Wednesday, September 30, 2015

A stronger move is now due

We didn’t see a particularly directional day yesterday… The market is probably quite wary because of Yellen’s speech later tonight and equally that suggests only limited moves can be expected prior to her mumblings. Patience remains the key word. Therefore, when I suggest a stronger move is now due, it really means that the real impact will only come from the burbling and muttering and that suggests a quiet day through Asia and European trading.

I had a quick look at the U.S. Indices just now, preparing my thoughts for today’s report, and found that quite interesting also because it suggests a rather sharp move also – a long Wave c / iii by the look of things. That the expectations in both Forex and Indices appear to coincide is equally encouraging.

Moving back to Forex, while there is a mild risk of mild confusion, it will suggest the outcome for which I have been waiting has more chance of being triggered and applies to the Europeans and Aussie. As suggested above, it should provide a solid move.

As for USDJPY… it’s playing a game, teasing the market – and teasing me - by flirting with the apparent triangle low – but is hanging on by a very tenuous thread. I don’t like the additional low we suffered yesterday and I’d like to call it lower – but I still find the overall structure more aligned to the upside. However, frankly this has been such a painful month of whips and false breaks that I’d much prefer a stronger break.

This should see EURJPY also generate a stronger directional move – but still in the structure I have been looking for…

Good trading
Ian Copsey  

Tuesday, September 29, 2015


29th September:

The (navy) Wave iii stalled between the 298.4%-323.6% projection at 96.55 which triggered the 58.6% retracement at 95.46 in Wave iv. From there we have seen Wave a and probably Wave b also (allow for a small margin below.) Thus we should now expect a 76.4% projection in Wave v to reach the (blue) Wave [iii] at the 176.4% projection at 97.36. 

Once the (blue) Wave [iii] has been seen, the Wave[iv] should be between 38.2% - 50% (probably the 38.2%-41.4%) before gains in Wave [v] that does seem to suggest a high somewhere around the 98.20-40 area... maybe allow for 98.40 - 60.

This should form (green) Wave A and thus require a correction in Wave B.

Good trading
Ian Copsey

A more directional day?

It was a strange day but one that appears to have followed the cautionary outlook I discussed yesterday that allowed the Dollar to weaken a little further. I do still have some reservations and from that perspective I still think we’re going to have to take extra precautions when establishing a position. The ideal will be a trigger through something fundamental or a set up pattern that points to the Dollar resuming its rally.

One clue was in GBPUSD that corrected a tad higher than I had expected which, when considering the required target I identified, does seem to make sense. However, it could still seem marginal breaks of yesterday’s high so the same precaution expressed above does still remain in place. However, once this move develops it does have the potential for a firm move.

That may have begun in AUDUSD that moved sideways and later lower. It’s still not a cut and dried outcome – or it will even if we see a deeper correction – so we’re really talking about the same mild uncertainty as the Europeans.

That USDJPY broke below the key support allowed losses to extend but remains within the large consolidation area. This range has been going for over a month now and there has to be a break before long. Again, I discussed the puzzle I have in terms of the larger upside and downside, something that suggests coming to fruition in early December. However, it does seem to be at odds with the Europeans and Aussie. Still, keep this in mind. We’re still in the range. Remain patient and wait for breaks.

With EURJPY drifting lower and now recovering it tends to point to the downside but there’s still a mild ambiguity. It will probably take more decisive action from EURUSD to really set this on its way…

Patience is still required

Good trading
Ian Copsey  

Monday, September 28, 2015


BIAS: Having seen a deeper recovery and the risk of consolidation elsewhere, I suspect we may see corrective behaviour

Resistance: 1.1212-20 1.1235 1.1253 1.1274
Support: 1.1182-87 1.1160-69 1.1140-45 1.1115

MAIN ANALYSIS: While we saw the deeper correction to the 1.1188-1.1215 area, with the outlook for GBPUSD and USDCHF potentially generating sideways consolidation, I am wary today and prefer to be neutral today - but of course depending on how USDCHF and GBPUSD develop. However, at the most, any deeper move higher could now see the 1.1235-53 area - although stops would have to be placed above 1.1295. While the upside risk continues the 1.1160-69 area should support. Thus, watch for bearish reversal indications at higher levels or on a break below 1.1150. 

COUNTER ANALYSIS: Only above 1.1295 would surprise and retest the 1.1329-50 area. Also note 1.1378-90 that should be observed for bearish reversal indications. 

Directly below 1.1150 would suggest more direct losses.

18th September: The recycling higher has been frustrating and much deeper than expected but appears valid. However, we do need confirmation of the larger decline. That all currency pairs appear to have reached their retracement limits tends to suggest resumption of Dollar gains. A break below 1.1213 would extend losses back down to the 1.1086 low and 1.1017-35...

Only back above 1.1440-60 would risk a deeper correction - but only above 1.1712 would once again frustrate but I'll need to review again.

Good trading
Ian Copsey

A cautious approach

The caution I outlined on Friday was justified. There’s something that doesn’t seem to add up and from one or two pairs I get the feeling that the start to this week could be slow, potentially ending up in consolidation. In particular, GBPUSD (which hit my 1.5136 target within 1 point) is in a position that needs to react in a manner that is related to an earlier correction. That reaction has a mild risk of generating a consolidation. There is also a chance of USDCHF doing the same.

However, not all the pairs have the same clues that would lead to consolidation – but I’m not sure that will make much of a difference except the potential outcomes in GBPUSD and USDCHF have a more defined pattern to follow while EURUSD could just follow a corrective route. What we should be looking for over the course of today is how GBPUSD and USDCHF develop, confirm the suspicion of a consolidation pattern and match those endings with EURUSD – perhaps even AUDUSD. Of course, if the basis for a consolidation fails, then we need fall back to Friday’s outlook.

Even the Antipodean found itself trapped, looking to one side and then the other and deciding to stay put. It may well develop similarly to EURUSD – corrective rather than in a consolidation.

For these 4 currency pairs we should be able to make out what can happen on the breakdown of any of the consolidation patterns.

Meanwhile USDJPY, having completed its own consolidation pattern, moved higher as expected and should do so again today. Whether it will be quite as straightforward as Friday is doubtful but needs to catch up – having been the laggard over the past week or three. This could have the potential to move sideways but basically should be more bullish than not. This should brush off on EURJPY although its development is not quite so easy to judge. Thus, best be cautious of the cross until the current confusions break down.

Have a profitable week
Ian Copsey  

Friday, September 25, 2015


The lower degree development broke yesterday and appears to have highlighted the same problem I have been discussing for the past few days – the wretched mini-corrections that seemed to last for ever. The break levels are often the trigger that allows identification of which mini corrections were the valid wave endings. Even this process takes a while to figure out the Sudoku puzzle – but still can be slightly off. From what I have seen this rain swept morning, the Dollar gains have resumed. Still, it would be beneficial to approach with care.

Having said that, USDJPY may well be a key identifier of Dollar gains having dipped to the 119.20-25 area that I have been pointing to for the past few days. We now need a break above the prior leg of the consolidation to confirm my expectations.

That EURUSD has reversed sharply from its deeper correction – and also USDCHF – is also quite encouraging. Until the recent Dollar highs are broken it would be prudent to take care. That GBPUSD failed to react so directly and remained in a sideways consolidation backs up the argument.

One pair that really has me confused is AUDUSD that equally saw a deeper correction but has now complicated the outlook. It’s not that I have altered my general view, but more making sense of the structure and the ratios. What will be needed from this point is a stronger fit for the ratios across the lower and higher wave degrees.

With the majors generally all in one accord, it suggests that EURJPY may well see less direct moves although I still feel EURUSD will outstrip USDJPY…

Have a great weekend
Ian Copsey  

Thursday, September 24, 2015


A comprehensive guide to forecasting financial markets

within an integrated technical analysis framework

Fractal Forecasting is a comprehensive update of a forecasting methodology centred around a framework of integrated analysis techniques that guides and controls the ratio projections in Harmonic Elliott Wave. The book provides a thorough description of Harmonic Elliott Wave (updated from my 2010 book) along with insights to key support and resistance areas, use of indicators that provide complementary information about price development. 




Harmonic Elliott Wave (HEW) is the most intriguing new breed of Wave Principle I have ever encountered since I initially started using the Wave Principle over 20 years ago.  One of the largest advantages of HEW, in my opinion, is that HEW’s consistent ratio structure significantly reduces the subjectivity of wave counting inherent in the conventional Wave Principle.  Also, HEW projects a single uniform structure under a forward-looking (ex-ante) discipline.  This significantly reduces the need to adjust a wave count.  Even when adjusting is made, the discipline of the ratio structure still must be adhered to.  Furthermore, the eradication of extended waves, failed fifths and leading/lagging diagonals also dispenses with the need to persistently re-label wave counts in hindsight.  With far-reaching implications for traders and investors everywhere, I recommend this book as a must-read for anyone interested in the Wave Principle.

Akira Homma, CFA, CIIA, CMA, CFTe, CMT, FRM
Vice President (Asia-Pacific), International Federation of Technical Analysts (IFTA)

Director, Chief International Officer, Nippon Technical Analysts Association of Japan (NTAA)

Ian Copsey’s third technical analysis book achieves what many others have attempted, yet failed to provide; a logical and methodical approach to wave counting. Copsey combines the best elements of his first two books to provide a complete analytical framework which traders and analysts of all levels would benefit from reading. The combination of congruent techniques, indicators, advantages and their flaws are worthy of a book in itself. Knowing how to objectively invalidate your analysis is another gem in this book, which is a topic which tends to get glossed over in others.
 Presenting such detailed analysis and forecasting abilities is no easy task, yet Copsey manages to do just that with real-world examples and a well-thought out methodology, in a format which is easy to digest.
 Copsey is an “analysts’ analyst” who has always strived for quality and accuracy, and the techniques and methodology he openly shares in this book are a direct reflection of his caliber. Here is the man who changed the way I look at a price chart forever and I am sure he will do the same for you. 

 Matt Simpson 
Senior Market Analyst