On Friday, I posted the analysis on this being a potential significant top. Is this the top? As indicated in the analysis, I am continuing to track this as an equity bull (B Wave) until support breaks. I spent some time with the scenarios this weekend. I do not have any changes but have cleaned up the analysis a bit.
Here is the update on the analysis for this week:
If there is still bullishness left in this market, my analysis states that we would be looking for a dip to buy around October 17, 2014. We will know if that dip is one we should buy if we are still above support when that occurs. This is was the import of the analysis in the prior post that we need to see support hold into the fall. If support falls, we are looking for a cycle low in March 2015 at around SPY 178.
Here is the potential bullish analog and the support based upon the indicator study off the August low:
Under this bullish analog, we are in a correction that would last until October 17ish. I have drawn the analog as a running correction (meaning we will get a higher high during the correction).
Per this analog, we would expect the first low to come in around Sept. 17ish (this week). As shown on the chart, the long term support area is the green line identified in last week's post. We need to see that hold into the fall or the significant top occurred last week. From a short term perspective, looking for a low Sept. 17-19 may be playable if one is nimble and can identify the low (if it occurs). I am not there yet as we are still a few days away from the potential cycle window. I would expect that low to come in around 1968-71 if it were to occur.
CURRENCY
From the currency front, I have a bit of a fib guess on a bullish AUDUSD chart. AUDUSD has completed 5 waves up off the low, has corrected down, and now has hit the 61.8 retrace and has reacted bullishly. The bullish position is taken off this fib retrace with a stop below the low. Chart:
From a Monthly view, the 2014 low (off of which we have built those 5 waves on the weekly and daily charts) came off an exact hit on the 38.2 retrace of the entire move up from 2000-2011. We caught that 2014 low here. AUDUSD 2014 Low. If that retrace holds (and if this 61.8 retrace of the 2014 impulse up holds), this would be far far more bullish than the smaller charts above suggest. Far more bullish. Here is the monthly chart:
Basically, what we are seeing on AUDUSD is a 5 wave impulse off that long term 38.2 fib, an ABC correction to the 61.8 of that 5 wave impulse. If that 38.2 correction is the end of the long term correction, the next wave up starting from this location would be a massive third wave that would take out the 2011 high and not stop.
Given that the FED is coming this week, and that may generate some noise, I have placed the stop below the 127.2 extension of last week's candle (@.8930). I believe the low is already in and I do not anticipate needing that stop. Chart:
CLOSING I am going to start posting sporadically on here again as my time has freed up a bit. There is always a bull path and a bear path. We cannot know which the future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions. Peace, Om, Souljester
