Trade War Report

TRADING
“The Trade War”
Published in early August 2018

https://www.orbex.com/en/?ref_id=c6455
by Mohammed Al Mariri & Richard Tataru
Who is Orbex?
Orbex is a global award-winning online forex broker, fully licensed and regu- Mohammed Al Mariri is a certified technical
lated by CySEC, specializing in the provision of access to the world’s biggest analyst (CMT) and a member of the American
and most liquid financial markets. Orbex has a rich experience of ensuring Market Technician Association (MTA). With
superior customer service. Traders enjoy 24/5 multilingual support, excep- over 15 years of experience, Mohammed has
tional trading conditions, and a wealth of educational material. headlined numerous investing conferences
Since its founding in 2010, Orbex has focused on the quality of its services and exhibitions while also providing advanced
and technological advancement. As a part of our customer support pro- bespoke training courses worldwide. His inno-
gram, we provide enhanced security of clients’ funds and high professional- vative approach to fundamental analysis in
ism in confidential finance matters. Orbex understands the value of rapid combination with sophisticated risk manage-
decisions in fast-paced financial markets; therefore, we ensure sharp execu- ment strategies make Mr. Mariri an exception-
tion, sound market analysis, and extensive trading education. al asset to aspiring traders.
What is the Trade War report about?

In the trade war report, Mohammed will be analyzing the matter from a
fundamental anlysis point of view, while Richard will be using his technical
Richard Tataru is passionate about technical
analysis skills to analyze - Forex, Metals, Energy and Indices. He will be
analysis with years of charting experience
examining historical data using Elliott Wave technical analysis in order to
under his belt. When it comes to his insights
forecast what the future may hold for the financial instruments.
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 to using and perfect-
ing this analytical method. Richard uses Elliott
About the Authors Waves in combination with Structures, Pat-
terns, Divergences, and then spices things up
Abd Al-Hameed Maher with Vibration Levels, Fibonacci measure-
a Financial Markets Analyst with over 10 years ments, Channeling, Break-outs or Flag forma-
of experience in the financial markets. Special- tions.
ist in writing fundamental and technical
reports at many economic websites, “deep
experience in technical analysis especially can-
dlestick Patterns”, “Fibonacci levels”, “price pat-
terns” and “trend line support and resistance”.
Joined the ORBEX team in 2011 as a Senior
Technical Analyst at the Research and Train-
ing Department.
https://www.orbex.com/en/?ref_id=c6455 1
Sumary
The Markets have been trading within complex structures within the first
quarter of 2018. As soon as the 2nd quarter started, new trends commenced
and impressed traders with sustained impulses.
During the 1st and 2nd quarter of 2018, EUR and Metals lost considerable
ground due to the USD’s strength, with EUR/USD reaching the 1.1510 support
after approx. 1000 pips decrease in value. With the start of the 3rd quarter, it
now seems to be developing a sideways consolidation on the support, and
the next big moves could be decisive for EUR’s future.
WTI (Crude Oil) continued the sustained rise in prices per barrel with the 1st
quarter of 2018. Moving into February, WTI felt the volatility spike as well,
showing a sharp decline, from $66.50 per barrel towards $58.20 per barrel.
Global Indices have taken a big hit in the 1st quarter, with the VIX (Volatility
Index) spiking in early February. Because of the volatility spike and the
return of the sellers, US Indices gave in and the bull market was interrupted
with a shocking drop. Dow Jones and SNP500 lost approx. 3500 and 350
points respectively, in just one trading week.
As we will explore later in the report, the current structures seem to be

aligned for a possible shift in direction and/or continuation of the larger
degree patterns.
We provide an in-depth technical analysis, with the views to be treated as

medium to long-term possible scenarios or forecasts.
CONTENT & COURSE STRUCTURE
Fundamental Analysis Precious Metals
What is a trade war? 4 Gold/Silver Ration – XAU/XAG 26
What happened in previous trade wars? 4 XAU/USD 28
The disadvantages of a trade war 4 XAG/USD 31
Who started this trade war? 4 Energy
Parties of the trade war 6 Crude Oil (WTI) 34
Who’s the winner and the trade war’s effect on markets so far? 7 Indices
Are tariffs the only weapon in trade wars? 11 US Bull Market – Wave Count 37
What is the long-term outcome? 12 S&P 500 41
Technical Overview DOW JONES 44
NASDAQ 47
Executive Summary 14
DAX30 50
VIX – CBOE Volatility Index 15
Forex
Dollar Index (DXY) 19
EUR/USD 21
USD/JPY 23
Definition In addition to tariffs, protectionist policies can be implemented by placing a
cap on import quotas, setting clear product standards, or implementing
A tariff is a tax imposed on imported goods and services. Trade wars are also government subsidies for U.S. processes to deter outsourcing. As noted
a result of misunderstandings of the widespread benefits of free trade. above a trade war can result from a protectionist penchant. Protectionism
represents government actions and policies that restrict international trade,
1) What is a trade war? generally with the intent of protecting local businesses and jobs from
foreign competition.
Trade wars can commence if one country perceives another country's
trading practices to be unfair or when domestic trade unions pressure 4) Who started this trade war?
politicians to make imported goods less attractive to consumers.
A Trade War is a side effect of protectionism that occurs when one country During a campaign speech in June 2016, President Trump vowed to cancel
(Country A) raises tariffs on another country’s (Country B) imports in international trade deals and go on an offensive against Chinese economic
retaliation for Country B raising tariffs on Country A's imports. practices, describing his promise as a reaction against "a leadership class
that worships globalism”.
2) What happened in previous trade wars? In 2017 and 2018, President Donald Trump has embarked on a protectionist
campaign, attempting to bring manufacturing jobs back to the United
One of the most notorious examples is the Smoot-Hawley Act passed by States from where they have historically been outsourced, such as China
Congress in 1930 that is often blamed for deepening the Great Depression. and India.
The law hiked U.S. tariffs by an average of 20 percent, initially to protect
American farmers before expanding as other industries lobbied for
protection. As demand collapsed, countries scrambled to maintain their
gold reserves by devaluing their currencies or imposing even more trade
barriers. As a result, global trade fell off the cliff.
When President George W. Bush in 2002 raised steel tariffs to protect

against a surge in imports, they created a slight $30.4 million drag on U.S.
gross domestic product, according to the U.S. International Trade
Commission. Workers’ wages also fell economy-wide and investors saw
lower returns on capital. The U.S. lost roughly 200,000 jobs, about 13,000 of
which were in raw steel-making, by one estimate.
3) The disadvantages of trade war?
The trade war that begins in one sector can grow to affect other sectors.
Likewise, a trade war that begins between two countries can affect other
countries not initially involved in the trade war. Protectionism can lead to
price increases with manufacturing in particular often becoming
domestically more expensive. Proponents of protectionism argue that
well-crafted policies provide competitive advantages and create more jobs.
TRUMP FIRED THE FIRST SHOT IN THE TRADE WAR
In 2018, President Donald Trump has threatened significant tariffs on Chi- China retaliated almost immediately with its own tariffs on $50 billion of U.S.
nese goods, as much as $500 billion on products including steel and soy. He goods, and claimed the United States had "launched a trade war." Import
has also threatened to pull the U.S. out of the World Trade Organization. The and export markets in a number of nations feared the tariffs would disrupt
WTO is the only global impartial organization that regulates trade among supply chains which could "ripple around the globe."
the 164 countries that belong to it. In a March 2nd Twitter post, Trump declared trade wars “good, and easy to
win,” though later he denied the U.S. and China are in one. He repeatedly
5) Parties of the trade war? pledges to reduce the U.S. trade deficit, which shows the country imports
hundreds of billions of dollars more than it exports. By the end of 2017, the
U.S. President Donald Trump imposed tariffs on $34 billion worth of Chinese U.S. trade deficit had risen to $568 billion from $505 billion in 2016. His admin-
goods as part of his new tariffs policy on July 6, 2018, which consequently led istration has asked China specifically to reduce its trade surplus with the U.S.
China to respond with similarly sized tariffs on U.S. products. The Trump by $200 billion, more than half the 2017 total, which was a record-high $375
administration said the tariffs were necessary to protect national security billion.
and the intellectual property of U.S. businesses, and to help reduce the U.S.
trade deficit with China. Trump had already, in August 2017, opened a formal
investigation into attacks on American and its allies' intellectual property,
the theft of which had been costing America alone an estimated $600
billion a year.
The US trade gap with other trading partners (US

trade deficit in 2017)
U.S tariffs against China
The U.S. is relying partly on Section 301 of the Trade Act of 1974 to prevent
what it claims are unfair trade practices and theft of intellectual property. It
gives the president the authority to unilaterally impose fines or other penal-
ties on a trading partner if it is deemed to be unfairly harming US business
interests. In April 2018, Trump had imposed tariffs on steel and aluminum im-
ports from China, Canada, and countries part of the European Union.
President Donald Trump

Tweets calling for trade war!!
U.S tariffs against EU
After president Trump imposed tariffs against a number of allies, including

Mexico, Canada and several countries in the EU, G7 finance leaders strongly
condemned the tariffs and planned to retaliate with tariffs of their own.
The biggest targets of the trade war are China and European Union,
as Trump mentions in his tweets.
6) Who's the winner and the trade war’s effect on markets so far?
By early July 2018, there were negative and positive results already showing
up in the economy as a result of the tariffs, with a number of industries show-
ing employment growth while others were planning on layoffs.
Trade war fears had led to a bear market in China whereby late June the total
value of the country's stock markets was 20% lower than it had been at the
beginning of 2018 when it reached record levels. The Japanese Nikkei also
suffered a "three-week pullback". On July 6, when the tariffs came into effect,
markets rebounded and rallied due to positive jobs report in the U.S.
Trump is still optimistic as he says in last tweet
US
However, US stocks rose more than 2% as investors assessed the risk of trade
skirmishes against the strong performance of the US economy. Chinese
stocks have been hit hard in recent weeks and have fallen more than 16
percent this year as fears over the trade war have also mixed concerns
about China's ability to control its debt and maintain growth.
US indices are the biggest winner since the threats The biggest tax overhaul since the Reagan era delivered another boost to
consumer spending and business investment, and the volatile categories of
of trade war began inventories and trade
probably juiced the number helped by a likely temporary jump in soybean
While there’s much to like about the economy right now, analysts reckon
exports ahead of retaliatory tariffs.
the confluence of positive forces will give way to solid, albeit less spectacular,
numbers in the second half and beyond as the tax stimulus begins to fade,
The U.S. economy may have hit 4 percent growth in the second quarter, the
the Federal Reserve raises borrowing costs further and the expansion ages.
fastest since 2014 and a feat President Donald Trump will tout as a sign of his
The burgeoning risk from tariff wars makes it even more unlikely that the
success.
torrid second-quarter performance is a new normal.
U.S economy may be heating up in the second quar-
ter after the trade war starts
While hedge funds are still bulls dominating the US dollar with long net posi-
tions at their highest level in a year and a half, but their confidence was not
matched by strength in the same currency until the moment.
Speculators raising their bullish bets on the China
greenback
The effects of the trade war are pushing China's economy to slow down in
But could tariffs backfire on the U.S.? They could. Take steel industry for
the second quarter. China's economic growth fell in the second quarter
instance. Many more people are employed in different industries, such as
amid intense tariff battles with the United States and efforts to ease debt
auto manufacturing, that uses and buys steel to deliver end-products, than
and financial risks. GDP data that usually comes as the same market fore-
in steel industry itself. Some consumers may also have to pay higher prices.
cast fell by 6.7% and came out less than the first quarter at 6.8%, registering
Trade tensions could boost inflation more than desired by the Federal Re-
the weakest pace since the third quarter of 2016.
serve policy-makers, who might feel the need to raise rates more aggressive-
ly than planned. On the other hand, if the tariffs result in job losses and the
economy slows, the Fed might want to ease the pace of rate hikes.
7) Are tariffs the only weapon in trade wars?
No, there are many others. Clamping down on Chinese investments in the
U.S. is one example. Intentionally weakening one’s currency is another. One
big worry for the U.S. is that China, the U.S.’s biggest creditor, will scale back
purchases of Treasuries, an option that China’s ambassador to the U.S.
doesn’t rule out. Over the years, countries have used other means to keep
foreign goods out and protect homegrown companies, a practice known as
mercantilism. Some practices are blatant, such as quotas and subsidies for
domestic industries (which Trump accuses China of using); others are less
public, such as unusual product specifications, lengthy inspections of goods
at entry ports and intricate licensing requirements.
What’s the solution to this situation?
The arbiter of international trade disputes was founded in 1995 out of a set of
agreements struck by countries trying to reduce trade barriers. If a
government’s complaint about another nation’s trade barriers is seen as
grounded, the WTO recommends acceptable retaliation. But the U.S. and
China both propose justifying tariffs under domestic law, rather than
GDP and industrial production slowed as retail sales following established WTO procedures, which could undermine the WTO’s
ability to mediate.
rose
With the new high tariffs on trade starting July 2018 and the threat of more
than hundreds of billions of dollars in commodity trade on the horizon,
China will face a strong political and economic challenge. However, credit
data indicate that officials are continuing their efforts to curb off-balance
the lending sheet, which could limit growth later in the year.
A Global Trade War and Equity Slump Would
Be Costly
China tries to challenging the U.S in Also, in the long run, there will still be a hit on the global GDP, irrespective of
the monetary policy choices. Less trade means less competition, less focus
World Trade Organization (WTO)
on areas of comparative advantage, and more barriers to exchange new
technologies and ideas this will affect the world economy’s supply potential.
The U.S., China, Canada, and EU have all started reaching out to the Gene-
va-based organization. China, Canada, and the EU have filed WTO dispute
complaints challenging the legality of Trump’s metal tariffs. Beijing has also
launched a complaint about Trump’s pledge to impose tariffs on $50 billion
worth of Chinese goods. Separately, the U.S. and EU have lodged WTO dis-
putes challenging China’s technology transfer policies. Retaliatory actions
that quickly unfold can test the WTO’s somewhat ponderous deliberative
process, as a resolution of a dispute can take years.
8) What is the long-term outcome?
The ambition of the Trump administration is not just to reduce the U.S. trade
deficit with China, but also to alter the development trajectories, making it
harder for China to achieve the technological advances necessary to outstrip
the U.S.
TECHNICAL OVERVIEW
Elliott Wave Technical Analysis

Forex – Metals – Energy – Indices
Executive Summary: The Market is showing considerable signs of a shift in directions, as the VIX
could be preparing another spike in volatility. If such a scenario would occur,
then this could be translated into a continuation of the uncertainty which
The Markets have been trading within complex structures within the first
covered the markets for the first half of this year. It could also lead towards
quarter of 2018. As soon as the 2nd quarter started, new trends commenced
extended risk-off periods and aggressive swings, for multiple markets.
and impressed traders with sustained impulses.
Wave Counts posted below are labeled under the presumption that the
During the 1st and 2nd quarter of 2018, EUR and Metals lost considerable
current and overall position of the Market reflects a Complex Corrective
ground due to the USD’s strength, with EUR/USD reaching the 1.1510 support
Cycle.
after approx. 1000 pips decrease in value. With the start of the 3rd quarter, it
now seems to be developing a sideways consolidation on the support, and
From a technical standpoint, and as per the explanations or illustrations
the next big moves could be decisive for EUR’s future.
below, the current structures seem to be aligned for a possible shift in
directions and/or continuation of the larger degree Patterns.
XAU/USD (Gold) unfolded with a complex corrective structure during the 1st
quarter and by entering the 2nd quarter, the precious metal broke through
In the lines to come, an in-depth technical analysis is shared, with the views
the 1285.00 daily support or decisive levels, then also breaching further on
to be treated as medium and/or long-term possible scenarios or forecasts.
the down-side. Moving into the 3rd quarter, Gold perforated through the
weekly support trend-line, under which it seems to be consolidating before
The technical analysis has been realized under the presumption that
a possible next move.
another spike in volatility could occur soon, and that a period of uncertainty
(risk-off) would be a possibility. As an effect of such scenario possibly
WTI (Crude Oil) continued the sustained rise in prices per barrel with the 1st
occurring, markets would be affected, and the present analysis points
quarter of 2018. Moving into February, WTI felt the volatility spike as well,
towards possible scenarios for multiple sectors.
showing a sharp decline, from $66.50 per barrel towards $58.20 per barrel.
The analysis and insights shared with the present content are not to be
Continuing with the 2nd quarter and entering the 3rd quarter, WTI reached
treated as an investment advice or as a solicitation to trade. Real risk behind
as high as $75.25 per barrel, but it seems to be having difficulties sustaining
trading in the financial markets needs to be carefully considered.
a bullish stance, as the aggressive sell-offs experienced along the way
upwards could indicate further weakness before higher grounds.
Analyzed markets
Global Indices have taken a big hit in the 1st quarter, with the VIX (Volatility
Index) spiking in early February. Because of the volatility spike and the Forex:
Energy:
return of the sellers, US Indices gave in and the bull market was interrupted Dollar Index (DXY)
Crude Oil (WTI)
with a shocking drop. Dow Jones and SNP500 lost approx. 3500 and 350 EUR/USD
points respectively, in just one trading week. USD/JPY
Indices:
Since the 1st VIX spike, the Market has been mostly consolidating, especially VIX (CBOE Volatility Index)
when it comes to US Indices. Since February 2018 until the first part of the Precious Metals:
SNP500
3rd quarter, Dow Jones and SNP500 managed to regain those huge losses GOLD & SILVER Ratio (XAU/XAG)
DOW30
and are currently showing possibilities of another aggressive dip, like the GOLD (XAU/USD)
NAS100
previous shockwave.As per the current Cycles and Elliott Wave counts, the SILVER (XAG/USD)
DAX30
overall position of the Market seems to be located at a somewhat crucial
point, a juncture.
Elliott Wave Technical Analysis
VIX – CBOE Volatility Index
VIX (Volatility Index) seems to be preparing for another spike in volatility.
Starting with February 2018, VIX jumped. That spike in volatility could
represent the first occurrence from a series of similar events.
This indicator is used by analysts to measure the state of buy-sell investors’

emotions, complacency versus the fear effect. In simple terms, a rise in the
VIX would or bring with it a sharp fall in Stocks and/or Indices.
A decrease in the VIX represents the periods when market participants are
in the state of greed, being complacent and euphorically enjoying the bull
market. A rise in VIX indicates a period of uncertainty, risk-off events that
impact the markets directly and suddenly. Such spikes bring with them a
fear effect as investors begin to feel worried for the market’s destined
directions.
VIX – 2H Chart
VIX – 2H Chart
Zooming into the 2H chart, the February 2018 VIX spike has been labeled as
the 1st leg of an Intermediate Degree bullish ABC formation.
Intermediate (A) (orange) presents a three swings sequence with its Minor
ABC (red) sub-waves, in which Minor C (red) is unfolding with an impulsive
swing.
Moving into Intermediate (B) (orange) and the corrective patterns, the entire
structure has been labeled as a Zig-Zag, with a Leading Diagonal in Minor A
(green), an Expanded Flat in Minor B (green) and an Impulse sequence in
Minor C (green).
The Correction in Intermediate (B) (orange) seems to have ended, and if this
scenario would be correct, then VIX could commence a larger degree rise in
an Impulsive sequence.
The rise labeled as Minor 1 (red) exceeded the previous lower-high and this
could indicate that an Impulsive sequence could be a possibility. Minor 2
(red) unfolded with a simple ABC (turquoise) correction, showing an Ending
Diagonal in its last leg.
Should the VIX be destined to spike once more, it could affect the markets
more than the previous one did, as Intermediate (C) (orange) could present
an Extension in its Impulse.
Such an imminent scenario would be invalidated or delayed only by a
decrease below the 11.50 levels, as a wave two cannot surpass the start of a
wave one.
Looking back on the previous volatility spike and towards the way this
affected the markets, it can be noticed that, during those volatile events, the
reactions were divided.
The USD remained stable towards strong, but the YEN was treated by
investors as the true safe-haven asset. Metals and EUR lost considerable
ground, while global Indices have shown historical one-week drops.
By looking into each market, one would notice some possible patterns and
correlations with the February 2018 bears return.
FOREX - Elliott Wave Analysis
Dollar Index (DXY) – Daily Chart
Dollar Index (DXY) – Elliott Wave Analysis possibility for a next swing, and this is because an imminent end of the
entire Intermediate degree correction would not pose as the best interpreta-
The USD has been losing ground ever since Jan 2017, when a 1-year tion. Time-wise, Intermediate (A) (turquoise) would need to be matched
down-trend started. During this period, EUR/USD and XAU/USD enjoyed bull- and/or exceeded by Intermediate (B) (turquoise), a detail which is currently
ish trends, but USD/JPY showed weakness. missing.
The down-trend on DXY has been labeled as a primary Degree Wave A Minor C (red) could be looking for the 92.00 vibration zone but could also
(blue), the 1st leg of an ABC Primary Degree Structure. target the 91.10 Levels if an extension would take place.
This downtrend shows a Leading Diagonal in Intermediate (A) (turquoise), a If the projected analysis will unfold as mentioned, then DXY would possibly
Zig-Zag (ABC orange) in Intermediate (B) (turquoise), and a sustained Impul- turn bullish and create a new high for the year, as an even more powerful Im-
sive Bearish Intermediate (C) (turquoise). pulsive swing in Intermediate (C) (turquoise) would be in focus, to complete
Primary B (blue) structure.
Intermediate (C) (turquoise) is showing an extension, with a 5 swings
sequence within its Minor Sub-waves (red 12345). The focus at these current points would be Minor B (red), as a new high
could invalidate the overall bearish continuation and change the pattern. As
At this stage, it seems like the USD reached its bottom for 2018, as per the an alternate view for an immediate bullish continuation, Intermediate (B)
bullish swings which started in the second half of Feb 2018. (turquoise) could reflect as a Triangle formation. The probability for such a
scenario is slightly decreased; however, it could be kept in mind as a variable.
The current Wave Count on the DXY paints a picture in which the USD could
be currently trading within an Intermediate Degree (A)(B)(C) (turquoise) DXY – Daily Resistance & Support
Structure.
Resistance: 95.00 / 95.50 / 96.00 / 98.00 / 102.00
The Bullish Sequence which started after the February 2018 bottom has
been labeled as Intermediate Degree Wave (A) (turquoise), which, if correct, Support: 93.90 / 92.85 / 92.00 / 91.10 / 90.00
would pose as the first leg of Primary B (blue).
The 5 Swings Sequence present in Minor C (orange) seems to have ended,

and with Minor C (orange) ending, so it would Intermediate (A) (turquoise). DXY – Summary
DXY found resistance around the 95.50 Levels, which are located close to the Expected to commence a Bearish Impulse at or around 95.00 or
50% Fibonacci Retracements of the previous Bearish Primary A (blue) down- 95.50 levels
trend.
Bullish Impulse expected around 92.00 / 91.00 levels
Considering that the Intermediate (A) (turquoise) finalized its cycle, this
would lead towards a Bearish Corrective Pattern within Intermediate (B) (tur-
quoise), which can be labeled with a 3 Swings Sequence.
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Intermediate (B) (turquoise) shows a sharp decline in Minor A (red) and a

Complex Correction in Minor B (red). Minor C (red) would be considered as a trading the USD! FX Trading & CFD trading involves a high
level of risk, including capital invested.
EUR/USD – Daily Chart
EUR/USD – Elliott Wave Analysis A bearish breach of the 1.1500 levels could translate into more weakness for
the EUR/USD, while a bullish break-out of the 1.1800 levels could translate
EUR/USD has been enjoying a sustained up-trend during 2017, while the into more ups-side ahead, and the preferred scenario’s outlook.
USD depreciated. A full year of bullishness ended in the middle of February
2018, when the EUR softened and started a complex consolidation which In case of bearish consistency proven and an imminent bearish breach to
was followed by a major sell-off, depreciating approx. 1000 pips. occur, then this scenario could translate as a decisive change in patterns,
and EUR/USD could be destined for significant down-side.
The 2017 aggressive increase has been labeled as an Intermediate Degree
(A)(B)(C) (turquoise) Bullish Sequence, thus completing a Cycle Degree, Should the Bullish Sequence be determined to commence, it could test the
labeled as Wave W (blue). 1.2000 or even 1.2150 levels, which could pose as a Strong Resistance. The
mentioned 1.2150 Levels reflect 61.8% Fibonacci Retracements of the 1st Quar-
Moving into 2018 and the 1st quarter, EUR/USD loss of approx. 1000 pips has ter fall but could also turn out to be the right shoulder within a complete
been labeled as Intermediate (A) (red), the first leg of a Complex Structure, Head & Shoulders Formation.
more exactly a Cycle Degree wave X (blue).
If the Head & Shoulders formation would become true and the 61.8% Fibo-
At this stage, the first bearish swing labeled as Intermediate (A) (red) nacci Retracements of Intermediate (A) (red) would hold, and the Bearish
appears to have completed, and EUR/USD seems to be gaining Support Sequence to be destined for a continuation, then Intermediate (C) (red)
around 1.1500 Levels. could even reach as low as 1.0800, because the Gap left behind by the
French Elections remained unfilled.
Those levels appear to pose significant importance, as the current structure
in Intermediate (B) (red) is showing the possibility of an ABC type of pattern, EUR/USD – Daily Resistance & Support
with a Flat formation as a possible scenario in Minor B (light blue).
Resistance: 1.1800 / 1.2000 / 1.2150 / 1.2300 / 1.2800 / 1.2500
If the current labeling would turn out to be correct, then this would lead EU-
R/USD towards a Bullish 5 Swings Sequence journey, which would reflect as Support: 1.1500 / 1.4450 / 1.1310 / 1.1100 / 1.0800 / 1.0450
Minor C (light blue) and the end of the larger degree Intermediate (B) (red).
A possible confirmation of such medium-term bullish sequence could be a EUR/USD – Summary

break-out of the 1.1800 Pivot and could indicate further increase.
Expected to commence a Bullish Sequence which could reach 1.2000
As a preferred scenario, Minor B (light blue) has been labeled as a Flat pat-
or even 1.2150 levels
tern because the 38.2% Fibonacci retracement of Cycle W (blue) historically
posed as a vibration zone. Bearish Impulse expected at or around 1.2150 levels
From an advanced technical perspective, the 1.1500 levels would be in focus

for a possible support, as a bearish breach or a continuation beyond the
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1.1500 levels would invalidate such scenario. In a Flat scenario, the 1.1500 Trade EUR/USD with low spreads!
levels would be of high importance as it could be the decisive support. FX Trading & CFD trading involves a high
USD/JPY – Daily Chartv
USD/JPY – Elliott Wave Analysis According to the Daily Structure, if USD/JPY would gain Support once more
and commence a Bullish Rally, then this Swing could reach as high as 118.00,
USD/JPY benefited from the crucial 100.00 Levels and gained an important or even 124.00 Levels.
Support during the 2016 summer. This resulted in USD/JPY getting a
sling-shot effect and delivering an impressive approx. 2000 pips Bullish
Rally. These Swings have been labeled as Primary W (blue).
USD/JPY – Daily Resistance & Support
Moving into 2017, USD/JPY started crumbling down, unfolding with a very
complex Corrective Structure, in what appears to be the Primary Wave X Resistance: 112.00 / 113.00 / 114.50 / 118.00 / 124.00
(blue). Support: 110.00 / 108.00 / 107.00
This Complex Bearish Correction lasted for a considerable period of time,

closing near the end of March 2018. That is when USD/JPY honored the USD/JPY – Summary
Golden Ratio and hit the 61.8% Fibonacci Retracements of Primary W (blue),
resulting in the decisive up-lift and starting an Intermediate Degree
(A)(B)(C) (turquoise) Sequence, which has been labeled as Primary Y (blue). Expected to continue with the Bearish Correction which could
complete at or around 110.00 levels, but could also reach 108.00 levels
At this stage, it seems as if Intermediate (A) (turquoise) finalized at the 111.00 Bullish Impulse expected at or around the 110.00 or 108.00 levels
Levels, rapidly reversing and possibly unfolding with a Complex Correction
in Intermediate (B) (turquoise).
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Minor B (red) exceeded the starting value of Minor A (red), which could lead level of risk, including capital invested.
towards either an Expanded Flat or a Running Flat scenario for its corrective
pattern.
In a Running Flat scenario, the Rising Channel would agree with a possible
support granted at the 110.00 levels, which reflect the 100% Fibonacci Exten-
sions of Minors A & B (red) for the possible end if Minor C (red). However, a
bearish breach of the lower rising trend-line could lead towards an Exten-
sion in Minor C (red) and the next best interpretation for a possible support
could be the 108.00 or even 107.00 levels.
Should this scenario be correct, then USD/JPY would be expected to resume

the overall up-trend with an Impulsive Bullish Sequence, labeled as Interme-
diate (C) (turquoise).
PRECIOUS METALS
Gold & Silver started 2016 with gaining supports and delivering outstanding
Bullish Swings, reaching their tops during the summer of the same year, and
hitting levels which were not seen again since then.
The Wave Counts shared below are labeled under the presumption that
Metals were trading within Complex Corrective Patterns. This is because of
the conflict of degrees and conflicts of corrections.
Starting July 2016 and until February 2018, Precious Metals have been
unfolding with sideways movements, with no clear direction, without
sustained Impulsive Swings, developing swings which were mostly
correcting one another.
After almost two years of heavy and sideways movements, the Precious
Metals sector seems to be slowly returning towards the Bullish side, as
multiple technical factors seem to be pointing towards that scenario.
The interesting thing which could be pointed out would be that Silver looks
as if it could outshine Gold if a Bullish Sequence would occur in the 3rd of
4th quarter of 2018.
XAU/XAG – Monthly Chart
Gold / Silver Ratio – XAU/XAG – Elliott Wave XAU/XAG – Monthly Resistance & Support
Analysis
Resistance: 86.00
The Gold/Silver Ratio chart suggests that the demand for Silver could be Support: 74.00
higher than the one for Gold.
The current Elliott Wave Count on the Monthly Chart would place XAU/XAG
XAU/XAG – Summary
in a Primary C (blue) Impulsive Bearish sell-off, within a Cycle Wave Y (or-
ange), of a higher degree Super-Cycle Wave (B) (purple).
Expected to start a Bullish Swing from the current 79.00 Levels and
XAU/XAG seems to be channeling within what appears to be an Ending Diag- complete the Ending Diagonal pattern at or around 86.00 levels
onal in the last 5th Minor Wave (blue), within Intermediate (C) (green) of the Bearish Impulse expected at or around 86.00 levels
even larger degree Primary B (blue) Wave.
The pink horizontal lines represent decisive Support and Resistance Levels.
The 86.00 levels could be treated as the Resistance, given a scenario where
XAU/USD would unfold the last Bullish Swing needed for the completion of
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The 74.00 levels could be treated as the decisive Support and a Bearish
Breach could confirm the down-trend.
Intermediate (B) (turquoise) shows a sharp decline in Minor A (red) and a

Complex Correction in Minor B (red). Minor C (red) would be considered as a
XAU/USD – Daily Chart
XAU/USD – Elliott Wave Analysis Within this degree, Minor Y (red) completely changed the outlook for this
precious metal, pushing it aggressively towards volatile levels and danger-
XAU/USD got catapulted on the up-side back in December 2015, commenc- ously moving XAU/USD into bearish territory.
ing an impressive Bullish Sequence and ending these moves in the summer
of 2016. The most it reached was 1375.00 Levels and these figures have not With the 2nd quarter of 2018 nearly ending, Gold made a crucial decision at
been seen again since then. the 1285.00 levels, as the retest of the lower trend-line of the Rising Channel
did not hold as a support. The following bearish break-out concluded into a
The 6 months of bullishness were sharply followed with the same amount of major sell-off, one which could resemble the 2016 US Presidential Election.
time of aggressive bearish sell-offs, resulting in a complex 3 Swings
Sequence which hit as low as 1125.00 levels in December 2016. Early in the 3rd quarter, XAU/USD also broke through the 1240.00 crucial sup-
port located at the weekly trend-line (red), which could be an even bigger
Following the sharp drop in Gold prices, XAU/USD started to rise again for an bearish sign. The mentioned trend-line comes from December 2015 and De-
entire year, unfolding with a pattern which does not appear to be sustained, cember 2016 lows, where Gold instantly reacted with bullish impulses.
as the previous Bullish Rallies were.
With the crucial 1240.00 levels broken, XAU/USD is most likely about to make
Due to this reason, and from an Elliott Wave perspective, XAU/USD daily another important decision.
structure seems to be revealing an ABC (black) cycle degree corrective pat-
tern. The 61.8% Golden Ratio area revealed by the Fibonacci Extensions of Primary
W & X (orange) could be treated as points of interest by both sides, bulls, and
The main focus would be Cycle B (black), which shows a Complex Corrective bears.
sequence, and this is due to multiple conflicts of degrees in its Primary
degree WXY (orange) sub-waves. From a bearish perspective, the breach of the weekly trend-line would pose
as a favorable sign and Gold could be pointing towards further weakness
The reason behind the Complex Structure would be because the period until the 100% Fibonacci Extension Primary W & X (orange). However, due to
from December 2016 until early February 2018 would reflect a Corrective the way the structures developed with complex swings within, a reaction
Structure, attempting to correct the period between July 2016 and Decem- could occur in a corrective bullish structure, before a continuation of the
ber 2016, which would also represent a correction. This leads towards a cor- mentioned weakness.
rective pattern correcting a previous correction, hence the reason why Pri-
mary X (orange) unfolded within a Rising Channel, it is also the reason why The preferred scenario would suggest a possible Bullish Corrective Structure
the swings within it were not consistent or impulsive by nature. at or around the 1210.00 – 1195.00 range, as a retest of the red dotted
trend-line, could lead towards a rejection and a pattern continuation.
Primary X (orange) structure has been labeled as a Complex Intermediate
degree (W)(X)(Y) (pink), in a Double Three pattern. As for the area which could reflect as points of interest and vibration levels,
the 1260.00 – 1300.00 zone could cause a bearish effect on the precious
The Bullish Corrective sequence which started at 1240.00 Levels back in De- metal.
cember 2016, rose until the 1360.00 Levels, where XAU/USD faced a decisive
resistance. From early February 2018 and until present times, Gold price Cycle Wave B (black) Fibonacci projections for a possible completion of its
action movements unfolded with a Complex Structure within Intermediate Flat Pattern would reflect the 100% Fibonacci Extensions of Primary W & X
(W) (turquoise). (orange), where Primary Y (orange) would be expected to finalize.
From a long-term perspective, the 1115.00 levels could pose as points of
interest for the bulls and the beginning of another cycle.
XAU/USD – Daily Resistance & Support
Resistance: 1250.00 / 1260.00 / 1300.00 / 1340.00 / 1380.00 / 1420.00 / 1480.00

Support: 1210.00 / 1195.00 / 1160.00 / 1115.00 / 1080.00
XAU/XAG – Summary
Expected to start a Bullish Corrective Structure in a three-swings

sequence at or around the 1195.00 levels and possibly retest the
1260.00 – 1300.00 vibration area.
Bearish Impulse expected around the 1260.00 – 1300.00 area,
towards the possible retest of the 1125.00 December 2016 lows and
the pattern’s completion.
If all scenarios would turn out to unfold as expected and Gold
would retest the 1115.00 levels, then that specific area could be seen by
bulls as an opportunity for longs, which could even reach the
1480.00 levels in an Impulse.
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XAG/USD – Daily Chart
XAG/USD – Elliott Wave Analysis If Intermediate (B) (orange) projection would turn out to unfold as expected,
with a three-swings sequence in a corrective manner, then the 16.00 - 16.75
XAG/USD enjoyed the sling-shot effect from the 13.70 Levels, in tandem with range could pose as a resistance and the possible trigger needed for prima-
XAU/USD, back in December 2015. The aggressive buying and the Bullish ry Z (purple) to complete with the impulsive Intermediate (C) (orange).
Swings within Cycle Wave W (turquoise) reached as high as 21.00 levels.
From a long-term perspective, the 14.35 Levels could pose as points of inter-
From July 2016 to July 2017, Silver lost 78.6% on the Fibonacci Retracements est for the bulls and the beginning of another cycle.
of Cycle Wave W (turquoise). The retracement performed under what
appears to be a very Complex Structure within the Primary degree (purple).
The Complex Structure has been labeled as a Triple Three, in a WXYXZ (pur-
XAG/USD – Daily Resistance & Support
ple).
Back in July 2017, the lowest readings were the 15.20 levels, and that is where Resistance: 15.70 / 16.00 / 16.75 / 17.75 / 19.00 / 20.00 / 21.00 / 22.00
XAG/USD instantly reacted with a Bullish Swing, which has been labeled as Support: 15.00 / 14.75 / 14.35
Intermediate (A) (turquoise). This swing topped out at 18.00 levels, where
another Corrective Pattern began, labeled as Intermediate (B) (turquoise).
The Triangle formation in the second interruption caused by Primary X (pur- XAG/USD – Summary
ple) has been labeled with sub-waves, Intermediate degrees (A)(B)(C)(D)(E)
(turquoise). Expected to commence a Bullish Corrective Structure in a three-swings
Primary X (purple) finalized its one-year triangle formation with the ending sequence at or around the 15.00 levels and possibly retest the 16.00 – 16.75
of the 2nd quarter of 2018, and moving into the 3rd quarter, XAG/USD com- vibration zone.
menced a bearish impulsive swing, retesting the 15.20 levels once more. Bearish Impulse expected around the 16.00 – 16.75 vibration zone.
If all scenarios would turn out to unfold as expected and Silver would
Silver’s current location, from an Elliott Wave standpoint, could reflect the
first Intermediate (A) (orange), sub-wave of Primary Z (purple). retest the 14.35 levels, then that specific area could be seen by bulls as an
opportunity for longs, which could even reach the 21.00 levels in an Im-
The current structure could leave room for another dip towards the 15.00 or pulse.
even 14.75 levels, as a Bullish Divergence would be needed to possibly begin
the projected Intermediate (B) (orange).
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ENERGY - Elliott Wave Analysis
Crude Oil (WTI) – Daily Chart
Crude Oil (WTI) – Elliott Wave Analysis The preferred scenario would be the Running Flat, which would leave 60.50
as the levels in focus. Should Crude Oil (WTI) be able to gain support there,
Crude Oil (WTI) lost approx. $120 per barrel in value from 2008’s Recession to then this would leave the overall pattern in the Bullish Intermediate (C)
February 2016 when it finally gained support around the 27.00 levels. (green) position, which would be expected to be sustained and even present
an extension.
The Bullish Structure leaves room to state that Crude Oil (WTI) could be trad-
ing within a Complex Structure as well. In a scenario where Intermediate (C) (green) would present the extension,
Crude Oil (WTI) could rally towards 80.00 levels but could also reach 90.00 or
The bullish Sequence on Crude Oil (WTI) from the February 2016 lows to Jan- even 100.00 levels.
uary 2017 highs, has been labeled as the Primary Wave W (purple), with a
Running Flat in Intermediate (B) (green) and an Ending Diagonal in Interme-
diate (C) (green). Crude Oil (WTI) – Daily Resistance & Support
The 6 months of Bearish Correction which followed, has been labeled as a Resistance: 70.00 / 80.00 / 90.00 / 100.00
Double Three Pattern in Primary X (purple).
Support: 66.50 / 60.50 / 58.00 / 52.00
From June 2017 up until January 2018, Crude Oil (WTI) resumed the Bullish
Cycle and unfolded a sustained rally in Intermediate (A) (green), presenting
an extension in the Minor C (light blue) sub-wave. Crude Oil (WTI) – Summary
Intermediate (B) (green) Corrective Structure started in February 2018, with Expected to complete the correction at or around the 60.50 levels and
what appears to be an ABC Minor Degree (red) Pattern. Within this struc- resume the up-trend in an impulsive manner.
ture, Minor B (red) surpassed the end of Intermediate (A) (green) and the
If the Bullish Impulse will present an extension, the swing could reach
start of Minor A (red), getting resistance at the 100% Fibonacci Extensions of
Primary W & X (purple). In doing so, it would lead Intermediate (B) (green) to 80.00 levels, but could also reach 90.00 or even 100.00 levels.
be labeled either as a Running Flat or as an Expanded Flat type of Corrective If a Bearish Breach of the 60.50 levels would occur, then WTI could even
Structure.
reach the 52.00 levels as the next bulls’ points of interest and vibration
In a Running Flat scenario, Minor C (red) would not surpass the end of Minor area.
A (red) and could find its end at or around the 60.50 levels, where the 61.8%
Fibonacci Extension of Primary W & X (purple) is located.
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In a bearish scenario which would include an extension in the impulsive

Minor C (red), if the Expanded Flat 58.00 levels would also be broken, then
this could leave Crude Oil (WTI) in a bearish zone, with a potential to reach
52.00 levels as the next possible support.
INDICES - Elliott Wave Analysis
Global Indices have been enjoying a full century

of Bull Market.
The chart below can illustrate how Dow Jones In-

dustrial Average performed over a period of 104
years, from 1914 up until 2018.
US Bull Market – Wave Count
US Bull Market – Wave Count However, before that, Dow Jones could still deliver a bullish Impulse to
complete Cycle Wave I (black).
Going back on the VIX (Volatility Index) weekly chart, one could notice the
The period until 1929 has been labeled as Grand Super-Cycle I (red) and what
correlations between the volatility spikes in the VIX and the contractions the
followed after that was the historical Great Depression of the 1930’s, labeled
Market suffered in 2000 and 2008.
as Grand Super-Cycle II (red).
The Bull Market commenced after a long period of uncertainty and a

sustained rally has been witnessed in an extension, up until 2000’s Dot Com
bubble, where Grand Super-Cycle III (red) has been placed.
Grand Super-Cycle IV (red) has been labeled with Super-Cycles (W)(X)(Y)

(pink), where Super-Cycle (W) (pink) reflects the Dot Com burst and bearish
outcome, and where Super-Cycle (Y) (pink) represents the bottom of the
2008 Recession.
Since the latest great contraction in 2008, the market has been continuing
the Bull Market. This Bullish Impulse has been labeled as Grand Super-Cycle
V (red).
Assuming the Bull Market has been correctly labeled, this would lead
towards a full Grand Super-Cycle formed out of a five-wave sequence
completing over the next two years or so.
However, before that, Dow Jones could still deliver a bullish Impulse to
complete Cycle Wave I (black).
Going back on the VIX (Volatility Index) weekly chart, one could notice the
correlations between the volatility spikes in the VIX and the contractions the
Market suffered in 2000 and 2008.
If this would turn out to come true and another Market Contraction would
be destined to happen, then the 2009’s lows for Dow Jones could be the
next projected area for such big contraction.
VIX – Weekly Chart
The analysis presented in the lines to come paints a picture in which the US
Indices are being labeled, on the lower timeframes, as Complex Corrective
Structures within a Primary Degree Wave 4 (blue), within the main Impulse
of Cycle Wave V (black).
A close-up on the VIX could indicate that the market might be preparing for
another spike in volatility, like the one experienced in February 2018.
VIX – 2H Chart
SNP500 – 4H Chart
SNP500 – Elliott Wave Analysis The 2825.00 Levels are considered to reflect a Vibration Zone, as that area is
considered to reflect the February 2018 sell-off, and points of interest for the
US Indices and most of the other global Stock Exchanges enjoyed 2 years of bears.
constant up-trend and an overall Bull Market. From February 2016 to Febru-
ary 2018, SNP500 rose approx. 1000 points, showing sustained rallies and Minor Y (purple) has been developing its waves within a Rising Channel,
short-lived corrections. under a Triple Three formation in its Minuette WXYXZ (pink) sub-waves.
Eventually, SNP500 peaked in February 2018, and right after that, this Index Minute Z (pink) could be considered as complete since it contains the neces-
lost approx. 350 points. That is when the VIX spiked and volatility came back, sary three-swing sequence in its Minuette sub-waves (orange).
resulting in a decrease in investors’ complacency and leaving room for peri-
ods of uncertainty. However, the pattern in Intermediate (B) (red) could allow another bullish
swing before Primary 4 (blue) would be finalized with another sell-off in
The All-Time-High created at the end of January 2018 has been labeled as Pri- Intermediate (C) (red), like the one witnessed in early February 2018
mary Degree Wave 3 (blue).
The colored boxes represent different scenarios in which SNP500 could
Since the start of the year, SNP500 has been showing signs of weakness, un- react and unfold its next decisive moves.
folding with limited swings and basically trading within a bigger degree side-
ways structure.
Blue Box – In case of an overshoot and an attempt to tag the previous
The entire Sideways Correction has been labeled as Primary Degree 4 (blue) all-time high, the 2875.00 could reflect a strong resistance.
in a Flat Pattern. Orange Box – Should the 2825.00 levels hold as the decisive resistance,
and then SPX could start unfolding a Bearish Impulse, along with the pro-
Intermediate (A) (red) represents the 1st leg of the entire Intermediate
Degree (A)(B)(C) (red) Correction, which would be necessary for the comple- jected VIX spike.
tion of Primary 4 (blue). Red Box – In the case of a bearish breach of the 2785.00 levels and the
lower trend-line of the rising channel, then SNP500 could enter the bear-
After Intermediate (A) (red) broke significant supports, Intermediate (B)
(red) began correcting the 350 points fall. The Structure appears to be unfold- ish territory.
ing as a Complex Flat Correction.
Should the Flat Correction scenario turn out to be valid, then SNP500 would
Intermediate (B) (red) is composed out of a Complex Minor WXY (purple) be left with Bearish Intermediate (C) (red), which could unfold with an
Structure, with all Minor Waves (purple) showing themselves Complex Pat- aggressive sell-off, and with a sustained impulsive structure towards
terns with their Minutes WXY (pink) sub-waves. 2500.00 / 2475.00 significant supports.
Minor Y (purple) could have completed Intermediate (B) (red) at or around

the 2825.00 Levels, where the 100% Fibonacci Extension of Minors W & X (pur-
ple) is located.
SNP500 – Resistance & Support
Resistance: 2835.00 / 2875.00 / 2920.00

Support: 2785.00 / 2700.00 / 2600.00 / / 2500.00 / 2475.00
SNP500 – Summary
Expected to complete Intermediate B (red) correction at or around the

2835.00 levels.
Impulsive Bearish Wave expected to start at or around the 2835.00 levels.
If an overshoot and a Bullish Swing would occur, then a strong resistance
could reflect the 2875.00 levels.
In case of an imminent spike in volatility and a massive sell-off to occur,
then SNP500 could pose sharp losses even until the 2500.00 levels.
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DOW30 – 4H Chart
DOW30 – Elliott Wave Analysis The strongest resistance seems to be located around the 26050.00 levels,
where the previous sell-off in February 2018 commenced. The mentioned
Dow Jones Industrial Average has been trading in a Bull Market for the past levels reflect a vibration zone, as the 100% Fibonacci Extensions of Minors A
two years, in line with SNP500 and NAS100, but with all global indices as well. & B (turquoise) seem to be located strategically in case of a Flat Correction as
the real structure.
DOW30 found its top with the VIX spike back in Feb 2018, when it lost 3500
points in a very aggressive manner. The sharp sell-off has been labeled as In a Contracting Triangle formation, DOW30 could be finalizing Intermedi-
Intermediate (A) (red) due to its three-swings sequence. ate (B) (red) around the 25425.00 levels, while in a Flat Formation DOW30
could be finalizing Intermediate (B) (red) around the 26050.00 levels.
As the structure unfolded and swings occurred, it seems like DOW30 could
be trading within a corrective pattern, due to its overlapping swings. The colored boxes represent different scenarios in which DOW30 could
react and unfold its next decisive moves.
DOW30 has been labeled in a Primary Degree Correction, visible on the pre-
sented chart as Primary 4 (blue). Intermediate (A) (red) is being presented as Blue Box – In case of an overshoot and an attempt to tag the 100% Fibo-
a first main swing from a total of three swings, necessary to complete the Pri-
nacci lines in a Flat Pattern, the 26050.00 levels could reflect as a strong
mary degree.
resistance.
At these stages in the current corrective pattern, DOW30 could be trading Orange Box – Should the 25425.00 levels hold as the decisive resistance in
either in a Contracting Triangle or in a flat pattern.
a Contracting Triangle, then DOW30 could start unfolding a Bearish Im-
Following the surprise drop, the structure has been labeled as a Contracting pulse, along with the projected VIX spike.
Triangle in Intermediate (B) (red), in which all Minor sub-waves ABCDE (tur- Red Box – In case of a bearish breach of the 24900.00 levels, then DOW30
quoise) are correcting one another and leading to a conflict in corrections, could enter the bearish territory, and a bearish breach could indicate fur-
thus unfolding as Complex Swings.
ther down-side as an increased probability.
In such Contracting Triangle pattern, the focus would be turned towards the
upper trend-line (black dotted), as Minor E (turquoise) is presenting the typi-
cal overshoot before a drastic change of directions would occur.
Should the Contracting Triangle scenario turn out to be valid, then DOW30
A medium-strength resistance could reflect the 25425.00 levels, as Minor E would be left with Bearish Intermediate (C) (red), which could unfold with an
(turquoise) could finalize around the area, in a preferred Contracting Trian- aggressive sell-off, and with a sustained impulsive structure towards
gle scenario. 22750.00 / 22200.00 significant supports.
DOW30 – Resistance & Support
Resistance: 25425.00 / 26050.00 / 26400.00 / 26700.00

Support: 25225.00 / 24900.00 / 24300.00 / 24000.00 / 23450.00
/ 22750.00 / 22200.00
DOW30 – Resistance & Support
Expected to complete Intermediate B (red) correction around the

25425.00 levels.
Impulsive Bearish Wave expected to start around the 25425.00 levels.
If an overshoot and a Bullish Swing would occur, then a strong resistance
could reflect the 26050.00 levels.
then DOW30 could pose sharp losses even until the 22200.00 levels.
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NAS100 – 4H Chart
NAS100 – Elliott Wave Analysis NAS100 has been labeled as a Complex Pattern, with one structure in Inter-
mediate (W) (purple) and another one in Intermediate (X) (purple), while
Nasdaq has been rallying for the past two years, showing consistency in its Intermediate (Y) (purple) would remain as a pending swing.
swings, fueled by the “buy the dips” sentiment.
Intermediate (W) (purple) was labeled as a Running Flat, while Intermediate
Like its fellow US Indices, NAS100 found its first top in February 2018, when (X) (purple) has been labeled as a Double Three within a Rising Channel, in
volatility occurred again. In line with DOW30 & SNP500 sell-off, the tech which multiple complex swings occur and conflicts between corrections, in
sector has also shown an 875 points decrease in early February 2018. an overlapping manner.
NAS100 seems to be fueled by the buying euphoria more than the other US Both Ending Diagonal & Expanded Flat scenarios would point towards Inter-
Indices, as since February 2018 it managed to rise towards fresh mediate (Y) (purple), which could reflect major down-side in NAS100, possi-
all-time-highs with each major rising swing. bly reaching even the 6100.00 levels.
While NAS100 has been creating new all-time-highs, DOW30 & SNP500 The colored boxes represent different scenarios in which NAS100 could react
failed to do so, by presenting lower-highs and then higher-lows. These and unfold its next decisive moves.
swings occurred during a period of contraction in the market, thus, it is to be
mentioned that this could represent a divergence between the US Indices,
one which could lead towards a stronger than expected bearish impulse. Blue Box – In case of an overshoot and an Ending Diagonal scenario, the
7650.00 levels could reflect as a strong resistance.
NAS100 is presenting a different type of pattern, one in which new Orange Box – Should the 7500.00 levels hold as the decisive resistance in
all-time-highs have been reached, but with corrective features reflecting.
an Expanded Flat scenario, then NAS100 could start unfolding a Bearish
The possibilities for the actual hidden pattern point towards an Expanded Structure, along with the projected VIX spike.
Flat as an interpretation. However, an Ending Diagonal would not be of the Red Box – In case of a bearish breach of the 7200.00 levels, then NAS100
question.
could enter the bearish territory, and a bearish breach could indicate fur-
In an Ending Diagonal scenario, NAS100 would be creating another ther down-side as an increased probability.
all-time-high, while reaching the upper Rising Channel trend-line and possi-
bly facing a Strong Resistance around the 7650.00 levels, which reflect the
red-dotted trend-line and peaks. Should the Expanded Flat scenario turn out to be valid, then NAS100 would
be left with Bearish Intermediate (Y) (purple), which could unfold with an
The preferred scenario would place NAS100 in a scenario in which the pat- aggressive sell-off, and with a sustained structure towards 6350.00 / 6100.00
tern would reflect an Expanded Flat, this leading towards the possibility of a significant supports.
bearish outcome needed, for Primary 4 (blue) to complete.
NAS100 – Resistance & Support:
Resistance: 7500.00 / 7650.00 / 7725.00 /7800.00

Support: 7300.00 / 7200.00 / 6850.00 / 6600.00 / 6350.00 / 6100.00
NAS100 – Summary
Expected to complete Intermediate X (purple) structure around the

7500.00 / 7650.00 levels.
Impulsive Bearish Wave expected to start around the 7500.00 / 7650.00
levels.
If an overshoot and a Bullish Swing would occur in the Ending Diagonal
scenario, then a strong resistance could reflect the 7725.00 levels.
then NAS100 could pose sharp losses even until the 6100.00 levels.
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DAX30 – Daily Chart
DAX30 – Elliott Wave Analysis This Impulsive Bearish leg has been labeled as Intermediate (C) (orange),
thus completing Primary W (purple).
DAX30, like most of the global Indices, has been trading within a Bull Market
and an up-trend, ever since February 2016. The Bull Market trend has been Primary X (purple) unfolded as well with a 3 Swings Sequence, with a Lead-
labeled as Super-Cycle Wave (V) (black). ing Diagonal in Intermediate (A) (orange), a false break-out during its Inter-
mediate (B) (orange) and an impressive Bullish Intermediate (C) (orange)
Bullish Cycle Wave I (green) began in early February 2016, covering 50% of wave. On the Fibonacci Retracement scale, Primary X (purple) managed to
the losses which occurred during 2015. This Bullish Swing was corrected by cover 78.2% of the entire losses caused by the VIX spike.
Cycle Wave II (green) with approx. 61.8% on the Fibonacci Retracements
scale, also establishing a strong support highlighted by the rising red This Complex Pattern involves combinations of structures, hence the reason
trend-line. why Primary Y (purple) would not be out of the question.
The Bullish 5 Swings Sequence period between July 2016 and November Within Primary Y (purple), Intermediate (A) (orange) reversed sharply on the
2017 represents the strongest up-trend and it has been labeled as Cycle down-side and after that, a correction began in Intermediate (B) (orange).
Wave III (green). This Bullish Rally presents a classic Elliott Wave Extension The correction unfolded within a Rising Channel and the continuation levels
within the Primary Wave 3 (blue) sub-wave. for Impulsive Bearish Intermediate (C) (orange) reflected the 13150.00 levels.
Cycle Wave IV (green) commenced its Corrective Pattern at the beginning of Impulsive Bearish Intermediate (C) (orange) would be expected to continue
November 2017 and ever since then, it has shown Complex Structures. From the projected sell-off if the VIX would spike again. Should this turn out to
an Elliott Wave standpoint, the Complex Corrective Patterns could be occur- unfold as expected, then DAX30 could even create a new yearly low, so it
ring because of the alternations between corrective cycles, if one is simple could complete the pattern, and aggressively test the Strong Support
then the other would unfold as complex, in this case between Cycle Wave II trend-line (red).
(green) and Cycle Wave IV (green).
Fibonacci Extensions of 23rd January 2018 and 26th of March yearly low are
According to the current Wave Count, Cycle Wave IV (green) could be unfold- pointing towards the 100% measurements, which reflect the 11600.00 levels,
ing as a Complex WXY (purple) Primary Waves. and an area which could be subject to a strong support.
Primary W (purple) began the Bearish 3 Swings Sequence with Intermedi- Should DAX30 deliver the expected Bearish Impulse, then that would com-
ate (A) (orange), which was followed by Intermediate (B) (orange), with a plete Primary Y (purple), but also the entire Cycle Wave IV (green), which
Complex Structure as well, due to the conflict between corrections and would result in DAX30 possibly continuing with Cycle Wave V (green).
degrees.
Cycle Wave V (green) would be expected to get resistance at or around the
Intermediate (B) (orange) finalized with DAX30 hitting a fresh all-time-high 261.8% Fibonacci Extension of Primary Waves 1 & 2 (blue). The 14400.00 levels
around the 13590.00 levels. also appear to be lining up with the 61.8% Golden Ratio and Fibonacci Exten-
sion of Cycle Wave III & IV (green).
The reaction at the 13590.00 levels was instant. With VIX spiking, DAX30 lost
approx. 1600 points in just one week.
DAX30 – Daily Resistance & Support
Resistance: 12850.00 / 13000.00 / 13650.00 / 13950.00 / 14400.00

Support: 12450.00 / 12000.00 / 11850.00 / 11650.00 / 11350.00
DAX30 – Summary
Expected to continue the Bearish Sequence towards the 11850.00 – 11650

area.
If Bearish Impulse would be delivered, a support is expected to occur
around 11650.00 or 11350.00, which could send DAX30 on a Bullish Impulse
towards the 13650.00 or even 14400.00 levels.
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Author’s Thoughts
Dear Traders,
Thank you for taking the time to go over the presented material.
Hopefully, it will be useful to you when charting or it would be of assistance when

you’re about to
take an important trading decision.
After reading this report, should you choose to expand your trading knowledge or
receive updates on price action movement, please don’t hesitate to join the Orbex
live sessions, where the current market patterns and structures are analyzed.
Mohammed Al-Mariri and Richard Tataru
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Risk warning: This material is intended as information only and does not contain, and should not be construed as containing, investment advice or an investment recommendation or an offer of or solicitation for any
transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. ORBEX does not take into account your personal investment objectives or financial situation. ORBEX
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Trade War Report

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TRADING

“The Trade War”

Published in early August 2018

What is the Trade War report about?

As we will explore later in the report, the current structures seem to be

We provide an in-depth technical analysis, with the views to be treated as

Fundamental Analysis Precious Metals

What is a trade war? 4 Gold/Silver Ration – XAU/XAG 26

What happened in previous trade wars? 4 XAU/USD 28

The disadvantages of a trade war 4 XAG/USD 31

Who started this trade war? 4 Energy

Parties of the trade war 6 Crude Oil (WTI) 34

What is the long-term outcome? 12 S&P 500 41

Technical Overview DOW JONES 44

Dollar Index (DXY) 19

When President George W. Bush in 2002 raised steel tariffs to protect

3) The disadvantages of trade war?

The US trade gap with other trading partners (US

U.S tariffs against China

President Donald Trump

U.S tariffs against EU

After president Trump imposed tariffs against a number of allies, including

Trump is still optimistic as he says in last tweet

What’s the solution to this situation?

8) What is the long-term outcome?

Elliott Wave Technical Analysis

VIX (Volatility Index) seems to be preparing for another spike in volatility.

This indicator is used by analysts to measure the state of buy-sell investors’

The 5 Swings Sequence present in Minor C (orange) seems to have ended,

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Intermediate (B) (turquoise) shows a sharp decline in Minor A (red) and a

A possible conﬁrmation of such medium-term bullish sequence could be a EUR/USD – Summary

From an advanced technical perspective, the 1.1500 levels would be in focus

This Complex Bearish Correction lasted for a considerable period of time,

The structure in Intermediate (B) (turquoise) seems to be developing as a https://www.orbex.com/en/open-real-account?ref_id=6458

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Rising Channel and this could complicate the readability.

FX Trading & CFD trading involves a high

Should this scenario be correct, then USD/JPY would be expected to resume

the potential Ending Diagonal.

Intermediate (B) (turquoise) shows a sharp decline in Minor A (red) and a

XAU/USD – Daily Resistance & Support

Resistance: 1250.00 / 1260.00 / 1300.00 / 1340.00 / 1380.00 / 1420.00 / 1480.00

Expected to start a Bullish Corrective Structure in a three-swings

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FX Trading & CFD trading involves a high

Will Silver post some gains in the Trade

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In a bearish scenario which would include an extension in the impulsive

Global Indices have been enjoying a full century

The chart below can illustrate how Dow Jones In-

The Bull Market commenced after a long period of uncertainty and a

Grand Super-Cycle IV (red) has been labeled with Super-Cycles (W)(X)(Y)

Minor Y (purple) could have completed Intermediate (B) (red) at or around

Resistance: 2835.00 / 2875.00 / 2920.00

Expected to complete Intermediate B (red) correction at or around the

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Resistance: 25425.00 / 26050.00 / 26400.00 / 26700.00

DOW30 – Resistance & Support

Expected to complete Intermediate B (red) correction around the

Resistance: 7500.00 / 7650.00 / 7725.00 /7800.00

Expected to complete Intermediate X (purple) structure around the

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