EUR/USD Elliott wave perspective

Its seems evident that the EUR/USD is in a contracting triangle wave iv down as of the daily chart posted above. All of which are part of a wave C of an expanded flat correction higher as seems evident on the chart above. the iiird wave travelled 2.618x of wave 1 hence was the extended wave which means we can expect the fifth wave to resemble wave i which means it most likely will be a swift short thrust out of this triangle wave iv after completion (currenctly in wave d of the wave iv triangle)

Looking at the triangle in greater detail it seems evident that wave B was the complex leg (Double zigzag)of the triangle which signals that the ONE complex leg to be expected in the triangle is complete and the rest of its legs will most likely be single and simple zigzags.

looking at wave d of the triangle is greater detail my preferred count is the i-ii-iii count rather than calling wave d complete. I hold this preffered count for several reasons.
1) The move is not contained between 2 parallel lines which is typical of a i-ii-iii count
2) The wave iii travelled 1.618x wave i which is a typical target for wave iii
3) The wave ii retraced almost all of wave i which is not typical of a wave b which mostly is limited to 79% of wave a

Regards,
Ahmed Farghaly

USD/CAD analysis

 From an Elliott wave perspective it seems like we a tracing out a flat correction from the 2011 highs. The key pattern that screams out "correction" is the wave B triangle that occurred in the wave (A) down of this flat. My alternate count is that we traced out a double zigzag correction which would mean that the correction is complete. What I don't like about that count is that the wave C of the second zigzag down is quite large relative to the A wave. The count presented above is the one that satisfies the rules and guidelines of the wave principle. The leading diagonal wave 1 signaled an extended 3rd wave to come in wave C which is what occurred (wave 3 being almost 2.618 of wave 1). Ideally this is where one would expect that wave 4 bounce to stop since we are in the area of the previous 4th wave, we are also at the upper boundry line of the corrective price channel, we are also at the 38.2% retracement of the wave 3 decline and the AO indicator made it above the zero line which one would expect in a 4th wave bounce. I wouldn't suggest shorting this currency pair since the 5th wave I'm expecting is likely to be a small decline considering the extended 3rd wave. Now lets add in some standard technical analysis

Looking at this weekly chart it seems evident that there very well might be an inverse head and shoulders pattern in this currency pair. If you look closely you'll notice that it formed 2 heads making it of the complex type. If you are a conservative long term trader you can wait for a breach of the neckline of this pattern before going long for a sizable move to the upside. It could take months to get there but it increases the probability of a successful trade.

Regards,
Ahmed Farghaly

EURGBP: A change in outlook

The EURGBP is in primary wave 3 down of Cycle wave 1/A. It seems evident from the running flat correction  (that ended in a contracting ending diagonal wave C for primary wave 2) that the upcoming decline would most likely be the extended wave. Hence, If I were only trading currencies. This is what my trades would look like based on broad based analysis for the rest of the year.

Alternate count cycle wave V(red) is not complete and we are currently in a multiple zigzag wave 4 (Circle), hence we will avoid shorting the EURGBP directly, instead we will position ourselves in trades that are likely to work out regardless what occurs in the EURGBP but will profit handsomely if our preferred count works out


Short EUR/USD
Short NZD/USD
Short CAD/JPY
Short AUD/JPY
Short NZD/JPY
Long USD/CAD
Long USD/CHF
Long USD/NOK
Long GBP/AUD
Long GBP/CAD
Long GBP/NZD
Long Gold/CAD



Regards,
Ahmed Farghaly

EURUSD: A supercycle perspective

The EURUSD looks like a mirror image of the USD/NOK if you look back into the early 70's. It seems evident that in 2008 this market put in its Cycle Wave C high which lasted aprox 8 years, Not only is that a fibonacci number it also is equal to the time of the initial advance into the early 90's (Cycle wave A). Notice that we made it right towards the wave IV of smaller degree which put in its high in the early 70's. The outlook is terribly bearish for this pair. If you have been resisting shorting due to what some would argue to be a bearish extreme in sentiment, perhaps you should reconsider at the breach of the neckline of the complex head and shoulders pattern that would end about 7 years of basically sideways movement!

Regards,

Ahmed Farghaly

USDNOK Elliott wave

Another currency pair suggesting a strong US dollar in the upcoming years is the USDNOK notice the textbook 5-3-5 zigzag decline from the 1985 peak in the US dollar, Another point worth noting is that the annual rate of change indicator made an all time high in 2008. This condition is called a Megaoverbought reading which is typically the kick off of a young and vibrant bull market. This market adds to the evidence for the US dollar bull presented since second quarter 2011.

Regards,
Ahmed Farghaly

3rd quarter 2012 portfolio final

T-bills = 33%

Currencies, commodities & stock futures:
Long USDCAD, long Gold/EUR & long Eur/CAD net position = long Gold/CAD,, short S&P & Nasdaq futures

Equities:
Egyptian equities.
Issues based on valuation:
ETEL: Telecom Egypt
POUL: Cairo poultry
EGTS: Egyptian for tourism and resorts.
MIPH: Mina pharm

Regards,
Ahmed Farghaly

It's is still early into the bull market despite the 40% rally this year

This is the DJ Egypt titans 20 index this is one of the indexes(the Egx 30 is the other) that ended with what I'm proposing to be a C wave failure which was about 61.8%x wave A. The EGX70, CMA general index & EGX100 made new lows in early 2012 & late 2011 relative to their 09 lows which I'm labeling the end of a super cycle correction. Notice the decline in volume towards the end of the super cycle decline, which is typical of what one would expect at the end of a second wave. Also notice that the volume during this year's bull run exceeded that of the previous bull market going into the peak in 2008. Another point to note is the potential inverse head and shoulders pattern that has been forming going into 2012,with a target above the 2010 high if the neckline is to be breached. If this target is obtained that would complete an even larger double bottom pattern ( 2009 low & 2011 low) which would project a target on logarithmic scale above the 2008 peak on this index, of course if this proves to be a super cycle degree low (which would be confirmed by an ROC 12 month period reading of above 100% or 1.0 depending on how your platform indicator) this bull market would exceed every bodies expectations. Another point to note is that intermediate wave two's extreme of social mode was evident by the cases of kills apparently by 'extremists' of 3 people for being liberal and enjoying their rights, is this highlighting an intermediate degree wave (2) correction extreme?

Regards
Ahmed Farghaly

PS a breach of the June 2012 lows would invalidate a wave (2) low. A decline bellow the Dec 2011 low would invalidate the wave (1) labeling.