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.

AUD/USD: Time to short risk into next week?

From an Elliott wave perspective it seems evident that the AUDUSD is in the terminal stages of a correction to the upside that started 3 days ago. Confirmation of completion would be a breach of the trendline visible on the chart. Whats even more exciting is how lined up this is with a chart of the S&P Futures chart as visible bellow.

Strong resistance lays at 1330 basis the September contract.

Regards,
Ahmed Farghaly

Egyptian stock market fun (ESMF)

Bellow is a more detailed look at the supercycle correction (basis the EGX70) that started in 2008. Please view the other post labelled "Egyptian stock market BUY BUY BUY!!!" Which looks at other Egyptian indexes from a wave perspective as well.

The absolute beauty of the wave principle.

This is what I posted to a few fellow traders and friends and hour before the open.

"This is the less widely followed EGX70, The EGX30 has bottomed in december 2011 and has not confirmed the new lows made this year by the EGX70 as expected. The Egyptian market gentlemen is setting stage for a strong rally despite the global risk off mode. The Egyptian economy is going to experience 'catch up' growth as did many of the economies in the emerging markets.


Regards,
Ahmed Farghaly


P.S. Confirmation would be a close above 440 (aggressive) A close above 530 ( conservative) on this index. Stop Bellow the low that is forming/has formed."

This index is up over 6% today, and this is a broad index, comprised of 70 stocks (rather than the EGX 30 [Main egypt index] which is comprised of only 30 stocks [which didn't confirm the 2012 lows to all the dow theorists our there [Dow theory signal buy signal would be established by a break of the 2012 highs on both the indexes stated above]). Other Egyptian indexes are up 8 and 7 %.

Now socionomically speaking we know that wars/ civil wars (or revolutions) occur towards the end of bear markets of primary degree or larger. Infact according to the teachings of Robert Prechter. the 12 month (annual) ROC on various indexes reached extreme negative values. In fact on the CMA general index it reached -81% in Dec 2011 which was even a greater extreme than the readings seen in 1932 in supercycle wave (IV) on the Dow Jones Industrials, this analagy suggests that the lows formed/forming are atleast of supercycle degree.


Only the wave principle can make you look at the markets in this way and in that great a detail.

Regards,
Ahmed Farghaly