Market Flash Crash? Risk-off events?

What does Elliott Wave Analysis have to say about this?

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Risk-off period appears to be making an impact on the charts and on the price action movements.

With the “VIX Spike & US Indices – Bears Territory” article, a scenario out of the ordinary was explained and then backed-up with charts and technical analysis.

The mentioned scenario reflects a possibility for a volatility spike and a rememberable sharp decline in global indices.

As mentioned above, this scenario might sound a bit extreme, but what if it happens? How would a trader or investor react to such a sudden dose of fear?

In the lines below, a complete wave count update will be shared, to possibly assist some individuals following this thread.

The wave counts listed below contain a revised version of last month’s “Orbex Q3 – Market Outlook Report 2018” downloadable PDF.

If such spike in the VIX would occur, the bigger picture would reflect the following scenarios as a possible outcome:

  • USD weakening or remaining frozen until further signs of consolidation exit.
  • US Indices entering bears territory and losing huge grounds before a bull market continuation.
  • EUR remaining within the sideways trend or exiting the consolidation.
  • YEN strengthening on market uncertainty sentiment and save haven outcome.
  • Metals remaining vulnerable to such shock but with a possibility to commence a medium-term bullish correction.
  • WTI reflecting further weakness ahead until higher signs of demand.

*This article contains delicate information and should not be treated as an investment advice or as a solicitation the trade. Risk must be considered.

Elliott Wave Counts & Updates

 The bullet points below are written and shared under the presumption that the current wave counts and overall directions are valid or correct.

VIX – 2H Chart

  • Volatility spike expected and along with it, a period of fear and uncertainty for global equities.

DXY – Daily Chart

DXY forex

  • Bearish outlook with a Minor C (red) remaining in focus, for the current corrective structure to finalize in Intermediate (B) (turquoise).

XAU/USD – Daily Chart

  • Vulnerability expected as a reaction, but with a larger degree bullish correction in focus.

XAG/USD – Daily Chart

  • Slightly more downside risk as a possibility, but with a larger degree bullish swing in play.

WTI – Daily Chart

  • Impulsive bearish swing expected to continue further on the down-side, but with higher grounds remaining as an option.

EUR/USD – Daily Chart

  • Triangle formation could reflect further downside risk, with a possibility to commence a bullish swing which would mirror a completion of the Intermediate (B) (red) structure.

USD/JPY – Daily Chart

  • Impulsive bearish leg expected to continue as a result of the fear effect and investors moving attention towards more safe-haven assets.

DAX30 – Daily Chart

DAX30 forex

  • Impulsive bearish leg expected to commence along with the VIX spike, until further signs of larger degrees patterns completion.

US30 – 4H Chart

  • Impulsive bearish swing expected to start in Intermediate (C) (red), as a result of the Complex Triangle completion in Intermediate (B) (red).

SPX500 – 4H Chart

  • Impulsive bearish swing expected to start in Intermediate (C) (red), as a result of the Complex Flat Structure completion in Intermediate (B) (red).

NAS100 – 4H Chart

  • Impulsive bearish swing expected to start in Intermediate (Y) (purple), as a result of the Complex Expanded Flat Structure ending in Intermediate (X) (purple).

Reminder:
*This article contains delicate information and should not be treated as an investment advice or as a solicitation the trade. Risk must be considered.

Many pips ahead!

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Richard is passionate about technical analysis with years of charting experience under his belt. When it comes to his insights and how he analyses the markets, he uses leading analysis tools. In particular, Elliott Wave Analysis is his forte, and he dedicates the majority of his time using this analytical method. Richard uses Elliott Waves in combination with Structures, Patterns, Divergences, and then spices things up with Vibration Levels, Fibonacci measurements, Channeling, Break-outs or Flag formations.