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
- 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
- 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!