Mar 062012

In my Elliott Waves update on the Australian Dollar posted in MarketWatch on 6 Febuary 2012, I had discussed my medium-term outlook for the AUD/USD. You might want to read that first.

The decline from the high of 1.0856 seen on 29 Feb is looking impulsive,but there is just a small chance that we could find some support around 1.0450/70 levels. Between 1.0450 and 1.0380 I would recommend that you don’t get involved. If you see a direct recovery towards 1.0620 you might consider a small short for a dip down to the 1.0480 levels. Only after we break down below 1.0380, the key level mentioned in my post on Wall Street Journals’ Market Watch should we start looking for where to sell aggressively for the medium term target below 0.8800.

If you would like to learn how to use Elliott Wave analysis, you should check out my book “Five Waves to Financial Freedom”

Jun 012010

The Elliott Wave analysis of AUD/USD published on 24th May in wavetimes suggested that any recovery to 0.8550 levels will find fresh sellers. The downside objective was below 0.7800. To our delight, the currency ran into a brick wall on 28 May exactly at 0.8551 and is already down by over 2%. If you managed to sell near the said levels, keep your stops now at 0.8560 and ride the position till we approach the target on the downside. Nothing works like elliot wave analysis when it works! And as you can see here in wavetimes, it works most of the time. WHen it does not work, your stops are so close that it really doesn’t hurt! Enjoy. Ramki

May 242010

There are two interesting developments in a chart that makes me sit up and take notice. One is an extending fifth wave, The other is a failed fifth wave. The Australian Dollar or AUD/USD had posted a failed fifth wave last week and I had warned you to look for a sell off. Sure enough the markets delivered, and boy, what a move it was! Don’t despair if you missed that initial move. Any recovery towards 0.8550/70 will find new selling. The downside objective in the coming few weeks is around 0.7750/70. But as always you have to bear in mind two important rules in order to make money. First, be patient until you find that sweet spot where your risk can be minimal (or at least affordable) After all, we are dealing with financial markets that are traded by thousands of traders across the world, and fund managers with huge financial muscle. Those guys can take large losses with just a shrug of the shoulders. But most of us cannot. So timing is of the essence. Second, your position size matters. No matter how confident you get, never take a position that is bigger than the size your capital can handle. Good luck.

Oct 282009


I am going to be away for a month on holidays. So will catch up with you when I return. In the meantime, here are two quick updates that you might find interesting. One is on GBP/USD and the other on AUD/USD.

As for India’s Sensex, I think we have seen a near term top. Use recoveries to 16,600 plus levels to get out of any stale longs that you still have, as we will likely decline to under 15,000 in the coming days. Early support lies at 15760 area.

GBP 28 Oct 2009AUD 28 Oct 2009

Apr 302009

This page gives you an example how one could use Elliott Wave Analysis to trade AUD/USD or the Australian Dollar. It was back in April 2001 that the Australian Dollar commenced its bull market run from a low of 0.4773. It took just over seven years for it to peak (in July 2008) at 0.9849. Clearly, the move was not a straight-line move. But even by looking at the weekly chart shown below, one can spot Elliott at work.

When the fifth wave of a progression is an extended wave, you should be prepared for a sharp reversal

There whole up-move is comprised of five waves, including two corrective waves. Interestingly, once the five waves were completed, we got a very sharp sell off, all the way down to 0.6004. Believe it or not, the downmove took less than four months to wipe out gains that took over five years. If you had a knowledge of the Wave Principle, you could have easily anticipated the depth of this correction, and taken some profitable trading decisions. Here is your chart of AUD/USD (Australian Dollar) with the Elliott Wave labels.

Elliott Wave Analysis of AUD/USD

Elliott Wave Analysis of AUD/USD

Oct 212008

Traders often lose money when trying to squeeze additional profits during a complex correction. Wave theory is quite clear. Corrections tend to alternate between simple and complex patterns. Also, the market tends to correct a prior impulse wave both in time and price. Put another way, this means if we have come down too quickly, then we have to allow for some corrections to take extra time before continuing the trend. With these guidelines in mind, you should look at the accompanying two charts of the Australian Dollar.