Ahead of an important weekly, monthly and quarterly rebalance flow it is a good time to update the AU10Y chart. Expecting a very short lived pullback in AU yields as valuations become stretched, as we pullback to resistance at 1.52 at the top in the channel we will start to see a lot of buying interest in AU bonds. To put simply, I am tracking 1.52 => 1.20 for...
The market has continued to selloff through significant levels and with the breach of 1.12 we have unlocked the lows. From a strictly technical perspective as this is all we will be covering today, the market is trading inside an incomplete ABC sequence from the April 2018 highs. This implies that the market can develop a final leg towards 1.0655. The nature of...
Here we can see the market has completed a 5 wave sequence. The rebound we have seen from the cycle lows are starting to gain momentum and a break above the 200MA will trigger the momentum in the move. Those following the live updates will already know we have been bullish on AUD since the 0.68 / 0.69 lows. The impulsive nature will be confirmed above 0.7127x...
Here we can see that the market has reached the requirements for a 5th wave since the lows at the beginning of the year. It also came very close to the Vth target from the entire wave over the decade. If the thesis is correct, we are able to make a case that Silver will outperform over the coming Months and Quarters. Here looking to play the move in mid-term...
As mentioned in the previous 'Xi what I did there...' (see attached ideas) we got the wedge breakout at 3009.xx and we have our first sign of the highs in US Equities ahead of a very important FED. This is typically a sign of a trend running out of steam, the initial target for this breakdown is the 2911 (38.2% retracement) of the leg since June 2019. If the...
Those following the Gold charts will know we have been expecting this impulsive rise, this is going to spillover into Silver as it completes a 5 wave sequence. The main target in this sequence comes into play at 16.61 which is also in congestion with the 38.2% retrace from the highs in 2016. Anything else to the topside will signal that we are in an impulsive...
Here we can make the argument that the market is building a material floor. The 5 wave sequence from 2018 has come to an end and the rebound has rallied through 3 waves implying that it is an overlapping correction. This is complex and a very advanced environment compared with 5-3-5 impulsive legs... this will test the deepest of pockets. All levels in play are...
As the cross approached the interesting support level we widely mentioned here it was clearing time for shorts. The RBNZ is expecting the housing market to receive a small boost from the recent drop in mortgage rates and the OCR cut. I think the boost will be larger and in my models house price inflation will accelerate to 6% by 2020. The view is not only based...
Here we can see Canadian 10-year yields are trying to find a temporary footing as we entered into the G20 weekend. From a strictly technical perspective we can see a double bottom forming here between 1.38/1.41, in order for confidence to remain in the basing thesis we will need to keep above here as the divergence plays out. To the topside, a break above...
Here we can see the target for the 5th wave has been exceeded. Breaking the 3009.84 is diminishing confidence in the 'early bears'. It is important to remember the break is just a squeeze ahead of a very important Fed before markets break for Summer. The size of the break needs to be kept in context, it is not enough to warrant invalidation, plus the nature of the...
Here we can see the SPDR Consumer Staples index reaching the minimum target in the sequence requirements in the decade long chart. For those with a background in waves you will know this is a very classical example of a count. This is time to start paying attention for any signs of a meaningful top forming. We also 'know' that once this final wave is completed a...
From a technical perspective the spread US/German spread differentials have looked corrective since Q418. In what is a textbook example of Elliot Wave in action, the spread completed a 5 wave sequence at the highs in November 2018. The retrace held 38.2% of the move, forming a Wave B and opening up room for Wave C to reach 2.179bps. We are in entering strong...
The corrective process is underway in German 10-year yields. The market met the criteria for the 3rd wave extension, since then we have retraced 23.65 of the prior leg down. A log of congestion here, expect oscillation for some time in this 4th wave (no surprises here for the FED / ECB combo coming later in the month). For confidence in a base formation we would...
The "big" news over the weekend was widely expected, if you ask anyone outside of the core they will all know $DB is a screaming short. It has been for years and is going to be the Lehman equivalent of this business cycle. We have been selling DB for literally years, a broken system with everything thrown at it and nothing has been achieved. The backdrop is a...
Here the market is starting to show signs of putting in a hard floor after a long-term 5 wave sequence. Whilst we are trading the bottom in the range, the cycle lows have held so far which is sending loud messages that the downtrend is tired. A textbook double bottom pattern is in the making here at 0.683x. If I am correct here and the market has put in the 5...
Here we are tracking a Long-term chart in AUD after some precarious price action all week with the PBoC sitting on the bid. We are marking the lows here for a very long time, with significant positive policy shifts the downside risk has materially subsided for AUD housing markets and domestic economy and therefore has become an attractive place to park this late...
Here we can see the market held the bottom in the range since last year. This is arguably already a double bottom, with bears starting to unwind it can be viewed as the start of another impulsive move very similar in nature to that of the 2018 rally. We came a few ticks away from clearing the lows, and now starting to see bulls come in again. Those following in...
Risk receiving another shot of caffeine after a ‘positive’ G20 outcome…. as expected … US and China agreeing to delay tariff increases while negotiations resume. Politically Trump needs to run on the back of a strong economy, the risk is that Xi will view him as already weaken and can continue to exploit this to the advantage of China. China called Trump’s bluff...
