Crude

Crude Oil extended to the lower end of the larger wedge pattern in wave e of E, at 35$. All we need is an actual price reversal to confirm that a support level has been found and we can use the swing low as a reversal level or stop. The daily sentiment index from trade-futures.com reached near 5% bullish on the crude, joining the list of extreme sentiment readings.

Wave E is an ending triangle in 5 waves as well. Here wave a is the smallest so it does not violate the requirement that the third wave should not be the shortest.

CRB

Oil has driven the CRB index to almost the target where C=A. Two weeks ago I posted a chart of the inverted index to show that wave 5 of C was in progress. Oil is the last commodity driving that move. So we should have bottomed. See the two blue lines. The lower one is where C=A exactly but at yesterdays low we reached the closest Fibonacci relationship. Where C=0.9415*A, Now you should ask me why 0.9415? 

Some Fib School for you. The way to come up with ratios easily is to square root or square of an existing know number. So √0.618 = 0.786 ; and √0.786 = 0.886 and √0.886 = 0.9415, similarly √0.5 = 0.707. All of these are good ratio. While 61.8% was the most useful, 78.6% has become popular more recently with repeated occurrences, the others are more rare, though 70.70 is often seen in currencies.

USDCNY

USDCNY - The Chinese Yuan is in the news, and rightly so. Some time back I did post that wave 5 up would develop. But now looking at the weekly chart and the RSI on daily and weekly charts, this appears overdone in the very short term. It is both overbought and at the weekly upper bollinger band resistance. So it is possible that we get a sharp reaction to this rally in the USDCNY. That might cool off the pressure for some time.

BSE Capital Goods

This is a much needed update because Larsen, after its 5 wave decline to the Sept low and rally back just kept falling and it has a big weight in the Capital goods index. The index itself from Sept to date not looks like a 5 wave ending diagonal in the 5th wave. So the 5th wave extended down in 3 more waves but should be mostly done here. It has been a long wait to see a wave B up counter trend bounce develop. So the time is now or never.

Bank nifty

Bank nifty - has fallen in 3 waves which on the hourly charts can fit a 5-3-5 structure or what is called a zig-zag. On a larger scale we see a 3 wave rise from Sept and a 3 wave fall from Oct. So the big picture developing could be a 3-3-5 rising pattern from the September low. This means the next move up is 5 waves up. This could mean a retest of the 18000 mark or going as far as the 18400 mark near the upper end of a rising channel. For this the 16180 low should hold out as a support, and we need to breakout of the falling channel above 17230.

Euro

The Euro has started wave iii up to 1.124, with support near 1.085

S&P

In Sept I started to anticipate a move up in the S&P that would be bigger. Big because it had fallen to the lower bollinger band on the Monthly chart and the reverse parallel channel shown on the chart below. The decline was not a perfect impulse on this index though it was on others like the NYSE Composite. So maybe the S&P would sneak out one more new high.

We did get a rally but not a new high yet. We have an impulse and I wonder if this is a truncated 5th wave that wont go higher or just wave 1 of 5. I think the latter makes sense given the size of the previous waves in 1 and 3. Unless weekly indicators roll over to the sell side, monthly momentum is almost near zero. Once this FED event is done a rally in the S&P would be wave 3 of 5 and the 5th wave would continue to extend to the upper channel longer term near 2300. Watch out for the next momentum buy/sell signal.