WaveTrack International

Elliott Wave Financial Price Forecasting

SP500 and Nasdaq 100 – Two Different Corrective Patterns – Same Message!

by WaveTrack International| April 20, 2018 | No Comments

SP500 – Nasdaq 100 – 1st Wave Of Ending-Diagonal!

The April 2nd / April 4th lows ended expanding flat corrective patterns that began from the February 27th highs. These lows formed at 2552.00 for the SP500 futures contract and at 6306.75 for the Nasdaq 100 futures. These patterns were labelled as ending sub-minuette wave (b) within February’s larger degree zig zag upswing – see fig #1. Following advances begin wave (c) which itself must develop higher whilst unfolding into a five wave impulse pattern, extending above the Feb. 27th highs of 2789.75 and 7009.00 respectively. So far, so good!

SP500 and Nasdaq 100 - Comparison!

SP500 and Nasdaq 100 – Comparison!

SP500 and Nasdaq 100 – Two Different Patterns?!

But taking a closer look at wave (c)’s upside progress from those April 2nd lows reveals two different corrective patterns ending into last Wednesday’s highs. A double zig zag for the SP500 (see left) and a single zig zag for the Nasdaq 100 (see right). How can that be? Surely, the advance must unfold as a developing five wave impulse pattern, i.e. 1-2-3-4-5? Perhaps this is a series of 1-2’s, you know, a five wave ‘expanding-impulse’ pattern which begins 1-2-1-2 etc. And then expands the price action with a 3rd-of-3rd wave surge to the upside. That could still happen. But if so, why have these indices dropped away from Wednesday’s highs? A 3rd-of-3rd wave should be propelling price action higher, not lower.

Furthermore, look at how these overlapping price-swings have adhered to fib-price-ratios that depict corrective sequences. For example, if the S&P has developed into a double zig zag, then extending the first from 2552.00 to 2672.25 by a fib. 38.2% ratio projects a terminal high for the secondary zig zag exactly into Wednesday’s high at 2718.50. Extending wave ‘a’ of the Nasdaq 100’s initial upswing from 6306.75 to 6654.50 by a fib. 61.8% ratio projects a terminal high for wave ‘c’ to 6878.75 – the actual high was 6867.00.

SP500 and Nasdaq 100 – The Puzzle Solved

The only obvious answer to this rather intricate puzzle is that wave (c) is unfolding higher, not as an expanding-impulse pattern, but as a diagonal-impulse pattern, specifically, and ‘ending’ type diagonal. The wave labelling of the two impulse patterns remain the same, [1]-[2]-[3]-[4]-[5], but in an ending-diagonal, waves [1]-[3]-[5] have a tendency to subdivide into ‘threes’, zig zags or multiples, i.e. double zig zags or even triples. This explains why the advances have unfolded into a double zig zag and single zig zag for these two indices.

What Next?

Firstly, with wave [1] ending into last Wednesday’s highs, wave [2] is now underway as a corrective decline. Second wave retracements are usually sharp and steep affairs, so watch for a sudden sell-off over the next few trading days. But ultimately, wave [2] will end above the April 2nd / April 4th lows, then resume higher afterwards to begin wave [3].

Conclusion

We already know that market watchers are mystified over recent price-swings and can only stand aside with expectations of more volatility. But from an Elliott Wave perspective, we gain an intimate view of price-progression in a way no other financial system can operate – that’s because it is completely suited to non-linear dynamics, the DNA and the heartbeat of the markets’ character.

If you haven’t already subscribed to our bi-weekly Elliott Wave Compass report and are actively watching or trading the markets, then do join our growing community – we have the answers you seek!

TESLA INC. – Expanding Diagonal!

by WaveTrack International| April 16, 2018 | No Comments

Tesla Inc. - Daily - Elliott Wave Forecast - by WaveTrack International

Tesla Inc. – Daily – Elliott Wave Forecast – by WaveTrack International

Tesla vs. Goldman Sachs – We’re Backing Tesla!

Tesla Inc. caught our attention following last week’s publication of investment bank Goldman Sachs’ recent analyst report. It stated suspicion over the sustainability of the Model 3 production rate for Q2 2018 and that it would probably be far lower than Tesla’s optimistic estimates.

CEO Elon Musk responded shortly after Goldman analysts advised clients to sell the stock by challenging them and any short-sellers by saying ‘place your bets’ to followers on twitter.
And from an Elliott Wave perspective, we agree with Elon Musk – this stock is trending higher again!

To understand how Tesla Inc. got to this point, we must travel back in time. In this case, to the origin of the dominant uptrend that originated from the Feb.’16 low of 141.05. February ’16 was a very important date, not just for Tesla. But for almost all global stock markets/indices, emerging-markets and commodities! Why? Because this marked the end of counter-trend declines in each of these asset classes. It was the date when corrective declines for global stock markets completed from their 2015 highs. And where emerging markets and commodities ended corrective declines that had begun from their 2011 highs.

They all converged at the same time, forming major, synchronous lows. We termed this the grand ‘RE-SYNCHRONISATION’ lows. Mainly because up until that point, developed markets had been diverging with emerging markets and commodities for 5 years. However, now they were re-aligned!

Tesla and the Expanding Diagonal

Tesla Inc. has since traded higher from the Feb.16 low into a developing five wave impulse pattern, but it’s no ordinary impulse, it’s taking the form of a DIAGONAL-IMPULSE pattern. It still consists of five waves but a diagonal necessitates the ‘overlap’ of wave 4 into the price territory of wave 1 – see fig #1.

Tesla Inc. - Daily Elliott Wave Forecast - by WaveTrack International

Tesla Inc. – Daily Elliott Wave Forecast – by WaveTrack International

The diagonal is labelled in minute degree, 1-2-3-4-5 where its 1st wave ended an initial thrust higher to 269.34 in April ’16, the 3rd wave ended the next upswing into the June ’17 high at 386.99 but the 5th is still in upward progress.

Now there are many aspects of this diagonal which heightens its ‘integrity’ or validity. We already know the diagonal is an ‘expanding’ type rather than a contracting variation because of the time and depth of the correction of its 4th wave that ended recently in early-April at 244.59. The boundary lines that connect the 1st and 3rd waves, the 2nd and 4th are widening as time elapses. This means using slightly different Fibonacci-Price-Ratios (FPR’s) in measuring the finalising 5th wave advance.

Tesla and Fibonacci-Price-Ratio Symmetry

In Tesla’s case, the 5th wave advance is shown unfolding by a fib. 61.8% ratio of the net advance of the 1st-3rd waves which projects a final high later this year towards 456.35+/-.

Note the other amazing fib-price-ratios in the diagonal’s development. This is an ‘ending’ type diagonal because it is the 5th wave within the intermediate-term uptrend that began way back in August ’11. Ending-diagonals usually contain impulse waves, i.e. 1st 3rd and 5th fifth’s that subdivide into [a]-[b]-[c] zig zags or doubles/triples. This is not easily visible in the 1st wave advance of this daily chart. However, it is clearly visible in the 3rd wave. Extending wave [a] to 287.39 by a fib. 61.8% ratio projects the terminal high for wave [c] of the 3rd at exactly the high traded in June ’17 at 386.99.

Furthermore, the 4th wave corrective decline that followed also measures amazingly into the early-April low at 244.59. This decline has unfolded into a double-three, labelled [w]-[x]-[y] and by extending the initial decline of [w] to 292.63 by a fib. 61.8% ratio projects the terminal low for [y] at 244.59!

The 5th wave has since begun to unfold higher and is expected to take the form of a three wave zig zag, labelled [a]-[b]-[c]. We’ve already measured the terminal high of the 5th to 456.35+/- earlier – if this is ‘cut’ by the ‘golden-ratio’ 61.8%, then an interim high is measured for wave [a] to 359.75+/-.

Conclusion

Stocks markets are still being jostled, pounded by conflicting news-flows but overall, we remain very optimistic for major indices over the next month. This positive outlook is also corroborated by Tesla Inc. too! Good luck Mr. Musk – we’re certainly endorsing your challenge!

Value Line Index – Expanding Flat!

by WaveTrack International| April 10, 2018 | No Comments

Markets Higher Now!

In recent updates, U.S. index declines from February 27th highs were identified as unfolding into 3-3-5, [A]-[B]-[C] expanding flat patterns. This is the case for the S&P 500, the S&P 400 mid-cap, the Russell 2000 small-cap, the Nasdaq 100 together with several sector indices including recent updates for the XLY Consumer Disc. Index. All indices ended the expanding flat patterns in or around the lows on April 2nd. Interestingly though, the Dow Jones (DJIA) unfolded during the same period into a different corrective pattern. A Zig Zag forming a 5-3-5 [A]-[B]-[C] pattern, the same as the major European indices. When two differing patterns like this synchronously unfold, it tells us a lot about their integrity, or validity. Moreover, it can tell us of what comes next.

Value Line Index

One index which also adhered to the expanding flat pattern between the dates of Feb. 27th to April 2nd was the Value Line index. Background (Wikipedia) – the total number of companies in the Value Line Composite Index hovers near 1675. The Value Line Arithmetic Composite Index was established on February 1, 1988. It is using the arithmetic mean to more closely mimic the change in the index if you held a portfolio of stocks in equal amounts. The Value Line index is a broader measure as it combines corporates from several exchanges, which has a tendency to smooth out distortions or exaggerated sequences.

Significance of the Expanding Flat Patterns

Note the expanding flat that began from the Feb. 27th high of 6178.38 (see fig #1, left) where wave [A] ended a double zig zag decline to 5900.74. Then a single zig zag upswing as wave [B] ending at 6257.54. And finally, wave [C] which at the time of this original update published on March 18th was trading at 6176.67 but forecast down towards the 5837.00+/- area.

Value Line Arithmetic Index - Forecast and Result!

Value Line Arithmetic Index – Forecast and Result!

As you can see, wave [C] declined into a tidy five wave impulse pattern, ending into the April 2nd low at 5815.77, just a little lower (see fig #1, right). The following advance into last week’s high at 6066.93 is too large to be part of the preceding expanding flat decline. It is undoubtedly confirming the completion of the expanding flat at those early-April lows. It is the beginning of the next upswing which at the moment, is targeting towards 6372.00+/- basis the original plan.

Conclusion

Stocks are still jittery as they trade around the volatile media news emanating from President Trump and his tariff plans. But there’s evidence in these Elliott Wave patterns that suggests we are seeing at least a short-term reprieve from the selling that occurred last month. Some positive gains are forecast during the next few weeks prior to the next breakdown.

Are you trading Nasdaq100, S&P 500, EuroStoxx, Russell 2000, Dow Jones 30, Dax, FTSE100, Shanghai Composite, Hang Seng or ASX200? Don’t miss WaveTrack’s regular updates in our bi-weekly EW-Compass Report! Ensure you’re tracking our Forex forecasts – subscribe online for the EW-COMPASS REPORT.

Visit us @ www.wavetrack.com and subsribe to our latest EW-COMPASS report!

Nasdaq100 – Expanding Flat – New Update!

by WaveTrack International| April 3, 2018 | 9 Comments

NASDAQ100 – Technology Stock Slide Over!

  • Nasdaq100 ended corrective expanding flat downswing yesterday at 6322.90 – outlook affirms bullish call for next several weeks.
  • Read more «Nasdaq100 – Expanding Flat – New Update!»

    EuroStoxx and SP500 – Relax, Don’t Do It (Sell!)

    by WaveTrack International| March 28, 2018 | No Comments

    RELAX, DON’T DO IT (SELL!) EUROSTOXX 50 ZIG ZAG – S&P 500 EXPANDING FLAT

  • Eurostoxx 50 to stage a marginal decline targeting 3135.50+/-. It then begins a sustained advance targeting 3543.00+/-, a gain of +13% per cent over the coming month
  • S&P 500 to test downside support at 2562.50+/- but then
    staging a reversal-signature that begins the next advance towards 2854.75+/-, a gain of +11% per cent over the coming month
  • Read more «EuroStoxx and SP500 – Relax, Don’t Do It (Sell!)»

    NASDAQ 100 – Success! Downside targets achieved

    by WaveTrack International| March 26, 2018 | No Comments

    NASDAQ 100 – Downside Targets Achieved @ 6507.84!

    Last week’s escalating news-flow around President Trump’s plans to expand upon existing U.S. import tariffs caught the markets out. Subsequently, leading to declines of -9.5% per cent in the Nasdaq 100 over the last 10-day period. Naturally, mass media and analysts continue to debate the impact of a potential trade war. However, the Nasdaq 100 together with the other major U.S. indices is quietly unfolding into some near-perfect Elliott Wave patterns that eliminates all the ‘guessing’ and ‘opinion’ from investors and pundits alike.

    Expanding Flat Pattern

    January’s decline hasn’t finished yet! It’s identified as unfolding into an Elliott Wave expanding flat pattern – see tutorial graphic, top-right – fig #1. There are quite a few twists and turns in this pattern particularly in the second sequence. This means we have to expect a lot more price volatility over the coming month.

    Nasdaq 100 - 60 mins. - Forecast by WaveTrack International

    Nasdaq 100 – 60 mins. – Forecast by WaveTrack International

    The expanding flat is composed of three main price-swings. These price swings are labelled in minuette degree as waves [a]-b]-[c]. Each of them subdividing 3-3-5 or otherwise termed as zig zag-zig zag-impulse patterns. Wave [a] establishes the initial price-extremity of the pattern. Wave [a] did this by declining from January’s high of 7022.97 into a zig zag, ending in mid-February at 6164.43. Now, waves [b] and [c] must then marginally break beyond wave [a]’s trading-range in order to complete the expanding flat. The amplitudes of waves [b] and [c] can be measured using fib-price-ratios.

    First of all, the 2nd sequence of the expanding flat, wave [b] is unfolding higher from the mid-February low of 6164.43 as a zig zag pattern, labelled (a)-(b)-(c). Wave (b) was recently forecast as unfolding into an expanding flat pattern, labelled [A]-[B]-[C] with downside targets towards 6498.00+/-. Also, last week’s dramatic sell-off basis the Trump tariff news pulled prices directly into this downside area ending into Friday’s session low at 6507.84. This is less than ten points from objectives – Monday’s (today’s) opening has rejected this low, trading now at 6657.21. This ends wave (b) of February’s zig zag upswing – wave (c) is now en-route towards 7381.64+/-.

    Trade Negotiations or Trade War?

    US Treasury Secretary Steve Mnuchin said yesterday this about China – ‘We’re having very productive conversations with them. I’m cautiously hopeful we reach an agreement’. China’s Ministry of Foreign Affairs replied by saying ‘China is willing to negotiate to appropriately manage and control differences with the United States on the basis of mutual respect and mutual benefit’.

    Conclusion

    Basis the expanding flat, a short-term reprieve around tariff talks has softened last week’s sell-off. Hence today’s stock market pull away from last Friday’s lows. But if the expanding flat has another sharp decline coming once current prices trade to higher-highs, then for sure, we can expect the talks to break down – unless another exogenous event takes its place!

    Are you trading Nasdaq 100, Russell 2000, Dow Jones 30, EuroStoxx, Dax, FTSE100, Shanghai Composite, Hang Seng or ASX200? Don’t miss WaveTrack’s regular updates in our bi-weekly EW-Compass Report! Ensure you’re tracking our Forex forecasts – subscribe online for the EW-COMPASS REPORT.

    Visit us @ www.wavetrack.com and subsribe to our latest EW-COMPASS report!

    NEW UPDATE! Nasdaq 100 Breaks to Higher-Highs – then Collapse!

    by WaveTrack International| March 15, 2018 | 2 Comments

    NASDAQ 100 – EXPANDING FLAT! – NEW UPDATE!

    Some of the major U.S. indices that declined during January/February’s sell-off unfolded into five wave impulse patterns. Yet, others developed into three wave corrective sequences. In order to maintain positive-correlation and pattern alignment, the ‘default’ procedure is to adopt developing [a]-[b]-[c] 5-3-5 zig zag pattern for the former. And naturally, an [a]-[b]-[c] 3-3-5 expanding flat patterns for the latter.

    There is only problem with this. It demands a -19% decline for the outperforming Nasdaq 100 during wave [c]’s final sequence! That’s far too big compared to European and Asian indices. As these are already in the final stages of ending counter-trend declines that began from the November/January highs.

    There are only two ways to reconcile this amplitude dislocation. Either the Nasdaq 100 and other U.S. indices will underperform European indices during wave [c]’s declines? Or the February lows ended the entirety of January’s correction for all U.S. indices with new impulse uptrends already in upside progress! However, with only a minor correction unfolding during the next week or so, correlating to final declines in Europe/Asia.

    Shorter-term, we’ve detected the more recent upswing for the Nasdaq 100 from the early-March low of 6645.03 into this week’s high of 7186.09 unfolding into a three wave zig zag – see fig #1. That indicates wave (b) is transforming from a zig zag correction. Originally labelled ending at 6645.03, into a more complex correction, an expanding flat. However, wave [C] downside targets are now towards 6498.00+/-.

    Nasdaq 100 forecast - 60 mins. chart by www.wavetrack.com

    Nasdaq 100 forecast – 60 mins. chart by www.wavetrack.com

    Conclusion

    We can’t be certain which of these two scenarios will unfold! But one thing is for certain, a short-term decline to 6498.00+/- would present the next major buying opportunity. This is labelled as either ending wave (b) within a zig zag with wave (c) upside targets to 7381.64+/- or ending minuette wave [ii] two within a new impulse uptrend.

    Are you trading Nasdaq 100, Russell 2000, Dow Jones 30, EuroStoxx, Dax, FTSE100, Shanghai Composite, Hang Seng or ASX200? Don’t miss WaveTrack’s regular updates in our bi-weekly EW-Compass Report! Ensure you’re tracking our Forex forecasts – subscribe online for the EW-COMPASS REPORT.

    Visit us @ www.wavetrack.com and subsribe to our latest EW-COMPASS report!

    NASDAQ 100 – EXPANDING FLAT!

    by WaveTrack International| March 13, 2018 | 4 Comments

    Nasdaq 100 Breaks to Higher-Highs – then Collapse!

    During January’s steep declines, benchmark indices like the S&P 500 unfolded lower whilst developing into five wave impulse sequences. If so, then this indicates downward continuity once a three wave corrective upswing has ended. But some indices like the outperforming Nasdaq 100 declined from January’s high into the mid-February lows unfolding into a three wave zig zag pattern. So how can you have two major indices that are positively-correlated unfolding into two diametrically opposite patterns? One that implies downward action, the other upward!

    The Un-Common Denominator – Elliott Wave Pattern Secret

    Well, there is a un-common denominator! And it combines a zig zag development for indices like the S&P 500 and the broader Value Line Index with yes, an expanding flat for the Nasdaq 100.

    Value Line Arithmetic Index - 30 mins. - Forecast by WaveTrack International

    Value Line Arithmetic Index – 30 mins. – Forecast by WaveTrack International

    The Value Line index was selected as a ‘proxy’ for the slight underperforming indices because it declined from the January highs into a picture-perfect five wave impulse pattern, from 6413.16 to 5699.27 – see fig #1. Using proprietary fib-price-ratios, note that wave (v) five declined by a fib. 61.8% ratio of waves (i)-(iii) ending at the exact low. That gave unequivocal confirmation that the decline did unfold into a five wave pattern, not a three, and that a counter-trend rally would then unfold. But that counter-trend rally must end below the January high. It can be very deep, but basis the rules of the Elliott Wave Principle, it must end below 6413.16. If the Value Line index is scheduled to complete a counter-trend rally ending below the January high before resuming the larger zig zag decline afterwards, then in all probability, the outperforming Nasdaq 100’s advance to higher-highs will also be capped, and that’s where the expanding flat comes in.

    Value Line and the Nasdaq 100 and Zig Zag Patterns

    Both the Value Line and the Nasdaq 100 are pushing higher from the mid-February lows into three wave zig zags but whereas the Value Line should not, must not break to higher-highs, this is a perquisite for the Nasdaq 100 because its January decline unfolded into a three wave zig zag, not a five wave impulse sequence – see fig #2.

    NASDAQ 100 Index - 60 mins. chart - Forecast by WaveTrack International

    NASDAQ 100 Index – 60 mins. chart – Forecast by WaveTrack International

    The Nasdaq 100’s expanding flat is labelled in minuette degree, [a]-[b]-[c] – see tutorial chart, inset. Wave [a] declined to 6164.43 as a zig zag and this is being replicated by wave [b]’s subsequent advance. Note that wave (a) of this zig zag ended below the preceding January peak that began the pattern. Extending wave [a] by a fib. 38.2% ratio projects a terminal high for wave [b] towards 7381.64+/-. It looks like it will be a tight squeeze to fit a five wave subdivision into wave (c)’s advance from 6645.03 but it’s certainly possible. The rarer fib. 61.8% extension ratio comes in at 7612.32+/- but this seems unlikely to be tested relative to upside targets for other major indices, including the Value Line.

    Conclusion

    Once wave [b] ends the Nasdaq 100’s advance, it opens the door to another sizable sell-off for wave [c] within this developing expanding flat pattern. Downside targets are towards the 5977.63+/- area, derived by extending wave [a] by a fib. 23.6% ratio. This was selected over-and-above the other two fib-price-ratios because this closely converges with the fib. 38.2% retracement support of the preceding uptrend.

    Market commentators are split between the hedonistic-bullish, and the perma-bears, but on this occasion, it looks like those treading the middle-ground have a more realistic chance of trading successfully in the months ahead.

    Are you trading Nasdaq 100, Russell 2000, Dow Jones 30, EuroStoxx, Dax, FTSE100, Shanghai Composite, Hang Seng or ASX200? Don’t miss WaveTrack’s regular updates in our bi-weekly EW-Compass Report! Ensure you’re tracking our Forex forecasts – subscribe online for the EW-COMPASS REPORT.

    Visit us @ www.wavetrack.com and subsribe to our latest EW-COMPASS report!

    SP500 – Drama, Declines & Opportunity!

    by WaveTrack International| February 12, 2018 | 9 Comments

    DIARY OF AN ELLIOTT WAVE ANALYST

    SP500 – A WEEK OF DRAMA, DECLINES & OPPORTUNITY!

    It was a week of drama, declines & opportunity for SP500. But it all began several days before, on Friday 26th January. The SP500 index was testing upside targets of 2861.75+/-, eventually overrunning slightly to 2878.50 (futures) first thing Monday morning. It then spent most of the week working lower. However, importantly unfolding into an intra-hourly five wave impulse pattern to 2813.00 ending a 1st wave in the process. Evidence of a five wave impulse pattern ensured downside continuity once a short-term correction had completed. And that’s exactly what happened by Thursday night when the index ended a 2nd wave correction at 2836.75. From then on, it was all downhill. Friday’s trading saw the SP500 decline in a 3rd wave sequence ending at 2755.00. On Monday, the 3rd wave ended at 2733.00 followed by a 4th correction to 2763.00 by the time the U.S. markets began trading. The 5th wave collapsed into Monday’s session to 2596.00, then extended into Tuesday’s low at 2529.00.

    SP500 – Could such huge declines really be predicted?

    Well, yes, why not. Perhaps the speed of the declines were not necessarily predicted unless you are familiar with the principle of VELOCITY in financial markets. If you’ve stared and studied such phenomenon in the past, you will begin to see! Understand that when any market runs higher, exponentially, upon exhaustion, it will decline by an equal or often larger velocity. That was certainly the case here.

    In Friday’s January 26th Elliott Wave report, the SP500 was forecast building an important high towards the 2861.75+/- area. But then beginning a multi-month correction with minimum downside targets towards 2625.00+/-. This happened to be the fib. 23.6% retracement of minute wave 3’s advance measuring from its origin, the June ’16 Brexit low. Soon enough, the collapse gathered pace as last week’s trading began. Subsequently, resulting in reaching this downside target in short succession! – see Track Record in fig #1.

    SP500 - Forecast and Result! Track Record

    SP500 – Forecast and Result! Track Record

    The Imporance of Correlations

    Cross-referencing the decline with various other global indices, a synchronous pattern began to emerge. Monday/Tuesday’s rapid, accelerative declines was actually a 5th wave that was undergoing an ‘extension’, where one of three impulse sequences within a five wave pattern unfolds much larger than the other two. We could ‘proof’ that through fib-price-ratio analysis – for example, a common ratio found in 5th wave extensions is where it unfolds by a fib. 161.8% ratio of the 1st-4th waves – see fig #2. This projected a low for the 5th wave towards 2595.02 (cash index) – the actual low was 2593.07!

    SP500 – Forecast and Result! Track Record

    SP500 – Forecast and Result! Track Record

    When 5th waves ‘extend’ like this, it commonly results in a hefty corrective upswing that follows, once again, the VELOCITY principle at work. During Wednesday’s session a three wave corrective sequence was forecast in our Elliott Wave report ending towards 2717.00+/-, the actual high was at 2727.67!

    The ‘Compensation’ Factor

    But because the preceding decline was an extended 5th wave plus the fact that the market’s emotions were running high, another principle was enacted – that of ‘COMPENSATION’. It’s function is to allow the market’s behaviours and emotions to ‘catch-up’ with the volatile price movements, and that often translates itself into a correction which unfolds as a ‘complex’ pattern, i.e. a horizontal/expanding flat, or perhaps a triangle. The subsequent trading-range created by such patterns allows the market’s behaviours and emotions to ‘digest’ the recent volatility. Our analysis reflected this too in Wednesday’s forecast for the S&P 500 to unfold the correction into an expanding flat pattern – labelled wave [b]. This required a decline from 2717.00+/- [2727.67] to a slightly lower-low, estimated down towards 2575.00+/-, [actual low was 2532.69] but then a hefty upside recovery that begins its final sequence, targeting upside levels towards 2738.50+/-. You can see how effective this forecast was into late-session Friday. The SP500 (cash) swing dramatically higher ending at 2619.55 – and this advance is by no means finished yet.

    SP500 and Futures Contracts

    Friday’s Elliott Wave report forecast this same decline, then reversal upswing for the SP500’s futures contract see fig #3. The same five wave impulse pattern ended wave [a] into Tuesday’s low, but the following upswing to 2726.75 ended the entirety of wave [b]. The following decline actually begins the 1st wave within wave [c] declines, and in the morning, this was still incomplete with downside targets towards 2527.00+/-. This downside target was measured from the internal five wave development of this decline, where the fifth wave unfolds by a fib. 61.8% correlative ratio of the first-third waves.

    SP500 – Forecast and Result! Track Record

    SP500 – Forecast and Result! Track Record

    Fast-forward to the evening session of Friday, the SP500 ran lower amidst nervous selling and a lot of bearish headline media reports, but within a few hours of the close, the SP500 hit a low at 2530.25, just a few points from ‘idealised’ target levels, then popped higher to begin wave [c]’s 2nd wave rally.

    This coming week is expected to be a very positive week with more upside potential.

    These price-forecasts are dedicated to R.N. Elliott’s work and discoveries – Peter Goodburn

    PS: All of this has been forecasted in WaveTrack’s EW-COMPASS REPORT

    For Stock Indices Traders

    Single Video – $48.00* *(additional VAT may be added depending on your country of residence. Currently US, Canada, Asia have no added VAT but most European countries do)PART I – STOCK INDICES (54 charts 2 hours long) (Dec. ’17/Jan. ’18) Table of Contents for the STOCK INDICES VIDEO

  • BONUS! Each of the 40+ charts illustrated in the VIDEOS will be created into a .pdf document/report and sent to you so that you can always keep these to refer to!
  • Are you trading Currencies – SP500, Nasdaq 100, Russell 2000, Dow Jones 30, EuroStoxx, Dax, FTSE100, Shanghai Composite, Hang Seng or ASX200? Don’t miss WaveTrack’s regular updates in our bi-weekly EW-Compass Report! Ensure you’re tracking our Forex forecasts – subscribe online for the EW-COMPASS REPORT.

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    Elliott Wave – The SLANTING FLAT Pattern – GBP/USD

    by WaveTrack International| February 9, 2018 | No Comments

    R.N. Elliott’s SLANTING FLAT Pattern – GBP/USD

    There’s a variation to the corrective ‘FLAT’ pattern that R.N. Elliott documented which causes some confusion in identification. Fortunately, it’s quite rare though. It’s called a SLANTING FLAT. Like the ‘horizontal’, ‘running’ and ‘expanding’ flat’s it subdivides the same, as a 3-3-5 sequence but with some slight differences.

    In a horizontal flat, waves A-B-C oscillate within almost-exact horizontal/parallel lines – in an expanding flat, wave A establishes an initial trading range, but waves B and C marginally exceed wave A upon completion – and finally, the running flat where waves A and B conform to the same movements as the expanding flat except that wave C falls short of ending towards the completion of wave A – see fig #1.

    Elliott Wave Pattern Highlight The Slanting Flat Pattern

    Elliott Wave Pattern Highlight The Slanting Flat Pattern

    Slanting Flat Pattern

    But the ‘SLANTING FLAT’ is a bit of a hybrid of these other patterns. Wave A establishes the trading range-extremity whilst subdividing into a three wave zig zag (can also unfold into a double/triple zig zag). But when wave B begins to unfold, it doesn’t equal or break above the original level of wave A – rather, it falls short. It does subdivide into a three wave zig zag though (can also unfold into a double/triple zig zag). Here’s the interesting bit – the next sequence as wave C unfolds into a five wave impulse pattern and it exceeds the completion of wave A. Sounds simple enough, but here’s the ‘rub’ – how can this be differentiated between a developing double zig zag pattern, i.e. A-B-C-X-A-B-C, 5-3-5-X-5-3-5? The same subdivisions for the ‘slanting flat’occur up until the sequence A-B-C-X-A…waves B-C are missing.

    There’s only one certain way to differentiate between a completed ‘slanting flat’ and a developing double zig zag and that’s cross-referencing the pattern with other contracts/markets – there’s a good chance the pattern is unfolding differently but is less ambiguous.

    GBP/USD

    For what it’s worth, GBP/USD has just completed a real-time ‘SLANTING FLAT’ pattern – see fig #2.

    STLG vs USD - 40 mins. Elliott Wave Forecast by WaveTrack International

    STLG vs USD – 40 mins. Elliott Wave Forecast by WaveTrack International

    R.N. Elliott’s original template is inserted top-right. Labelled in minuette degree, [a]-[b]-[c], note that wave [a] subdivides into a required zig zag ending at 1.3980 and how wave [b] doesn’t quite make it to wave [a]’s origin of 1.4345 instead ending short at 1.4278 (a retracement of 81.6%). In reality, the 1.4278 high could have ended wave [x] within a developing double zig zag. The following five wave impulse decline to 1.3836 is labelled as ending wave [c] of the slanting flat but could be mistaken for wave [a] within a secondary zig zag. A comparative look at the Euro/US$ confirms the slanting flat because it has synchronously completed a double zig zag at the same time GBP/USD traded to 1.3836.

    Fib-Price-Ratios

    Our proprietary use of fib-price-ratios also comes in useful in verifying the completion of a slanting flat rather than a developing double zig zag pattern. Extending wave [a] by a fib. 38.2% ratio projects a terminal low for wave [c] to 1.3843+/-, the actual low was 1.3836.

    Conclusion

    Yes, it is still possible to conclude the following rally from 1.3836 to 1.4067 in GBP/USD is wave [b] of the secondary zig zag within a double formation but again, analysis must be cross-referenced to other positively-correlated contracts/markets.

    Good luck and best wishes,

    Peter Goodburn
    WaveTrack International

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    About WTI

    WaveTrack International is a financial price forecasting company dedicated to the Elliott Wave principle and work of the R.N. Elliott. Clients include Investment Banks, Pension Funds, Total/Absolute-Return/Hedge Funds, Sovereign Wealth Funds, Corporate and Market-Making/Trading institutions and informed individuals -- & just about anyone who is affected by directional price change.

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