Good day to everybody, and to all readers of ForexAnalytix.com. As , initially of every 12 months I at all times scan some increased diploma timeframe charts to have a look at the larger cycles, so we will perceive what to anticipate and what to pay attention to fairly than being stunned. In case you have been studying our work a 12 months again, that was once I highlighted that the S&P 500 might see a pullback into the primary half of 2025, earlier than the market might stabilize and the greenback might resume decrease.
This state of affairs unfolded very effectively, as you’ll be able to see on this publish right here:
https://www.forexanalytix.com/weblog/heres-the-only-2025-trading-preview-post-youll-need-to-read/
the place I additionally highlighted the vital resistance zone for a greenback high across the 108–110 space.
The query now could be the place we will go from right here. As soon as once more, I need to present simply three charts that I consider might be a very powerful going into 2026. The primary chart is the S&P 500. Trying on the every day chart, discover that from the April 2025 low we will clearly depend 5 waves up. This doesn’t imply that the fifth wave has to finish proper right here, however it is very important perceive that after 5 waves the market can begin to decelerate. There may be due to this fact a danger of a correction, regardless that the fifth wave might nonetheless prolong increased, probably towards the 7200 space, earlier than a reversal decrease.
On the similar time, have a look at the VIX index. It’s sitting close to the underside of its vary, exhibiting little or no worry available in the market. That often means one main cycle nonetheless lies forward, a worry cycle, and whereas the timing is at all times unsure, each time it exhibits up it sometimes comes with a spike in VIX and a pullback in shares. Collectively, these indicators recommend that we could also be within the late phases of this Elliott wave five-wave restoration from the April 2025 low. Alternatives will nonetheless present up, however it might be wiser to attend for clearer route fairly than chase costs right here.
The following chart to have a look at is the US greenback. The greenback has already moved properly to the draw back, however once I have a look at the larger image, I don’t see a powerful bullish pattern beginning. As a substitute, it seems to be extra like stabilization. After all, there’s nonetheless an opportunity for a stronger greenback restoration, particularly if charges are placed on maintain for longer, or if we see a sharper sell-off in shares, probably coming from the AI area. Then charges will go decrease however, greenback woudl diverge and bounce, extra be like a “safe-haven” asset play.
Earlier than calling any main cycle shift for the greenback, it is usually vital to have a look at positioning. The COT information exhibits that giant speculators are closely brief the greenback, near ranges seen again in 2007–2008. We all know what occurred with the greenback after that interval. I’m not saying we’ll see the identical final result now, however based mostly on sentiment, wave construction, and positioning, I believe we have to be very cautious and conscious that the greenback might stabilize and even rebound for a time period.
I hope you appreciated this content material. Be happy to contact me on x if in case you have any questions, and hopefully I’ll see you in our members space, the place I present extra of Elliott Wave evaluation.
Good luck, commerce effectively, and all the most effective in 2026.
Grega
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