EurUsd: EW International's current take

ID has produced yet another masterpiece. Clearly laid out alternatives and excellent study material for a student. Much obliged.

Shocked to see ID's "despised" alternative coincide with my preferred call. I thought we was friends! :) :)

Presented is EWI's latest EurUsd take -- its on their website and is a free article; don't believe I'm violating any copyright laws, but if so, I'll straighten it out with them, if contacted.

Here's the article in its entirety:


What Moved EURUSD Today: Facts or Speculation?
2/28/2006 3:00:24 PM

Today (Tuesday, Feb. 28) was an especially interesting day to watch forex headlines. In the very early morning hours U.S. time, one major online news source ran a story saying that the dollar was “headed for its first monthly gain since November against the euro on speculation the Federal Reserve will keep raising interest rates.”

Oh, that proverbial “speculation” about the soon-to-be-here higher interest rates. Listen to that reasoning, and buying the U.S. dollar every day is a great idea. But oops – how ironic – just as that story was hitting the newswires, around 2:30 AM this morning the dollar started to fall, sending the EURUSD almost 100 pips higher by noon.

Seeing such “unexpected market action,” the headlines changed the tune later in the morning, blaming the EURUSD rally on two negative economic reports released at 10 AM: drops in consumer confidence and Chicago area manufacturing.

Of course, if you check the chronology, you’ll see that the USD started losing to the EUR almost eight hours before the Chicago PMI and consumer confidence numbers came out. In fact, by 10 AM this morning, the EURUSD rally was already half-way finished.

Still, forex reporters did get one fact straight today – the one about the currency markets being moved by speculation about facts, not necessarily by facts themselves. Speculation is all about hunches, feelings and emotions – in a word, about psychology. And few market analysis methods are as good at anticipating shifts in market psychology as Elliott wave.

To wit, here’s the forecast we published Monday night in anticipation of today’s EURUSD rally:


Update For: TuesdayPosted On: Mon, 27 Feb 2006 21:19:00 GMTEURUSD [Last Price]: 1.1849Confidence Level: Medium-High …the Minor wave A bottom is in place and that an irregular flat Minor wave B corrective rally is in its early stages.

EURUSD 2005 drop

Hi
I know I've posted my preferred views on EURUSD in few occasions on MoneyTec, and know I am posting kind off an update of that Charts.

Joseph, I started writing my analysis on JPY Longer Term, but would definitely like to try a recorded video or a MS NetMeeting conference. I have some problems with audio, hope to solve it quickly. If not I'll have to write it. I'll do NIKKEI and CAD together with JPY.

On the charts is the drop from beginning of 2005. Since I believe the chart is clear enough no need to explain it.















Second chart is the recent drop and how I see it.

As I wrote few posts back in those Market updates, I believe we are in a downtrend and I don't expect any surprises.


But there is a possibility of a correction to go to upper levels 1.2040 to 1.2160
On the chart up are the resistance levels, and above that could comletely change the view.
If USDX can't make it above 90.40/55 then we can expect it will drop further down, so possible larger gains in USD based pair.

For Bear : misunderstanding!

Bear,

Thank you for your explanation on the subject of assumed risk. Nicely stated.

However, I see you've misunderstood me quite a bit.

I was not looking to enter UsdJpy at the resistance level of 121 or even thereabouts. Such an entry, even one for a long-term play, would be foolhardy as the most probable route is south. Buying a top is the 2nd worst sin in my book.

Even before my post I had a gameplan wherein I would enter on the correction to the area between 108 and 116 -- not @ 121. This is still my plan regardless the longer-term view.

The question was not entry dependent, only directional dependent -- i.e. looong-term is UsdJpy heading to the upper reaches or to the basement. EW thoughts and other types of analysis, all welcome.

Hope this clears things up.

USDCAD: Some important points to consider.

I will enter only on breakout! If we do get to the 78.6% retracement level @ 1.1000, I will position. The 75% Long/Short ratio at Oanda suggests a short-term rally, but for a lasting bottom we've got to see a "flip" in positioning -- i.e. a sudden switch by the majority to a Net Short position. Then we might have a true bottom.

UsdCad is retracing the entire run from 1970 -- Jan 2002 and has crossed the 61.8% fib & is just shy of the 78.6 @ 1.1000. Core support, dating back to 1978 has slowed down this freight train some.

Lowest RSI weekly reading in June 2003 -- divergence galore; players banking on divergence alone can be found in low-cost hospitals all around the world.

I've swing traded this beauty very gently -- low leverage plays, profitable but not worthy of substantial merit.

She's got to retrace the drop from May 2005 sooner or later -- that will be a nice run. I shall partake of her bounty, but only on breakout!

ID, know any other establishment that puts out accurate Long/Short ratios, other than Oanda?

EurUsd: As straight as I can say it, friends or no friends!

EurUsd is declining in a large degree A-B-C pattern. Stated another way, the decline from December 31st, 2004 is NOT a 5-waver down!

Trying to put 5-waver labels on the run into 1640 will engender considerable difficulty later on.

It is best that one resolves these difficulties asap and has plenty of powder ready for the large degree wave C down, which is yet to come, perhaps later this year -- we are still a ways from this, but preparation is the ticket here.

Any which way you cut it, EurUsd ain't in a '5' down!

:) Peace brothers!

Nikkei: EW study continues .....

ID,

alternate: A large wave IV triangle that spans decades is the appropriate punishment for 200 years of bullishness, 2 world wars and millions killed in Asia. If I was calling the shots, I would have China gobble them up -- but there's always the possibility that Uncle George might just make them the next state. :)

OK, thanks -- the (a) (b) (c) longer leg view is now clear as to what you had previously meant.

Regarding your valid point about wave 3 being only 100% of wave 1, which would therefore bring Nikkei close to zero-- not impossible, but unlikely? .... see my take below ...

It soy-tenly can! Wave 3 can terminate a market at zero and bankrupt it regardless the Fibonacci ratio matching up at the point of death -- to see the full extent of the damage one would have to continue on into the afterlife to see the actual termination point, hehehehehe. :)

A country that has started 2 world wars, slaughtered millions in Asia, still predominantly bullish for the most part -- a country with the likes of Honda and Toyota still in raging bullmarkets -- after just 13+ years of correction of the whopper prior run, they're now in a new raging bullmarket?

If so then their bearmarket has been more like a picnic. :)

If everybody agreed on the count there'd be no fun -- ... said the englishman to the indian, "its very strange that you have so many clocks in your house -- all showing different times!" ..... replied the indian, "no, my friend, what would be idiotic would be to have so many clocks all showing the same time!"

USDJPY: An alternate count!

Still inviting analysis from others, but kindly be more specific as to your caveats etc. -- a chart showing your points is preferred.

We are still only talking about the long-term view -- let's not mix this up with trading views.

See the 2 yellow ellipses in the chart -- the first is a definite triangle, the second is also a possible triangle but I'm not yet convinced.

Presented are my 2 counts.

Action between 121 and 100 will certainly give me the clue as to whether UsdJpy will break the heavy resistance @ 121 or take out ultimate support @ approx. 100.

Somewhere between now and the next few weeks there should be a revelation in this regard.

Until that time, no long-term funds are being placed.

Market Update - 28 Feb 06

USDX
Down to 89.90/70 to 88.7. Below that down to 88.05 to 87.22
Above 90.40/65 continuation above 91 and above 92.63

JPY
Now it is right on target (I expected 115.5)
Down to 113/112.90
Above 117.80 could be first good indication of a continuation above 121.38 top, if it is to continue down then this ongoing correction would most probably stay below 116.80/90 my preferred view is still down but changed in the part that this whole action from the 121.38 top is not clearly a reversal pattern so we could expect to see a continuation up above the 121.38 top from some of the lower levels.

EUR
above 1.1950 to 1.2 to 1.2025 to continue down
below 1.1890 to 1.1825 to continue down to 1.15/14

CAD
down

GBP
Above 0.7436 up to 1.7655 to 1.7700/7750
to continue down to 1.69/68 to 1.66

AUD
Above 0.7436 up to 0.7480/85 to continue down.
Below 0.7385 could indicate down to 0.67 - Below 0.7350 is good confirmation
So could be a low risk short from either current levels or little above @ 0.7480, preferably second. Also breaking below 0.7410 will be a first sign of weakness.

Bear: Long to short ratios could be used as a good contrary indicator, since if you see the Open Trades summary on Oanda, there are never more than 15% of all open trades in profit.
In fact since we spoke yesterday, Long to Short on CAD move to even More Net long, and the profitable positions fell from just below 10% to now around 5%

Axiom #1: The secret is to go sideways between the home runs

...... and not lose much during periods of market indecision.

That is what I did -- took a few days off, had a ball and did anything but the market.

I have alot of catching up to do as I see many new posts.

Just to let you all know that I've not forgotten about your contibutions on my UsdJpy long-term play postulates; this week I shall be going thru' the charts again and will post answers to ID's piercing EW questions.

Doing an EW analysis is a time consuming effort and anybody who helps me out in this endeavor can rest assured -- I'm in his debt -- and can call it in anytime.

Risk: Playing it safe is dangerous!

Rule #1: Don't lose money!
Rule #2: Playing it safe is dangerous.

An update:

Positions unchanged; EurUsd (Long) from Friday made a new low, but UsdJpy (Short, also from friday & earlier too) is paying handsomely for my coffin, which, after reading Bear's call, suggests that this might be a good time to visit MoneyTec, socialize with the cuddly, exasperating winners that live there and get some fundamental data on coffins and burial sites.

My call? Still the same -- EurUsd, GbpUsd etc., heading north to close out the rally that started November 16th. After the rally the $ will decimate every mother's son on the planet as he heads for 96-100 (USD Index).

What can I say? Hope I'm not wrong; but if so, I can turn on a dime and go with my buddy.

Rule #1: "Don't lose money!" ... continues to thrive untrammeled!

Rule #3: "Make money!" ..... continues to teach me the lesson of "market patience" as I've made zip since Feb 10. Although nicely profitable for the entire move from Jan 23rd, the turns are where the fun is and this particular one has shown me depths of deceit that ain't even been discovered yet, hehehehe.

Why I answered this newspaper ad, I'll never know -- "Men wanted for hazardous journey. Small wages. Bitter cold. Long months of complete darkness. Constant danger. Safe return doubtful. Honor and recognition in case of success."

:) :) :)