Hey guys,
Its that time of week again. My favorite time of week. A time where I like to analyze what transpired stress free because markets are close. This was not a particularly good week for you if you a JPY bull as I am. Thats why its super important exercise your third option as a trader. The 3 options being, you could either be long a position, short a position, or my favorite position to be FLAT!. Yes its my favorite cause its stress free. Theres not emotions involve, all you do is SIT, HIDE, and WAIT for your next attack. Your next catch. Like a hunter waiting for his next game. So without further contemplation, Ill dive right in.

Lets analyze the GPB/JPY as Ive been doing so the whole week but know that it can be applied to all the JPY pairs. I was just as much a Jpy bull in late February but lo and behold, I was wrong there as new highs were made. This time I still believe its different based on several reasons. Feel free to follow along as your about to see, if my wave count is right, this may be one of the most important trades you ever put on.


1.Looking at the weekly, we have a green candlestick. Its it a full blown reversal? Are the bulls back again. Is this early march all over again? Should I abandon my bear bias and turn bullish. Not by a long shot. Its looks different this time for 2 reasons. One, its green but it did not make a reversal candlestick as it did in early march, and two, that low in late Feb early March was surpassed and a new low as made, which was the initial signal for a position trader to GET SHORT! So now all thats left is to see what that green candlestick is made of.

2. Looking a daily, we still have three waves up. The RSI is rapidly approaching the 50 which as we know is where reversals like to take place. A top may be very close.

3. Looking at the hourly, at first looks a little scary. It almost looks as a 5 wave rally is taking place, but I think were still in a 3 wave C rally. Why? Because that last big rally up. The one that happened on Thursday. The one that caught everyone by storm leaving the bears to scratch the heads as say what gives? Aren't we expecting a wave 4 down? We all know wave 4s shouldn't retrace more than 38.2 % of wave 3. What gives. I think somebody forgot to tell the market that. Or maybe, just maybe, THE MARKET IS NEVER WRONG and its up to us to re ajust our wave count and stop assuming we know all.

So back to the analyzes. The last rally, if you count well, the one that began at 3 am Wednesday morning till 6am Thursday morning (in case you want to follow along), that rally is actually in 7 waves. In Elliot rules, 7 = 3. That makes it corrective. So we have 7 waves up (or 3), from Wed. 6 am, then we have 3 waves down. Then we have 3 waves up. CAN you say D-I-A-G-O-N-A-L. lSunday could be very interesting.

So suppose my diagonal transpires, what then. Are we still in a wave 4? Possibly. Or, I see something MUCH bigger that maybe about to happen. Wave 3 down may still be happening and may come down with vengeance. (The bear may be about to punish the Feds for trying to interfere with its path and lower the rates...OUCH!) Perhaps we are in a 2 of 3 down of a larger degree. So 3 of 3 may be about to happen. That makes wave 3 of a larger degree, the extended wave. You think you saw a giant move happen about a month ago, if I'm right, You Ain't SEEN NOTHING YET!

I think its a wave 2 of 3 for several reasons. For this well have to look at another pair.
1. Look at the CDN/JPY, it cant be a wave 4 on this pair cause as I speak, its already trading in wave 1 territory but hasn't passed the extreme of wave 2/ Thats key folks. Even with the GBP JPY, the bull is back if and only the extreme of wave 2 is surpassed. and we are a ways away from that.

2. The retracement seems too deep. In the GBP/JPY alone, it retraced 50 % of waves 1 to 3 and 61.8 % of 3 alone. Thats either super rare for a wave 4, or something else is going on. Be ready for anything this week.

Have a good weekend.