Elliott Wave Analysis by EWF

DAX Elliott Wave Analysis: Ending The Wave 3 Soon

DAX Elliott Wave view in shorter cycles suggests that the rally from March 26.2018 low (11704) is extending higher in Impulse sequence with extension in the 3rd wave. It’s important to note that an impulse structure should have internal subdivision of lesser degree 5 waves impulse. And in particular, DAX’s case, Minute wave ((i)), ((ii)) and ((v)) within wave Minor degree should have an internal subdivision of 5 waves impulse Elliott Wave structure of lesser degree.​
The rally to 12152.62 ended Minute wave ((i)) of 3 in 5 waves structure, Minute wave ((ii)) of 3 ended at 11792.29 low. Then the rally to 12639.73 high ended Minute wave ((iii)) of 3 in 5 waves and pullback to 12319.80 ended Minute wave ((iv)) of 3 as a Flat correction. Above from there, the rally is unfolding in another 5 waves structure in Minute wave ((v)) of 3. Near-term, although the index has a minimum amount of swings in placed already to end the Minor wave 3. But while dips remain above 12319.80 low index is expected to extend 1 more push higher towards 13276.55 area approximately. Afterwards, the index is expected to do a pullback in Minor wave 4 in 3, 7 or 11 swings before further upside is seen. We don’t like selling it.​
DAX Elliott Wave 1 Hour Chart
 
CVR Energy CVI Showing Bullish Structure

CVR Energy (NYSE: CVI) is one of the best performing Energy stocks in the recent 2 years yielding +220% since November 2016 low. Despite the correction taking place in the stock market, CVI did manage to retrace the whole decline since January peak and it’s currently already up +7.9% year-to-date.​
To understand further the technical structure of the stock let take a look at the weekly Elliott Wave chart:​
CVI Weekly Chart Scenario 1
CVR Energy ended a double three 7 swings correction in 2nd November 2016 after it reached the equal legs area $12.04. Up from there, the stock is showing an impulsive 5 waves move to the upside and looking to reach the minimum target around equal legs area $42.14 – $50.78. That technical area aligns with the 50% – 61.8% retracement of the decline from 2013 peak. Down From there, CVI can see 3 waves pullback to correct the cycle from 2016 low and then it’s expected to resume the move to the upside.​
In the next chart, we’ll take a look at a second scenario for the Energy stock:​
CVI Weekly Chart Scenario 2
If the current move manage to extend higher erasing the divergence from January 2018 peak, then CVI would be trading within an extended 3rd leg and will be looking to reach higher levels above $51 area before finally breaking above 2013 peak $72. For this scenario to take place, CVI needs to remain supported above March 2018 low $28 and keeps finding buyers in 3 , 7 or 11 swings.​
Recap:
The bigger picture for the Energy stocks remain bullish and they are expected to remain supported for a higher move during the coming years. CVI ,which is one of the leading stocks in the sector, is showing a bullish structure from the 2016 lows which is the first step toward new all time highs.​
 
HFC HollyFrontier Corporation Impulsive Elliott Wave Rally

Holly Corporation and Frontier Oil merged in July 2011 to form HollyFrontier Corporation (NYSE: HFC). The company is a petroleum refiner and distributor of petroleum products, from gasoline to petroleum-based lubricants and waxes.​
Over the past 2 years, Hollyfrontier Corp performed better than majority of its peers in the Oil & Gas Refining and Basic Materials sector. Its stock price is already up 34.4% year-to-date and still expected to see more gains as Oil price is also up 20% this year which helped the petroleum companies to perform well recently.​
In the below chart, we can notice that HFC and CVR Energy (NYSE: CVI) are closely correlated together. They shared the same cycle from 2013 peak then the current one from 2016 low. However, in the recent 2 months, HollyFrontier managed to outperform with a strong move to the upside breaking to new all time highs despite CVI being one of the leading stocks in Energy sector in recent 2 years and showing an impulsive structure but failed to do the same.​
Overlay of HFC and CVI
After spending 3 years in a corrective cycle to the downside (2013-2016), which took the form of a 3 waves Flat structure, HFC started a new bullish cycle advancing in 5 waves impulsive structure building a nest and looking to reach extreme area around $79.2 – $90.5. Down from there, the stock can see 3 waves pullback before resuming higher again as it’s expected to remain supported and find buyers in 3 , 7 or 11 swing.​
HFC Elliott Wave Weekly Chart
 
USDCAD Extending Lower As Elliott Wave Impulse

USDCAD short-term Elliott Wave view suggests that the bounce to 1.2998 on 5/08 high ended primary wave ((2)). Below from there, primary wave ((3)) remains in progress as an Impulse Elliott Wave structure looking for more downside extension. In Impulse wave, the subdivision of wave 1, 3, and 5 is also an impulse structure of a lesser degree. On the other hand, wave 2 & 4 are corrective in nature i.e double, triple three, Flat etc. In the case of USDCAD, Intermediate wave 1, 3 and 5 are impulse with sub-division of 1, 2, 3, 4 & 5 in Minor degree.​
Down from 1.2998 high, the pair ended intermediate wave (1) in 5 waves at 1.2725 low. Then the bounce to 1.2924 high ended intermediate wave (2) as zigzag and the correction against 5/08 high (1.2998). Below from there, Intermediate wave (3) of ((3)) is in progress looking for more downside extension as an impulse. Minor degree wave 1 of (3) ended in 5 waves at 1.2745 low and the bounce to 1.2911 high ended Minor wave 2 of (3) as a zigzag correction. Near-term focus remains towards 1.2733-1.2691, 100%-123.6% Fibonacci extension area of wave 1 & 2, to end the Minute degree wave ((i)) of 3 lower. Afterwards, the pair should bounce in Minute wave ((ii)) to correct the cycle from 1.2911 high before further decline resumes. We don’t like buying the proposed bounces.​
USDCAD 1 Hour Elliott Wave Chart
 
GBPUSD Elliott wave view in short-term cycle suggests that the decline from 4/17/2018 high (1.4377) is unfolding as an impulse Elliott wave structure where bounce to 1.3607 high ended Intermediate wave (4). Down from there, intermediate wave (5) remains in progress as Elliott Wave ending diagonal structure. Ending diagonal usually appears in the sub-division of wave (5) of impulse or wave (C) of a Zigzag correction with internal distribution of 3-3-3-3-3 corrective structure. It also commonly shows a wedge shape and has overlap between wave 1 & 4 when wave 4 may or may not enter the territory of wave 1.​
In the case of GBPUSD, the decline from 1.3607 high to 1.3450 ended Minor wave 1 of (5) as a zigzag structure. Then the bounce to 1.3569 high ended Minor wave 2 of (5) in 3 swings as a zigzag structure. Down from there, the decline to 1.3389 low ended Minor wave 3 of (5) as Elliott wave double three structure. Above from there, the bounce to 1.3492 high ended Minor wave 4 of (5) which shows the overlap with Minor wave 1. Near-term, below from 1.3492 high, Minor wave 5 of (5) remains in progress which can extend to 1.3333-1.3295. This area is where Minor wave 5 = Minor wave 1 or 100%-123.6% Fibonacci extension area to end the cycle from 4/17/2018 peak. Afterwards, the pair is expected to do a bounce in 3 swings at least. We don’t like buying it into proposed bounces.​
GBPUSD Elliott wave 1 Hour Chart
 
The Hang Seng Index Larger Bullish Cycles

Firstly the Hang Seng index larger bullish cycles has been trending higher with other world indices. In April 2003 it put in a huge degree pullback low. From there the index rallied with other world indices again until October 2007. It then corrected the rally as did most other world stock indices. It ended this larger degree correction in October 2008. From those 2008 lows, the index shows a 5 swing sequence that favors further upside. Price has reached and exceeded the area of 29410 – 32040 which is the .618 – .764 Fibonacci extension of the 2008 to 2015 cycle.​
The way this is measured is as follows. Use a Fibonacci extension tool on a charting platform. Point 1 will be at the beginning of the cycle at the 2008 lows. From there on up to the 2015 highs will be point 2. The point 3 will be down at the 2016 lows. As previously mentioned, the index in January 2018 saw the .618 – .764 Fibonacci extension of the 2008 to 2015 cycle. In most cases a fifth swing will end in this Fibonacci extension area however this index has been a bit more bullish. Analysis continues below the chart.​
Hang Seng Index Weekly Chart​
In conclusion . Currently the Hang Seng pullback from the 5th swing high ended the cycle up from the 2016 lows. It did a 3 swing pullback to the February 2018 lows to complete the 6th swing. At this point it is favored to remain above there during dips. Worst case if it remains below the January 2018 highs it can continue a pullback in the 6th swing in 3 more swings. This would make a possible 7, or 11 swings to correct the cycle up from the 2016 low which should be similar to the 2nd swing pullback of 2011. Afterward of completion of the 6th swing pullback it should see more upside in the 7th swing toward 36314.​
 
Delay in Nafta Deal Doesn’t Hurt Canadian Dollar

We wrote in our previous article that Canadian dollar may get a bid if NAFTA (North America Free Trade Agreement) is successfully renegotiated. The three countries under NAFTA (U.S., Canada, and Mexico) are all under pressure to reach a deal soon. The reason is because of Mexico’s presidential election in July as well as US congress procedural deadline and U.S midterm elections in November. Failure to conclude a deal will cause job loss and uncertainty, denting business confidence. Delay will also add to political unpredictability since some politicians may no longer be involved in politics next year. Mexico will have a new administration and US will have a new congress after mid-term elections. There’s also U.S. threat on steel and aluminum tariffs. The tariffs are scheduled to take effect in June 1, if the NAFTA deal doesn’t come through.​
US House Speaker Paul Ryan gave a self-imposed May 17 deadline in order for US Congress to review and approve it. However, last week the deadline had passed and still the parties have not agreed to a deal. Mr. Ryan has since extended the deadline by 1 or 2 weeks to the end of May. He clarified that it still has enough time for voting provided that the U.S. independent body can analyze the new deal faster.​
Last week, the failure to meet May 17 deadline combined with less than expected inflation data from Canada caused the Loonie to initially get sold. However, the Canadian Dollar has since reversed last week’s weakness and even extends higher against some currencies. This underscores the belief by market participants that a resolution will eventually come through. The high Oil price has also helped Canadian Dollar. The continued US/Iran geopolitical tension and threat of new sanctions underpin the support in Oil. There are also some progresses on the US – China trade war negotiation. Although a deal is nowhere close, but the two sides continue the talk and thus defusing the tension.​
CADJPY 4 Hour Elliott Wave Analysis Favors Canadian Dollar and Nafta Deal
CADJPY shows a bullish sequence from 3.19.2018 low. The rally from there either is unfolding as an impulse Elliott Wave structure or a zigzag. Either way, as far as pair stays above 5/8 low (83.87) in the first degree, it should extend higher to at least 89.14 – 90.38 area. The technical view therefore is in favor of Canadian Dollar​
GBPCAD 4 Hour Elliott Wave Analysis favors Canadian Dollar
GBPCAD decline from 3.19.2018 shows an extension (161.8%) in the third swing lower. If this interpretation is correct, then it has a chance to extend lower as an impulse. The characteristic of an impulse wave is an extension in wave 3 with 161.8% fibonacci extension or higher as the typical extension. As far as bounce stays below the proposed wave 2 at 1.809, the pair has a chance to extend lower as an impulse. This pair then also favors Canadian Dollar’s strength.​
Conclusion
Despite failure to reach Nafta deal by May 17, Canadian Dollar continues to be supported due to the ongoing speculation that eventually a deal will come through. The elevated price of Oil has also been supportive of Canadian Dollar. Technical view of some Canadian pairs also look to confirm this view.​
 
Elliott wave Theory and Market Timing

In this blog, we will talk about the concept of Market Timing. Market is a wild animal which always, is in full control. Many traders want to trade every day and always getting in and out of the market which ends up more like gambling than trading. We at Elliottwave-Forecast have practiced the Elliott wave Theory for years and we have been guilty of many early entries into the Market following the Theory. Years ago, we started practicing The One Market only concept which allow us to see the Market as a whole. The Idea allows you to be able to pick 1 or more instruments showing a clear structure within either the 3-7-11 or 5-9-13 sequences and using them as a guideline to trade the other instruments within the same group and sometimes within other groups also. In other words, we are able to use the correlation among instruments to pick the right timing to enter the trade. We have developed a system as like many others, we have fallen victim to the suggestive nature of the Elliott wave Theory. It is almost impossible to trade based in the Theory alone and it gets even more difficult when you are trading based in the Theory alone and without correlation i.e. analysing and trading instruments in isolation rather than using correlation and One Market Only concept. Our system divides the market in groups and within the groups we locate the instruments with a better structure, we locate the cycles and sequences and then identify the areas in which the market should turn, we call these areas ceilings or floors. This technique helps tremendously with the timing both as a forecaster and trader and without this technique, it’s extremely difficult to trade using the Elliott wave Theory. The difference now compared to when the Theory was developed is that now, we are able to see many instruments as compared to only a few before so why not taking advantage and use groups and correlation to get an edge in the market.​
Most World Indices dipped early in the year and $IBEX entered the correction early in 2017, we knew that $IBEX was the Floor and we told members to wait for the Index to reach the Floor to gather the timing in World Indices to end their respective corrections.​
Below is the Daily chart of $IBEX at 1.2018 when the Index was doing a (X) wave, we were calling lower knowing the rest were about to peak.​
IBEX Daily Elliott Wave Analysis – Market Timing – January 2018
IBEX-Yearly-forecast.png
Below is the $FTSE Daily chart at 1.2018, we knew have reached the Blue Box and a dip was about to happen, it was only a matter of time.​
FTSE Elliott Wave Analysis – Daily Time Frame – January 2018
FTSE-January-2018-daily-chart.jpg
Here is the latest chart of $IBEX showing the bounce from the Blue Box after reaching the floor. Blue box represented the buying area from where we have already seen a reaction higher and any longs from the blue box should already be in a risk free position now.​
IBEX-DAILY20180512100911.jpg

Here is the $FTSE latest Daily chart showing the reaction higher. $FTSE Index is about to break above the previous peak seen in January 2018 and a break of that peak would be the confirmation that next leg higher has started. To know the targets, check out this blog about $FTSE leading the World Indices higher.​
UKX-FTSE-DAILY20180512114414.jpg
This is a text book Market timing and understanding Market nature which without is impossible to ride the Wild Horse named Market. The Reason why Indices like $FTSE have been rallying since early February have nothing to do with Fundamentals or anything else, it is all about the Timing which in this case was $IBEX, We hope you guys understand our ideas and become a better trader understanding that nothing is perfect, but having a system help a lot and understanding the nature even more.​
 
Elliott Wave Analysis: EURJPY Has a Bearish Sequence

EURJPY short-term Elliott Wave view suggests that the bounce to 5/14 high at 131.38 ended Minor wave B. Down from there, the decline is unfolding as Elliott wave impulsive structure in Minor wave C lower. The internal sub-division of each leg lower is showing 5 waves structure in lesser degree cycles, which is characteristic of an an impulse. Also, it’s important to note here that the below chart is showing a bearish sequence tag, which refers to the incomplete downward structure in the pair.​
Below from 131.38 high the lesser degree Minutte wave (i) of ((i)) ended in 5 waves structure at 129.49. Above from there, the bounce to 131.35 high ended Minutte wave (ii) of ((i)) as a double three structure. Then the decline to 128.22 low ended in Minutte wave (iii) of ((i)) with another 5 waves structure. Up from there, the lesser degree Minutte wave (iv) of ((i)) ended at 129.06 high. Down from there, Minutte wave (v) of ((i)) ended at 127.94 low in another 5 waves. Above from there, the pair is correcting the short-term cycle from 131.38 high within Minute wave ((ii)) bounce which is epxected to fail in 3, 7 or 11 swings for further downside extension. We don’t like buying it into a proposed bounce.​
EURJPY Elliott Wave 1 Hour Chart
 
EURUSD Elliott Wave View: Bounces Are Expected To Fail

EURUSD short-term Elliott wave view suggests that the decline from ( 1.1996 ) 5/14/2018 peak is unfolding as ending diagonal structure in Intermediate wave (5) lower as mentioned in the previous post here. The internals of each of leg in ending diagonal structure is the combination of a 3 waves corrective structure i.e the internal of wave 1, 2, 3, 4 & 5 unfolds as double three, zigzag etc. Ending Diagonal usually appears in the sub-division of the wave 5 of impulse or wave C of Zigzag or Flat.​
Down from 1.1996 high, the decline to 1.1715 low ended Minor wave 1 lower. Then the bounce to 1.183 high ended Minor wave 2 bounce as double three structure. Below from there, Minor wave 3 remains in progress as Elliott wave double three structure where internal Minute wave ((w)) of 3 ended at 1.1644. The bounce to 1.173 at yesterday’s high ended Minute wave ((x)) of 3. Near-term focus remains towards 1.1544-1.1500, which is 100%-123.6% Fibonacci extension area of Minute ((w))-((x)) to end the Minute wave ((y)) of 3. Afterwards, the pair is expected to do a bounce in Minor wave 4 which should then fail below 1.1833 high in 3, 7 or 11 swings for more downside. We don’t like buying it the pair.​
EURUSD 1 Hour Elliott Wave Chart
 
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