Crude Oil forecast as of 11/25/2008

QMF9 –Elliott shows that market has finished the Impulse (IM) down. Next market will consolidate in the range of 63.13 – 95.77 for next several months.

Market move down, continuing making new lows, signals that the IM down is not complete after all.

Impulse is a five wave pattern, where three waves (#1,3,5) are impulsive in nature and two waves (# 2,4) are  corrective in nature.

Gold forecast as of 11/25/2008

Gold – Elliott shows market is in the process of “D3” 3rd wave in the range of 874.86 – 1185.57 between November 6th and December 12th.

Market move below 700 making new lows, shows that the move down has not completed yet.

D3 is a three wave pattern, where all 3 waves are corrective in nature.

British Pound forecast as of 11/25/2008

GBPUSD – Elliott shows that market is in the process of larger Impulse and this IM is doing 4th wave in the range of 1.5194 – 1.6327 between November 27th and December 19th.

Market move below 1.46 makes it more likely that IM 4th wave is complete and 5th wave down has started.

Impulse is a five wave pattern, where three waves (#1,3,5) are impulsive in nature and two waves (# 2,4) are  corrective in nature.

Euro forecast as of 11/25/2008

EURUSD – Elliott shows that market is in the process of “Impulse” (IM) 5th wave in the range of 1.0368 – 1.2294 between November 12th and December 22nd .

Market move above 1.40 makes it more likely that move down is complete and longer term consolidation is in process.

Impulse is a five wave pattern, where three waves (#1,3,5) are impulsive in nature and two waves (# 2,4) are  corrective in nature.

What is Elliott Wave Theory

Ralph Nelson Elliott developed the Elliott Wave Theory in the late 1920s early 30s. He discovered that stock markets, thought to behave in a somewhat chaotic manner, in fact traded in repetitive cycles. He found that the upward and downward swings in financial markets, the mass psychology, always showed up in the same repetitive patterns, which were then divided further into patterns he called “waves”. Elliott argued that because humans are themselves rhythmical, their activities and decisions could be predicted in rhythms, too.

In the financial markets we know that “every action creates an equal and opposite reaction” as a price movement up or down must be followed by a contrary movement. Price action is divided into trends and corrections or sideways movements. Trends show the main direction of prices while corrections move against the trend. Elliott labeled these “impulsive” and “corrective” waves.

R. N. Elliott’s analysis of the mathematical properties of waves and patterns eventually led him to conclude that “The Fibonacci Summation Series is the basis of The Wave Principle.” Numbers from the Fibonacci sequence surface repeatedly in Elliott wave structures.

To read more about Elliot Wave Theory, check out the Wiki page

Crude Oil forecast as of 11/18/2008

QMZ8 –Elliot shows that market is in the process of IM 5th wave in the range of 10.11 – 53.71 between November 11th and December 12th.

Market has touched the likely price and time level, so the move down can be over any time. At the same time, market has plenty room to go. Market must move above 70.00 to confirm that the down move is over for now.

Impulse is a five wave pattern, where three waves (#1,3,5) are impulsive in nature and two waves (# 2,4) are  corrective in nature.

Gold forecast as of 11/18/2008

Gold – Elliot shows market is in the process of “D3” 3rd wave in the range of 874.86 – 1185.57 between November 6th and December 12th.

Market move below 700 making new lows, shows that the move down has not completed yet.

D3 is a three wave pattern, where all 3 waves are corrective in nature.

British Pound forecast as of 11/18/2008

GBPUSD – Elliot shows that market is in the process of larger Impulse and this IM is doing 4th wave in the range of 1.5052 – 1.6194 between November 19th and December 10th.

Market move below 1.46 makes it more likely that IM 4th wave is complete and 5th wave down has started.

Impulse is a five wave pattern, where three waves (#1,3,5) are impulsive in nature and two waves (# 2,4) are  corrective in nature.

Euro forecast as of 11/18/2008

EURUSD – Elliot shows that market is in the process of “Zig-Zag” (ZZ) 3rd wave in the range of 1.0215 – 1.1978 between November 20th and December 30th. . Market move above 1.30 makes it more likely that move up has not been completed.

Zig-Zag is a three wave pattern, where 1st and 3nd wave is Impulse and the 2nd wave is corrective in nature.

What am I talking about in my forecasts?

All my forecasts start with ” Elliott shows that market…”.

Who is this Elliott and why is he talking? In fact this is just my shorthand of saying that these are the results from the program I use for forecasting. I use Elliott Wave International program called Refined Elliott Trader (RET).  The program uses Elliott Wave method of pattern recognition and forecasting of financial markets. RET is a highly complex software package based on sophisticated pattern recognition and probability algorithms. This program is currently available only for professionals.

I have used RET since 2003. I have forecasted stocks and commodity futures. I find futures forecasting more meaningful as I am dealing only with handful of different commodities, rather than hundreds of stocks. The forecasts that I am providing here, free of charge, are predicting market movement for next weeks to months. For my own trading I also use much shorter term forecasting from days to even hours. The beauty of Elliott Wave method is that the same patterns work in large scale and small. Next week I will share little more about the method behind the RET program I use.

For more info on the RET program click here.

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