirmed that the January close on SPX met the criteria for some very bearish long term stats suggesting very strongly that the best case for SPX in 2015 would be a flat close, and the worst case a large decline. You can see that post here.


Significant Corrective Low for S&P 500?

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Although the Emini S&P 500 plunged beneath the lower-support boundary line of its Apr-Jun price channel at 2070 and then followed through to the downside to slice beneath a cluster of its prior significant June pivot lows at 2061 to 2062, the selling pressure managed to abate just north of the most critical recent low at 2050 established on May 7.

Purely from a technical perspective, the fact that the index recovered sharply after a near 1% penetration of its lower-channel boundary is the first sign of a potentially meaningful low in progress.

That said, given the ongoing headline risk, we cannot and should not rule out another swoon or two in the upcoming hours that retests the overnight lows. If the tests are successful, then the likelihood that the e-SPU has put in a significant corrective low increases substantially.


Originally published on

Fibonacci Resistance Levels on S&P 500 E-mini Futures

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Depicted on the Weekly chart below of the S&P 500 E-mini Futures Index (ES), are two External Fibonacci Retracements, a Fibonacci Extension, and a channel.

There are two upcoming levels of confluence representing major resistance:

  • the first is between 2139 and 2155 (which could be hit any day now)
  • the second is between 2213 and 2216 (which could be hit around July 20th if this extreme bull run continues in an aggressive, sustained momentum)

I’d watch for any aggressive drop below 2070 to signal a possible re-test of the bottom of the channel around the 1980 level, or even lower (I’d watch for general signs of weakness in the Dow Jones Composite Index — as noted in my post of June 20th — as confirmation)…otherwise, if price holds above 2070, we could very well see the second target resistance level hit by July 20th.

Eye on EBAY

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After breaking out, EBAY pulled back to the 61-handle support area, allowing us to unwind the puts entered into at resistance in our model portfolio.  This was just in time, as EBAY reversed to push to new highs, despite a week tape. At this point, it is likely that wave (iii) of circle-iii will reach at least the 1.618 extension of wave (i) at 65.00 (red fibs). I will consider reducing risk at that time. Conversely, further pullbacks to 61 handle will have me consider adding to the long side of the trade.

full-63fce2e5a6b353c6bf854deb6ec9eaed694ade74By Xenia Taoubina,

GPS Looking Lower

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GPS experienced significant downside last week, in a move that I count as capitulation under my base case. Though Friday’s unrelenting rally did make some progress in beginning to repair that decline, initial confirmation of the perspective shown under either of the two counts on the attached chart is a rally to 40 area. Until then, it is reasonably probable that GPS may have, indeed, broken down. My base case, however, remains that October low (35.46) will not be broken without a move to 43.85 at a minimum. Not planning any changes to this position, at this time.


by Xenia Taoubina,