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Markets
FTSE 100
Indicators are mostly bearish and the Elliott wave is wave iii (circle) down. Wave ii (circle) ended at 6314.5, the index should not return to that level. The decline has resumed with wave iii (circle) in five waves [(i),(ii),(iii),(iv),(v)]. Sentiment is bearish and wave (i) is over, the index is now bouncing back to complete wave (ii). This bounce is not yet complete therefore the next decline will start from higher levels.
Strong resistance between 6314.5 (previous high) and 6231 (resistance line).
S&P 500
Indicators are mostly bearish and the Elliott wave is wave v (circle) down. Sentiment is bearish, the decline is wave 1 in five waves [i,ii,iii,iv,v (circle)]. Wave iii (circle) may have ended yesterday at 1886.5 in which case yesterday’s rally in is the start of wave iv (circle). The RSI is oversold (below 30), this suggests the index will bounce back. The rally should extend near the resistance line at 1967 then the index should turn down to complete wave v (circle). The next move down will start from higher levels but wave iv (circle) cannot overlap the bottom of wave i (circle) at 2019.5 [impulse wave].
Strong resistance between 2019.5 (Elliott wave resistance) and 1973 (pivot R2).
EUR/USD
Indicators are mixed and the Elliott wave is wave C up. It would appear that the euro is tracing out a long term triangle [(A),(B),(C),(D),(E)]. The current rally is wave (C) in three waves [A,B,C]. Wave B ended at 1.0710, wave C up is currently underway. This move should terminate near 1.1200.
Strong support between 1.0710 (previous low) and 1.0769 (support line).
Gold
Indicators are mostly bullish and the Elliott wave is wave C down. The rally to 1113 was wave B, the current decline is wave C in five waves [(i),(ii),(iii),(iv),(v)]. The decline from 15 October last year to 1046 is wave A of a downward zigzag [A,B,C] that will form wave (5). We have a long term ending diagonal [(1),(2),(3),(4),(5)] and we are in the final stages of wave (5). But too many indicators are bullish and the risk of a trend reversal is high.
Strong resistance between 1141.5 (previous support line) and 1152 (resistance line).
Thierry Laduguie is Trading Strategist at www.bettertrader.co.uk
