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How to Use Channels In Elliott Wave Theory

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Dec 29 2010

In this time of the year, a lot of traders are away from their trading desks as markets can be very tricky and hard to predict. As such, we at www.ew-forecast.com decided to record an educational video which may help to a lot of traders, especially those who are using an Elliott Wave Principle.

In today’s video we will show you how channels can help you to identify a direction and strength of a market moves, combined with Elliott Wave technique. The most important question in Elliott Theory is: “Is this only a corrective retracement (correction) or start of a new trend (impulse)?! Well, channeling method presented in the video can definitely help you with that, which will also be used on Aud/Usd pair.

VIDEO:


VIX Testing Levels From 2008

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Jan 27 2011

Below we can see VIX chart. This is a volatility index of the S&P500; actually measures an “investor’s fear” in current market conditions. The greater the fear is, the higher the VIX level will be. If the fear decreasing in the market than you will see VIX falling; like in our case. The results of course, are higher stock prices; higher S&P500. VIX is at very low price right now, and S&P 500 is very high, so we can say that trade is “overcrowded”, because there is no fear in the market and a lot of investors are buying it. But as you know, usually when something is overcrowded the opposite reaction follows. In our case this would be on the upside.

From a technical perspective, we can see a triangle on VIX chart before market fell into a new low. But since the VIX is in a downtrend we know that triangle can be placed only in wave 4, because triangle can never appear in wave 2.

And here is the next important fact from an Elliott Wave perspective: “triangles unfold just prior to the final move in the larger pattern”. So, wave 5 must be a final move as shown on our chart, which means that reversal from the lows should follow in the near term; at least into a higher correction, because after every five waves temporary change in trend occurs!

So, if we are on the right track here, then top on the S&P500 is also near. Market is currently testing 1300 psychological level…



In 2008, before the stock market collapsed VIX hit the lows around 16.



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Building Wealth In The Trading Business

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Aug 23 2010

Everyone would love their money to grow so that despite inflation their standard of living can improve. There is no better way to do it than investing in trading business. There are many options of trading to make good money. The trading you can grow your investments faster than the inflation which is the most important idea.

When it comes to investing your money there are some popular areas that are commonly used today. The first is the stock markets where people deal with stocks of the companies. The others are financial markets where actual currencies are traded. You have two options: the FOREX trading happens on a wide range of currencies where as the dollar trading is based on dollars.

Stock trading is a very well known business where you are trading stocks. Stocks are in general percentage ownership of the company. So when you buy stocks you are buying some ownership in the company. The idea behind the stock is that if the company performs well, they will share the profits and hence people are willing to pay for its ownership.

With currency trading like FOREX trading, a similar approach is taken towards currencies. Based on the government holdings, borrowing, loans, trade, etc the currency exchange rate between two nations changes regularly. People can tap into these changes to make money.

Sometimes the currencies are not traded in local exchange but in their dollar equivalents. This is kind of trading is called dollar trading.

In all these trading opportunities you are taking a risk based on speculation. You expect the rate or value to go up while there is no guarantee it would. However, it is this speculation that drives these markets and if you play it to the market trends and sentiments you can make decent returns on your investment.

Have you ever heard of Elliott Wave Financial Service? We know how to get business done. Follow us on Twitter today!


U.S. Dollar And Stocks: “Market Psychology and Wave Structure”

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Jul 11 2010

Hello Traders!

The stock market was higher in the past week and pushed the U.S. dollar index down towards the 84.00 support region. The overall price action however, was very slow on forex, even when the Wall Street session saw a bounce for more than 3% on Wednesday, the most since May 11th 2010.

The Eur/Usd moved higher from 1.2555 Sunday open to 1.2722 weekly highs, but on a very thin volume and slow price action. The reason for a slow, upward price action could be a falling trend line from 1.5140 region (December 3rd, 2010), which in fact reacted as a huge resistance on Friday during the European session when the Eur/Usd fell from 1.2722 highs towards the 1.2600 region. The weekly close on the pair was around 1.2640, 80 pips below the trend line resistance, and that could be a bearish signal for the start of the coming week (Monday, Tuesday), as traders were unable to push the pair above the trend-line.

Eur/Usd daily chart:



Dollar, however, will strengthen only if stock market finds sellers. But for the mid-term, that could be a problem, especially because of the S&P 500 wave structure. From an Elliott Wave Perspective a bearish run on S&P 500 from 1.2220 top is not over yet, no doubt, but the question is how to count a decline?! Well, we are monitoring two wave counts and important price points that will confirm the correct count. Anyway, what we know, and what is the most important, is that a recent bounce from 1010 region is only a correction, a short covering rally from an oversold bounce. But where this correction will end?! It may trade up even to 1140-60 region, IF YOU COUNT A DECLINE FROM 1220 TOP AS A LEADING DIAGONAL, as shown on the chart below.

S&P500 daily chart:



So, if 1140-60 region is reached while the 1010 support holds, then optimism will come back into the market, and investors will move from Short into Long positions and they will be sure that a decline from 12220 was only a correction and that new highs are now approaching. But at that time it will be too late to buy the market!! Market will reverse and will fall like a stone, because when something is fully expected, the opposite reaction is seen!! Like the past week per example; a lot of traders and investors, were expecting a huge move lower after the 1040 was broken, but market made an opposite move, it bounced higher and took out traders that were looking for a huge Short move and also those who were positioned Long with stops down there!!

If you are an Elliott Wave trader, then you exactly know what I am talking about. The Elliott Wave Theory is a detailed description of how groups of people behave. It reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific and measurable patterns. Elliott Wave Theory gives you an ability to predict the Long-term and Short-term market moves with some very simple rules and guidelines.

Our team provides technical analyzes for the financial markets based on Elliott Wave Principle. Members of our service receive weekly and daily wave counts that are updated during the weekend, 4 hour wave counts posted every day before the European session gets underway, plus the intra-day wave counts (such as 1 hour or lower time frame) which are posted and updated during the European and U.S. trading sessions. If you do not want to miss a trading opportunity, or if you don’t have time to analyze the charts everyday and monitor the intra-day wave counts…we are here for you!! Check out Our Elliott Wave Service now.


Aud/Usd Bulls

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Jul 20 2010

Aud/Usd moved lower as expected over the past few days, after an impulsive upward move found the top 0.8870 region. A decline from there is corrective, a blue wave (B) in our case, which could already found the final bottom at 0.8631 region. If that is the case, then new highs are next; break through 0.8870 should be seen.

Aud/Usd 4h chart:



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You don’t have time to analyze the charts everyday and monitor the intra-day wave counts? We do it for you!

We analyze Eur/Usd, Gbp/Usd, Aud/Usd, Usd/Cad, Usd/Chf, Usd/Jpy, Oil, Gold, S/P Futures and Dollar Index. Learn more about the service

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Gold "Upward Correction To Come"

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Jul 21 2010

Gold reached new lows over the past trading days as expected, after the upward corrective wave 4) found the top at 1218 region. Wave 5) already broke through the 1185 wave 3) lows, which means that a while five wave move of decline from 1265 top can complete very soon!! Traders must realize, that always when five waves are shown, a correction will be seen, which means that temporary bottom on gold could be extremely near. New short positions are not recommended in this zone!!

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Gold 4h chart:



WHAT WE DO?

We are providing technical analyzes for the financial markets and how they behave based on the Elliott Wave Principle. What is the Elliott Wave Principle?

You don’t have time to analyze the charts everyday and monitor the intra-day wave counts? We do it for you!

We analyze Eur/Usd, Gbp/Usd, Aud/Usd, Usd/Cad, Usd/Chf, Usd/Jpy, Oil, Gold, S/P Futures and Dollar Index. Learn more about the service

Follow our updates on TWITTER or FACEBOOK



Eur/Usd

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Jul 23 2010

Eur/Usd found a temporary bottom yesterday around 1.2731 as the equity and commodity market moved higher. The prices bounced from the black support line connected from 1.2148 region, which definitely needs to be taken out, before bears are confirmed. At the moment it is unclear, if this recent small decline from 1.3030 top is only a correction, blue wave (4) maybe, or is this already the first leg of some larger decline, red wave 1) maybe?! Traders that are bearish should pay attention on 1.3031 top which must hold.

Eur/Usd 4h chart:



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