Friday, July 8, 2011

7/8/11 - EOD Update [4:48 PM Update]

[4:48 PM Update]

The dollar looks like it may be setting up for a breakout to the upside.

Copper is sporting a negative divergence on the 4 hr chart.

EOD Update


This is an excerpt from yesterday's post,"Near the close it looks like a little selling right at the intersection of the mid-channel and green trendline (3/3 -4/8 high). Based on the count above, it may be concluded that wave 3 of Minor 5 is most likely complete. We shall see if there is a sell the news event for NFP tomorrow for wave 4 down of Minor 5."

Based on today's price action I'd say yesterday's post was correct in assuming wave 3 of Minor 5 was complete. Not quite a sell the news event per se but a sell the worse than expected news sorta thing.

In the chat room I mentioned that we should be prepared to see some range bound trading over the next few days between 1330-1356. This would form a sideways wave 4 that would alternate with wave 2. This would also present some frustration as usual in wave 4s. So we'll see what is in store next week.

For now, I believe, waves a and b of 4 completed today. It is possible wave b may try to tag the 1345 level but I think there is a good chance it completed today.

I'm expecting a wave c drop to follow that may be limited to 1330 and possibly down to 1320 based on Fibonacci extension of wave c to a (See the 60 min chart below for this). If 1330 or 1320 does not hold, perhaps a backtest of the 50 day SMA at 1317.

Does wave 4 triangulate, form a zig zag or a flat? It's still too early to tell.

W'ell need to see how the start of earnings season next week will affect the wave structure. Keep in mind that a bearish head and shoulders pattern on the daily is something to be mindful of and if earnings comes in poorly, that could be a catalyst to have that price pattern follow thru.



1 Min

Today's bounce off the low surely counts better as a corrective wave along with a bearish flag pattern. Let's see if the bulls follow through with the buying like they did into the close to break this pattern.

60 Min

Some Fib extension targets for wave c.

Minor 5
Minor 5 still looks like it is underway. Let's see what wave 4 of Minor 5 does.

60 Min Bollinger Bands

Stopped just shy of the 20 SMA on the hourly. One more drop to touch the lower band at 1330?

H/S

Need to keep an eye on this one, however, momentum to me appears as though this pattern will be wiped out.

EUR/USD

The eur could be done with wave e if you look at the hourly. The hourly also formed a positive MACD divergence. So if e is not in, that would set up the bounce for wave b of e.