Commodities Elliott Wave Analysis
|Copper (Spot)
TECHNICAL ANALYSIS
Members were advised to enter short on the 10th of April. Stops were initially set just above 2.700 and are now moved down to breakeven to eliminate risk.
On the 12th of April Copper had a classic downwards breakout from a consolidation zone, supported by volume. Now price is turning up to test resistance at prior support, about 2.590. The downwards session for the 12th of April has strong volume. The last upwards session for the 13th of April has lighter volume. Volume is bearish.
The long upper wick on the candlestick for the 13th of April is bearish.
On Balance Volume is bearish. RSI is not extreme, so there is plenty of room for price to fall. ADX is still below 15 and does not yet indicate a new trend. Bollinger Band expansion indicates volatility returning a!er the consolidation; with price moving lower as Bollinger Bands expand, this is bearish.
ATR may be expected to begin to increase a!er a period of a small range.
Stochastics is not yet oversold. This may remain extreme for long periods of time during a trending market. Only when it has been extreme for some time and then exhibits divergence with price while extreme should it be read as a strong warning sign of an impending trend change. That is not the case yet.
TREND LINE
Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The doji candlestick for February puts the trend from up to neutral.
ELLIOTT WAVE ANALYSIS
The upper edge of the blue channel has still provided resistance, with a strong overshoot for the 30th of March. Copper may in the early stages of a third wave at three degrees now and this should see an increase in downwards momentum.
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US Oil (WTI Crude – Spot)
TECHNICAL ANALYSIS
The red daily candlestick of the 12th of April completes a Bearish Engulfing Candlestick pattern. This is the most reliable of candlestick reversal patterns when it comes a!er an upwards trend. It doesn't always work (it didn't work on the 3rd of April), but it works more o!en than not. It is supported by volume. The last upwards day for the 13th of April did not have support from volume. This is also bearish.
Overall, this chart is more bullish than bearish.
Members were advised that I entered short Oil on the 12th of April. At this stage, this position is now positive.
ELLIOTT WAVE ANALYSIS
The basis for entering short was price breaking below the lower edge of the small gold channel that contains the upwards wave labelled minuette wave (ii).
Now price may be beginning to move down and away.
GBPUSD
TECHNICAL ANALYSIS
The prior pennant pattern is no longer correct.
The last daily candlestick for the 13th of April is bearish and has support from volume.
ATR and Bollinger Bands show there is something wrong with this upwards trend due to a lack of range and volatility. This trend is relatively weak at this stage.
VOLUME ANALYSIS
The bearish signal given in last analysis for On Balance Volume was negated. The support line is redrawn. On Balance Volume is constrained, giving no signal today.
ELLIOTT WAVE ANALYSIS
Cycle wave c needs to complete as a five wave structure. The final fi!h wave is incomplete and may only have just begun. The target expects to see the most likely Fibonacci ratio between primary waves 5 and 1.
Primary wave 4 fits perfectly as a regular contracting triangle, o"ering perfect alternation with the zigzag of primary wave 2. Primary wave 2 lasted 2 months and primary wave 4 lasted 6 months. Triangles are usually longer lasting structures than zigzags, so this disproportion is not only acceptable but should be expected. This wave count has the right look.
The breakout from the triangle should be down.
Minor wave 2 moved higher and fits perfectly as an expanded flat correction. These are very common structures. The choice to try another short position here is based heavily on the three wave structure of minute wave b; with a three down following minor wave 1, only an expanded flat following an impulse will fit. The trend should therefore be down if this Elliott wave analysis is correct.
Minor wave 2 may not move beyond the start of minor wave 1 above 1.26157.
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