Page 28 | Impulsewave — Trading Ideas on TradingView

2 Views Suggest Counter Trend Bounce Higher As we approach major news events, one exercise I like to do is assess the possible wave picture before the event so when the volatility of the event hits, I'm mentally prepared with a plan. For anybody that has traded for a while, we've been caught in 'chasing' mode during a volatile news event countless times and it is no fun. What strikes me is that Thursday's sell off stopped at a confluence of wave relationships near 1.1090. Therefore, as the labels on the chart suggest, the potential for a move up to 1.1300 is elevated. Even if Thursday's sell off was a wave 'b' of an expanded flat, that still suggests a bounce higher to at least 1.1250. Retail sentiment has been increasing which suggests the longer term trend is shifting lower so any bounce higher may be one to consider shorting...but not until the 1.13 area. A break below Thursday's low in conjunction with a GBPUSD break down may suggest a powerful 3rd wave lower is already underway. *Feel free to share your views as well. I'm always looking for other options.

USDJPY Poised to Sell Off Again?The USDJPY chart is looking quite similar to the SPX500 chart. The wave picture appears incomplete to the downside. The current upward push terminated at a former swing low and is within the bounds of a 38-50% retracement of the preceeding 3rd wave. Therefore, we are anticipating a fifth wave lower to retest Monday's low near 116. Here are the internals we are watching: Elliott Wave Count: It appears we are in a wave (v) lower to retest 116. The counts for EURUSD, SPX500, and Gold all show US Dollar weakening. Wave Relationships: The wave (iv) appears to have terminated in typical relationship to wave (iii). That places a target for wave (v) near the wave (iii) low of 116. OBV: 1 hour and 4 hour OBV is hovering near lows even though price still has a couple hundred pips to match the lows. This means down volume is still in control and is a bearish symptom. SSI: Sentiment is currently positioned at +2.5. Both long and short positions have dropped compared to Friday's levels. Positioning dropped means traders are less committed to the market...possibly out of fear. However, at +2.5 it is still an extreme SSI reading. Since the stock market sold off and ended the day on its heels, this suggests the USDJPY may follow suit. Will China step in and rescue equities?

Stocks Push Into Resistance Zone - Look for Opening Gap to Fill As we are about 90 minutes for the US Stock market bell ringing, overnight price movements suggest a gap higher on the opening. Assessing the wave pattern and wave measurements, it appears this opening gap likely will get faded as we retest the lows from yesterday. Prices could drift as high as 1970 and still be within the realm of a normal upward correction as it appears we are in wave iv. If correct, wave v would move lower retesting yesterday's low. This view lines up with the EURUSD as well as it approaches support and may likely retest its highs from yesterday.

EURUSD Repels From Wave Relationship Confluence - 1.1450 Key Today’s rejection at 1.1720 coincided with multiple wave relationships. It is difficult to determine which count is standing out as the confluence includes relationships from the top 2 counts. We’re leaning towards another 1 or 2 series of down-up sequences which suggests slightly higher prices. Therefore, the better risk to reward ratio trade suggests waiting to buy until EURUSD drops back to 1.1350-1.1450 while targeting 1.18. I’m leaning towards the impulse labeling on the chart because RSI is behaving more like a 3rd wave than a 5th wave. That suggests more jabs higher may still exist. Additionally, on ‘b’ waves (like count #2 suggests), though prices pivoted at the 1.382 times wave 'a', we should see heavy divergence on RSI. As we troll through several time frames, we see no evidence of divergence which leans us towards the impulse. Here are other internals we monitor: Elliott Wave Coun – It appears we are in red (iv) of circle ‘c’ of blue Y. This suggests more upside potential with the greater risk to reward ratio trade from lower levels as we anticipate the end of wave (iv). Wave measurements – typically wave (iv) retraces about 38.2% times wave (iii). This would place a target near 1.1450. This price level also coincides with the June 18 and May 15 highs. SSI – SSI currently sits at -2.6 which is near Friday morning’s level. Oddly enough, as Friday ended, SSI was approaching -3 so traders are less willing to sell this rally which suggests we may sell off some. OBV – Volume surged and is carving new highs. This is bullish.