Gold’s New Rally to All-time Highs Continues

Last week, see here, when GOLD continues contract was trading at $1836, I was looking for a “top shorter-term around $1860, drop to $1745-90 before rallying to $2045-90.”

Today GOLD is trading at $1868. Thus, so far, so good. Ideally, the precious metal should top soon, fall back to around $1800-1765 support before rallying to ideally $2100-2200. See Figure 1A below. However, the late March low rally is a bit ambiguous upon further and more detailed inspection and could see GOLD rally as high as $1965 before seeing the more significant wave-2/b decline. See Figure 1B below.

Figure 1. GOLD daily charts with detailed EWP count and technical indicators.

Chart

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Drop now or later. How to know the difference?

If the Gold Bugs can hold the precious metal’s price above last week’s low (green minor wave-4 in Figure 1A and grey minute wave-iv in Figure 1B) at $1808 on any pullback, then the Elliott Wave Principle (EWP) option shown in Figure 1B becomes operable. That pullback would then be green minor-4 of red intermediate-iii of black major-1/a. If the price closes below it, then GOLD is making a lower low, will close below its rising 10-day and 20-day Simple Moving Averages (SMAs), and the technical indicators -such as the MACD, FSTO- will most likely switch from the current “buy” to “sell” sell.

Bottom line. With price now having broken out from the (grey) downtrend channel it has been in since the complex correction started late July last year and moving back above its SMAs, including the 200-day SMA (see green arrows in legend), it is apparent a new uptrend has started. But as described above, it is now a matter of the finer details on how this uptrend will unfold. I prefer the option shown in Figure 1A, but beggars cannot be choosers, and as always, I will let the market tell me which path it will choose. A break and close below $1808 from current levels will present an excellent low-risk buying opportunity, while if it holds, one can ride GOLD to at least the mid-1900s.

For a look at all of today’s economic events, check out our economic calendar.

S&P500 Last Chance for 4300s

Two days after that update, the index spiked to the (green) 138.20% Fibonacci-extension at SPX4214 (The index got to as high as SPX4219), and then dropped to SPX4128 on May 4, which is close to the (green) 100% Fib-extension at SPX4114. That sufficed for a classic Fib-based (green) wave-3, 4 structure. However, it then rallied to only SPX4238 two days ago and then dropped to as low as SPX4057 today. See Figure 1 below.

Figure 1. S&P500 hourly chart, the focus in this update is on the green and grey inserts

SPX4052 needs to hold to allow for SPX4315 +/- 5 to be reached.

The above-described path was less than ideal as the rally to SPX4238 fell short of the ideal SPX4375 target. This presents a conundrum. Was SPX4219 (green) minor-3, or was it SPX4238? Alternatively, did (green) minor-5 already top? The latter would be relatively short of its ideal target (3%), but nothing states the market must always follow an ideal textbook, patterns, far from it. The market owes us nothing. All a 5th wave does is make a higher high, and so far, it appears it did.

Now, if SPX4238 was indeed only minor-3, then minor-4 is now underway and likely complete as it must hold the 76.40% extension at SPX4052. This level is lower than the previously mentioned SPX4095 level because, in this case, minor-3 did not reach its usual potential (the 161.80% Fib-extension at SPX4276. Today the index dropped to as low as SPX4057 and thus essentially stopped right where it had to. This lower support level also means the S&P500 should “only” reach the 176.40% Fib-extension at SPX4315+/-5 for a typical “wave-5 = wave-1 “relationship.

Bottom line: With the lower than anticipated top and the index dropping to must-hold support, we will know soon enough the market’s intentions: below SPX4052 and the red arrow for (black) major wave-4 becomes operable, targeting SPX3725-3850 ideally. Or, back above SPX4215 targets, ideally, SPX4315+/-5 (green arrow).

Gold Setting up for a Rally to New All-Time Highs?

Previously I was looking for GOLD to rally to $1820+/20 and then drop back to “ideally $1680-1620 before staging a multi-month rally to new all-time highs. Conversely, this rally has already started, but the market has not given us the all-clear signal that is indeed the case.” The $1820+/-20 zone was reached, but the bears were unable to push GOLD’s continuous contract prices below $1745, which was required to usher in the move to $1680-1620, and instead, the Bulls took the ball and ran with it. Thus, the rally to new all-time highs -although originally stated as lower odds- has IMHO already started.

Figure 1. GOLD daily chart with detailed EWP count and technical indicators.

One last drop before the next rally commences.

As said in my previous article, see here, “The double bottom [in March] does present a bit of a twist. It can mean the entire correction has already been completed and blue wave-V to the low- to mid-2000s is already underway (exemplified by the blue dotted line).” Given the strength of the current rally, albeit it has not broken back above the 200-day Simple Moving Average (SMA) and the upper grey trendline of the downtrend channel price has been in since the July 2020 top, as well as the internal -impulse, looking- wave structure I view the double bottom in late March as the completion of the eight months’ long correction.

Ideally, but not necessarily, GOLD should soon rally marginally higher to around $1860 for a last, smaller wave-degree, 5th wave to complete (back) major-1/a. Then we should see a multi-week retrace back to ideally $1745-1790 for the major wave-2/b, before major wave-3/c takes hold and rallies price to ideally $2045-2090 depending on where wave-1/a tops and wave-2/b bottoms: see dotted black arrows in Figure 1 for the anticipated path.

Bottom line: The Gold Bugs were careful and did not allow GOLD one last time to ideally $1680-1620 before staging a multi-month rally to new all-time highs. Instead, they held the 50-d SMA and rallied price to new uptrend highs. This price action strongly suggests a new, more significant impulse move (see here) has started that should top shorter-term around $1860, drop to $1745-90 before rallying to $2045-90. As long as the Bulls can hold $1725 on any pullback, they are in control.

For a look at all of today’s economic events, check out our economic calendar.

Ethereum: How High Can It Fly?

While up to recently, Bitcoin (BTC) and ETH would pretty much move in unison, the former topped already on April 14 and is currently trading a the same price level it reached February 21. Meanwhile, ETH is 71% higher than on April 14 and gained almost 115% (!) since that same February date. Thus the two largest cryptocurrencies by market cap are heavily diverging. After running in parallel for many years, such divergence does not make my life any easier as an analyst. It means

  1. going back to the drawing board as all I can do is “anticipate, monitor, and adjust accordingly.”
  2. the more significant correction (50-70%) I anticipated in ETH has been postponed.

In my previous update, see here, I showed the monthly chart and how extremely overbought ETH had become on that time frame. But “overbought can always become more overbought” (the monthly RSI5 went from 98.7 then to 99.3 now), and, indeed, “in Bull markets upside surprises while downside disappoints.” I did not show the daily chart for ETH back then, but I would like to share it today.

Figure 1. ETH daily EWP count and technical indicators.

$2860 reached and exceeded by 45%, what gives?

Figure 1 above shows how I originally derived the $2700-2855 target zone. It was based on standard Fibonacci-extensions for a 5th wave (1.764 to 2.000x the length of the 1st wave, measured from the 2nd wave’s low). Given ETH topped right in the ideal Fib-based 3rd wave target zone/box mid-April, (red wave-iii), then bottom also right in the 4th wave Fib-based target zone/box a few days (red wave-iv) later, strongly and logically suggested the 5th wave would the top in the ideal Fib-based target zone too.

But no such luck, and ETH decided to present a very extended 5th wave. Thus, my work and method had it right two out of three times, which is about as good as it gets for us analysts. One can not get it right all the time.

Note, such extended waves can never be known beforehand. I only know they can happen, i.e., anticipate them, monitor for them, and if they occur, adjust according, which is what I am doing now. When 5th waves extend, it is even harder to forecast where they will top as then the sky is the limit. Will it end at the 3.0x wave-1 extension or the 4.0x or 5.0x extension? It is unknown. Accepting one’s analytical method has limitations provides the necessary humility and humbleness to remain objective.

Currently, this 5th wave is in an extension of an extension and can rally for another month to reach as high as $5-6K. It should now be wrapping up (orange) microwaves 3, 4, 5, to completed (grey) minute wave-v of (green) minor-3, followed by a minor-4 and -5 waves to ultimately achieve the important 3rd wave top I have been anticipating for some time.

Bottom line: The anticipated rally to the ideal target zone of $2700-2855 was completed in late April, but ETH presented us with a very extended 5th wave as it has so far added another 50% since. Meanwhile, BTC has done nothing. It is hard to know where precisely an extended 5th wave will top, but a rally for another month to $5-6K cannot be excluded. ETH will need to see at least four consecutive down days or drop below $2644, with a severe warning on a close below $3185, to tell us the dreaded 50-70% haircut is underway. And make no mistake, it will happen as nothing goes up forever.

For a look at all of today’s economic events, check out our economic calendar.

Bounce in Gold Complete: $1620s Next?

Two weeks later, in the follow-up update, see here, I confirmed this thesis and narrowed the bounce target to $1820+/-20. Gold rallied to as high as $1798 on April 21, 22, and has since started to decline. See Figure 1 below. Gold June 21 contracts are currently trading at $1767/ounce (not shown in Figure 1).

Figure 1. GOLD daily chart with detailed EWP count and technical indicators.

Did the bounce complete, and is the next move lower underway?

The thick dotted orange arrows in Figure 1 show the path I anticipated in early March. Besides the late-March double bottom, GOLD has followed along remarkably well. If the Bears can push the price back down $1745, the 50-day Simple Moving Average (SMA) increases the odds for a retest of $1680-1620, with $1620 preferred based on simple symmetry (C=A: black dotted arrows).

The aforementioned double bottom does present a bit of a twist. It can mean the entire correction has already been completed and blue wave-V to the low- to mid-2000s is already underway (exemplified by the blue dotted line). But for now, I consider this option lower odds, as it would require

  1. A daily close back above the 200-day SMA (now at $1857)
  2. A daily close back above the upper grey trend line of the downtrend channel GOLD has been in since late July last year.

Thus, there’s plenty of upside left (~25%) when GOLD checks the above two boxes, and I instead prefer to enter low risk, high odds trades than high-risk, low odds trades.

Back to the preferred view. The by now nine months’ long correction (!) GOLD has been subjected to, is, in EWP-terms, called a double zigzag (see here). Incredibly complex and frustrating, as I’ve had to navigate my Premium Members for many months through very erratic downward sloping price action. But now the end appears near, and my Premium Members are gearing up to buy GOLD. Are you ready too?!

Bottom line: The in early-March anticipated bounce may have completed $2 (0.11%) below the ideal target zone last week. It is hard to get more accurate than this six weeks in advance. Regardless, if the Gold Bugs are not careful, GOLD should drop one last time to ideally $1680-1620 before staging a multi-month rally to new all-time highs. Conversely, this rally has already started, but the market has not given us the all-clear signal that is indeed the case.

 

Ethereum Reached the 2800s. What’s Next!?

I say “mostly” because I did not get it right all the time, which is, of course, impossible when one is trying to forecast a non-linear, stochastic environment. And I will be first to admit “I am wrong till proven right,” as that allows for a humble, objective approach to improve my forecasting accuracy and reliability for my premium crypto members. But, as you may recall, $2775+/-100, $2700-2855 more specifically, was my next intermediate-term upside target for ETH for quite some time, and this week it has been reached.

So what is next?

Not shown here, but the daily chart for ETH strongly suggests it is wrapping up some tiny 4th and 5th EWP waves to complete the more significant (black) major-3 wave, as shown in Figure 1 below.

Figure 1. ETH monthly EWP count and technical indicators.

The rally to $2860 will soon complete

The monthly chart above tells what the big-picture, long-term trend, and EWP count is. ETH is in a solid Bull market as it is well above its ascending 10-month, 20-month, and 50-month Simple Moving Averages (SMA), with the 10>20>50. A 100% Bullish setup. In addition, the monthly Relative Strength Indicator (RSI5) is at almost 99, showing how strong the current uptrend is as the maximum possible reading is 100.

The summer of 2017 had similarly high monthly RSI5 readings (red box): 99.18 and 99.38, respectively. ETH peaked in June 2017 at $417.21, dropped to $132.64 in July 2017, followed by a rally to $1422.86 in January 2018. A 68% correction, followed by 970% gain. Quite impressive numbers. Back then, ETH completed blue Primary III, IV, and V of pink Cycle wave-1, respectively. Therefore, the instrument is in a similar wave setup now, albeit at different degrees: currently completing Major wave-3 of Primary-III. The current maxed out RSI5 reading supports this notion as 3rd of 3rd waves are the most substantial waves. Given the near-vertical ascend of ETH over the past six months, it is pretty obvious we are dealing with such a wave, and the 2017 analogy tells us we should expect a pretty decent correction soon: wave-4.

Typically 4th waves retrace between 23.60-38.20% of the initial 3rd wave but can extend to the 50% retrace. If anything, 2017 showed us it could even be more. The black box in Figure 1 shows the standard, textbook, target zone for this pending wave-4. Besides, horizontal support resides at $1900-2000 and $1300-1500. The latter area would “only” be a 55% decline for ETH and still fit well with the 2017 correction. An almost 1000% advance, even from those levels, would target the low- to mid-ten thousands. But for now, let’s focus on the pending decline, as extreme wave extensions cannot be forecasted and thus not guaranteed.

Bottom line: The anticipated rally to the ideal target zone of $2700-2855 has been accomplished. Although wave-extensions, i.e., even slightly higher prices, can not be excluded, I now expect a multi-week decline back to at least around $1900-2000, but ideally $1400+/-100. The latter would be an almost 50% haircut, which is not uncommon before ETH is ready to stage its next multi-month rally. A move and close below this week’s low at $2088 from current levels or slightly higher will signal this deep correction is underway.

 

S&P500 Still On Track For 4375

Then I expect a wave-4 down to around current levels (SPX4110+/-10) before a last 5th wave (green minor-5) rallies price to SPX4375. This [Elliott Wave Principle] EWP path forward is based on the assumption the index will follow a textbook EWP impulse pattern higher. There is nothing to tell me it will not, but it can, of course, always deviate. To be determined. But for now, this is all I can go by.

Now at the end of April, the index topped last week at SPX4191, went sideways for the remainder of the week, i.e., dropped in three waves (grey a, b, c highlighted in the grey insert in Figure 1 below) down to SPX4120+/-5p and is now making new all-time highs. Thus, so far, the SPX fell 19p (0.45%) short of the lower end of the ideal (green) minor wave-3 target but nailed the forecasted minor wave-4 target zone (4118, 4124 vs. SPX4110+/-10). All are well within the margins of error and show the accuracy of Fibonacci-based EWP forecasting.

Figure 1. S&P500 hourly chart, the focus in this update is on the green and grey inserts

The S&P500 can still reach SPX4375 assuming Fibonacci-based wave extensions continue to work.

The question now is if SPX4191 was all off (green) minor 3, SPX4124 all of minor-4 (in the form of a running flat: see here for examples of what are called “flat corrections” in EWP terms), and now minor wave-5 to ideally SPX4375 is underway, potentially subdividing in the grey “i? ii?, iii?, iv?, v?” waves. Since minor-1 and minor-3 are subdivided into five smaller (grey) minute waves, it is logical to assume minor-5 will do the same. Besides, ordinarily, 5th waves are equal length to the 1st wave, and since in this EWP count, wave-4 bottomed at the 100% extension, wave-5 should then target the 200% extension (100% of wave-1 + 100% of wave-1) at SPX4375. So far, so good.

The -even more Bullish alternative- is that last week’s high was only (grey) minute wave-iii of green minor-3 because the SPX “only” reached the 123.60% extension followed by “only” a 23.60% retrace (123.6100.0%). This option is labeled as “alt: iii, alt: iv.” Albeit wave-3 is now longer than wave-1 and has accomplished its minimum requirement (see here), it is slightly less than usual. Thus one needs to be aware of an alternative, which I am presenting here. It means minor-3 is still unfolding and can still try to reach SPX4214-4275 before minor-4 kicks in.

In Bull markets, I always prefer to have an alternate, more Bullish EWP option because they often present upside surprises and downside disappoints. The alternate option surely fits that bill. Besides, IMHO, this is simply a bit of a luxury problem, i.e., a matter of “how high can we go?”.

If the index can hold last week’s low and especially SPX4095, then I see no reason to become bearish, and I will let the market dictate me if the preferred or alternate, even more, Bullish path is unfolding. Ultimately both point to SPX4375, and as I continue to tell my Premium Major Markets Trading Members: “do not short, instead view pullbacks as buying opportunities as we keep our eyes on the SPX4375 price”.

Is Ethereum Still on Track for $2800?

In my article on Ethereum (ETH) from early last week, I found using the Elliott Wave Principle (EWP), “ETH should now be in red wave-v of black wave-3, which should ideally target $2340-2595, … once wave-3 completes -ideally- in the target zone, wave-4 should bring ETH back to around $2160+/-35. From there, wave-5 should target $2775+/-100 to finalize the larger blue wave-V. I then expect a retest of $1450+/-75, an almost 50% haircut, before the next significant, multi-month rally starts. See Figure 1 below.

ETH peaked at $2547 on April 16 for wave-3, declined to $1975 on April 18 for wave-4, and is now already making new all-time highs (ATHs), and wave-5 is gunning for $2700-2855. Thus, except for a lower wave-4 than anticipated ($2035-2190 was the target zone, see Figure 1, with $2160+/-35 ideally), ETH has so far followed the path I expected ten days ago -black dotted arrows- very well. It is simply impossible to be 100% accurate in a non-linear, stochastic environment, but this is the accuracy and reliability my premium crypto members take advantage of.

Figure 1. ETH daily EWP count and technical indicators.

The Rally to as High as $2860 is Now Underway

As you can see, once Fibonacci-based EWP target zones are reached, strong reactions occur, and ETH is no exception. Since the $1975 low did not overlap with the wave-1 high at $1941 on March 13, the standard impulse pattern is alive and well because, in a motive wave, the 1st and 4th waves are not allowed to overlap. Thus, as ETH is now on its way to the ideal $2700-2855 target zone, which it can overshoot, it is time to look at the technical indicators. As you can see in Figure 1, the red dotted arrows show ETH is moving higher on A) less strength: lower daily RSI5 readings, B) less momentum: lower daily MACD readings, and C) less liquidity: lower Money Flow readings. These divergences fit with a rally that should peak soon before a much larger correction is expected.

Bottom line: The rally to new ATHs is underway as anticipated, and ETH has adhered rather well to the Fibonacci-based EWP path I outlined early last week. Thus $2775+/-100 should still be doable, with an ideal target zone of $2700-2855. Once reached, I expect a sharp multi-week decline back to the critical support at around $1400+/-100, an almost 50% haircut before ETH is ready to stage its next multi-month rally, ideally to $4500+/-500. A move and close below this week’s low at $1975 from current levels or higher will signal this deep correction is underway.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin Should Rally in an Overlapping Fashion to Around $72K

Early last week, I showed, using the Elliott Waves (EWP), “I prefer the larger ending diagonal (ED). EDs are hard to forecast price structures as they consist of five waves, which [in turn] most often are comprised of three overlapping waves to the upside and downside. BTC is most likely in wave-iii, subdividing into three (a, b, c) waves … [with] wave-c to ideally $66050-72175. … A daily close back above last week’s high ($60062) will favor the upside diagonal. A daily close below $53900 is needed to shift the odds in favor of the Bearish option (a diagonal to the downside).

The above “if-then” scenario is the power and beauty of the EWP as it allows for straightforward elimination of options and increases one’s trading success’ odds. BTC has rallied over the last nine days since my last update. With the additional available price data, I know the ED pattern to the upside is operable: blue lines in Figure 1 below, as so far BTC has done nothing to invalidate it. Please compare to the ED example inserted in Figure 1.

Figure 1. Bitcoin daily chart with detailed EWP count and technical indicators.

The Contracting Diagonal pattern suggests a choppy rally to around $72K.

As said before, EDs are choppy, terminal patterns, and the recent price action supports this notion as BTC is barely above its March 13 wave-i top of $61749. Because in contracting diagonals the 3rd wave cannot be longer than the 1st wave I find BTC should ideally top at a maximum of $69K. This level corresponds with the (red) wave-iii=i relationship, the (green) 1.382x extension for minor-c of wave-iii, and the (grey) c=a extension of grey minute-c of minor wave-c, exemplifying the fractal and complex nature of the internal waves of a contracting ending diagonal. Once wave-iii completes, wave-iv should drop to around the lower blue trend line, which should be around $62K. (Red) wave-v of (black) wave-5 of an even larger (blue) wave-III will target about $72K. From there, BTC should then fall back to the beginning of the ED pattern to complete wave-IV: the low $50Ks to the low $40Ks. Only then is BTC, IMHO, ready to set up for a rally into the six digits: blue wave-V.

What does it take to invalidate my preferred POV? A first warning will be on a daily close below $59K, with a “lights out” on a daily close below $55355. Why? Because if BTC drops that low from current levels, the ED pattern as shown will not complete. Please remember that BTC is, IMHO, in a larger-degree terminal pattern, and the price action over the next few weeks will not be as easy to trade, track and forecast as it was before. Thus, one has to “anticipate, monitor, and adjust” to allow for safe trading now more than ever.

For a look at all of today’s economic events, check out our economic calendar.

Ethereum Gunning for $2800?

In my previous article on Ethereum (ETH) from four weeks ago, I looked for as low as $1200+/100 in ETH before the next rally to new all-time highs (ATHs). All ETH gave us was, however, $1549 on March 23. Although in Bull markets, “downside disappoints and upside surprises,” that shallower than expected pullback meant we’re dealing with another impulse move higher. See Figure 1 below.

Figure 1. ETH daily EWP count and technical indicators.

A rally to as high as $2860 should be expected

Using the Elliott Wave Principle (EWP), I now label the late February low as a 4th wave (blue IV), and blue wave-V is now underway. It is subdividing into five smaller waves, in black. Waves-1, 2 have already been completed, and wave-3 is now underway, which should ideally target $2340-2595. As you can see, wave-1 consisted of clean and clear five smaller waves (red waves-i, ii, iii, iv, and v), and so does the current wave-3. The target zone is based on standard Fibonacci-extensions for 3rd waves: 1.382 to 1.618 times the length of wave-1, measured from the wave-2 low.

ETH should now be in red wave-v of black wave-3. This wave can even move beyond the target zone, but for now, all I can go by is “the known unknown,” i.e., standard Fib-extensions, as U.S. Secretary of Defense and congressman Donald Rumsfeld once said.

But what I do know is in an impulse move, wave-4 always follows wave-3, and wave-5 always follows after wave-4. Thus, once wave-3 completes -ideally- in the target zone, wave-4 should bring ETH back to around $2160+/35. From there, wave-5 should target $2775+/-100 to finalize the larger blue wave-V. I then expect a retest of $1450+/-75, an almost 50% haircut, before the next significant, multi-month rally starts. The above-described path forward is exemplified by the black, red, and green arrows in Figure 1.

Bottom line: A month ago, when ETH was trading in the mid-1700s, I was looking for $1200+/-100 and then a run to $3000. Although the anticipated path of lower and then higher was correct, all ETH gave us was a drop to the mid-1500s and now the rally to new ATHs is underway. Besides, it means I am adjusting my upside projection based on the current price action slightly to $2775+/-100. But remember, in Bull markets, downside disappoints and upside surprises. So I will continue to monitor the price action to see if ETH decides to deviate from the anticipated path. Because all we can only do is “anticipate, monitor, and adjust.”

For a look at all of today’s economic events, check out our economic calendar.

S&P500 on Track for 4375?

Last week I foundThe S&P500 is still in a 100% Bullish uptrend … and a move below the early-March low (SPX3725) is needed to confirm a more pronounced correction down to SPX3250-3500. Until then, the index can still try to move higher to SPX4065-4185…”

Fast forward, and the S&P500 (SPX) is now trading at SPX4095. Target zone reached. So was that it? Using the (EWP) see figure 1 below, I think there’s still more upside in store first before the subsequent more significant multi-week correction unfolds.

Figure 1. S&P500 hourly chart

The S&P500 can reach SPX4375 assuming standard Fibonacci-based wave extensions.

In this update, I want to focus on what is shown inside the larger green square. I’ve drawn in the typical 3rd, 4th, and 5th wave targets for a standard, Fibonacci-based impulse pattern that started from the early-March low (red wave-iv). Green (minor) waves 1 and 2 have been completed, and now wave-3 is underway, which should ideally target between SPX4210-4275. Then I expect a wave-4 down to around current levels (SPX4110+/-10) before a last 5th wave (green minor-5) rallies price to SPX4375. This EWP path forward is based on the assumption the index will follow a textbook EWP impulse pattern higher. There is nothing to tell me it will not, but it can, of course, always deviate. To be determined. But for now, this is all I can go by.

Thus, as long as the index stays above the grey (minute) wave-i high at SPX3978 on any short-term pullback, while on its way to ideally SPX4210-4275, then the in Figure 1 shown EWP path (grey arrows) should unfold, and the index will reach higher than I initially anticipated March 11th.

Bitcoin Bears Are Likely Going To Get Paid Later.

Why is BTC not continuing its unabated rally? I even have had traders sign up for my Premium Crypto Trading Service, literally thinking BTC would only and always go up. Well, no. BTC, like any other financial asset, still must go through its Elliott Waves (EWP).

Two weeks ago, based on the available data, I concluded, “If BTC moves below $52625 without making a new ATH first, my preferred “flat wave-4” scenario continues to play out as initially anticipated, with the added “flavor” of an irregular flat. Therefore, the ideal downside target can be adjusted to $43K+/-1K for a classic C=A relationship. Once the downside region is reached, I then expect the rally to $75K+ to take hold. If there is no overlap with $52625 over the next several days, and BTC can instead reclaim its 10d and 20d SMAs, to be followed by a rally over $60K, then the impulse pattern with an ideal top at $63.4K is favored. Only then can the Bears have another shot at, with a potential downside target of $40+/-1K.

Figure 1. Bitcoin daily charts with detailed EWP count and technical indicators.

More downside was correct but limited. Can BTC, therefore, still reach $70K?!

Fast forward, and as I preferred, BTC moved lower. It dropped below $52625, bottomed at $50406 on March 25, but never reached $43K +/- 1K. Instead, it rallied back to $60K. Thus, my idea BTC would see the low $40Ks when below $52625 was wrong. But, as said at the beginning of my update, BTC has not moved much over the last two months (on February 21, it reached $58K, and today April 6 it is still at $58K). Unfortunately, sideways price action is the hardest to interpret, especially from an EWP perspective, as it leaves the door open to many options. But eventually, one option will be chosen by the market, the smoke will clear, and the subsequent path will then be much easier to forecast, track and trade. As usual, all we can do is “anticipate, monitor, and adjust.”

So, what is next? With the current and additional price data at hand, I now prefer the larger ending diagonal (ED), as shown in blue Figure 1A. EDs are hard to forecast price structures as they consist of five waves, which most often are comprised of three overlapping, waves to the upside and downside: the green a, b, c’s of the larger (red) waves i, ii, iii, (and iv and v). As you can see, the red wave-i rally of the black (major) 4 low made at the end of February was three waves (green a, b, c), with the c-wave made up of five smaller waves (grey waves i, ii, iii, iv and v). The subsequent decline, red wave-ii, was also three waves. BTC is most likely in red wave-iii, which is also subdividing in three green (a, b, c) waves. Wave-a completed, wave-b is likely still underway and soon to be followed by green wave-c to ideally $66050-72175 depending on the exact Fibonacci-extension it will have. From there, a wave-iv and v await but let’s focus for now on the potential wave-iii as the internal price structure is complicated enough. Right!? Well, such is the nature of EDs: hard to forecast, track and trade as there are few firm rules (see here for a summary)

The Bearish option is the diagonal to the downside to complete black major 4. See Figure 1B. The market has still left this major-4 option on the table but is close to invalidating it. A daily close back above last week’s high ($60062) will favor the upside diagonal. A daily close below $53900 is now needed to shift odds in favor of this Bearish option.

Thus, while BTC has not done much over the last two months, it will soon tip its hand and tell us which of the options it will prefer: breakout is Bullish and targets the low $70Ks ultimately, while a breakdown is Bearish and targets the low $40s once again before reaching the $70Ks.

Can The S&P500 Still Reach Over 4000?

In my article from a little over two weeks ago, see here, I had “three individual and independent tools/methods pointing first and foremost higher and towards the same target zone/region (SPX4065-4185) for a significant top.” Fast forward, and the index reached as high as SPX3984 on Mach 17 and made a secondary high of SPX3982 yesterday. Was that all she wrote, so to say, or can we still expect the target zone to be reached. Since markets are stochastic, dynamic, and probabilistic, nothing is ever set in stone. Therefore, one must continuously (re)assess the charts to see if once assertions based on prior price data are still correct with the new price data at hand: anticipate, monitor, and adjust if necessary.

Figure 1. S&P500 daily chart

The S&P500 is still in an uptrend, but technical indicators are diverging.

A strong uptrend has price above its 10-day SMA, which is above the 20-day SMA, above the 50-day SMA, and subsequently the 200-day SMA. Besides, all these SMAs should be rising. In short, price>10d>20d>50d>200d and all SMAs rising = a 100% Bullish price chart. It is then logical to expect a Bullish outcome. Conversely, when price<10d<20d<50d<200d and all SMAs are declining, then the chart/index is 100% Bearish, and one should expect Bearish outcomes.

Moving averages are, however, not predictive but trend following and therefore they are not the holy grail. Adding technical indicators, such as the MACD, RSI, a stochastic oscillator (FSTO), and Money Flow (MFI), can give another layer of evidence to assess the next likely move. So let’s put the current daily chart of the S&P500 to the test (see Figure 1 above)

We can observe that the index is above its rising 10d>20d>50d>200d SMA. Thus it is still 100% Bullish (green horizontal arrows). What about the technical indicators? The MACD is on a buy, the RSI is above 50, while my stochastics’ based Buy/Sell indicator is on a buy as well. However, the MFI is weak as it is below 50. Besides, the RSI, MACD, and MFI are all negatively diverging (red dotted arrows). What does that mean?

As the price is rising, it is doing so on less Strength, less Momentum, and less liquidity. Now divergence is only divergence until it is not, i.e., it only takes a few solid up days to erase it, but for now, it must be noted and suggests the uptrend is weakening. But, based on the SMA setup, the uptrend is still intact. The index is still above the lower black dotted trendline, connecting the March 2020 low with the October 2020 and March 2021 lows. However, the dotted purple trendlines suggest an ending diagonal pattern, i.e., wedge, is forming, which resolves bearishly when completed. See here.

Bottom line: The S&P500 is still in a 100% Bullish uptrend based on its SMA-setup and trendline support and the technical indicators. However, the latter are negatively diverging since at least mid-February telling us the uptrend is weakening and running on less liquidity. The Bears’ first order of action is to close the index back below its 50d SMA, which should bring it back below last Thursday’s low. A move below the early-March low (SPX3725) is needed to confirm a more pronounced correction down to SPX3250-3500. Until then, the index can still try to move higher to SPX4065-4185, albeit all the divergences.

Bitcoin Bears: Pay Me Now Or Pay Me Later?

I shared that the cryptocurrency was most likely in a more significant 4th wave, taking weeks to complete. Back then, I preferred for BTC to “top around $54.7K to $ 56.1K, for a b-wave, before the next leg lower (wave-c) should target about $39.2-40.6K.

But, I was conscious of the fact that “BTC can have one more trick up its sleeve as 4th waves of this magnitude are often more a sideways affair where recent gains are digested more in price than time, i.e., a trading range is made. This means the red b-wave/bounce can even target as high as $64.3 (ranging from $56.9 to $64.2) before that pesky C-wave takes hold … bringing the price back to $40+/-2K.

Figure 1. Bitcoin daily charts with detailed EWP count and technical indicators.

Bitcoin can still try to reach $63.4K, but odds favor more downside.

Fast forward, and indeed BTC had a trick up its sleeve, rallying to a new all-time high of $60.7K five days ago. That was precisely the 1.618x Fibonacci-extension of (green) minor-a, measured from the minor-b low (see Figure 1A above). Classic irregular flat in EWP terms: see here? Not so fast just yet, as this pattern also means the recent ATH could have been a 3rd wave (red wave-iii) because 3rd waves often extend that far as well. The Bullish thesis suggests BTC is now in red wave-iv, with the last wave-v to ideally $63.4K before topping (see Figure 1B above).

What would it take for BTC to invalidate my original thesis? As long as it does not move below $52625 (the minor-a or red intermediate-i high), it can still try to reach $63.4K because 4th and 1st waves are not allowed to overlap in a common impulse. Only in a diagonal (see insert in Figure 1B) do we see such overlap. But those are erratic patterns, and I would not try to bank on them.

What do the charts favor? Currently, BTC is below its 10- and 20-day simple moving average (SMAs), while all the technical indicators are pointing down, i.e., on a sell. Not a good sign for continued upside. Besides, the MACD-indicator made a lower high at the recent ATH compared to the late-February price high. Thus the recent rally was on much less momentum and strength.

Bottom line: the chart setup on the daily time-frame is short- to intermediate-term relatively weak. Suppose BTC can now move below $52625 without making a new ATH first. In that case, my preferred “flat wave-4” scenario continues to play out as initially anticipated, with the added “flavor” of an irregular flat. Therefore, the ideal downside target can be adjusted to $43K+/-1K for a classic C=A relationship (see Figure 1A). Once the downside region is reached, I then expect the rally to $75K+ to take hold. But, if there is no overlap with $52625 over the next several days, and BTC can instead reclaim its 10d and 20d SMAs, to be followed by a rally over $60K, then the impulse pattern as shown in Figure 1B, with an ideal top at $63.4K is favored. Only then can the Bears have another shot at, with a potential downside target of $40+/-1K.

Bounce in Gold Underway?

In my previous and first update for Gold, I assessed, using the Elliott Wave Principle (EWP) and Technical Analyses (TA), if it was ready for a bounce before the next leg lower. It was trading at $1723 back then.

Two weeks later and the instrument dropped a little lower than the ideal “equal length” (see Figure 1) would like ($1670 vs. $1725), over the next few days, only to now rally slightly back above to where it was back then ($1723 vs. $1733). Thus the “thick” orange path I had drawn in appears to be transpiring, albeit with some slight initial undershoot.

Figure 1. GOLD daily chart with detailed EWP count and technical indicators.

A Bounce followed by the next move lower still most likely

Back in early March, I anticipated “this bounce to last several weeks and target the declining 200-day Simple Moving Average (200d SMA), now at $1860, but it should be at around $1820 horizontal resistance by then.” If I adjust the current anticipated orange path lower (from the start of red, intermediate, wave-a?), then we should indeed see close to $1820+/-20. That should complete red wave-b? similar to the bounce from September to October 2020 (thin orange arrows). From there, the last decline (red wave-c?) to ideally around $1640+/-20 should follow to complete the mirror image of the initial drop in 2020 (black, major wave-a). In EWP-terms, this would then be a double zig-zag.

Such a lower low will then, ideally, set up a nice positive divergence on the technical indicators (green dotted arrows), signaling the next leg higher is to commence. It is not necessary but preferred. The market does not owe us anything, so we have to wait and see. But, Gold will have to move to and close above $1870 from current levels to tell us the early-March low was already blue Primary wave-IV, and wave-V to new ATHs ($2300+/-100) is then underway. For now, that is not my preferred POV, neither does the chart even remotely tell me that is the case.

Bottom line: The early-March anticipated bounce is now most likely underway and should ideally move Gold to around $1820+/-20. From there, I still “expect several weeks of downside back to $1620-1680. After that, I anticipated the next Primary-V rally to ~$2300+/-100. However, a weekly close below $1605 targets $1495 and strongly suggests a Primary-V wave may not happen as the decline is almost too deep for a wave-IV, and the odds are not in favor of it anymore.”

Should You Chase Ethereum Here Or Wait For A Pullback?

In my previous article on Ethereum (ETH) from three weeks ago, I was “… looking for a somewhat tricky, whipsawing, move higher, ideally to around $1880+/-40, but it could even challenge the recent all-time high. From there, I expect several weeks of downside back to $1200+/100. After that, I anticipated the next rally to ~$3000+. However, a weekly close below $1200 targets $900…

Fast forward, and ETH topped this week, so far, at $1891. Thus, using the Elliott Wave Principle (EWP) and Technical Analysis (TA) was once again a powerful way to forecast the price levels to be reached three weeks in advance. Therefore, it is time to become more cautious by, for example, raising stops, maybe take (partial profits), etc.

In this week’s update, I would like to look at the weekly and monthly charts to better understand ETH’s big picture potential (months to years out). See Figure 1 below.

Figure 1. ETH weekly and monthly charts with EWP count and technical indicators.

A retest of 1200+/-100 and then rally to new all-time highs.

As you can see, the weekly and monthly charts feature two different EWP wave-labels, but both point to higher prices (anticipated paths). The weekly chart’s EWP points to two more rallies (black major-5 and blue Primary-V) after an initial pullback (major-4) before this Bull run is over. Whereas the monthly chart suggests, we could see three more rallies (add purple Cycle 5). I always have an alternate (more Bullish) EWP count for Bull runs like ETH is in to ensure my Premium Crypto Trading Members do not miss out or get caught on the wrong side. The market will eventually tell me which one is correct: “anticipate, monitor, and adjust if necessary.”

What we do know, with all certainty, is that the weekly technical indicators (RSI5, MACD histogram, FSTO, and MFI14) are all negatively diverging (red squares). Although divergence is only divergence till it is not, it means ETH is now moving higher on less strength, less momentum, and less liquidity. The latter is essential because liquidity drives markets. If the buying dries up, only selling is left. However, ETH is well-above all its important Simple Moving Averages (SMAs), which are all rising and Bullishly stacked: 10w>20w>50w>200w). Thus this is still a 100% strong, Bull market.

The monthly chart is different as there are no negative divergences on the technical indicators. Instead, the RSI5 is getting very overbought, suggesting there’s less room for upside left over the next 1-2 months. See the 2017 rally for example. However, the monthly Money Flow is still strong, and so is the MACD. Only the FSTO is not in favor of more upside.

Nonetheless, also on the monthly chart, the SMA setup is 100% Bullish: ETH is well-above its rising SMAs, which are also Bullishly stacked: 10m>20m>50m. Thus, this is still a 100% robust, long-term Bull market. Hence, the one-degree higher EWP count compared to what is labeled on the weekly chart has merit.

Bottom line

ETH’s weekly and monthly charts are 100% Bullish and suggest plenty of upside left over the coming months to years. However, negative divergences are creeping in on the weekly chart suggesting a pullback is most likely imminent. A daily close below $1657 will be a severe warning that the $1200+/-100 level will be revisited to complete a more significant correction before ETH can move to new ATHs again.

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A “Buy the SP500” Signal Was Given: SPX4000+ Is Most Likely Next.

In last week’s article, see here, I showed and explained one of my -reliable- “buy/sell the S&P500” indicators, as it had reached the “buy zone,” but no “buy the SPX500” signal was given. I concluded, “When it does give a buy signal, I expect it (based on the Elliott Wave Principle [EWP]) to be a good one that can last for many weeks and bring the index to as high as the low 4000s, which is my ultimate target for the current Bullrun that started in March last year.

Well, on Monday, the indicator gave a “Buy the SPX” Signal as it moved up and out of the buy zone. The index has since not looked back. I share this indicator daily with my premium major market members, and they use it to their full advantage.

Figure 1. Market Breadth-based Buy/Sell Indicator in Buy zone, but no buy signal yet

Buy Signal given, how high can the S&P500 go before the next correction looms?

The buy/sell indicator does not predict how high or low the index can go, and for that, the EWP is the go-to tool of choice. Figure 2 shows my detailed EWP count for the S&P500 using the hourly chart and the daily chart with straightforward, technical analysis (TA) based symmetry upside targets. Remember, symmetry is essential for the markets; as I forecasted, mid-February SPX3950 would be an important top: see here.

Figure 2. Detailed EWP count for the S&P500 and simple symmetry upside targets for the S&P500.

All that is left is then a wave-iv and wave-v to end the rally that started in March 2020. But for now, let’s focus on the upside target zone. Namely, if we add the length of the September 2020 and the early-November 2020 rallies to last week’s lows, blue arrows, then we have symmetry targeting SPX4065-4125. Hence, both symmetry and the EWP point to a similar upside target zone. Besides, the index is back above the 10-day Simple Moving Average (10d SMA) as well as its 20d SMA and 50d SMA and has remained well-above the 200d SMA (solid green small arrows). Thus the index is in a 100% Bull market as all SMAs are also rising with the price.

Bottom line: I now have three individual and independent tools/methods pointing first and foremost higher and towards the same target zone/region (SPX4065-4185) for a significant top. Combining methods: EWP + TA + Market Breadth is, IMHO, one of the most potent ways of analyzing and forecasting the markets as it provides a weight-of-the-evidence approach. All three methods point towards the same: higher prices, and thus I must expect higher prices as long as last week’s low holds.

Bitcoin: Back to $40K First Before Heading to $75K?

While such percent pullbacks are the norm for this cryptocurrency, the question remains: is the current rally only a “dead cat bounce,” or is BTC heading for new all-time highs straight away again? Using the Elliott Wave Principle (EWP) I will try to answer that question and present the most likely answer. Unfortunately, there are no certainties in the financial markets, but plenty of if/then scenarios.

Figure 1. Bitcoin daily chart with detailed EWP count and technical indicators.

The Elliott Wave Principle still suggest a next leg lower first before moving higher

This February decline is what I call an “initiation wave,” red wave-a in figure 1, and has set in motion a more extensive correction: black wave-4 in Figure-1. After an initiation move, there’s always a “dead cat bounce first before the next leg lower starts. In EWP-terms, this counter-trend rally is called a B-wave. B-waves always consist of three smaller waves: a, b, c. In Figure-1, I have labeled the B-wave in red and its smaller waves in green.

IMHO, green wave-c of B is now underway or has possibly already been completed, and red wave-c should ideally target around $41K. Why is that? Because 4th wave (black major-4) often retrace approximately 23.60-38.20% of the prior, same degree 3rd wave (wave-3), shown with the black box. Besides, C-waves are usually equal to the length of the A-wave. Since red wave-a went from $58.4K to $42.9K, and the current red wave-b rally should typically top around $54.7K to $ 56.1K, the next leg lower (wave-c) should thus target about $39.2-40.6K. Are you still hanging with me?! As you can see, this price target range fits well with the 23.60% retrace level mentioned prior.

C-waves can, however, extend and, in this case, go as low as $29.8K, which is close to the 38.20% retrace at $32.2K, but for now, I prefer the upper end of the black box as in Bull markets downside often disappoints and upside surprises. How do we know the next leg lower is in order? It is confirmed on a move below the end of red wave-a low, but warning bells will already be ringing on a break below yesterday’s low ($49.3), followed by a break below the green wave-b low at $46.3K.

Now, BTC can have one more trick up its sleeve as 4th waves of this magnitude are often more a sideways affair where recent gains are digested more in price than time, i.e., a trading range is made. This means the red b-wave/bounce can even target as high as $64.3 (ranging from $56.9 to $64.2) before that pesky C-wave takes hold, i.e., “the rug gets pulled from under,” as they say, bringing the price back to $40+/-2K once again. That would be called an irregular flat in EWP terms: see here. How do we know if this tricky B-wave pattern is evolving? Break and daily close above the ATH, with the first warning on a daily close above $55.9K.

Bottom line

shorter-term, I am looking for this counter-trend rally to fizzle out soon before we see the next leg lower. Since BTC is in the heart of the most strong Bull market leg, it can see a dead cat bounce exceeding the recent ATH. Thus, before one is brave (or stupid) enough to short a raging Bull, the price will have to -at least- close back below $46.3 to suggest the $39.2-40.6K range is ideally next from which the next multi-week leg higher to $75K can start.

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Can the S&P500 Reach Around 3770 Before Moving to 4000?

Almost two weeks ago, see here, I anticipated, based on the Elliott Wave Principle (EWP) and Technical Analysis (TA): “the S&P500 … should now be in (grey) wave-c to end (green) wave-4 at ideally around SPX3770+/-10p. Once this C-wave completes, I expect a strong rally to ideally SPX4185+/-10p for (green) wave-5 of (red) wave-iii … though it can stall at SPX4085

Although the index took a short detour with Monday’s high at SPX3915, it got as low as SPX3723 so far today. That is lower than anticipated, albeit I was still only off by 1%, and it could now be heading for SPX3670 (see my February 16 article here) But, will it go that low, or should one start buying now?

Monday’s detour shows the market can have many tricks up its sleeve before ultimately doing what it is “supposed to do,” which can cause confusion and uncertainty. Thus we should also apply other objective tools that can give reliable buy and sell signals. If we combine the EWP, TA with such buy/sell signal tools, we have a compelling way to buy and sell at low risk and with high reward. One of these tools I have and share with my premium major market members daily is shown below.

Figure 1. Market Breadth-based Buy/Sell Indicator in Buy zone, but no buy signal yet.

I am waiting for a buy signal.

This Buy/Sell indicator is based on market breadth, and when it drops between 0-5, like now, the market correction is often reaching its end as the index is getting very oversold. But only when it moves back above 5, like in February, March, July, September 2020, and January, February 2021, is the correction is over: green circles. Similarly, when the indicator reaches very overbought readings of >90 and then drops back below 90, we have a reliable sell signal on our hands.

There are a few false signals and occasions when the indicator doesn’t reach 0-5 or >90 before the S&P500 rallies or corrects again, like August and November 2020, but no indicator, tool, and method is flawless. An indicator like this gave a sell signal late-February 2020 before things went severely south in March, avoiding sitting through a 35% crash, and then got you back in late-March for a 15% multi-month rally. It is proof that it can prevent a lot of pain while also providing many occasions with many gains.

For now, the indicator has not given a buy signal yet. It can take a while -like in March or September 2020- but telling us a sustainable bottom in the index is getting much closer than a top. When it does give a buy signal, I expect it (based on the EWP) to be a good one that can last for many weeks and bring the index to as high as the low 4000s, which is my ultimate target for the current Bullrun that started in March last year.

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Should You Buy Gold Soon?

Gold reached an all-time high (ATH) of $2089 on August 7 last year and has since been in an ugly downtrend, losing almost 15% of its value. See Figure 1 below. Meanwhile, I have helped navigate my Premium Members through this uncertain period, using the Elliott Wave Principle (EWP) and Technical Analyses (TA).

Figure 1. GOLD daily chart with detailed EWP count and technical indicators.

The Elliott Wave Principle points to a bounce followed by the next move lower.

GOLD is per the EWP in a double zig-zag Primary-IV correction (see here for an explanation): black (major) waves a, b, c. Each of these waves consists of three waves (aka. fractals): red (intermediate) waves a, b, c. Gold is, IMHO, now in the last leg lower: major wave-c, which should ideally target between $1620-1680. Note that the red, intermediate, current wave-a is equal in time and price to the red, intermediate wave-a that completed September last year at this week’s low: dotted black and red down arrows, respectively. Perfect time-price symmetry. Thus, if the double zig-zag analogy holds, we should now see a -complicated- red b-wave bounce similar to the September->October 2020 move before the last red wave-c of black wave-c (orange arrows).

I anticipate this bounce to last several weeks and target the declining 200-day Simple Moving Average (200d SMA), now at $1860, but it should be at around $1820 horizontal resistance by then. Note that price is below its declining 20d SMA, which in turn is below its declining 50d SMA, and which is subsequently below the 200d SMA. That is a 100% Bear market setup. I must, therefore, treat every rally as a counter-trend bounce, aka Bear market rally, until the charts have improved enough, i.e., price>20d>50d>200d SMA to tell us the anticipated next rally (Primary V) is underway.

Namely, the bigger picture EWP count -see Figure 2 below- anticipates wave-c to target around $1675 as well (red arrow), from which the blue Primary-V of (purple) Cycle-C should rally to the $2200-2400 target zone.

Figure 2. GOLD monthly chart with detailed EWP count and technical indicators.

Bottom line: shorter-term, I am looking for a somewhat tricky, whipsawing, move higher, ideally to around $1820+/-40. From there, I expect several weeks of downside back to $1620-1680. After that, I anticipated the next Primary-V rally to ~$2300+/-100. However, a weekly close below $1605 targets $1495 and strongly suggests a Primary-V wave may not happen as the decline is almost too deep for a wave-IV, and the odds are not in favor of it anymore. Hence, at current price levels, the risk/reward for GOLD on the long side is IMHO 120/600 = 1 to 5. Quite good, if I may say so, but for now, I prefer to wait things out until confirmation of a new uptrend. Trade safe!

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