Perfect Elliott Waves

While I believe that all markets trade in Elliott waves, sometimes the waves aren’t perfect. Sometimes wave 4 overlaps wave 1 by a few pips, and sometimes what looks like five down in an ever expanding market (like stocks which are measured in a depreciating currency) is actually a false break. Regardless of being a Perfect Elliott Waves

Entering Capital Preservation Mode

We’ve made the case for well over a year now that our “dollar strength” theme, is more like “other currency weakness” than any “policy divergence.” In other words, it’s the underlying weakness in European and Asian economies that are allowing their currencies to fall against the dollar; as oppossed to dollar strength coming from the Entering Capital Preservation Mode

EURUSD Out of the Triangle!

EURUSD Last week’s title was dead on, “Euro to Follow the Pound.” The breakdown from the triangle happened on Tuesday, and it was straight down from there, likely completing wave (i). A small bounce may develop in wave (ii), but remember what we cautioned several weeks ago. This triangle has been so long in development, EURUSD Out of the Triangle!

Euro’s Spring Compressed

EURUSD We remain on the side that this consolidation is corrective in nature, and that a collapse is coming. The European banking system is woefully under capitalized, and the bailout structures aren’t in place. We have little doubt that the ECB and Brussels will cobble a system together once it’s deemed necessary, but the problem Euro’s Spring Compressed

ECB, BoJ & Fed Tighten By Failing to Loosen Policy

We’ve all heard comments like, “Orange is the new black.” Well, in today’s upside-down world of monetary policy all three major central banks decided to not loosen policy further. Most market participants were disappointed, although it did spark some “risk-on” behavior. But, underneath the bullish action, some subtle deterioration in the “Central Banker Omnipotence” theme ECB, BoJ & Fed Tighten By Failing to Loosen Policy

Dollar Strength Doesn’t Mean Bullish Risk

EURUSD The bullish case for the euro has taken a turn. We’ve long been expecting this corrective rally to fail, and it seems the time may be upon us. After wave (E)’s false trendline break, a choppy decline ensued. But, the rally up from the 1.1123 low is a clear three wave move. As such, Dollar Strength Doesn’t Mean Bullish Risk

Elliott Waves Suggest Japanese Trouble

EURUSD The euro has been consolidating for over a year now, but it’s gained almost no ground. Without something impulsive to the upside, we can still assume parity is coming eventually. The action up from the wave (D) low is choppy and overlapped, and prices found resistance at the broken up trendline. It’ll take a Elliott Waves Suggest Japanese Trouble