by WaveTrack International| November 26, 2015 | No Comments
IN THE NEWS!
The shareholder approval of Lonmin’s rights issue on the 19th November resulted in a sharp mark-down in the share price when trading opened in London the next day. From the previous evening’s level of 9.85, it plunged to 1.50 on the opening, later edging down to 1.12 on the 25th November.
The company has re-negotiated its funding from a consortium of 10 banks for its existing facility of US$540m to US$370m due in 2020. As of September ’15, Lonmin had net debt of US$185m.
So what next?
From an Elliott Wave perspective, the additional decline that followed the rights issue has created an entirely different dynamic. It changes what was previously a three wave (counter-trend) pattern unfolding from the all-time-high of 4400.00 to the Sep.’15 low of 14.50 into a five wave (trend) expanding-impulse pattern – see fig #1. That translates into two ongoing aspects – first, it eliminates the possibility of trading into new record highs – second, following the completion of a counter-trend upswing, it will later crash down again, into oblivion.
For the moment, basis Fibonacci-Price-Ratio (FPR) analysis, there is a risk that prices fall even further than they already have, meaning the five wave pattern remains incomplete. The next major support projects down to 0.42+/- pence, derived by extending primary waves 1-3 by a fib. 61.8% ratio.
Now that Pandora’s box has been opened, there are no guarantees, but upon a satisfactory completion of a five wave pattern, R.N.Elliott’s original postulation states that a counter-trend rally will follow and it will ultimately trade back towards ‘4th wave preceding degree’. This area is labeled primary wave 4 and it begins from the fib. 38.2% retracement level of 14.00+/- and extends to its approximate high at 43.00+/- which is the fib. 50% retracement level.
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by m.tamosauskas| November 24, 2015 | No Comments
Yesterday’s news that confirmed Argentina’s centre-right wing party had won a slender majority in its latest elections might be the beginning of a long-term positive development for the country having been isolated from international funding since the left-wing party came to power in 2003.
The incumbent President Mauricio Macri had earmarked various changes to the monetary system including a ‘unified exchange rate’ and removing currency controls, bringing down the 20% per cent inflation rate, regaining access to international capital markets and reducing government spending that is currently at 40% GDP. The markets took cheer in his mandate – Argentina’s benchmark Bonar 24 dollar bonds rose 1.55% to 102.69 cents per dollar – corresponding yields fell from 8.61% per cent to 8.37% per cent.
Whilst this offers an optimistic ‘long-view’ outlook for Argentina, a look at the Merval index suggests otherwise – in fact, from an Elliott Wave perspective, it would seem that this is a classic set-up of ‘buy the rumour, sell the fact’.
The entire activity of the Merval index from the September ’14 high of 12847.00 has all the characteristics of a developing expanding flat corrective pattern – see fig #1. The pattern is composed of three main price-swings, labelled a-b-c and assigned in minor degree as intermediate wave (4). Minor wave a. establishes the initial ‘price-extremity’ of the pattern between 12847.00 and 7452.00 whilst waves b. and c. must ultimately trade slightly beyond these levels – see tutorial inset chart. The pattern is also required to subdivide into a 3-3-5 sequence – minor wave a. fulfils this criteria by unfolding into a 3-wave zig zag. Minor wave b. has just done the same, advancing from 7452.00 into Monday’s election high at 15261.00.
The zig zag advance for minor wave b. has also unfolded where minute waves a & c measure equally, by a fib. 100% correlative ratio. This adds to its integrity. Furthermore, it has completed above wave a. close to and within the fib. 38.2% extension level of wave a. – another criteria satisfied.
Monday’s higher high and lower low closing also triggers a technical ‘key-reversal’ sell-signal. If further downside occurs during the next week or so, and reintegration follows below the dual peaks of 12847.00 and 12866.00, then minor wave c. declines will become a high-probability reality with ultimate downside targets to 6883.00+/- during the next several months.
Mauricio Macri has admitted that he is in no position to determine what condition Argentina’s financials are in…‘To know what we are inheriting, we have to be there [in power] – we still don’t really know’.
by WaveTrack International| November 12, 2015 | No Comments
In this exciting interview with Dale Pinkert – a Former Member of the Chicago Mercantile Exchange whose market forecasts have been aired on Financial Television and Radio station including CNBC Peter Goodburn elaborates his views on Elliott Wave, muses with Dale on the cyclicity behind historical market events and the US Dollar. Listen to this amazingly insightful interview here:
Don’t forget – our bi-weekly Elliott Wave Compass report features many short-term updates of various asset classes.
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by WaveTrack International| November 10, 2015 | No Comments
Trader’s World magazine has just published another of Peter Goodburn’s Elliott Wave articles in its latest #61st edition and you can see it absolutely FREE in cooperation between WaveTrack International and Trader’s World editor Larry Jacobs.
We’ve interacted with many of you, our members and subscribers over the last few months on the subject of overlaying Fibonacci-price-ratios to the Elliott Wave counts we publish. As Peter commented in this latest article ‘ I rather think of ratio and proportion and pattern and form as the two sides of the same coin – one cannot exist without the other – neither is dependent, independent but co-exist in interdependency. Together they increase the probability of correct forecasting exponentially. Some do degrade and seemingly run short, but this is by far a minority, something a good strategy can take care of’.
The article is an extract from a larger, as yet, unpublished work that Peter wrote back in 2012 as part of the up-coming WaveSearch Tutorials. It begins with some interesting history about R.N.Elliott’s introduction to the Natural Laws of science & metaphysics by Charles J. Collins who sponsored his publications of ‘The Wave Principle’ in a series of articles for the Financial World magazine in 1939.
Later, it follows one of Peter’s several successful ‘long-range’ forecasts – this one, for the Dow Jones Industrial Average (DJIA), published in early 2004 and how his specific methodology and application of FPR’s captured the Dow’s upsurge into the October 2007 highs, and the subsequent collapse during the Lehman crisis that formed lows in 2009.
For those of you fascinated by the geometric symmetry found hiding within the evolving nature of price activity, this is a must read! You can view it immediately by visiting: www.tradersworld.com
Just turn to page 49 to view!
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by WaveTrack International| October 30, 2015 | No Comments
A very impressive pattern sequence that we identified this month is shown for the Euro/US$ (published in WaveTrack’s Elliott Wave Compass report). By mid-October, the Euro had already advanced more than three cents from its late-September low and was threatening the mid-September high of 1.1461. Conventional technical analysis at this point might have implied the possibility of upside acceleration once the 1.1461 high would be broken. But our Elliott Wave analysis, based on proprietary fib-price-ratio measurements, helped to almost pinpoint the achieved high and forewarn of an accelerative decline.
The reasoning behind it was based on a thorough examination of the price action of the last eight weeks and, equally important, of the last several months. When looking back to the May ’15 high, we were able to identify a three price-swing decline into the July low followed by a three price-swing advance into the August high. Basis the preceding (larger) five wave advance into the May high, it was clear (for an Elliottician) that this 3-3 sequence would have to be followed by a downswing. Moreover, as the correction following the impulse to 1.1468 was in a 2nd wave position, it was also clear the downswing would have to take the shape of an impulse decline (because a 3-3-3 can only occur as part of a 3-3-3-3-3 triangle – and this can happen only in a 4th wave).
Thus, we were ready to pull the trigger by mid-October when the Euro was attacking the 1.1461 high. Measured targets defined the 1.1450-1.1517 zone as a highly probable reversal area. Look how the Euro reacted to the predetermined fib-price resistance levels! It reversed from the 1.1496 high and almost instantly took up so much downside momentum that after a couple of days it was clear something big had occurred! Under Elliott Wave theory, it was clear that the Euro had now entered the 3rd wave within the five wave decline from 1.1712; and this five wave decline was the finalising leg of the previously described 3-3 sequence. What to expect next is shown on the chart – enjoy the ride into lower lows!
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by m.tamosauskas| October 25, 2015 | No Comments
Despite some great percentage gains in commodities since prices formed lows last August, the subsequent advances have mostly traded higher into Elliott Wave counter-trend patterns. This is especially evident in the CRB-Cash index. This is a proxy for many of its components including base metals and energy contracts like crude oil, and whilst we expect an imminent completion of the entire declines that began from the year-2011 highs, one additional but final sell-off now seems inevitable.
The examination of this final stage of declines for the CRB-Cash index has also revealed some archetypal Elliott Wave patterning and adherence to Fibonacci-Price-Ratios – it therefore makes an excellent ‘real-time’ study of price development according to two of the Elliott Wave Principle’s (EWP’s) most important aspects, that of ‘structure’ and ‘dimension’.
The CRB-Cash index staged a counter-trend upswing from the March ’15 low of 407.21 ending into the May high at 439.00. Its structural composition has unfolded into a typical three price-swing sequence, the definition of an EW zig zag pattern. Furthermore, dimension is evident applying Fib-Price-Ratio studies – extending wave a (ending at the f phi symbol) by a fib. 61.8% ratio projects the high for wave c of the pattern to within a single point of its actual conclusion at 439.00.
The following decline extends the overall five wave impulse decline in progress from the April ’14 high of 569.70. This is labelled a 5th wave, designated minor wave v. five and it must develop with a five wave component labelled 1-2-3-4-5 and assigned in minute degree. Its downward progress has adhered to several typical characteristics of a developing five wave expanding-impulse pattern. First, the ‘rule of alternation’ where waves 2 and 4 differ in their overall structure – wave 2 unfolds into a complex ‘expanding flat’ whilst wave 4 unfolds into a simple ‘zig zag’. Wave 3 visibly ‘expands’ the price action and is much larger than wave 1 – it adheres to Elliott’s concept that third waves are commonly the largest but never the shortest in the pattern. Wave 3 subdivides into a perfectly formed five wave structure ending into the August low at 382.09.
- Wave 4 unfolds into a symmetrically formed three wave zig zag pattern. Extending wave [a] by a fib. 61.8% ratio projects a terminal high for wave [c] to within a point-and-a-half of the actual level traded at 409.48.
- Dimensionally, wave 2 is a fib. 76.4% retracement of wave 1 – wave 4 is a fib. 50% retracement of waves 1-3.
The projection for a final fifth wave decline, labelled minute wave 5 that began from 409.48 is the element where EW Rules & Guidelines are practiced in the real world, real-time. To determine the amplitude of wave 5, two common fib-price-ratios are used. These are selected over-and-above others because of the depth of the fourth wave to 409.48.
- The first is where a Fibonacci ‘extension’ ratio is used measuring waves 1-4 and extending this by fib. 161.8% to project the low for wave 5 to 365.86+/-.
- Second, a Fibonacci ‘correlative’ ratio taking waves 1-3 (= 100%) and multiplying this by a fib. 61.8% ratio for the measurement of wave 5 to 375.80+/-.
And so we can see that from a combination of structure/form and dimension/symmetry, a viable determination of ‘trend’ and ‘amplitude’ can be made. Hope this was helpful, if you enjoined – you can find more EW tutorials in our website.
by m.tamosauskas| October 19, 2015 | No Comments
Sugar is getting more and more expensive! The decline that began from the Feb.’11 high of 36.08 has unfolded in to a five wave expanding-impulse pattern with completion into the recent low of 10.13, where the net decline of wave 1 to 3 and wave 5 contains a fib. 100%/61.8% correlation ratio. The following counter-trend advance has staged a plus +40% rally to the upside and basis our Elliott Wave analysis it does look incomplete. More expensive sugar in the months ahead?
by m.tamosauskas| October 18, 2015 | No Comments
Over a month ago, Lonmin PLC has started to surprise most of market participants with a sharp advance from the 14.50 low (see the previous forecast here). This upswing has extended up to 46.50 level, producing a stunning +220% price increase in a very short period of time. Moreover, this advance unfolded into a five wave expanding-impulse pattern, labelled i.-ii.-iii.-iv.-v. in minor degree with almost a perfect fib-price-ratio measurement – extending the net advance of waves i. to iv. by a fib. 61.8% ratio to project upside objectives for wave v. This confirms our reversal signature to the upside, suggesting much more will come in the months/years ahead!
by m.tamosauskas| October 8, 2015 | No Comments
Peter Goodburn, the founding partner of WaveTrack International, and his trading experience spans back to the late 1970′s working then in the commodities business for exchange members and their clients. In those earlier years of his career, he created the first OTC (over-the-counter) copper option product based upon the comex (New York) contract around the mid-eighties, and in the same period, devised Opval, an option-evaluation software program that is currently used in many of the major market-making institutions of today. Recently, Peter was invited to join a ‘52Traders’ podcast to share his experience with wider audience. Read or listen the entire interview here: http://52traders.com/peter-goodburn/ . Find out why Elliott Wave analysis is used by many institutional managers nowadays. What are the most important aspects beginning using the EW for trading and investing? Killer stock pick and much more!
by m.tamosauskas| October 5, 2015 | No Comments
The devastating decline that began from the July ’07 high of 4400 has reached as low as 14.50 in Sep.’15. In our latest update of this equity we were looking for a minimum downside target below the March ’15 low of 105.70 but it has extended much lower. Despite this however, the recent price development shows a sign of life – Lonmin PLC has advanced from the 14.50 low to above 23.00. Basis revised Elliott Wave analysis, the decline from the 4400 high into the 14.50 low is best described as a five wave expanding-impulse pattern, suggesting the following advance will unfold into a corrective sequence. It has a potential to advance much higher, but we stay conservative here with a call of a fib. 38.2% retracement level of the preceding decline targeting 128.00+/- in the years ahead. The mining sector becomes more and more interesting by each day, join us to find out more http://goo.gl/hQNwOukeep looking »