Mid term Elliott waves for gold, EURUSD, AUDUSD, and AUDJPY

I was traveling for a couple of weeks, and I have not updated my quarterly result at the end of March. In Q1, I only traded once and it was negative 2.32%.

I’m currently long gold as I’ve been  tweeting. I’m still recovering from the jet lag, and I just show the weekly charts here:

AUDJPY sell zone

Update: The Elliott wave count and the trading idea in this article have been rejected.

USDJPY moved 300pips in one hour this afternoon after USA told its military force supporting Japan to stay outside the 50 miles radius of the nuclear plants in Fukushima. AUDJPY was also badly sold off. The move was so fast and violent and once it started, it was too late to enter the market. So, I stayed away of course. It’s funny I just wrote about the idea of selling AUDJPY. But I did not take position for a good reason.

Now it seems to be in a temporary rebound phase in hourly chart, I started to count the wave. In the daily chart assuming the AUDJPY is in an impulse wave towards c targeting 68.36, I believe Wave 3 has not quite concluded yet:

Zooming up to 6 hours chart, it’s a bit tricky to count, but I think 74.437 was the peak of the panic of the day and we are now seeing a clear rebound that I believe to be wave .4. I think I can learn something from May 6, 2010 (flash crash). Though the usual  sell zone is 38.2% rebound (78.00~), I won’t be surprised if it overshoots just it did after the first let of the flash crash (70+% rebound, click this link and check I and II of the 3rd chart). So, I would wait for a while to see how strong the rebound will be, and sell somewhere between 78.00~80.00 and set the stop loss at 82.00, a little above the low of 1 . The ideal target is 72.00, but I’d be ready to take partial profit in the rapidly changing & abnormal market condition.

Sell AUDJPY at rally and buy AUDUSD at dip?

The earthquake and tsunami that hit Japan shocked the world, and the global equity markets plunged. It was the one more and even more horrifying event to the world that was already busy following the news from the Middle East. Surely it made the price of everything from stocks, bonds, gold to oil volatile.

Surely at first, I suspected the massive decline of Japanese stock market becoming the catalyst of the greatest risk aversion after 2 years of what Elliot Wave follower believe to be the massive bear market rally…or should I call it dollar’s sell off against everything else.

For the risk aversion part, it is persuasive because AUDJPY’s one day decline is something we never saw for almost a year after C of b that looks like an ending diagonal (i.e. reversal sign):

But when I look at AUDUSD, I’d rather draw different conclusion and Aussie may have some more way up towards summer. Here is the weekly chart:

As I zoom up to 360min chart, I see very complex wave structures that I barely managed to label Elliott wave that makes most sense so far.

What this wave is telling me is that we are in the woods of very complex IV wave that may dip to 0.9533; this is an support that we call IV wave floor as I showed with gray line.

So, as much as I want to short AUDJPY, I would like also to buy AUDUSD if the IV wave floor holds well. A possible strategy may be to first short AUDJPY at the rebounding rally, then buy AUDUSD at the dip?

Real time trading tweets

The plan in the article may get rejected any time, so please check out my tweets on Twitter.

Current risk exposure:

Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

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