Hey Jamie,
I think something really important has happened last night. The GBP/JPY actually retraced 50 % of waves 1 to 3 or 61.8 % of the 3rd wave and it did so in 3 beautiful waves. Im my eyes I see 1 of 2 things going on.

First, we are either in a wave 4 of 1 In which case, wave 5 is coming and it should be a short one cause the retracement was so deep.

Or second, we could be in a 2 of 3 of a larger degree. You would count the whole decline as 1, 2 then 1of 3, 2 of 3. Then you know whats coming. Thats right 3 of 3 and we know what happens in 3 of 3s. The next wave could be the biggest wave you have ever seen since its at a larger degree.

Or third, your B wave scenario is also a possibility, one that I did not see before so thank you for that.

My first preference is its in a wave 4 but Im not ruling out the second either. Im not ready to accept the third one either until I see 3 waves down in a b of B. As far as what Zeev said about th credit crunch being over, I highly doubt it. This mess has been going on for way too long for our punishment to be only 1 month long. I think the bear woke up from hibernation last month and I don't think hes ready to go back to sleep.

I like your interpretation of the USD/JPY. I thinks its right on. I do however disagree with your interpretation of the GBP/JPY and the EUR/JPY. Looking a monthly on both, you clearly see 3 waves up on both. I think were going to hit new lows on those as well.

Jamie,
What do you think about Eur/Jpy?
4 - chart doesn't show alternation between wave 2 and 4 (if this is wave 2 and 4). They are both 61.8% of correction.
The other option is ABC. If I look at 30 min chart it's possible that it's abc correction(Wave A almost equal Wave C). What else is confirming that is last drop from 159.08 is in 5 waves (look at 5 min chart).
Any comments on that, please?
Marta

Attached Files

	4h.doc (86.5 KB, 61 views)
	30 min.doc (84.0 KB, 50 views)
	5 min.doc (85.5 KB, 48 views)

Hey guys,
I think the big move down will begin this evening on the GBP/JPY. I think were in a final wave v of 5 of C as we speak. I dont see it making a new high as the wave 4 of C retrace way too much today...it almost looks impulsive but I dont think it is. Anyways be ready for anything tonight.

For those who like trading the other Yen pairs, the same applies.

I should've been more clear about the credit crunch being over so I will try to explain here.

The ripples in the markets that the credit crunch has caused is over, in my opinion. I have carefully analyzed world equity markets and I do not see at this stage a beginning of a bear market. So I see this credit crunch in its early stages appearing only as a liquidity issue for the time being, which has only caused a correction in a bull market that started in 2002. I do not see this as a start of a bear market. The fed and other central banks have pumped a lot of money into the financial system, investment banks have bailed out several key players (countrywide, bear stearns hedge funds, and others). So for the time being this issue has been quieted. *HOWEVER, the problem has NOT been solved.* The only solution to this problem is to let markets go their course and readjust (and the readjustment has to be massive thanks to the fiat system of pumping money and creating inflation and causing malinvestments). But the day of reckoning has not yet arrived. You may remember February 27, 2007 as a big day, what many considered the start of the collapse of the credit-induced rally, collapse of the yen carry trade, etc. The fed's pumping of money into the financial markets has currently worked to calm the markets but will exacerbate the problem in the future. Currently the uptrend I believe has resumed. And the key thing to keep in mind is that we are in a globalized economy where emerging countries are being rapidly industrialized, so the rally is both fundamentals-driven and credit-driven.

So, to make my point:

- I believe the credit crunch issue has subsided currently.

- I believe it will reinforce itself much harder later on (according to my analysis, in a few years, I think 2010-2012) when equities will be grossly overvalued, in which no amount of pumping or easing of rates will help.

- A liquidity issue does not start a new bear market when economic fundamentals are sound (equities are not overvalued at these levels).

I just saw something I hadnt before. Looking at an hourly chart on the GBP/JPY, the afternoon rally may have been a b wave of iv of C. The decline tonight may have been a c of 4. Were at a fork in the road, a push above tonights high of 233.57 puts us in a wave 5 of 5 of C. Looking for the 50 % retracement of waves 1 to 3 for a top. A push below, 231.70 means my original count was correct and the afternoon rally was not a b wave, but a truncated fifth. which means were headed much lower. I will be looking for these prices for confirmation.

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.

Jamie,

Do you have an update for the dollar index ? (attached chart is from May)

I cannot figure out if the B wave is over and if the C wave has actually started.
Would that be considered a flat correction ? What would be your target for wave C ?

Thanks

Serge

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Hey guys
Heads up.
5 min chart on GBP JPY may have just completed a diagonal
If this is the case, are we haeded for a wave 4 of a larger diagonal or is this the big drop
If you decide to get in now, keep stops tight!
A drop below 235.20 is the initial signal...stop above todays high.

My diagonal scenario proved to be right as it already fell below the begining of wave 1 of the diagonal at 234.42. Now the question is how far down will it go.

Looking at a 30 min chart, you see the possible diagonal im talking about. If my scenario of a larger degree diagonal pans out ( see post 365) then we may be tracing out wave 4 of the diagonal. That means in three distict waves it should stop anywhere between 232.64 to 233.74.

Thye daily techs are update at http://www.dailyfx.com/story/dailyfx...217435268.html

The EURUSD is in wave c of wave B. Wave B is from 1.3360 and wave c of B is from 1.3450. A high probability reversal point is 1.3750, which is a Fibo confluence area.

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Looking at the dollar index, it is possible that the bottom for wave B is in place. The advance from 79.96 is in 5 waves (wave v is extended). This is a possible count because wave iii is NOT the shortest wave. Waves i and iii are both 75 pips. The decline from 82.13 is in a-b-c form, but it looks like one more low will be registered closer to the 78.6% at 80.42. This wave count suggests that a significant dollar bottom will form this week.

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Thanks a lot.

So it looks like a C wave on the way up for the US dollar with a potential C wave down on the Dow and SP500, and a major correction on the oil as well. If the technical is predicting the near future, then the fundamentals is probably telling us that the subprime mess is not over.

From your experience, do you often see the fundamentals turning into your technical prediction ?

Also, when you see a turn in the USD coming, how do you explain that the USDCHF still look bearish ? Do you think that the flow into the CHF will be more important than the USD ?

When looking at the different pairs, I simply have to go by what the pattern is telling me...in this case, the USDCHF looks bearish. Remember that the euro makes up almost 60% of the index and that the CHF makes up only 3.6% of the index. It is completely possible that the USD rallies substantially (euro falling) while the CHF also gains (which means that the EURCHF is a nice trade idea).

The thing to understand about fundamental stories is that they are a description of what has happened. The stories that you read in the paper or hear on CNBC is a direct result of the price action that has already occurred.