In today’s blog, we will look at Elliott wave technical analysis for the CAD/JPY currency pair, S&P 500 index and Amazon stock. The development of these markets has revealed another possible scenario for their development.
The CAD/JPY currency pair after the completion of wave (iv) which nicely tested the broken up trendline from which it rebounded and continued into wave (v). If we take a closer look at the potential wave (v), we can see that the price could now be in the fourth wave iv. In this wave, the price is testing the level of 107.880 for the second time, which defines the end of both the wave and wave (v). From this level we could rebound into wave v and complete the entire impulse wave. Wave v waves (v) could head towards a rising trend level defined by the ends of waves (iii) and iii. From there, the price could then head for a wave (i) to (v) correction, in which it could head towards the 104.680 level, which coincides with the 38.2% Fibonacci retracement for wave (i) to (v).
Development of the currency pair CAD/JPY (daily chart – D1):
The price of the S&P 500 index continued to complete the corrective wave (iv) where in the wave (c) the price headed towards the $4117.0 level, which exactly coincides with the 61.8% Fibonacci retracement for the wave (iii). From this level, the price bounced sharply and looks like it is heading straight for the $4389.0 level, which defines the end of wave iv. This level will be important for further developments on this index, because after crossing it we can say that the correction (a) to (c) in wave (iv) is over and we continue to complete wave (v) of wave 3. It should to aim at least towards the end of wave (iii) at $4607.0, but it seems likely that it will head to test the market high at $4800.0.
Price development of the S&P 500 index (daily chart – D1):
After breaking down the downtrend line, Amazon stock price continued to form wave 3, reaching the price of $145.50, which is approximately the 161.8% Fibonacci extension of wave 1. From this level, the price went into wave 4 correction, forming something like correction (a), (b) and (c) which came to a price of $119.50. From this level, the price of the S&P 500 index bounced back sharply, easily crossing the $133.50 level, making it clear that the correction is over. The price is now likely to form the first wave of wave 5, and we can therefore expect a continuation of the rise after the correction in the second wave.
Amazon share price development (daily chart – D1):
An important element of trading is the point when the market is trending in your direction but has not yet reached the target area and you are starting to get signals that the movement in your direction is probably over. At this moment, it is important not to stubbornly insist on your goal, but instead to adapt to the market and take what it offers you.
I wish you successful trading!
Jiří Hruška
