Current EW count for DJIA

The clearest picture of the current markets is shown, in my opinion, by the DJIA:

USD/CHF is it like in 2008?

Is the CHF a "safe haven" at this point? I doubt it. In any case, the similarity is striking:

Medium term projection for EUR/USD

The following projection of EUR/USD behavior considers that the correction of the first wave down in the US equity markets will be done by mid or end of July. The August, in this case, will be really hot with the 3d wave down for the equities and the 5th for the euro.

Is the final capitulation on euro still ahead?

I think the set-up is quiet good for the final capitulation on the euro. On EUR/USD that should be at around 1.175-1.18

The risk is back

Market has tried to rally and was sold in a controlled manner during the second part of the yesterday's  session. But looking in the details one will remark that risk is starting to enter by a small door. Small caps were clear performers. Commodity currencies were strong as well as East European ones. The implied volatility as well as it expectation (VXX and contracts on VIX) were about unchanged.
As for the moment I'd expect  one more close near the recent lows for the broad US indexes as well as for other risk plays (EUR/JPY, EUR/CHF) before we start the summer risk rally.

A turning point?

May be we have seen the turning point today and the beginning of the summer rally. In any case my trend lines for IYT (Dow Transport) and Intel have worked just fine. XHB and R2K have gotten a bit lower, but have preserved with a good margin their February's lows. Financials were strong, that is bullish.
In my opinion, this week and even may be tomorrow will be decisive.

The 5th is the 5th

So, yesterday we've closed at multi months lows on DJIA and SPX thus confirming my view and the possible trend reversal.
A good indicator to watch is the old good EUR/JPY. Technically it's rather constructive.

Expanding triangle as a terminal wave on EUR/USD?

As for the cable, we should avoid to make  new lows:

Some ideas about the market's medium term future

Last Tuesday (in US it still was Monday) I've posted the projection on how the markets could behave with some US sectors and individual stocks during the nearest future in the russian part of the blog. The main idea behind this projection is the fact that US markets are entering the period of the broad top formation for the whole rally which started from the March '09 lows. In this context, there is high probability that many individual stocks have already put their cyclical tops in and are in early stages of decline. The same thing may be true even for major broad indexes (SPX, Dow Industrial). But what was clear at that point for me, it's that some important individual stocks, secondary indexes and even the Dow Transport were still strong ans able to refresh the new cyclical highs before the things really roll over. So, as for example, I've cited just few of them:
Russel 2000, XHB (homebuilders ETF), IYT (Dow Transport ETF) and INTC (Intel Corp). All of them seems to be on the road to complete the expanding triangle pattern:

Since that post, the defined  supports were touched on 3 of 4 (INTC missed by about 30 cents). Market has rallied  strong and many pundits have declared the correction over.
I'm not sure the things are so simple, especially for the broad indexes like SPX or Dow Industrial.
Let's take the latter. If we look at the candle charts, the move since late April looks more corrective than not.

 But if we take the close price only, things are much  clearer. And they will become even more clear, should we retest the last Tuesday's lows, especially closing near them. In this case we'll have a  5 waves decline on the close basis, meaning, from the point of view of classical Elliott wave principles,  that the trend for the Dow Industrial has changed. But, since many  other narrow indexes are still looking bullish , the rally in DOW will be long with a deep retrace.  May be, at the top, we will see the case of the Dow theory  non confirmation : new highs on Transport with the failed Industrial.

The setup for EUR/USD is good

By establishing the double bottom at around 1.215  EUR/USD confirms my positive opinion and EW count and validates the target of 1.32+ in coming weeks. This target is confirmed as well by the price action in  GPB/USD and equities.