Dax, possible reversal at 5150

Analysing longer term charts usually gives better results...This is the Dax Weekly chart..  Since the market crash the last 10 days, the Dax has been pretty much glued to the lows, unable to get any upside momentum, like the US markets..

----------------------------------------------Updating this post made on Aug 22, almost 2 weeks ago.. The German Dax reversed exactly at 5150!!

--------Sep 12, and the Dax is looking weak again, grinding back down to the level mentioned above..5150 doesnt look like its going to hold. As of the time writing this, its 5164 on the Dax, and chances are its heading lower. For neutrals, shorting is an option. For longs with position, a stop is essential here to protect capital. The next target is at 4620, and im fairly confident should we get there in the next 2 weeks, it will mark a very significant turning point in the markets, (along with a top for gold, which is moving inversely with the markets these days, at around 1960, mentioned a while back here on the blog).

update on eurchf

Expectations coming few days....(1) a move up to burn any looming shorts, then a (2) decent move lower, and finally an (3) extremely powerful move higher co-inciding with the market bottoming out...

--------------August 26....The move higher is in play.. If im correct, we should see a move lower starting next week, taking this cross lower, along with all the other risk asset classes..

---------------------------The move lower is in play...Soon expecting a powerful move higher

Here comes the powerful move higher we were talking about. The news out today is on the Swiss Government intervention, but as always, the news comes out in the charts first....

 

Silver and Gold about to fall off a cliff

Ive been fortunate with the last few silver calls..Here's the last post made on July 1..  I believe the corrective wave 2 is close to completing this week, around 45.50..The next wave down should see us back below 30..

The gold buying frenzy continues, taking it ever higher.. On this blog, ive tried to emphasize one point in particular..That the news counts for nothing! The markets have targets, placed well in advance by market makers.. Fundamentalists (people following the news, or value analysts) will argue that gold is in a bull market, heading to infinity...

But, every bull market comes to an end, and this one in particular is very close to ending. The extremely fast moves we are seeing now are telling us that its about to end, (or climaxing).....This is not a time to add, or buy. Rather this is a time to liquidate, and go short..What saddens me to see is that so many people are getting caught up in the hype and buying here at these prices.....Human memory is too short however, these same people, or fundamentalists will be buying all the way down..wondering what went wrong after its too late. I reckon we'll never even get to 2000..

with the exception of the 2 blue circles, we've seen a reaction at every Fibo level here. Im betting 1960 should be the level to flip this gold bull over its head...There's so much momentum to the upside, any strong pullback can quickly turn into a crash..

Update on Swiss (Chf) plays..

The past 2 weeks, we outlined some plays based on the Swiss Franc (CHF) in anticipation of a major trend reversal as that currency bottomed out. Here is the end result.....The blue lines are the levels where the buy recommendations were positioned at.  The first graph is for the Eur/Chf, and the second two graphs for the Usd/Chf  and Gbp/Chf crosses.

EUR/CHF

USD/CHF

GBP/CHF

update - Crude Oil, long opportunity.

----------------------This is a quick update on the long Oil play posted today morning..

Quick Update on the USD/CHF

Quick update on an idea posted a week ago, on the USD/CHF cross. I believe we have just witnessed capitulation, which usually marks the change in trend.  My original target was 73.40, and the low today was 72.70, so i wasnt very far off.  Stops should be placed 40 pips below the low just seen, at 72.30.

And to wrap up the plays ive been following on the CHF (Swiss), here is the GBP/CHF cross, having just hit 1.1770. I think it reverses to the upside as the panic in general subsides, with a target of no less than 2,000 pips.

Excellent play on the Eur/Chf. High probability of a trend reversal here

Ive been following this cross for a while now, as i figured it holds great potential with an extremely overbought Swiss (CHF) Franc, and a Euro holding up remarkably well despite all the panic (hinting it wants to revisit the 1.50 level or higher.)  We just saw an ending diagaonal in a 5th wave, which usually happens at the end of a major move. Im fairly confident we will see a complete trend reversal from here on this cross..

S&P has bottomed out for now....

After Fridays panic, and the powerful bounce that followed taking the S&P to 1216 from 1168, it seemed that a temporary bottom had formed. However, on Monday the gains evaporated and a new low was seen at 1118. Overnight, the market continued to tank late after the market closed, finally settling at the 1080 level. I dont think anyone could have imagined such a crash, but im sure some were able to sense the turning point around 1080..

---------------------------------Updating this post today August 26.. Im still not convinced we've seen the worst of it.. I think we could get down to 1030-1032 before a sustained move higher...

Expecting a decent bounce, and possible a trend change on Oil

------------------Ok, its been tricky, with the market crashing....Most stops on any plays would have got hit, but from 75.80 (a solid Fibo level) we should see a major bounce, if not a complete trend reversal..

The Mighty CHF, close to its end...

This is a quick comparison between the weekly charts of the Eur/Usd & the Usd/Chf crosses..As both ratios have a common factor, it is only natural to expect them to move inversely..However a closer look in the area's circled shows the deviation in the correlation, mainly due to the excessive strength of the Chf seen the last few weeks...The acceleration of the move over the last few days, indicates that a change of trend is near.

Weekly comparison btw Eur/Usd  &  Usd/Chf

From the highs of 1.81 in 2001, theUsd/Chf cross has been in a powerful bear market for over 10 years now.. For long term players, getting in now is a no brainer. Just take a position and wait. The US $ is not going to disappear anytime soon. For short term players, i will try and fine tune a better entry point.

Elliot Wave Count



The 4th wave of this downmove formed a bearish triangle or wedge (which is a continuation pattern). The target of this wedge is outlined with the purple lines.. According to this method, the low we saw yesterday of around 76.1 should be enough for a sustained bounce and change in trend, but in all honesty, i am not convinced we have seen the last of this downmove. Nevertheless, opening a small long position at these levels with a stop just below 76 is not a bad idea..just in case..



Classical Textbook Triangle target

Finally, the level im betting on to cap this monster of a move..There's a good chance we might never get there, but im putting it out here just in case.. If its going to happen, id expect it to happen during August, maybe even within the 10 days or so..



Oil Update, August 3

Back to blogging, after a small break.. Markets have been falling apart lately, with volatility at the highest level i've seen in months..I will start my updates with the Crude Oil chart. I believe starting tommorow, we will see the beginning of a new leg up...Im betting on the 91.20 level seen today to hold the decline. The plan is to place a stop just below the 91.00 and go long, aiming for over $100..

Oil, 8 Hour chart