‘ Inflation – Pop ’ Lift-Off! – T-Minus 3 Months & Counting…
by WaveTrack International| January 7, 2020 | No Comments
‘ Inflation – Pop ’ Lift-Off! – T-Minus 3 Months & Counting…
Part I of our Annual 2020 Elliott Wave forecasts has been published, outlining Stock Index trends for the coming year and beyond.
This year’s major theme is a resumption of the ‘Inflation-Pop’ cycle.
Following a 2-year pause in inflationary pressures that resumed in early-2016, i.e. lows for developed stock indices, emerging markets, and commodities, trends are about to change direction once again. This time, US10yr Inflation-TIPS are ending their two-year corrections. And are now set to surge higher from around the end of Q1 2020 onwards. Various commodities that have been engaged in two-year corrective downswings are also approaching major lows, timed into the late-March/April period. Take a look a Copper prices and you’ll see what I mean!
This year’s expectation of U.S. GDP remaining around current levels of 2.0% or 2.25% per cent is an underwhelming forecast but the consensus majority. From an Elliott Wave perspective, the US$ dollar is forecast significantly lower, timed to its declining 7.8-year cycle. And this, in turn, is set to ignite various asset prices significantly higher.
Gail Fosler’s Forecast
But this outlook is not just a perspective drawn from our Elliott Wave analysis. It’s corroborated by one of the U.S.’s most prominent economists, Gail Fosler. The Wall Street Journal twice named Fosler America’s most accurate economic forecaster.
In Gail’s latest research note, she highlights several distinct aspects evolving in the Global and U.S. economy – two of which point towards rising inflationary pressures and a weakening US$ dollar – see fig’s #1 & #2.
GFG – The Gail Fosler Group – Inflation Pressures are beginning to emerge
With inflationary pressures beginning to emerge, she highlights (fig #1):
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Stock Indices Video Outlook 2020
by WaveTrack International| December 29, 2019 | No Comments
Stock Indices Video Outlook 2020 – ‘Inflation-Pop’ Lift-Off! – T-Minus 3 Months & Counting…
This report combines ELLIOTT WAVE with updated SENTIMENT & ECONOMIC INDICATOR STUDIES
We’re pleased to announce the publication of WaveTrack’s Annual 2020 video updates of medium-term ELLIOTT WAVE price-forecasts. Today’s release is PART I, Stock Indices Video Outlook 2020 – Parts II & III will be published during January/February.
• PART I – STOCK INDICES
• PART II – COMMODITIES
• PART III – CURRENCIES & INTEREST RATES
Elliott Wave Stock Indices Video Outlook 2020 – Summary
Dow Jones On-Course for Long-Term 40,000 Upside Targets
Back in November/December 2014, five years ago, the Dow was trading at 17817.00, approaching original upside targets forecast back in 2010. However, this secular-bull peak wasn’t aligned to the completion of corresponding ‘Inflation-Pop’ upside targets for Emerging Market indices and key Commodities like Copper and Crude Oil.
This was a big hint that the secular-bull uptrend in the Dow Jones (DJIA) and other developed market indices were far from completed. Further analysis revealed some amazing Fibonacci-Price-Ratio (FPR) ‘proportion’ values across the entire history of its major five wave impulse uptrend dating back to the Great Depression lows of 1932 – see fig #1. They coalesced towards Dow 40,000! Read more «Stock Indices Video Outlook 2020»
2020 – Next Stage of the ‘Inflation-Pop’
by WaveTrack International| December 17, 2019 | No Comments
The Next Stage of the ‘Inflation-Pop’ is Getting Underway in 2020!
2020 – the next stage of the ‘Inflation-Pop’ is getting underway!
EuroStoxx 50 – Forecast Mid-Year Triple Video Series!
Last June’s Mid-Year 2019 Video Report forecast a 2nd wave corrective downswing for the Eurostoxx 50 unfolding from April’s high of 3515.15 – it had a lot to do to achieve this forecast, but that’s the power of the Elliott Wave Principle!
The 2nd wave correction labelled primary wave 2 was forecast unfolding into an expanding flat pattern, (A)-(B)-(C) subdividing 3-3-5. Wave (B) upside forecasts were towards 3555.00+/- to max. 3622.00+/- which ultimately ended at 3573.57! Next came the forecast for wave (C)’s five wave decline targeting 3211.60, max. 3197.00+/-. However, the actual low formed in early-August at 3239.20!
Track Record – EuroStoxx 50 – Forecast 22nd June 2019 – Triple Video Series – Mid Year
EuroStoxx 50 – Result! Track Record
The result was phenomenal! – the Eurostoxx 50 then began a huge advance to begin primary wave 3. As a result, since August, there’s been a gain of almost +16% per cent!
Track Record – RESULT! – EuroStoxx 50– 17th December 2019
It’s been a similar story for the S&P 500 and many other world indices too.
We’re getting ready to publish the Annual 2020 PART I Video Report before month-end (December). If you like this example of applying Elliott Wave forecasting with our proprietary use of Fibonacci-Price-Ratio analysis, then keep a look-out for our announcements within the next couple of weeks!
We hope you’ll join us in tracking some amazing inflation-led forecasts for the coming year!
WaveTrack’s Elliott Wave Compass report
Get WaveTrack’s latest Nasdaq forecasts by subscribing to the Elliott Wave Compass report.
The ELLIOTT WAVE COMPASS report focuses on the shorter-term perspective of price development. The report is comprised of two online updates per week describing and illustrating a cross-section of market trends/counter-trends for stock indices, bonds, currencies, and commodities from around the world. This report is ideal for professional and private clients trading a time horizon of just a few days to a few weeks ahead.
The bi-weekly EW-Compass report offer short-term perspective for global markets
· Stock Indices
· Bonds
· Currencies (FX)
· Commodities
If you like to know more details about the Elliott Wave Compass report click here, please click here
Nasdaq 100 – Downswing Test
by WaveTrack International| December 3, 2019 | No Comments
Nasdaq 100 – Corrective Zig Zag Downswing Test at 8168.25+/-
Read more «Nasdaq 100 – Downswing Test»
SP500 – Approaches Upside Targets!
by WaveTrack International| October 30, 2019 | 22 Comments
SP500 – Leading/Expanding-Diagonal Approaches Upside Targets!
Read more «SP500 – Approaches Upside Targets!»
Russia RTS Index – Decline Underway?
by WaveTrack International| October 3, 2019 | 2 Comments
Russia RTS Index – Decline Underway Towards 1171.00+/- but Downside Risk to 990.00+/-
Two Elliott Wave pattern developments dominate the short-term picture over the next few months – both confer a decline to minimum levels of 1171.00+/- but there is also a heightened downside risk of a sustained decline towards 990.00+/- as the concluding sequence of an a-b-c running flat pattern that began from the Jan.’17 high. The medium-term outlook remains very bullish with outperformance forecast during the next few years.
The Russia RTS is a favourite of ours, mainly because it fits the pattern schematic of the A-B-C ‘Inflation-Pop’ from its financial-crisis low of 493.00 but also because its upside potential as primary wave C is huge during the next several years.
Wave C’s uptrend must ultimately develop into a five wave impulse pattern, labelled (1)-(2)-(3)-(4)-(5). A 2nd wave correction as a subdivision within intermediate wave (3) began from the Jan.’17 high of 1197.00. It was originally identified as completing an a-b-c running flat pattern into the Dec.’18 low of 1033.00, the same time that U.S. indices, including the S&P 500 ended their corresponding expanding flat patterns.
But the following advance into the July ’19 high of 1414.00 is problematic. It’s difficult to identify this upswing as unfolding into a five wave impulse pattern. However, this irregularity in identification opens the way for two developing scenarios. Although, both confer a more immediate short-term decline testing levels towards 1171.00+/-.
Russia RTS Index – Count #1
Count #1 – the Dec.’18 advance from 1033.00 to July’s high of 1414.00 unfolded into a five wave sequence. A counter-trend corrective downswing is currently engaged, targeting levels towards 1171.00+/-. See fig #1.
Russia RTS Index – Daily – Financial Forecasting by WaveTrack International
Russia RTS Index – Count #2
Count #2 – this scenario depicts the continuation of the a-b-c running flat pattern that began the corrective downswing from the Jan.’17 high of 1197.00. Wave b has unfolded higher into a multi-year double zig zag pattern ending last July at 1414.00 – wave c must now develop lower into a five wave impulse pattern with an ultimate task or revisiting the 2017 low of 959.00+/-. Fib-price-ratio targets are towards 990.00+/-. See fig #2.
Russia RTS Index – Daily – Count #2 – Financial Forecasting by WaveTrack International
Conclusion
The Russia RTS’s pattern development from its June ’17 low in incredibly complex. Hence, two ongoing scenarios. But when juxtaposed to each other, both confer a minimum downside risk towards 1171.00+/-. Most importantly, this is in alignment with expectations of deeper corrective declines emerging from U.S./European indices. A time horizon is into the Jan/Feb.’20 period.
Doomsday Dollar, FT and Peter Goodburn
by WaveTrack International| October 1, 2019 | 4 Comments
US Dollar Highlight – This is Peter Goodburn’s response to a Financial Times article published in Monday’s newspaper entitled ‘The Doomsday Dollar Scenario’ by Rana Foroohar
Monday 30th September 2019
Dear Ms. Foroohar,
Just read your article on the US$ Dollar. Your reference Ulf Lindahl at AG Bisset as your source but notice you also build an interesting hypothesis around his idea that the US$ dollar would decline around 50-60% per cent whilst U.S. stock markets begin a generational decline.
WaveTrack is an Independent Research Provider and we specialise in price-forecasting. For price itself, we model the Elliott Wave Principle. And for timing, Cycle Analysis from Edward Dewey’s Foundation for the Study of Cycles model. Above all, both confirm what AG Bisset has hypothesised. The dollar’s decline resumed its 15.6-year cycle in late-2016. Actually, this next decline is its half-cycle interval of 7.8-years – see attached cycle chart (report dt. June 30th 2019, fig #125).
US Dollar Cycle – Monthly – WaveTrack International Financial Forecasting
Basis EWP model, downside targets for the benchmark US$ dollar index are towards 49.35+/- during this next 7.8-year cycle downtrend – see attached, $indx190806.
US Dollar Index – Monthly – WaveTrack International Financial Forecasting
US Dollar, the Elliott Wave Principle and Cycle Analysis
The only aspect that seems unlikely basis EWP and Cycle Analysis is that U.S. stock markets begin to trend lower now. Our ‘Inflation-Pop’ hypothesis which we’ve had in place since late-2010/early-2011 remains on course where U.S. stock markets remain in a secular-bull uptrend until its next cycle peak is due, sometime in year-2023 – see attached cycle chart (report dt. Dec. 27th 2018, fig #12).
Dow Jones – Quarterly – Cycles – by WaveTrack International
US Dollar – Looking Ahead
Looking ahead, beyond year-2023, yes, U.S. stock markets are set to undergo a quantum shift in the way we’ve perceived investing for a generational term. But this seismic shift will most likely, decimate asset values right across the global horizon. Worst affected will be those economies with the largest debt ratios. Governments will most likely be forced to confiscate wealth in order to ensure survival. That means hitting those at the high-end of the wealth-scale first. Subsequently, taxing property ownership to the point which causes a house-price collapse, triggering an uptrend in interest rates too.
Our analysis leans heavily on long-term historical data. We have interest rate data going back to year-1727 (almost 300 years), the US$ dollar index data begins in year-1660 and stock market data beginning in year-1695.
Would be happy to engage if you would like to follow-up on this intriguing subject. In the meantime, please see our annual 2019 currency market report which is attached – very best wishes,
Peter Goodburn
Founder, Managing Director
WaveTrack International
A Regulated Investment Research Company – BaFin
More insights on US Dollar developments…
If you’d like to learn more about the ‘Shock-Drop-Pop’ and ‘Inflation-Pop’ scenarios, long-term Elliott Wave Analysis + Cycles, see our annual and mid-year reports below.
To review WaveTrack’s mid-year 2019 video-trilogy of long/medium-term ELLIOTT WAVE price-forecasts simply click the links, then follow the instructions!
• STOCK INDICES Mid-Year-2019-Video – PART I
• COMMODITIES Mid-Year-2019-Video – PART II
• CURRENCIES & INTEREST RATES Mid-Year-2019-Video – PART III
EuroStoxx + Xetra Dax – Can You Spot the EXPANDING FLAT Pattern?
by WaveTrack International| September 27, 2019 | No Comments
Eurostoxx 50 – Xetra Dax 30
Can You Spot the EXPANDING FLAT Pattern?
Wow! – it’s been a really busy summer!! – but very profitable too! Although attention is usually focused on the major U.S. indices like the S&P 500, even if you don’t trade positively-correlated indices from other countries, we always advise analysing them as if you were.
A good example was how two European indices, the Eurostoxx 50 and Xetra Dax 30 played out from May’s highs into August’s lows. Back in May/June, our Elliott Wave Navigator and Elliott Wave Compass reports had identified a corrective pattern unfolding from the May’s highs, as a developing 2nd wave correction. Can you spot what pattern that is? – Yes, an expanding flat!
The expanding flat is a three wave sequence, A-B-C subdividing 3-3-5. For the Eurostoxx 50, (A)-(B)-(C) where wave (A) sets the initial price-range – to fulfill the pattern, waves (B) and (C) must marginally complete beyond wave (A)’s range whilst unfolding into a three and five wave sequence. If those conditions, those requirements are met, then the pattern can complete and is validated at predetermined fib-price-ratio levels – see figs #1 & #2.
EuroStoxx 50 Track Record by WaveTrack International
Basis charts in report/s dt. June 26th, wave (B) upside targets for the Eurostoxx 50 were towards 3530.00+/-, to max. 3559.00+/- then a five wave impulse decline to begin declines as wave (C) towards 3210.00+/-. The actual high for wave (B) was 3569.00 and the low for (C) at 3231.00.
Xetra Dax Track Record by WaveTrack International
The Xetra Dax had minor wave b. upside targets towards 12602.00+/-, max. 12821.00+/- then a five wave impulse decline to begin declines as wave c. towards 11399.00+/-. The actual high for wave b. was 12650.00 and the low for c. at 11257.00.
Conclusion
The completion of these expanding flat patterns was also replicated in London’s FTSE-100 index. Moreover, it gave validation that other major indices, like the benchmark S&P 500 would also stage a reversal-upswing in August, despite unfolding into a slightly different corrective pattern. This affirms our belief that trading a set of indices should be supported by analysing other related groups too!
Find out what WaveTrack’s latest EuroStoxx and Xetra Dax forecasts are and subscribe to the Elliott Wave Compass report.
The ELLIOTT WAVE COMPASS report focuses on the shorter-term perspective of price development comprising of two online updates per week describing and illustrating a cross-section of market trends/counter-trends for stock indices, bonds, currencies and commodities from around the world. This report is ideal for professional and private clients trading a time horizon of a just a few days to a few weeks ahead.
The bi-weekly EW-Compass report offer short-term perspective for global markets
· Stock Indices
· Bonds
· Currencies (FX)
· Commodities
If you like to know more details about the Elliott Wave Compass report and what contracts are covered please https://www.wavetrack.com/products/elliott-wave-compass.html
New CURRENCIES Mid-Year Video Update! PART III/III
by WaveTrack International| July 24, 2019 | No Comments
Currencies and Interest Rates H2-2019 Video – PART III/III
We’re pleased to announce the publication of WaveTrack’s mid-year 2019 video updates of medium-term ELLIOTT WAVE price-forecasts. Today’s release is PART III, CURRENCIES & INTEREST RATES – Parts I & II were released in June/early-July
• PART I – STOCK INDICES – out now!
• PART II – COMMODITIES – out now!
• PART III – CURRENCIES & INTEREST RATES – out now!
Currencies Review – H1 2019
January/February’s annual report began by forecasting US$ dollar strength, currency weakness across-the-board. This was based upon the incomplete a-b-c zig zag advance in the US$ dollar index from its Feb.’18 low of 88.26. Upside targets to complete minor wave c. were towards 102.79+/- and six-months on, that’s still the current outlook.
The last several months has seen a gradual push higher for the dollar, but each time it has attempted to break to a higher-high, it has fallen back inside the preceding trading range. But importantly, it has produced higher-lows together with higher-highs which maintains wave c.’s five wave impulse uptrend. We can look back over the first-half of the year and say that nothing too much has developed, but that’s certainly not the case going forward, for the next 6-month period.
Currencies – Key Drivers/Events for H2 2019
The most important event gripping the headlines revolves around expectations of a mild global recession. The latest Global Purchase Managers’ Index (PMI) from JP Morgan/IHS Markit shows economic activity continuing to oscillate towards a 3-year low.
That fact has not gone amiss with central banks. The European Central Bank and the Federal Reserve have both reiterated their commitment to ease back on monetary tightening policies with interest rate cuts, as necessary. Investors are watching how the trade negotiations are developing between the U.S. and China, but also Europe as the U.S. threatens to slap tariffs on European car imports.
Significance of the Inflation-Pop
From an Elliott Wave perspective, the slowdown in economic activity is expected to be simply a temporary dip within the larger ‘INFLATION-POP’ event. The ‘inflation-pop’ is the second event within the multi-decennial ‘SHOCK-POP-DROP’ deflationary cycle. The ‘inflation-pop’ began lifting asset prices higher following the end of the 2007-09 financial-crisis. Central banks added monetary liquidity that forced sharp asset price rises in the following years to this day.
Shock-Pop-Drop
The Shock-Pop-Drop can be visualized as an Elliott Wave expanding flat pattern, A-B-C – the ‘Inflation-Pop’ is simply wave B, itself unfolding in an upward direction as a primary degree zig zag pattern, A-B-C. Primary wave A represents the way asset values trended higher from the financial-crisis lows but ending into the peak in early-2011. Wave B then declined afterwards, but a retracement of wave A’s preceding advance – by necessity, wave B’s retracement is only a partial regression so it must end above the 2009 lows of wave A.
If you take a look at the JP Morgan/IHS Markit global PMI and the related Manufacturing/Services & Trade chart (see above), you’ll see the primary degree zig zag in upward progress from the 2009 lows. The peaks in 2010/11 complete primary wave A but wave B is still engaged to the downside, but is attempting to complete before year-end 2019. Levels might break slightly below the initial lows of 2013, but not too far – but afterwards, turning higher to begin primary wave C’s advance.
From this we can discern that the global economy will tick lower through H2-2019 into year-end, which is expected to have the effect of pushing the US$ dollar higher during the same period. Why is that? Mainly because a dip in the economies will prompt safe-haven buying of the US$ dollar, especially since Elliott Wave analysis expects U.S. stock markets to undergo a -11% per cent correction into year-end. But also because of interest rate differentials – the Euro currency is attracts negative interest rates, as does the Yen. That’s a huge premium for the US$ dollar.
EW-Forecasts H2 2019
For more detailed analysis, please view the video/report
Bitcoin
Crypto Currencies like Bitcoin have trended exponentially higher since ending 4th wave corrective lows last December. Our latest Elliott Wave analysis updates the medium-term outlook, Bitcoin’s uptrend over the next several years. Amazingly, it projects an uptrend towards some astonishingly high levels!! – this is going to be quite a journey!
Interest Rates Review – H1 2019
The year began with US30yr yields at 3.000% per cent, US10yr at 2.700% per cent and forecasts down to 2.690+/- and 2.075+/-. That seemed enough to depict a counter-trend correction unfolding from the late-2018 highs. Yields have since traded even lower, to 2.465% and 1.939% but they’re still counter-trend declines!
The big clues on interest rate direction comes from the fact that the 60-year cycle in AAA Corporate Bond Yields is very rhythmic, oscillating at 30 to 35-year sub-intervals from peak-to-trough-to-peak etc. The last cyclical peak occurred back in 1981 – thirty-five years later, the next cycle-trough bottomed in July 2016, at least for the long-end yields. It would take a phenomenal feat for interest rates to break back below those lows during 2019’s declines because the next 30-35 year cycle is already exerting its influence higher.
Interest Rates – Key Drivers/Events for H2 2019
This year’s corrective declines in underlying U.S. and European interest rates are expected to continue even lower than original downside targets. A global downturn in economies is being exacerbated by U.S. President Trump’s trade war with China and its allies, Japan, Europe, Canada and Mexico.
The IMF has just published its latest World Economic Outlook paper – it summarises ‘global growth forecast at 3.2% per cent in 2019, picking up to 3.5% per cent in 2020 (0.1 percentage point lower than in the April WEO projections for both years). GDP releases so far this year, together with generally softening inflation, point to weaker-than-anticipated global activity’. It highlights weak final demand, soft global trade and muted inflationary pressures.
EW-Forecasts H2 2019
For more detailed analysis, please view the video/report
New Currencies and Interest Rates H2-2019 Video – PART III/III
This MID-YEAR 2019 VIDEO UPDATE for CURRENCIES & INTEREST RATES is unique to WaveTrack International, how we foresee trends developing through the lens of Elliott Wave Principle (EWP) and how its forecasts correlate with cycles and Fibonacci price ratios.
We invite you to take this next step in our financial journey with us – video subscription details are below – just follow the links and we’ll see you soon!
Most sincerely,
Peter Goodburn
Founder and Chief Elliott Wave Analyst
WaveTrack International
What you get
Contents: 68 charts | Video duration: 1 hours 45 mins.
The contents of this CURRENCY & INTEREST RATES VIDEO include Elliott Wave analysis for:
• US$ index + cycle
• Euro/US$ + cycle
• Stlg/US$
• US$/YEN
• US$/CHF
• AUD/US$
• NZD/US$
• US$/CAD
• Euro/CHF
• Euro/Stlg
• Euro/YEN
• Stlg/YEN
• Stlg/ZAR
• Stlg/AUD
• Asian ADXY
• US$/IDR
• US$/MXN
• US$/TRY
• US$/ZAR
• US$/BRL
• US$/RUR
• US$/YUAN
• US$/PLZ
• Bitcoin
Interest Rates:
• U.S. AAA+ 30-Year Corporate Bond Yields
• US30yr Yield + cycle
• US10yr Yield
• US10yr TIPS Break-Even Inflation Rate
• DE10yr Yield
• ITY10yr Yield
• JPY10yr Yield
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New Commodities 2019 Video Update!
by WaveTrack International| July 8, 2019 | No Comments
Commodities In Final Leg Of 2018’s Corrective Downswing – Additional Sell-Off Forecast Thro’ H2-2019 – Major Lows Year-End Followed By Inflation-Pop Upsurge In 2020
INCLUDES ANALYSIS ON MEDIUM-TERM CYCLES & EQUITY MINERS
New Commodities 2019 Mid-Year Video Series | PART II/III
We’re pleased to announce the publication of WaveTrack’s mid-year 2019 video updates of medium-term ELLIOTT WAVE price-forecasts. Today’s release is PART II, COMMODITIES – Part I was released last month and Part III will be published later this month, in July.
• PART I – STOCK INDICES – out now!
• PART II – COMMODITIES – out now!
• PART III – CURRENCIES & INTEREST RATES – coming soon!
EW-Forecast Review – H1 2019
The Annual 2019 report published last February (2019) highlighted several main points. Base Metals were set to continue 2nd wave corrective downswings that began almost a year earlier, from the Jan.’18 highs. Copper, Aluminium, Lead and Zinc were all engaged in wave (2) downswings although only at the half-way stage. As barometers of the global economy, this was indicating a period when inflationary pressures that were beginning to build higher for the first time in a decade through 2016 were easing back for a while.
So far this year, benchmark Copper rallied higher into a correction from December ‘18’s low of 5725 ending into the April high of 6608. But prices have since resumed wave (2)’s downswing with a price decline towards 5740. And there’s more to come before year-end! Note the timing correlation with U.S. stock markets.
The same pattern development is unfolding in the other Base Metals, Aluminium, Lead, Zinc and Nickel.
The Next 6 Months?
The latest Elliott Wave patterns indicate some short-term upside potential but targets are limited. Especially, since analysis of the US$ dollar indicates the currency will significantly trend higher into year-end. The downside targets for Copper, Aluminium, Lead and Zinc vary, the smallest is -12% per cent, the largest is -19% per cent.
Base Metal Miners
The trade war initiated by U.S. President Trump with China continued through the first-half of this year but this had little impact for the equity markets. January/February’s forecasts for the benchmark XME Metals & Mining index included an initial downswing from 28.21 to targets of 24.12+/-, ending the entire correction from 2018’s high of 39.62. The actual low traded in late-May to 24.25!! Prices have since trended higher to 28.00. This action was typical for several mining stocks. But one aspect which is recurring across those miners that are directly connected to the Copper sector is that more downside potential exists for the remains 6-month period of 2019.
Precious Metals
Over the last several years, two medium-term wave counts/scenarios exist for precious metals, one super-bullish, the other bearish. When the upside rallies occurred from the grand ‘Re-Synchronisation’ lows of 2016, gold advances by +30% per cent whilst some gold mining stocks rallied by +300% per cent, a 1:10 ratio. This level of underperformance in the underlying bullion price of gold and silver means there’s no longer a certainty they will undergo a sustained uptrend to new record highs during the final stages of the ‘Inflation-Pop’. Rather, they will participate in the next advances, but unfolding into corrective patterns, ending below those current historical highs of April/August 2011. Despite this, the mid-year report updates both scenarios.
Meanwhile, gold has attracted attention recently, since breaking above the 2016 high of 1375.27 but over the next 6-month period, Elliott Wave analysis predicts an initial extension higher, above 1500.00+/- but then a severe counter-trend downswing unfolding into year-end.
Silver has prolonged its 2016 downswing from 21.14 into last September’s (2018’s) low of 13.93 and whilst it is possible to construct an intermediate-term bullish count from this low, and the slightly lower-low of 13.89 traded last November, the following rally into February’s high of 16.22 and its subsequent decline into the late-May low of 14.29 is more leaning towards the confirmation that 2016’s double zig zag pattern is extending into a triple zig zag.
Platinum is positively correlated to silver and is also extending its decennial A-B-C zig zag pattern unfolding lower from historical highs traded back in March ’08 when it was at 2304.00. Downside targets for wave C require a break below wave A’s low of 732.50.
Palladium has been one of the star outperformers since bottoming in Jan.’16 at 450.67 and price rises have continued until reaching a high last March at 1624.33. This began a counter-trend 4th wave correction beginning with a decline of -22% per cent but all of this has since been recovered with a current reattempt of the highs. But another downswing is expected to get underway soon.
Precious Metal Miners
These are expected to outperform the underlying bullion price in the next phase of the ‘Inflation-Pop’ uptrend, due to resume later this year. But as bullion gold, silver, platinum, even palladium pull lower into year-end, so does a pause occur in the mining stocks.
In the shorter-term, further gains are expected in July/August but then turning lower afterwards to begin a correction. This report examines how deep those corrections can unfold.
Several precious metal mining stocks like Newmont Mining project uptrends towards 166.00+/- over the next several years (currently 38.30) although some form of correction is seen unfolding from current shorter-term upside targets. Other miners including Barrick Gold, Agnico-Eagle Mines, AngloGold Ashanti each have a similar wave count/structure to the GDX.
Commodities – Energy
There’s a certain fascination with the energy contracts of Crude & Brent oil because their price declines from the 2011 highs which coincided with Base/Precious Metal interim peaks within the ‘Inflation-Pop’ uptrend ultimately broke below the financial-crisis lows, unlike their commodity counterparts.
Crude oil
The low in Feb.’16 for Crude oil at 26.05 ended a zig zag downswing from the all-time-high of 147.27 traded in July ’08. That means the following advance from 26.05 is either a single zig zag as wave X ending into Oct.’18 high of 76.90 a developing double zig zag that ultimately extends to new record highs, at some stage over the next several years.
Our take on this depicts a double zig zag unfolding to record highs – why? Because it’s positively correlated to the driving force of the global economy, U.S. stock markets and eventually, a weakening US$ dollar. Stock markets are forecast to higher-highs over the next several years – the US$ dollar correspondingly engaged in a downtrend (notwithstanding the opposite moves during H2 2019).
The sharp decline from the Oct.’18 high of 76.90 began an X wave correction in the form of an A-B-C zig zag, but this remains incomplete. Downside targets are below last December’s low of 42.36 which can only mean one thing – a dip in global growth will limit consumption over the next 6-month period, pulling prices lower.
Brent oil
Brent oil has exactly the same rhythm as Crude oil. Brent formed its major low in Feb.’16 at 27.10 and is engaged in a cycle degree A-B-C-X-A-B-C double zig zag advance which ultimately projects prices trading to new record highs over the next several years.
Shorter-term however, a stronger US$ dollar through H2 2019 combined with a slowing of global growth pulls prices lower as wave X – downside targets are below the Dec.’18 low of 49.93.
XLE Energy index
One interesting contradiction comes from the XLE Energy index. Its Dec.’18 low at 53.36 ended a primary degree expanding flat correction which began from the Dec.’16 high of 78.45. Furthermore, the Dec.’18 advance into the May ’19 high of 68.81 completed the 1st wave of a new major uptrend and this was followed by a zig zag correction ending just recently, at the end-May low of 58.77. That ended a 2nd wave retracement at the exact fib. 61.8% level, confirming the next stage of its 3rd wave uptrend has already begun. Some pullback can be expected over the shorter-term horizon, perhaps reattempting the 58.77 low if Crude/Brent stage expected declines, although not breaking below that support. But it does question the validity of the comparably larger declines forecast for Crude/Brent oil through H2 2019.
Conclusions
As the second-half of 2019 gets underway, there are several aspects to be aware of. The first is the heightened probability that the US$ dollar will now accelerate higher by up to +7% per cent. Base Metals are still engaged in 2nd wave corrective downswings that began from the early-2018 highs. Precious Metals are set to pull lower over the next 6-months despite gold recently breaking above its 2016 highs. Crude and Brent oil have yet to complete zig zag downswings that began from their 2018 highs (similar pattern to Base Metals), requiring a modest break below last December’s lows.
The natural conclusion is that the global economy will take a dip in growth during the next 6-month period, causing stock markets to extend counter-trend declines that began from the early-May highs, triggering safe-haven buying of the US$ dollar and pulling economic-sensitive commodities lower in the process.
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