Category Archives: E-Wave

Textbook Set Up in the Metals Complex

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by Avi Gilburt, ElliottWaveTrader.net

First published Sat Aug 6 for members of ElliottWaveTrader.net:  Last weekend, I prepared you for the potential set up for the 3rd wave to much higher levels in the metals complex.  More specifically, I provided you with a map as to how the 3rd wave set up would look on the GDX, should the market comply by filling in our 8 minute chart as outlined:

As long as we do not break below that support, and ideally remain over the 1.00 extension at 29.87, then I will be looking to complete 5 waves up off the recent low, which I would classify as wave (i) of wave 3 of iii.  That suggests that after a corrective wave (ii) pullback is seen, and we then break out over the top of wave (i), the market is well on its way into the heart of its 3rd wave, and targeting the 39-41 region next.

And, over the last week, the market has complied in almost textbook fashion.  In fact, once we completed 5 waves up into the top of our wave (i) target region, I sent out an Alert with a target box for a wave (ii).  On Friday, the market dropped right to the top of our target box.

While the micro count in the c-wave does not look quite complete, it would seem that the market could still see lower before this c-wave bottoms. But, as long as the GDX remains over 29, I am viewing this chart as being on the cusp of the heart of a 3rd wave break out, which is pointing to 39-41, and quite quickly.

Now, for those who will read my words and consider leveraging up to the hilt in an irresponsible manner, I want to interject reasons one should still maintain your standard risk management practices.  Set ups such as these are estimated to be about 70% probability.  That still means there is a 30% probability that it could fail.  One of the reasons this set up could fail is because all retracements in the GDX chart have been VERY shallow.  This forces an analyst such as myself to make certain educated assumptions about where 2nd waves in the structure are located (since they are otherwise deeper retracements), which can have an effect upon the overall wave count if even one of those assumptions is wrong.

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USD/CAD Key Support Approaches

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Two weeks ago I wrote that the USD/CAD would likely see more downside in the weeks ahead. At the time of that writing the pair was trading at 1.3517 some 350 pips over the low that we saw last week at 1.3166. We are now approaching an area of key support that should be key in helping to give us clues as to where we are heading in this pair over the next several months. The question at hand is whether the January top was, in fact, a major multi-year top in this pair or whether we will yet see higher levels before we can consider this multi-year top in place.

Looking at the daily chart, we notice a few different things from a technical and Elliott Wave perspective that are giving us signals we may be closing in on at least a temporary bottom. The first is that we have what we can consider a completed (or very close to completed) abc corrective pattern into the current levels. While on the smaller degree timeframes this corrective pattern would look slightly better with one more low, we do technically have enough waves in place at the current levels to consider this move off of the January highs as a fully completed ABC.

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Has AMZN Finally Topped?

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By Zac Mannes, ElliottWaveTrader.net

In January 2015 I posted an Insta-blog on Seeking Alpha calling for a low in the 280 region prior to the January earnings report. In that post I called for a resumption of the long term rally looking for a target well over 450. AMZN did not disappoint, and in our regular StockWaves updates we tracked the progress and continued to revise the extension targets and raise the support levels. While the potential for further extension in this Primary degree 3rd wave is still possible, the failure to hold higher levels of support as well as the failure to utilize the most recent ER for a potential extension setup makes it more likely that the early stages of the Primary Wave 4 are underway.
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US Dollar Ready To Rebound Or More Pain Ahead?

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The main drivers of the large move down in the US Dollar’s DXY index a week ago Thursday (Dec 3) were the European currency pairs with the USD/CAD and USD/JPY mostly sitting out the decline in the DXY index. The GBP/USD was certainly up on Thursday but had very much underperformed the gains that were seen in the DXY Index as a whole.

The picture is even more dramatic if we look at the weekly data which is now in. Viewing an entire week’s worth of data we can see that the European currency pairs accounted for over 98% of the losses in the DXY Index for the week with the EUR/USD accounting for over 85% of the indexes drop. Additionally not only did the USD/JPY and USD/CAD currency pairs end the week fairly flat they had very little movement throughout the entire week as well trading in a very tight range.

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