Elliott Wave 5.0 "Reboot"

Saturday, December 12, 2015

Euro Weekly Chart Elliott Wave Count 2008-2015 Review:



What was once the best thing that happened since sliced bread the Euro has suffered  a 7+ year bear market. As you may have noticed I have started to bring my wave three position back online on a few of the asset classes that I cover.  From this 2008 peak all the waves that the Euro bear market has produced, have overlapped each other  to where there is no chance of a clean 5 wave sequence except for very small degree 5 wave runs. 

I am showing you a 5 wave count, but I can only do this if we are in a diagonal or a triangle type pattern. If the triangle is in play, then I would have to bump my bear market wave count up by one degree.   From my perspective any rally that is completely retraced, was just a bear market rally. 

Any 5 wave runs that have formed also look long which shows that the trend is still down as it is the 5 wave impulse that points the direction of the main trend.  My bet is that there is next to nobody that can give me the fundamental reason what caused each huge rally and each huge decline. 

I sure can't tell you and I will not waste my time giving reasons based on price. Will the 1.04 price hold? No, not in the longer term, but I think the bullish run is still in the future. The rally from early 2015 is a bearish rally already, but that does not mean a rally will not happen. When we get a low bullish consensus of 10% we should get a bounce if not a very strong move to the upside. At the very worst up or down, it should stay within the two larger trend lines.  Any 4th diagonal 4th wave has not played out long enough, even though it sure looks like a small 4th wave just happened last week. 

The Euro needs to travel north a bit more to completely kill the 4th wave scenario. There seems there may be a liquidity crunch coming as junk bonds are imploding, so a run into the Euro could happen. Commercial traders increased their short positions in the Euro which also suggests that any Euro rally can be short lived.

The Euro is at a point where it makes or breaks an impulse pattern and this has to be cleared up.