Daily Archives: May 14, 2018

Australian Dollar Weekly Chart Elliott Wave Count Review

The Australian dollar is not in the US dollar basket but it is important to watch as it follows the commodity cycles. During the years I worked on it off and on as the wild gyrations were far above my pay grade.  Once we line up the 2001 bottom with the peak of the US dollar and the bottom in gold, The AUD bullish cycle was a zigzag with one mother expanded “B”  flat ending with a vertical drop that shocked may gold stock investors.  “C” waves of flats end like this as with zigzags this is reversed most of the time.

For gold to crank up dramatically the Australian dollar has to crank up as well. This is not what I see about to happen as the present rally sure fits great into another Elliott Wave triangle.  A triangle in a 4th wave bear market rally is fooling many into thinking the bull market in gold is imminent.

At this time the AUD is already heading down and it should not take that long before it trashes the previous wave 3 low in Intermediate degree. It may take the rest of the summer and some of fall to play out, but I sure would never want to bet long on a 4th wave bear market rally.

I have a pretty clean 5 wave decline so far, with diagonal leanings but it does look good as an impulse. One Intermediate degree drop is all we need to help confirm the entire decline.

The AUD also peaked in 2011 and has followed gold and gold stocks down together.   You can’t get a better correlation to Gold than when you look at the Australian Dollars big trends. So is gold going to suddenly soar while the AUD keeps heading south? I doubt it, as it would be truly amazing if it did.

The COT report does not show the commercials in a net a short position, but they are long by a small amount but not to any extreme just yet. This may happen at the .60 cent price level. A huge double bottom would be setting up, and a bullish H&S would show up as well.

The perfect setup for a major reversal will come folks, when the talking heads are all spewing out bearish fundamentals concerning the Australian Dollar. Welcome to the club as our Canadian dollar will tag along with the AUD  during the next decline.

Given the history how fast the AUD can crash, what may be bullish looking right now, by next week it could trash my wave 3 bottom.

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Japanese Yen Intraday Elliott Wave Review

eI want to warn readers that this YEN Elliott Wave count is an experimental project that can go wrong in unknown ways very quickly. The 2011 top matches gold and gold stocks very well. I see the YEN decline matching the gold stock decline, right down to matching the mid 2013 correction as well. Even the 2016 rally matches gold’s rally fairly well.  Our present rally is also a choppy rally  that just will not fit into an impulse without some extreme “forcing”. Forcing a wave count to fit our outlook will never work in the long run as the markets will shred those types of wave counts in short fashion.

I have tried for many years to make sense out of the bigger picture in the YEN. It still would need an incredible amount of time and attention before ‘I’m happy with the big picture, but for now an intraday wave count will have to do.  All support would have to get “taken out”, including the 2015 low for the YEN to show us that the bearish trend is still alive.

Commercial reports do not show extreme short positions on the YEN, so they are not that useful at this time. As the YEN declines, then the commercials will just keep adding to their bullish positions. They say gold is still going to head north, but will the YEN follow?  The YEN is one of 6 currencies in the US dollar index basket and it deserves watching if this gold/yen relationship keeps up. Futures are strictly “single units” as they are not “Pairs” like you would find in the Forex markets. You would have to find the exact pair that matches this futures chart to take advantage of any action that may happen in the futures market.

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