Elliott Wave Analysis of the Sensex

The current bounce appears to be suggesting a 4th wave of an impulse wave is likely in progress. We need to see 9 swings for an impulse wave with one extended wave, so the better look and preferred idea is to see a new low for both the Sensex and Nifty. A move back below 37000 is needed to support further weakness for wave [d] of the triangle idea.

The alt idea for wave 4 is to see a bit more upside towards 37800, to end a 3 wave bounce from the Aug lows followed by new lows under 36000 to end wave 5 and complete a large impulse wave from the Jun 2019 highs, it’s then I would suggest investors could look to turn bullish as a large rally in 3 waves to correct the current decline would be expected to develop from below 36000.

Sensex

Nifty

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Elliott Wave Analysis of the FDAX (DAX Futures)

We have been closely watching for the end to an upside corrective bounce from the Aug 2019 lows, the same look can be seen on many other European markets such as the Cac 40 and Euro Stoxx 50. Last weeks high could be enough to suggest the upside has ended, although until we see either an impulsive decline below 11800, then we can still allow for a bit more upside.

As long as any further upside remains below 12650 then we are going to stay bearish and target more weakness and continue to look for a move below 10000 and retest the Dec 2018 lows.

Staying bearish below 12650.

Before

After

European traders that are actively trading the FTSE, CAC or DAX, should take note of the look from the mid-August lows. If the bounce remains in 3 waves, then it can set up for a move lower, you can cross-reference most of the major European markets such as the AEX or Euro Stoxx 50, they too are showing the same 3 wave looking rally at the moment. If that remains, and the current upside holds below their respective Jul 2019 highs, then it can set up for a move lower.

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Elliott Wave Analysis of the Dow Jones Industrial Average (DJIA)

The high into yesterday can be counted as the end of a double zigzag correction from the lows made at 25339. However in order to see a move lower and suggest the recent upside has ended, a strong move back below 26099, then 25952 is needed.

If it continues to hold above yesterdays low at 26099, then there is still scope for a move higher towards 26400 – 26600 before it ends wave [y] and completes what appears to be a double zigzag correction from 25339.

Remains bearish below 27398.

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Elliott Wave Analysis of the NYSE Composite Index

The declines on both the INDU (DJIA) and NYSE can be counted as a 5 wave move from their respective Jul 2019 highs for an impulse wave, both markets have extra gyrations which allow us to be able to count an impulse wave.

Whilst the SPX and NDX declines from their Jul 2019 highs are not as clear as some other US markets, the declines on the INDU and NYSE could be offering substantial clues to suggest the next ‘likely’ direction for the SPX and NDX. If the current bounces remain as a corrective pattern on both the NYSE and INDU, then it can support a move lower for the broad markets, regardless if the SPX and NDX push a bit higher.

If you have been actively watching the markets over the past 18 months you may have noticed that some US markets have not participated in the new all-time highs made by the SPX and NDX, that’s a bearish non-confirmation.

So going forward, a little more upside could be seen in the US markets, but as long as they remain below their respective Jul 2019 highs, then we are going to maintain a bearish bias and look for opportunities to sell the SPX and NDX. The ideas on the INDU and NYSE further support the bearish setups we are currently tracking on the SPX and NDX.

We are wrong if any of the markets move above their respective Jul 2019 highs. So in the case of the INDU, SPX, and NDX, that would mean a new all-time high.

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Elliott Wave Analysis of TLT 20 Year Treasury Bond ETF

The move from the Jul 2019 lows appears to be developing as an impulse wave (5 wave rally), a new high still appears to be needed, so I favor we still see minor new highs on both ZB and ZN. Whilst TLT remains above $136.00, I still think one more high can be seen, it’s then it can potentially offer a bearish setup for a move lower.

As TLT and ZB move to a new high, TYX is expected to make new lows to end the 5th wave of an impulse wave from the Jul 2019 high (2.67%). Expect the media to freak out, a rally on TYX (yields move higher) can develop from new lows.

TLT

TYX