Market Update 27-01-2021

Can history repeat itself?

It's not a question of if but when. The latest idea on the Dow Jones indicates that it is right back where it was in February last year right before Wave C crashed around 38%. Exactly one year ago we saw the beginning of a series of waves that will lead straight to the topping of this market however there is still time for all that to take place.

Trading these coming waves in the DOW JONES or NASDAQ will require an understanding of exactly what is going to happen. There are a few variations of what Wave E can look like so it is important to have your wave analysis abilities ready for when this move begins.

Just to refresh your memory, other past E Waves include the 1987 crash and the GFC crash. These moves can be extremely deep and painful but they can also happen quickly so establishing when Wave D ends is of critical importance which is why I have been tracking this move up since March as best I can in order to reach the kind of conclusions that will inevitably lead to a clear indication of a top even if it is a short-term one as we have established.

What will this mean for the EURUSD?

The EURUSD is currently correcting in Wave iv of an ending diagonal Wave E or as we call it a Type-1 Weak Wave E and because Wave ii was short and shallow I expect Wave C of Wave iv to be deep and perhaps lengthier. It could also coincide with what will happen in the DOW JONES and other markets over the next month or two. The EURUSD also gives us clues that the major top is still not in place. We will continue to monitor the progress of this ending pattern until it is complete because that will also present a very unique trading opportunity in the future.

What will this mean for GOLD?

My view on Gold has changed slightly in the way which I believe it will play out it's final waves as we head into a top. It appears that Gold is creating a regular 5-Wave move up since 2016 however it still has the potential to be a Type-2 ending diagonal and that is because Wave iv is still in progress and it appears as though a pretty decent move to the downside is on the horizon which may send price action into the area of Wave i and Wave ii. Even though this pattern is not very common that doesn't mean it won't happen. In terms of corrective patterns, nothing surprises me these days.

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